Thai gov. to tax (remitted) income from abroad for tax residents starting 2024 - Part II

[Lorry]

Re: gifts

For another reason I listened to the Swiss Embassy video one more time.

 

#AskTheEmbassy with Khun Nathanan Junprateepchai, Revenue Department 

 

41:05 starts about gifts. 

Kh. Nathanan: "so, example, if you have Thai wife,  and you are Swiss, you give Thai wife support, right, then Thai wife will be exempted from tax.

Or, in another case, if you stay in Thailand,  and your wife is outside, and pay[s] you money inside Thailand, i[t']s a foreign source,  right,  will be exempt up to 20 million Baht per year"

 

I don't want to open this can of worms again,  but as the videos have disappeared in the tax threads,  here is the Swiss one for everybody to watch. 

The French one, is verboten, obviously.

[ukrules]

5 hours ago, stat said:

Thai RD knows anyway via CRS the value of your holdings as the max account/portfolio value is transfered anually if you are a tax resident. What I meant was make sure that you do not have substantial cap gains in 2025 when it is unclear if unremitted income will be taxed even if you are holding an LTR visa. Also be carefull regarding remitted income in 2024 as it is only 99% sure that this income will not be taxed if you hold an LTR visa.

 

Godspeed to us all on this bumpy ride!

 

 

So right now I sold a bunch of stuff for the USD equivalent of many tens of millions of Baht a few weeks ago, that's a capital gain, a large one, it's all gain, the principle is separate on this one.

 

I'm out of the country for 6 months this year and will ensure I'm not resident anywhere by moving around a bit.

I would like to know about turning this pile of cash into savings for future usage though.

 

Does anyone know at what point something is considered savings after a period of a couple of years minimum of non residency - is it already and automatically considered savings due to it being realised during a non resident year when global taxation isn't happening?

 

I may remit between 5 and 10 million Baht either this year or next year, or some each year (also going to be non resident in 2025) and that will last me a number of years going forward.

 

The USD is not in a bank, it's on a major crypto exchange in the US at the moment but it's still USD, not USDT (a type of crypto) at the moment.

 

[Lorry]

55 minutes ago, ukrules said:

at what point something is considered savings after a period of a couple of years minimum of non residency - is it already and automatically considered savings due to it being realised during a non resident year when global taxation isn't happening?

It never "becomes savings." @chiang maihas explained this very well.

 

But it is income you gained in a year you were not a tax resident, no need to pay tax on it (first Q&As of TRD, 9.)

(For double security,  I would remit it in a year I am not a tax resident, either.

@sometimewoodworkerhas criticized this as unnecessary.  He is right, of course. I am just too anxious)

 

[chiang mai]

48 minutes ago, Lorry said:

It never "becomes savings." @chiang maihas explained this very well.

 

But it is income you gained in a year you were not a tax resident, no need to pay tax on it (first Q&As of TRD, 9.)

(For double security,  I would remit it in a year I am not a tax resident, either.

@sometimewoodworkerhas criticized this as unnecessary.  He is right, of course. I am just too anxious)

 

Wearing belts and braces won't hurt anyone for a while.

[chiang mai]

7 hours ago, TroubleandGrumpy said:

True - but in most DTAs there is a Clause that states all non-Thai tax residents must be subjected to the same tax rules and tax benefits as Thais (Non Discrimination).  I am not saying that Somchai in the local TRD Office will automatically accept that, but it is what is in the DTAs.   

The mutual fund taxation issue is not discriminatory. The fact that some products are taxed differently than others, doesn't discriminate against different races, nationalities or ethnic groups.

[chiang mai]

1 hour ago, Lorry said:

It never "becomes savings." @chiang maihas explained this very well.

 

But it is income you gained in a year you were not a tax resident, no need to pay tax on it (first Q&As of TRD, 9.)

(For double security,  I would remit it in a year I am not a tax resident, either.

@sometimewoodworkerhas criticized this as unnecessary.  He is right, of course. I am just too anxious)

 

If I explained it quite well I must re-read it because I admit to still being confused.  Thai people have savings, why not foreigners too? Some times people just save money, they're allowed to do this and trying to trace back to find out how they saved it is punitive,  pointless and the notion represents paranoia. "Ah yes, well, I saved that 20 quid from my salary ten years ago". No says the TRD, "if you saved it from salary income it's still income that must be taxed at our rate of tax"......it doesn't works that way at all.

 

The objective of the modern day tax inspector is more  about ensuring the funds were legally acquired and taxed somewhere, at the correc t rate. Their objective is NOT to try and tax every baht and satang they find down the back of the sofa and do forensic audits spanning decades, to do so erodes the concept of fairness and enhances the informal economy.

 

The standard definition of savings, from a Western tax perspective, is tax paid income after expenses. If I sell my house and pay all my expenses and tax on that sale, in my home country, I might be required to leave it as "savings" for a period of time, in order to overcome any perception of manipulation, before the funds can truly be regarded as savings. Statute of limitations on taxes  in the West is around 5, 7 or 10 years. Nobody imagines that 35 years from now, a Revenue inspector will still be asking questions about the two up two down you sold in Basingstoke nearly four decades earlier! 

[bkk6060]

10 hours ago, stat said:

Thai RD knows anyway via CRS the value of your holdings as the max account/portfolio value is transfered anually if you are a tax resident. What I meant was make sure that you do not have substantial cap gains in 2025 when it is unclear if unremitted income will be taxed even if you are holding an LTR visa. Also be carefull regarding remitted income in 2024 as it is only 99% sure that this income will not be taxed if you hold an LTR visa.

 

Godspeed to us all on this bumpy ride!

 

 

False!

 

USA is not part of CRS exchange. 

[chiang mai]

And......In the UK and the US, the respective Revenue Departaments never queried me about savings, savings was savings and that was understood. 

[motdaeng]

20 minutes ago, bkk6060 said:

USA is not part of CRS exchange. 

 

what ever that means and what the diffrent is to CRS ....

 

"Instead of joining the CRS, the US has been using a domestic law since 2015 also known as Foreign Account Tax Compliance Act (FATCA), which is aimed at obtaining information about the financial accounts of American citizens abroad."

[stat]

9 hours ago, bkk6060 said:

False!

 

USA is not part of CRS exchange. 

 

It is called FATCA for the US of A. So you are correct that USA is not part of CRS but nevertheless the US transmits data to other countries under FATCA rules which is very similiar to CRS. I am not aware if currently the US IRS  transmit data to Thailand. However the USA transmits currently a similiar dataset as CRS from the US to Germany for example.

https://www.bzst.de/DE/Privatpersonen/Selbstauskuenfte/FATCA/fatca_node.html

 

 

 

[stat]

15 hours ago, Lorry said:

It never "becomes savings." @chiang maihas explained this very well.

 

But it is income you gained in a year you were not a tax resident, no need to pay tax on it (first Q&As of TRD, 9.)

(For double security,  I would remit it in a year I am not a tax resident, either.

@sometimewoodworkerhas criticized this as unnecessary.  He is right, of course. I am just too anxious)

 

IMHO thailand will tax income i.e. capital gains, interest etc they will not tax the principial i.e. "savings". Of course they could demand such extensive documentation that you would run into trouble but IMHO the principal should be and will be tax free. So if you have 500K USD profit from your house sale in 2024 and are not a thai tax resident and now invest the money and transfer it in 2025 only the interest + cap gains etc should be taxable as your country of origin had the right to tax the profit in 2024.

 

 

[NoDisplayName]

22 hours ago, TroubleandGrumpy said:

True - but in most DTAs there is a Clause that states all non-Thai tax residents must be subjected to the same tax rules and tax benefits as Thais (Non Discrimination).  I am not saying that Somchai in the local TRD Office will automatically accept that, but it is what is in the DTAs.   

 

Same rules for taxpayers, different rules for registration country of mutual funds. 

 

Mutual funds registered in Thailand = no tax on capital gains.  Mutual funds registered in foreign country = tax on capital gains as ordinary income.

[bkk6060]

10 hours ago, motdaeng said:

 

what ever that means and what the diffrent is to CRS ....

 

"Instead of joining the CRS, the US has been using a domestic law since 2015 also known as Foreign Account Tax Compliance Act (FATCA), which is aimed at obtaining information about the financial accounts of American citizens abroad."

Like I said, USA is not part of CRS.

[Danderman123]

I asked this in the wrong topic, so I will ask here:

 

I know bar girls who live off remittances from abroad, some very substantial.

 

Why doesn't TRD monitor the bank transfers from abroad, and tax them? The bar girls use their Thai ID, which is their tax ID. It would be very simple for TRD to find them.

[Mason45]

I've lived in Thailand for 24 years, I support my wife, her daughter and the daughters boy friend, throw in my wifes invalid brother. I'm not complaining but aren't I already taxed enough given their daily needs. I'm far from rich but if this money grab ever eventuates then I know of several homeless people who will be victims of their government. In my case this will be the final straw,

[stat]

23 minutes ago, bkk6060 said:

Like I said, USA is not part of CRS.

Nevertheless thai RD will receive information about your US accounts to my understanding and that it what is concerning most members here.

[chiang mai]

25 minutes ago, Danderman123 said:

I asked this in the wrong topic, so I will ask here:

 

I know bar girls who live off remittances from abroad, some very substantial.

 

Why doesn't TRD monitor the bank transfers from abroad, and tax them? The bar girls use their Thai ID, which is their tax ID. It would be very simple for TRD to find them.

Maybe they do, how do you know they don't?

 

Maybe they pay tax on that money, how do you know they don't?

 

Maybe they declare it as a Gift, how do you know they don't?

[Lorry]

1 hour ago, Danderman123 said:

I asked this in the wrong topic, so I will ask here:

 

I know bar girls who live off remittances from abroad, some very substantial.

 

Why doesn't TRD monitor the bank transfers from abroad, and tax them? The bar girls use their Thai ID, which is their tax ID. It would be very simple for TRD to find them.

I have thought about this one, too.

Looks like TRD doesn't care

[Danderman123]

1 minute ago, Lorry said:

I have thought about this one, too.

I never heard of a girl building a house, paying tax for the required remittances.

I guess TRD doesn't care. 

 

We have people posting here about TRD monitoring credit card transactions, why would they ignore big remittances from abroad to Thai girls?

[chiang mai]

6 minutes ago, Danderman123 said:

We have people posting here about TRD monitoring credit card transactions, why would they ignore big remittances from abroad to Thai girls?

No we don't have that! What we have is people asking whether credit card transactions are assessable income and opinions regarding that being expressed, that's all. Nobody has ever said that TRD is monitoring credit card transactions, only that it is theoretically possible for them to do so.

[Lorry]

2 minutes ago, Danderman123 said:

We have people posting here about TRD monitoring credit card transactions, why would they ignore big remittances from abroad to Thai girls?

Most girls in Soi 6 let the customer sign a gift contract for every st.

Otherwise this would all be taxable income,  taxes on top of the payroll taxes they pay as bar employees. 

(Disclaimer: not serious)

[Mason45]

2 minutes ago, Danderman123 said:

We have people posting here about TRD monitoring credit card transactions, why would they ignore big remittances from abroad to Thai girls?

The reason bar girls are exempt for taxation purpose is there's no prostitution in Thailand. So the girls work in the bars as a community service for free.

[Danderman123]

4 minutes ago, chiang mai said:

No we don't have that! What we have is people asking whether credit card remittances are assessable income and opinions regarding that being expressed, that's all. Nobody has ever said that TRD is monitoring credit card transactions, only that it is theoretically possible for them to do so.

Actually, there were posters going on in another topic about how TRD was monitoring credit card transactions and ATM withdrawals.

 

BTW, I just asked a bar girl about whether she paid taxes on remittances to her.  Her response:

 

"What?

 

No body bay that".

[Lorry]

Girls in Bangkok with a regular day job, whose taxes are withheld automatically, who also have a sponsor (or several sponsors), should add the sponsorship money to their assessable income. 

Do they do that?

[Lorry]

1 minute ago, Danderman123 said:

there were posters going on in another topic about how TRD was monitoring credit card transactions and ATM withdrawals.

Some posters are not very smart.  No smart poster has ever said that.

They COULD monitor, yes

[Danderman123]

3 minutes ago, Lorry said:

Girls in Bangkok with a regular day job, who also have a sponsor (or several sponsors), should add the sponsorship money to their assessable income. 

Do they do that?

Typically, if a Thai has a formal job, their company will file a tax return for them - but the tax return only includes formal earnings, not sideline work, for which there is no reporting mechanism.

[Danderman123]

2 minutes ago, Lorry said:

Some posters are not very smart.  No smart poster has ever said that.

They COULD monitor, yes

My opinion is that there are accountant types here who are hyping this tax thing to drum up business.

[Lorry]

1 minute ago, Danderman123 said:

Typically, if a Thai has a formal job, their company will file a tax return for them - but the tax return only includes formal earnings, not sideline work, for which there is no reporting mechanism.

But they always charge me 35% for tax!

[Yumthai]

1 hour ago, chiang mai said:

Maybe they do, how do you know they don't?

 

Maybe they pay tax on that money, how do you know they don't?

 

Maybe they declare it as a Gift, how do you know they don't?

I hope you're being sarcastic, sometimes I'm wondering.

[treetops]

13 hours ago, motdaeng said:

what ever that means and what the diffrent is to CRS ....

 

"Instead of joining the CRS, the US has been using a domestic law since 2015 also known as Foreign Account Tax Compliance Act (FATCA), which is aimed at obtaining information about the financial accounts of American citizens abroad."

 

FATCA gives the USA info on accounts held overseas but does not give overseas governments info on USA holdings which CRS would.  However, as mentioned elsewhere, the USA is a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes which is effectively the same thing as the CRS, just using different mechanics the way I read it.