Its Happening - Law to Tax Overseas Income Now in Progress

[Sigmund]

For those who can, why torture yourself `?

 

If you can, leave and set up shop in India, Vietnam. Malaysia or other Asian countries that are far more respectful with foreigners, better value of your money and living and the ladies who are far more open and friendly with foreigners.

 

Malta or Portugal have also become more cheap in many aspects compared to Bangkok or other popular beach towns like Hua HIn where cost of living is getting more and more expensive and foreigenrs are being over charged there almost on everything.

[oldcpu]

22 minutes ago, JackGats said:

Indeed this tie-breaker aspect is reiterated on this webpage (in German, search for ""Staatsbürgerschaft steuerpflichtig"):

 

https://staatenlos.ch/lifestyle/7-irrtuemer-der-steuerpflicht-in-deutschland/

 

 

 

Thanks. Interesting article. While in German language, one can easily translate with Google translate or DeepL translation.

 

Article suggests (to avoid being considered a German tax resident)
a.  do NOT own an apartment in Germany that one uses regularly
b.  do NOT work in Germany

Those appear to be somewhat obvious to me.

 

One can visit friends/family for birthdays, weddings, Christmas,or just for fun - and use a guest room for up to 30 days without any risk. ... 30 days is a bit short ... When I go to Europe (from Thailand) I like to go for at least 2 months.  But typically I only spend a few weeks in Germany in any given stretch during such European travel - and I will visit Ireland, or Scotland, or England, or France, or Spain during the 2 months (only the majority of my time traveling will be in Germany).

 

I found it interesting to read that in Germany the left-greens have been calling for a tax liability based on citizenship in Germany for years, similar to the USA, but it is unlikely in the short term because it violates EU law.  Shocking (that the left-greens push for such) ! 

 

And such violates EU law ??  I was not aware of any such EU law. Interesting !

 

I liked the confirmation that one does NOT have to close all of one's accounts and contracts in Germany to be a non-resident (that confirms what I have been doing is legal - which I thought it was). 

 

I thought the recommendation to avoid being active on the board and other activities (of German organisations) useful to know (to avoid being considered a German resident).  I have been asked to be a remote member on the board of a volunteer organization in Germany, which I turned down as my being retired I did not want to work any more (but I still feeling guilty for turning this down ) and I see now I may have avoided a tax pitfall.

 

I also use a friend's address in Germany for a (limited) financial purpose, and I read that is legal.

 

It also notes the misconception that if there is no residence, that citizenship makes one liable to tax.  That confirms my understanding from the Thai-German DTA.

 

Overall - for me - an interesting read.

Edited 6 hours ago by oldcpu

[spidermike007]

I see there's a lot of discussion about the fact that the authorities don't seem to be willing to acknowledge the fact that many affluent foreigners who live here full time will be lost. The important aspect of this is that I think that's what they want. I don't think they put any value on us as contributors to the economy or to Thai society on any level, and I think quite the opposite might be true. Their arrogance is stunning and they're ignorance is enormous, so vision is not exactly their strong suit.

 

They have no desire or ability to objectively evaluate just how much we bring to the table as relatively affluent expats. 

[chiang mai]

1 minute ago, spidermike007 said:

I see there's a lot of discussion about the fact that the authorities don't seem to be willing to acknowledge the fact that many affluent foreigners who live here full time will be lost. The important aspect of this is that I think that's what they want. I don't think they put any value on us as contributors to the economy or to Thai society on any level, and I think quite the opposite might be true. Their arrogance is stunning and they're ignorance is enormous, so vision is not exactly their strong suit.

 

They have no desire or ability to objectively evaluate just how much we bring to the table as relatively affluent expats. 

Perhaps that's because the loss is not significant and that we over rate our Importance to the economy, yet again.

[oldcpu]

29 minutes ago, andre47 said:

The problem is that many banks and stock brokers are demanding your tax ID and tax residency. Without ID no account. If you give them a ID which is not correct or your ID does not currently match your tax residency there is a risk of committing a crime.

 

Yes indeed !!

 

I encountered this - although they only asked for my "residency" (they did not ask for "tax residency") and they asked for my "tax ID".

 

I applied for , and was refused a Thai tax ID, because I was not bringing money into Thailand at present time (I brought a bunch in PRIOR to 1-Jan-2024).  But the Thai RD official advised that my Pink-ID # (same number as on my Yellow Book) could become my Thai Tax-ID ONLY after it was activated (and the Thai RD official saw no need to activate).

 

So for the bank and trading accounts that demanded my residency I gave "Thailand" and for my Tax-ID I gave them my "Pink-ID" number with the truthful caveat that it had not yet been activated in Thailand.  That was accepted by them.

 

I don't want to start a Yellow book/Pink-ID debate, but for any might who encounter this problem where a Thai Tax ID is demanded from a foreign bank or trading account, perhaps the approach I adopted might work for such.

Edited 6 hours ago by oldcpu

[ukrules]

5 minutes ago, spidermike007 said:

They have no desire or ability to objectively evaluate just how much we bring to the table as relatively affluent expats.

 

Exactly, and the truth of the matter is that there is no way for them to evaluate whom among us has a couple of million USD in investments and who has almost nothing to their name.

 

Perhaps that will change with CRS which provides end of year balances to bank accounts, does it apply to brokerage accounts? Who knows!

Edited 6 hours ago by ukrules

[JackGats]

25 minutes ago, andre47 said:

The problem is that many banks and stock brokers are demanding your tax ID and tax residency. Without ID no account. If you give them a ID which is not correct or your ID does not currently match your tax residency there is a risk of committing a crime.

Indeed the problem lies not with RD's but with banks. It's banks we mostly have to deal with, not RD's. Would we be committing a crime if we gave a Thai TIN to an offshore bank or broker while at the end of the day staying in TH under 180 days? Good question.

[andre47]

4 minutes ago, oldcpu said:

 

Yes indeed !!

 

I encountered this - although they only asked for my "residency" (they did not ask for "tax residency") and they asked for my "tax ID".

 

If you provide a Thai TIN (from your pink ID) and you name Thailand as your residency it is consequential also you tax residency. They will provide your account data to the Thai RD. Maybe the Thai RD will find out that this data is on you, then they will fine you because you didn't file your tax return. If the Thai RD could not identify your provided TIN they will inform your broker/bank about that and you will get problems from that side. Therefore I don't think that this is a good solution.  555

[oldcpu]

5 minutes ago, andre47 said:

If you provide a Thai TIN (from your pink ID) and you name Thailand as your residency it is consequential also you tax residency. They will provide your account data to the Thai RD. Maybe the Thai RD will find out that this data is on you, then they will fine you because you didn't file your tax return. If the Thai RD could not identify your provided TIN they will inform your broker/bank about that and you will get problems from that side. Therefore I don't think that this is a good solution.  555

 

Its a good solution if you are compliant with Thai law.

 

The Thailand RD official (Phuket office) specifically advised me that if I was NOT bringing any foreign money into Thailand, that I had no need for a tax ID, I had no need to file a Thai tax return. 

 

So you are saying they are going to fine me for what reason??   I am most interested to learn - as I try 100% to be legally compliant.

 

Now Yes - I AGREE 100% that one should not try to avoid taxes if one is required to pay taxes ... but there are clear legal scenarios where one does NOT have a tax residency and yet one needs to provide a tax ID to a bank or broker.

 

So I TOTALLY disagree with you.  This CAN be a good solution - but do be aware of the laws of the states where one is obtaining their income from, and be compliant with such.

 

Edited 5 hours ago by oldcpu

[JackGats]

3 minutes ago, andre47 said:

If you provide a Thai TIN (from your pink ID) and you name Thailand as your residency it is consequential also you tax residency. They will provide your account data to the Thai RD. Maybe the Thai RD will find out that this data is on you, then they will fine you because you didn't file your tax return. If the Thai RD could not identify your provided TIN they will inform your broker/bank about that and you will get problems from that side. Therefore I don't think that this is a good solution.  555

My fear is that the Thais would reply to the CRS report: "Please don't send us CRS reports about this person as he/she is not a taxpayer in Thailand". Thus the CRS can be a formidable weapon to expose individuals who pay taxes nowhere. Whether Thailand is already advanced enough in its commitment to the CRS to send such feedbacks is an open question.

[oldcpu]

17 minutes ago, JackGats said:

My fear is that the Thais would reply to the CRS report: "Please don't send us CRS reports about this person as he/she is not a taxpayer in Thailand". Thus the CRS can be a formidable weapon to expose individuals who pay taxes nowhere. Whether Thailand is already advanced enough in its commitment to the CRS to send such feedbacks is an open question.

 

I don't have a fear there.

 

There is no written law that one MUST pay tax everywhere. 

 

Rather individual countries have taxation laws that one MUST abide by - and I fully agree with following the laws.  I 100% agree with abiding by tax laws.

 

CRS would IMHO only help a government go after someone who is illegally not paying taxes they legally should pay.

 

But legally managing one's finances to reduce ones tax exposure breaks no laws.

 

In my case of using the Yellow-book/Pink-ID # as a tax ID number for a foreign bank & foreign broker:

(1)I  first applied for a tax-ID and was refused

(2) I also obtained confirmation from Thai RD that the pink-ID/yellow book could be used as a tax ID (but that it needed to be activated - which the Thai RD official would not do as I did not meet his criteria for the activation), and

(3) when I passed the pink-ID/yellow-book # to the foreign (non-Thai) broker/bank, I made it clear that the number was not yet active (in accordance with what the Thai RD official told me).  The foreign bank/broker could have refused my providing a not active tax-ID number, but they decided to accept such.  And it is a legitimate number.    I have NO worries about it being traced back to me. Maybe if it is, then the Thai RD will activate the number - which they would NOT do when I asked them to do so.

 

I think if one follows the law, one need not worry about CRS.

 

 

 

Edited 5 hours ago by oldcpu

[Kwaibill]

My wife for some reason wants to go to the US anyway, and is willing to go back to work to make it happen.

I’m not sure frankly if we can afford it anymore, and a bit concerned about tomorrow’s results should a non-white-person  discriminatory administration take root.

I tried to interest her in thinking about Costa Rica, but no sale.

I wonder if a month vacation every six months in someplace like Laos would get the revenue junkies off of ones financial back? Maybe even just a couple of weeks. 
Anybody know if/ how the “ residency clock” can be reset? I haven’t seen a lot of discussion along those lines. 

[chiang mai]

3 minutes ago, Kwaibill said:

My wife for some reason wants to go to the US anyway, and is willing to go back to work to make it happen.

I’m not sure frankly if we can afford it anymore, and a bit concerned about tomorrow’s results should a non-white-person  discriminatory administration take root.

I tried to interest her in thinking about Costa Rica, but no sale.

I wonder if a month vacation every six months in someplace like Laos would get the revenue junkies off of ones financial back? Maybe even just a couple of weeks. 
Anybody know if/ how the “ residency clock” can be reset? I haven’t seen a lot of discussion along those lines. 

Tax residency is based on the number of days per year, it resets every year on 1 January.

[oldcpu]

7 minutes ago, Kwaibill said:

Anybody know if/ how the “ residency clock” can be reset? I haven’t seen a lot of discussion along those lines. 

 

As noted to you Thai "Tax residency is based on the number of days per year, it resets every year on 1 January. "

 

For other countries than Thailand, it really depends on the country.  I know for Canada (and I believe for Germany) one does have to be precise in the connections to those countries that one severs (and does not reconnect) to ensure non-residency is maintained.   Its important IMHO that one follows the law in such cases - ie ... important that one has good legal financial taxation management.

[NoDisplayName]

54 minutes ago, oldcpu said:

But the Thai RD official advised that my Pink-ID # (same number as on my Yellow Book) could become my Thai Tax-ID ONLY after it was activated (and the Thai RD official saw no need to activate).

 

You should be fine.  As I understand it, the pink ID number is your tax filing number.  It only needs activation for use with the online filing system, paper returns don't require activation.

[oldcpu]

2 minutes ago, NoDisplayName said:

Quote

But the Thai RD official advised that my Pink-ID # (same number as on my Yellow Book) could become my Thai Tax-ID ONLY after it was activated (and the Thai RD official saw no need to activate).

You should be fine.  As I understand it, the pink ID number is your tax filing number.  It only needs activation for use with the online filing system, paper returns don't require activation.

 

I note I also used the yellow-book/pink-ID # to buy Thai government bonds via Bangkok Bank (where I believe such then goes to the Bank of Thailand).  Bangkok Bank staff entered that number into the computer application system to obtain the bonds, and I successfully purchased 2-million THB of Thai government bonds.

 

That was almost 2 years ago - and I have had no problems with the Bank of Thailand.  They regularly postal mail me the status of the bonds.   When I take the Bond book to Bangkok Bank, they regularly update the Bond book.

 

No one has complained about my using a 'tax-ID' number for Thai government bond purchase that is not activated yet for online use in filing a on-line tax return.

 

And back to the point - I do try to be fully legal, and I think if one was advised by a Thai RD official that (even thou one is a resident of Thailand) that one does not yet qualify for a Thai tax ID, but that when one does, the pink-ID# / yellow book # can then be used as the Tax ID, then, it is perfectly acceptable to provide such # to a foreign bank/broker, with the noted caveat that it may not yet be active.

[Dickp]

Citizenship based taxation - International comparison | TFX

Taxes for expats

https://www.taxesforexpats.com › Expat tax advice

 

 

 

 

The US is one of two countries in the world that taxes based on residency. So do not think that there a lot of countries that taxe income made out side there country.

\

[jesimps]

On 9/8/2024 at 6:21 AM, ikke1959 said:

They don't have a clue what the local Thai people are doing and earning, how can they know what foreigners are earning/Where and how do they get the information from? I am  not sure if all financial institutions are giving all informations as may countries have a law to protect the personal information. And besides that how do they use all the different languages, forms, etc Almost nobody can speak or read English here.. I think it will be just as everything a lot of screaming but in reality nothing will  happen.

Thais don't like to work

A short while ago when I changed my UK contact address, I received a form from my bank which I had to fill in and return on which I had to state who I was paying tax to. I had to give them my UK tax reference number and send a copy of my passport as proof of identity. It said that because of an agreement signed by a hundred countries, banks had to ensure that their customers paid tax to a country of residence, regardless of where. Thailand is one of the countries signed up to it. This is globalism at it's finest and anyone voting for a left wing government is only encouraging this. Take note all you spams intending to vote Democrat in the US election, don't whinge on here if the Thai tax people take you to the cleaners.

[andre47]

2 hours ago, oldcpu said:

 

Its a good solution if you are compliant with Thai law.

 

The Thailand RD official (Phuket office) specifically advised me that if I was NOT bringing any foreign money into Thailand, that I had no need for a tax ID, I had no need to file a Thai tax return. 

 

So you are saying they are going to fine me for what reason??   I am most interested to learn - as I try 100% to be legally compliant.

 

Now Yes - I AGREE 100% that one should not try to avoid taxes if one is required to pay taxes ... but there are clear legal scenarios where one does NOT have a tax residency and yet one needs to provide a tax ID to a bank or broker.

 

So I TOTALLY disagree with you.  This CAN be a good solution - but do be aware of the laws of the states where one is obtaining their income from, and be compliant with such.

 

I agree, but there still remain the point that you would not provide a real TIN. The number that you provide could be your TIN (if it would be registred), but it isn't and perhaps your bank/broker will get notice.

It may work, but it is quite shaky.

and one point more:
Everybody, who stays more than 180 days in Thailand can get a TIN, because he is Tax resident here. When I got my TIN they didn't ask me anything about foreign remittances. Just my passport and a residency certificate from the Immigration....15 minutes finsihed.

Edited 3 hours ago by andre47

[jesimps]

In my opinion, I reckon that the agreement between over 100 countries to share financial information to ensure that everyone pays tax to a country somewhere in the world who're part of the treaty doesn't mean that you'll be expected to pay tax to more than one country. Even without a DTA, if you're being taxed in UK, you shouldn't be taxed by the Thais. You'll have to prove it of course, but it would be immoral to expect someone to pay tax twice. 

 

Speaking of the DTA, I've been told that because I'm an ex UK government worker, I don't have to file a tax return here, as per the said agreement. Will my position still be the same? Seems that there are lots of questions, but so far no answers.

[oldcpu]

55 minutes ago, andre47 said:

Everybody, who stays more than 180 days in Thailand can get a TIN, because he is Tax resident here. When I got my TIN they didn't ask me anything about foreign remittances. Just my passport and a residency certificate from the Immigration....15 minutes finsihed.

 

Perhaps this is location/province specific?

 

I applied online - which goes to Bangkok. 

 

Bangkok passed it to Phuket. 

 

Phuket RD phoned, and when advised of my details (myself an expat resident who stays > 180 days in Thailand , whose income is from outside of Thailand, and who is NOT bringing that money into Thailand as of 31-Dec-2023), they stated I did not need a tax-ID, nor need to file a tax return, and they would not active (for an online tax submission) my pink-ID # - even though they also noted nominally my pink-ID# would nominally be used for my Thai tax ID.  

 

Whether my pink-ID # would work for a snail mail (or hand delivered) tax return - I do not know. I do not plan to put that to the test for the near future.  IF and when I start bringing money back into Thailand , I might then try the tax return hand delivered method (note also I am on an LTR visa - however the Phuket RD tax official NEVER HEARD of such - so that is not part of this discussion).

 

NOR do I plan to pound on the Phuket RD tax officials desk and tell him is wrong.  Its against my policy to cause RD officials to lose face if such can be avoided.

 

THAT IS THE OPPOSITE of what happened to you.

 

What can I say other than This Is Thailand.

 

Edited 2 hours ago by oldcpu

[oldcpu]

1 hour ago, andre47 said:

I agree, but there still remain the point that you would not provide a real TIN. The number that you provide could be your TIN (if it would be registred), but it isn't and perhaps your bank/broker will get notice.

It may work, but it is quite shaky.

 

Its the best number I could provide.  Clearly.

 

The Phuket RD offiical himself stated it would be the tax ID # once activated (for online tax returns). That is 'straight from the horses mouth' as the saying goes.

 

Further, I advised both the foreign bank and foreign brokerage, that the number would be the tax ID but it was not yet activated.  That is the 100% truth.  And they were happy with that.

 

So you say its shaky?  Why ?   And what for me was the alternative?

 

If I did not provide a tax ID, I would have been forced to close a substantial foreign account (or have it frozen) and in another case not open a foreign account (with a substantial amount).  By my proceeding, I was able to trade on my new brokerage account resulting in a substantial financial return.  Not as much as I would have liked (as my trading was frozen for over 1/2 year) but still by my books, substantial.

 

All I did was tell truth and follow up with what was told me by a Thailand RD official, and provide the foreign banks that exact same information.  A potential tax-ID that was not yet active - which they accepted.

 

The alternative would have been to close my accounts with a massive amount in cash, not insured as it greatly exceeded the amount countries will insure in bank accounts.  That IMHO was FAR FAR FAR more shaky (shaky because not having such cash funds 100% insured ) as compared to structured in more appropriate assets.

 

I guess as the saying goes " you pays your money and you takes your chances". 

 

I think my passing on the truth was the best course of action (ie a likely tax-ID that was not yet activated).

 

The approach to NOT provide such as a potential (yet to be activated) tax-ID is IMHO FAR FAR more shaky  (shaky as without providing the tax-ID I would have had very large uninsured amounts in cash).

.

Edited 2 hours ago by oldcpu

[Yumthai]

27 minutes ago, oldcpu said:

The alternative would have been to close my accounts with a massive amount in cash, not insured as it greatly exceeded the amount countries will insure in bank accounts.  That IMHO was FAR FAR FAR more shaky (shaky because not having such cash funds 100% insured ) as compared to structured in more appropriate assets.

You could certainly have found a high street bank in say Singapore/HK/Switzerland that will have accepted your massive amount of cash understanding that you can't provide a Thai TIN if you are legally exempted or don't pay tax in Thailand.

[oldcpu]

4 hours ago, spidermike007 said:

I see there's a lot of discussion about the fact that the authorities don't seem to be willing to acknowledge the fact that many affluent foreigners who live here full time will be lost. The important aspect of this is that I think that's what they want. I don't think they put any value on us as contributors to the economy or to Thai society on any level, and I think quite the opposite might be true. Their arrogance is stunning and they're ignorance is enormous, so vision is not exactly their strong suit.

 

They have no desire or ability to objectively evaluate just how much we bring to the table as relatively affluent expats. 

 

I am probably an outlier in my view here - so I expect many confused/sad/laughing icons as a result.

 

I agree that the Thai authorities don't worry that some affluent foreigners will be lost.  The Thai tax authorities are intent on going after the affluent Thai (who have managed their assets to minimize tax) and if they impact foreigners (who live here in Thailand as well) then so be it - they are just going to treat foreigners the same in this case as they will attempt to treat the affluent Thai.  

 

And in parallel, they have programs such as the LTR visa, which BoI advertise as tax exempt for foreign income - intended to attract the affluent foreigners.  Of course, this begs the question - how long will the LTR visa tax exemption for foreign income last ?  But at least here they have a way to keep those the foreigners that they  vedit/prove are wealthy to their criteria.

 

So I don't see this as arrogance at all.  Nor ignorance. They are trying to do their job to earn revenue for the country that it can then spend on the citizens/infrastructure/services. 

 

Many western countries, for residents, tax global income.  Thailand is not there (yet) although clearly some senior people in the Thai RD would like to tax global income.

 

Further, some western countries even try to tax non-residents to their country for global income.  Case in point:  Practically every second year I receive an official postal mail from Revenue Canada offering to treat me as a Canadian tax resident (even thou I reside in Thailand)  as by doing so I could take advantage of more Canadian resident tax deductions.  But by doing so, I would also have to pay tax to Canada on all my global income - which would cost me a LOT more money.   Is the Canadian Revenue department being arrogant and ignorant? No - they are simply hoping I will be (ignorant) so that they can get more tax money from me - by taxing my global income, when I don't reside in Canada (but I reside in Thailand).

 

I am thankful that Thailand, has what I consider more favourable (to myself) tax rules than Canada, and some other countries that I won't mention.

 

I concede that, what should I say, 'the golden years' in Thailand re: taxation management may be starting to fade away ...  but the affluent foreigner will likely find ways around such while still staying in Thailand,... possibly via LTR visa, or possibly by staying for only 179 days per year in Thailand, but ways will be found.

Edited 1 hour ago by oldcpu

[oldcpu]

24 minutes ago, Yumthai said:

You could certainly have found a high street bank in say Singapore/HK/Switzerland that will have accepted your massive amount of cash understanding that you can't provide a Thai TIN if you are legally exempted or don't pay tax in Thailand.

 

Yes - but I did not want to provide too much detail in my response in my above posts.  But since you raise the point ..... 

 

Singapore/HK/Switzerland were only applicable for maybe 20% of my frozen assets (by the brokerage & bank in Canada) ... that could be transferred to them (but I did not).

 

80% were in what is known in Canada as a Registered Retirement Savings Plan (RRSP) [similar conceptually I think, to a US 401k] . This is a tax free account, where money is taxed only when it is withdrawn from the account.   One can NOT transfer such a registered account to Singapore/HK/Switzerland without paying a massive amount of tax for the one shot transfer ... ie likely 50% tax ON THE ENTIRE AMOUNT likely due to the very large amount of money involved.

 

So another approach was needed. 

 

And I am happy that the Thai TIN I provided IS legal.  The Thailand RD official said as much himself, with the caveat it was not active for online tax submission.  So I passed that exact same information to the Canadian financial institutions which they were perfectly happy to accept.  They were told the TIN is not yet active.

 

That saved me paying 50% tax on a VERY large amount of money (ie saved 50% which would have been the tax if the money in the RRSP were to be pulled out of the RRSP in one tax year and sent abroad).

Edited 1 hour ago by oldcpu

[oldcpu]

19 minutes ago, oldcpu said:

That saved me paying 50% tax on a VERY large amount of money (ie saved 50% which would have been the tax if the money in the RRSP were to be pulled out of the RRSP in one tax year and sent abroad).

 

To be more precise, if I had closed the Canadian RRSP and brought the money out in one shot, the tax rate to Canada would have been 33% (federal) + 25.75% (provincial) = 58.75% (ie even larger than 50% tax).

 

So from a legal tax management perspective, as the years go by I will pull out a much smaller amount out of the RRSP (soon to be changed to something similar called an RRIF) every year, which will have a much lower taxation due to the yearly amounts withdrawn being smaller than the 'one shot' approach.

 

Of course this is unique to me (and maybe some other Canadian expats from Canada who have very large RRSPs).  Everyone needs to look at their own finances and tax management.

Edited 1 hour ago by oldcpu