Thailand as home, roaming the world tax free - the pipe dream

[KhunHeineken]

6 hours ago, ronnie50 said:

I think this is one of the main points, isn't it? For single guys, retired or receiving considerable earning on investments, pensions or whatever, it's a much simpler case. They can go wherever and whenever they want, provided they have the funds. But for those of us married and supporting a family here, the math doesn't work out (e.g. moving your whole family elsewhere for 6 months). Also many of us, like you, would not want the alternative of leaving them behind for 6 months every year - nor could most even afford to do that.

I agree.

 

For some that have no choice but to stay and pay, this tax could impact their lifestyle, and that of their family.  Of course, depending on their income stream, but the bigger the income stream, the more tax to pay, and in my opinion, it could get to a point that it's just a rip off. 

[oldcpu]

18 minutes ago, KhunHeineken said:

Sure, but I was speaking in general, and not to your specific circumstances. 

 

Many seem to think their country's DTA with Thailand means there is no tax to pay in Thailand. 

 

I posted this clip in another forum a while ago.  I'll post it here also.  He explains it quite well. 

 

He calls it "The double taxation treaty myth."

 

The video link did not work for me. <<< EDIT - the link works now!!

 

I do agree - a DTA should likely be checked by each expat in Thailand who brings current year income into Thailand, to see if the DTA between Thailand and the source country of their income, says anything about where one is liable for tax. 

 

Such a DTA may be helpful - or may not be helpful - dependent on the country and type of income.

 

[oldcpu]

47 minutes ago, KhunHeineken said:

I posted this clip in another forum a while ago.  I'll post it here also.  He explains it quite well. 

 

He calls it "The double taxation treaty myth."

 

 

Its (IMHO) a good video - although I believe the absolute main take away from it needs to be one should check the DTA of their income source country, with Thailand.

 

In the video he states, one's country of residence typically has the 1st taxing right - which he also notes countrys typically tax global income.   Most of his video is associated with this generalization. 

 

It is important to note thou, at present, Thailand does not tax global income if money left outside of Thailand. Yes that could change , but that is important at present.  That does not mean to say the video is not good, but its important not to get carried away when watching the video.  

 

Why? Currently, to the best of my knowledge, Thailand (given paw.161) will only tax income and savings brought into Thailand if that income was earned AFTER 31-Dec-2023, ...  and in the case of savings only tax that savings (when brought into Thailand) if the savings was saved AFTER 31-Dec-2023.  But the savings/income MUST be brought into Thailand to be assessable for Thai tax (at present time).

 

if the foreign income is not brought into Thailand, then there is no Thai tax on such.

 

Further, if one can show that the income/savings was earned (or saved) BEFORE 1-Jan-2024, then when that (old) income/savings is brought into Thailand, it is not taxable by Thailand.  It may not even be assessable (but i don't know re:assessable - where assessable vs exempt tax may be important if it comes to filing a Thai tax return).

 

Also - I want to go back and point out what I noted that one should check the DTA (with Thailand) of the country where their foreign income is sourced.  Because despite what he generalized, it is possible that one of the countries has exclusive taxation rights for certain income, or its possible one of the countries has given up its taxation rights for certain income.  Those details are important, generalizations here are VERY BAD, and one should, ... I repeat should ... check the relevant DTA with Thailand.

 

So in summary - yes that video is interesting - but the BIG take away is to check one's DTA, because the possibilities that he noted in that video may indeed NOT be the case, dependent on one's income type/source, and one's source income country DTA with Thailand.

 

Also - I am NO tax expert - so any reading this - you are likely better served to research this yourselves, as this is my opinion based on what I have read - and I could be wrong.

[ronnie50]

25 minutes ago, oldcpu said:

 

...dependent on one's income type/source, and one's source income country DTA with Thailand.

 

My own sense - DTAs aside - is that this will 'primarily' boil down to each country's definition of a 'tax resident'. For example, if you are a UK citizen, but not resident there, the HMRC will not tax your non-UK foreign income (except government pensions at source). The UK seems pretty straightforward on that (this assumes one has no other investments in the UK like rental properties, etc.). Some other countries are a bit more complicated in 'determening' one's residency status. Canada has a non-res compliance form twice as long as your arm, and looks into every corner of a normally non-resident's life to see if it can claw something back  - it has terms like 'Deemed Resident' and 'Factual Resident' largely based on any property you might still have there - even a storage locker - and even what relatives you have there, and your relationship with them. Even having a bank account or credit card there - but nothing else - could be a 'determing factor' (though not likely a major one). So the noose is tightening worldwide. I'm sure there are other countries making it harder and harder to claim non-residency for tax purposes.  

[KhunHeineken]

23 minutes ago, ronnie50 said:

So the noose is tightening worldwide.

I agree, and whilst many think it's just for the big fish, the laws do not, and can not discriminate, so the little fish are caught in the same net also.

 

24 minutes ago, ronnie50 said:

I'm sure there are other countries making it harder and harder to claim non-residency for tax purposes.  

True.  There are also countries making it harder and harder to still claim to be a resident for tax purposes, to availe themselves of tax free thresholds and exemptions. 

 

It's been the source of much debate in the Australia forum where the government has proposed changes to tax residency laws that are similar to Thailand, and that is 183 days inside Australia, you are a tax resident, but outside of Australia for 183 days, you will be deemed a non tax resident, and the tax rates on non residents starts at 30% from $0 to $135,000, no tax free threshold, and no exemptions.  

 

Pensions are deemed an income, pensions are taxable, there is no exemption for the aged pension, there is no means testing in the proposed changes, and the aged pension is not covered by the DTA, and the Aussie expat is in Thailand full time, so over 183 days.  Put all that together and it doesn't look good.  

 

Time will tell how that unfolds, but I completely agree, the noose is tightening, even for the little fish, whether that be resident or non resident for tax purposes.