4M baht taxable?

[NoDisplayName]

3 minutes ago, sometimewoodworker said:

It is, in fact true, though if you did not crystallise the accounts as of 1/1/2024 you now have commingled funds this makes life complicated.

 

 

 

For that, we'll have to wait and see how those funds are treated when some unlucky foreigner gets audited!

[Jingthing]

9 minutes ago, sometimewoodworker said:

It is, in fact true, though if you did not crystallise the accounts as of 1/1/2024 you now have commingled funds this makes life complicated.

 

 

Not sure what you mean by crystalized.

But any amount that you withdrew from a retirement investment account (or all of it) and put into a bank account before December 31, 2024 would be exempt if remitted.

But I was obviously not talking about that.

[anrcaccount]

11 minutes ago, chiang mai said:

15 minutes ago, sometimewoodworker said:

The guidance is precisely as the OP “now ignored” as stated. No overseas inter-account transfer required, other than to the overseas Wise receiving account,. Irrespective of Tax residency of the person making the gift

 

Others disagree. YMMV TIT

That advice is wrong, either incomplete, misunderstood or plain and simply wrong and I don't care who gave it.

 

Again, do you have any source for your opinion? 

 

You dismiss paid professional advice to come up with your own interpretation? 

 

Would it make any difference, if you knew others had received exactly the same professional advice on gifting, from a different but equally valid source?

 

 

[sometimewoodworker]

1 minute ago, NoDisplayName said:

The overseas Wise account is in the OPs name, thus OP is remitting the funds and may be liable for tax.

 

The transfer goes OP -> Wise U.K. then U.K. Wise -> Wise Thailand then  Wise Thailand -> gift recipient’s account. Thus not touching the OP’s account, thus no tax liability for the OP. The OP has not remitted funds into their account/s

[Jingthing]

2 minutes ago, sometimewoodworker said:

The transfer goes OP -> Wise U.K. then U.K. Wise -> Wise Thailand then  Wise Thailand -> gift recipient’s account. Thus not touching the OP’s account, thus no tax liability for the OP. The OP has not remitted funds into their account/s

Perhaps.

But I wouldn't bet the house on the interpretation. 

[NoDisplayName]

2 minutes ago, sometimewoodworker said:

The transfer goes OP -> Wise U.K. then U.K. Wise -> Wise Thailand then  Wise Thailand -> gift recipient’s account. Thus not touching the OP’s account, thus no tax liability for the OP. The OP has not remitted funds into their account/s

 

Perhaps.

 

But if I send current year income via SWIFT it goes from my borkerage account to borkerage JPMorgan account as correspondent bank then to my BKK Bank account.  Presto-chango -- JPM and my borkerage remitted the funds, not me.

 

I'll believe it when someone passes an audit!

[anrcaccount]

22 minutes ago, Barney13 said:

So you've basically got involved here to say I know the answer, but I'm not telling? Waste of skin!

 

The poster has given you the answer, all you need to do is read it. With respect, if you're considering such drastic measures as leaving the country, just get your own professional advice.......

 

When you do, please share, as this poster has done, and I bet it'll back up the same answer.

 

 

 

 

[sometimewoodworker]

8 minutes ago, Jingthing said:

Not sure what you mean by crystalized.

But any amount that you withdrew from a retirement investment account (or all of it) and put into a bank account before December 31, 2024 would be exempt if remitted.

But I was obviously not talking about that.

Any amounts in any kind of account pre 1/1/2024 are non assessable (see p 162). There is nothing magical about bank accounts, they are just easy to define. 

 

The difficulty comes with proving the exact values as of 1/1/2024 this is why bed-and-breakfasting is advisable, if you didn’t/couldn’t B&B then you have commingled funds and a headache!

[anrcaccount]

9 minutes ago, sometimewoodworker said:

The transfer goes OP -> Wise U.K. then U.K. Wise -> Wise Thailand then  Wise Thailand -> gift recipient’s account. Thus not touching the OP’s account, thus no tax liability for the OP. The OP has not remitted funds into their account/s

 

Spot on, exactly correct.

 

For other readers who may doubt this, WISE in Thailand does not have the facility to have local Thai bank account numbers, as they do in many countries. You can use WISE to send to any Thai account but cannot create a Thai Bank account number with WISE. 

 

So any WISE transfer into Thailand is never capable of hitting an individuals "Thailand WISE account", because they do not exist. You cannot remit something to your 'Thailand WISE account'.  

 

WISE simply performs some magic to exchange the foreign currency to THB, and transfers it to the recipient Thai Bank account.

 

Anyway, it's a moot point, it could be a normal wire transfer from a foreign account to a Thai one of the recipient, same result. 

 

[sometimewoodworker]

10 minutes ago, NoDisplayName said:

But if I send current year income via SWIFT it goes from my borkerage account to borkerage JPMorgan account as correspondent bank then to my BKK Bank account.  Presto-chango -- JPM and my borkerage remitted the funds, not me.

Spelling please, though it is possibly an accurate description 🙂😉 

 

The money goes into your account, thus you receive it, thus you are liable 

[Barney13]

7 minutes ago, anrcaccount said:

 

The poster has given you the answer, all you need to do is read it. With respect, if you're considering such drastic measures as leaving the country, just get your own professional advice.......

 

When you do, please share, as this poster has done, and I bet it'll back up the same answer.

 

 

 

 

Calm down, he needed to just give a straight answer without the sillyness

[Jingthing]

6 minutes ago, sometimewoodworker said:

Any amounts in any kind of account pre 1/1/2024 are non assessable (see p 162). There is nothing magical about bank accounts, they are just easy to define. 

 

The difficulty comes with proving the exact values as of 1/1/2024 this is why bed-and-breakfasting is advisable, if you didn’t/couldn’t B&B then you have commingled funds and a headache!

My understanding is that you're just wrong. That income from such retirement accounts are classed the same as non excluded PENSIONS when remitted. In the case of the U.S. that would include IRAs and 401ks. I reckon some other countries may have similar very specialized very rules based retirement programs,  which same as the US would not be excluded unless specified in DTAs.

[NoDisplayName]

6 minutes ago, sometimewoodworker said:

Spelling please, though it is possibly an accurate description 🙂😉 

 

The money goes into your account, thus you receive it, thus you are liable 

 

Nah, it's JPM's savings, not my current income.

My current income comes from my account.

 

This deposit just showed up in my account from JPM....go ask them to show if it was THEIR assesssable income, and THEY as remitter can file a return and pay the tax.  I'm calling it a gift.

 

Majik!

 

P.S., yes the spelling was intended.  Speaking with a borkerage rep on the phone a couple nights ago, the rep was unaware of what a SWIFT was.

[chiang mai]

47 minutes ago, anrcaccount said:

 

Again, do you have any source for your opinion? 

 

You dismiss paid professional advice to come up with your own interpretation? 

 

Would it make any difference, if you knew others had received exactly the same professional advice on gifting, from a different but equally valid source?

 

 

It's not me that needs to provide proof that assessable income, when remitted, is subject to tax assessment, that is fact. Any proof that it isn't assessable to tax, when remitted to a third party, needs to come from those who believe that. The tax law in many countries is littered with proof that taxpayers cannot escape tax by simply remitting oncome to third parties, some explicit, some implicit, were that not the case, evasion on a massive scale would prevail. 

 

The paid professional opinion I have read  on these pages has been full of holes, albeit I have rarely said so at the time.........the paid professional advice on this subject is wrong, has been relayed incorrectly, misunderstood or whatever.

 

If you have no proof to substantiate your opinion and instead want to continue playing bat the ball back and forth, count me out of explaining the things over and over again. 

 

 

[sometimewoodworker]

24 minutes ago, NoDisplayName said:

 

Nah, it's JPM's savings, not my current income.

My current income comes from my account.

 

This deposit just showed up in my account from JPM....go ask them to show if it was THEIR assesssable income, and THEY as remitter can file a return and pay the tax.  I'm calling it a gift.

 

Majik!

 

P.S., yes the spelling was intended.  Speaking with a borkerage rep on the phone a couple nights ago, the rep was unaware of what a SWIFT was.

While an entertaining discussion there are a few problems.

 

The receiver of a remittance is potentially taxable, the remitter being outside Thailand has no liability.

 

Received advice is that gifts should be supported by a contract.

If you are able to get JPM to sign a gift contract (you can’t, they won’t) then you can consider it a gift.

 

If however it just magically appears in your account then it is not yours and you must make every effort to return it to sender, if you don’t then you are guilty of Conversion.

 

JPM probably considers the funds are held by them as a trustee but yours not theirs so are sending you your funds.

[NoDisplayName]

1 minute ago, sometimewoodworker said:

JPM probably considers the funds are held by them as a trustee but yours not theirs so are sending you your funds.

 

That sounds...................Wise.

[anrcaccount]

18 minutes ago, chiang mai said:

It's not me that needs to provide proof that assessable income, when remitted, is subject to tax assessment, that is fact. Any proof that it isn't assessable to tax, when remitted to a third party, needs to come from those who believe that. The tax law in many countries is littered with proof that taxpayers cannot escape tax by simply remitting oncome to third parties, some explicit, some implicit, were that not the case, evasion on a massive scale would prevail. 

 

The paid professional opinion I have read  on these pages has been full of holes, albeit I have rarely said so at the time.........the paid professional advice on this subject is wrong, has been relayed incorrectly, misunderstood or whatever.

 

If you have no proof to substantiate your opinion and instead want to continue playing bat the ball back and forth, count me out of explaining the things over and over again. 

 

 

Not sure what more proof you need. Members have shared professional paid advice.

 

The gifter isn't liable for Thai assessment or tax, the source of the funds (income or otherwise) are irrelevant. You're misunderstanding the nature of a remittance. 

 

Let's try to get you to think about it this way - can the TRD assess and tax a single inbound foreign funds transfer, twice, for two different parties?  No? That's what you're suggesting occurs. 

 

The funds are already subject to TRD tax assessment, but for the recipient only, and the tax assessment is, that those funds are a tax exempt gift.

It's not tax evasion, it's a gift, to his wife. 

[chiang mai]

5 minutes ago, anrcaccount said:

Not sure what more proof you need. Members have shared professional paid advice.

 

The gifter isn't liable for Thai assessment or tax, the source of the funds (income or otherwise) are irrelevant. You're misunderstanding the nature of a remittance. 

 

Let's try to get you to think about it this way - can the TRD assess and tax a single inbound foreign funds transfer, twice, for two different parties?  No? That's what you're suggesting occurs. 

 

The funds are already subject to TRD tax assessment, but for the recipient only, and the tax assessment is, that those funds are a tax exempt gift.

It's not tax evasion, it's a gift, to his wife. 

Under 20 mill. it is untaxed income, income of the gifter, what is so difficult for you to understand!

 

We're done here, go argue with somebody else.

[NoDisplayName]

18 minutes ago, anrcaccount said:

You're misunderstanding the nature of a remittance. 

 

The remittance to the wife doesn't become property of the wife until it is deposited in the wife's account.  At that point, gift tax rules apply to the beneficiary.

 

Until then, it's yours.  As @sometimewoodworker postulates, the financial entity is acting on your behalf as trustee, transferring YOUR funds into Thailand. 

 

If you remit assessable funds, you are liable for tax.  When you gift taxed remitted funds, the gift transferred domestically is not taxable to either party.

 

I'm guessing this is how some of the great houses move their wealth around freely.  Gifts transferred offshore are still gifts, but avoid tax implications for remitting current income.

[Yumthai]

1 hour ago, NoDisplayName said:

My wife called the 1161 TRD helpline (NOT our local TRD office) last week and confirmed with them that a gift received outside of Thailand is treated as a gift when the recipient remits into Thailand.

So, instead of wiring directly from abroad to the receiver's Thai account (what would trigger tax for gifter as you imply, I disagree), by just having an extra step transferring money to a receiver's offshore account the gifter can legally avoid (or potentially evade) tax. Ludicrous isn't it?

 

Remittance taxation coupled with generous gifting rules is as inconsistent as unenforceable.

 

[NoDisplayName]

20 minutes ago, Yumthai said:

So, instead of wiring directly from abroad to the receiver's Thai account (what would trigger tax for gifter as you imply, I disagree), by just having an extra step transferring money to a receiver's offshore account the gifter can legally avoid (or potentially evade) tax. Ludicrous isn't it?

 

Remittance taxation coupled with generous gifting rules is as inconsistent as unenforceable.

 

 

That's the way I understand how the system works at present.

Rich folks write the rules to protect rich folks' wealth.

It appears to work in our favor in this instance.

 

I don't know whether or how TRD tracks remittances and matches them to tax numbers.  I don't know what would happen if a Thai reporting "no salary" on their joint tax return receives 5 million baht in their bank account.  I don't want to be the first to find out.

[Yumthai]

2 minutes ago, NoDisplayName said:

That's the way I understand how the system works at present.

Rich folks write the rules to protect rich folks' wealth.

It appears to work in our favor in this instance.

Needless to be rich to hold an offshore bank account.

For instance, you could just spend a few days in Cambodia to open a (non-CRS) bank account for your wife and use it as intermediary account for gifting. That will just involve few extra transfer fees.

[ChaiyaTH]

2 hours ago, NoDisplayName said:

 

Perhaps.

 

But if I send current year income via SWIFT it goes from my borkerage account to borkerage JPMorgan account as correspondent bank then to my BKK Bank account.  Presto-chango -- JPM and my borkerage remitted the funds, not me.

 

I'll believe it when someone passes an audit!

Is no perhaps about this at all, you just have no idea at all how things work clearly. Wether someone is liable for tax is one subject but the only person being liable for it, is the end receiver, not the sender.

So the fact that you send it a brokerage send it or jesus send it, doesn't matter at all. Unless you of course send it to yourself but in that case it is not gifting nor paying/sending to a third party (person). Also if a broker sends money, they still do that in your name legally / tax wise, even it comes from their bank.

 

If you instead want to talk about someone who before giftig it to their wife, still had to pay profit taxes in the origin country where it was made, or some personal income taxes over there, that is also a complete different subject as well not related to Thailand itself.

[ChaiyaTH]

4 hours ago, Jingthing said:

My understanding is that would be irrelevant IF the wife is actually paying for living expenses for both. If she wants to pay the rent, make car payments, pay for dinner, why not.

Exact what I do since recent times, just as a in between and let's see what really will happen. She gets a good gift and that covers now her allowance, my son, school costs, rent, utilities. I just keep sending a small part for myself, worst case I'm good to pay over that.

Otherwise spending at a minimum, no purchases, no extra money into Thailand etc etc. Had a buffet setup prior to 2024 starting as well.

[NoDisplayName]

25 minutes ago, ChaiyaTH said:

you just have no idea at all how things work clearly

 

Twas reductio ad absurdum.

 

The tax consequences for sending via Wise, using various Wise accounts, "should" be the same as if sending via Swift, using various intermediary/correspondent accounts, if we're declaring the assessable money we remit into Thailand.

 

We have opinions, but nothing definitive, on whether gifts sent directly to a wife's account would be potentially taxable to the giver.   Thai law is specific only on the tax liability of the receiver.  Tax implications of how it's received is a gray area, conducive to interpretation.

[NoDisplayName]

27 minutes ago, Yumthai said:

Needless to be rich to hold an offshore bank account.

For instance, you could just spend a few days in Cambodia to open a (non-CRS) bank account for your wife and use it as intermediary account for gifting. That will just involve few extra transfer fees.

 

That wasn't the point.

 

You don't have to be "rich" to benefit from tax-free capital gains, but that particular exemption is especially beneficial to those with large amounts of capital to start with.

 

You don't have to be "rich" to benefit from seasoning your income for a year overseas before bringing it in.  Those earning millions annually overseas will benefit biglyer than workers picking strawberries in Sweden to support their family in Thailand.

 

These appear to be special dispensations for people with friends in upper management that just happen to benefit the little people.

[chiang mai]

7 hours ago, NoDisplayName said:

 

The remittance to the wife doesn't become property of the wife until it is deposited in the wife's account.  At that point, gift tax rules apply to the beneficiary.

 

Until then, it's yours.  As @sometimewoodworker postulates, the financial entity is acting on your behalf as trustee, transferring YOUR funds into Thailand. 

 

If you remit assessable funds, you are liable for tax.  When you gift taxed remitted funds, the gift transferred domestically is not taxable to either party.

 

I'm guessing this is how some of the great houses move their wealth around freely.  Gifts transferred offshore are still gifts, but avoid tax implications for remitting current income.

 

7 hours ago, ChaiyaTH said:

Is no perhaps about this at all, you just have no idea at all how things work clearly. Wether someone is liable for tax is one subject but the only person being liable for it, is the end receiver, not the sender.

So the fact that you send it a brokerage send it or jesus send it, doesn't matter at all. Unless you of course send it to yourself but in that case it is not gifting nor paying/sending to a third party (person). Also if a broker sends money, they still do that in your name legally / tax wise, even it comes from their bank.

 

If you instead want to talk about someone who before giftig it to their wife, still had to pay profit taxes in the origin country where it was made, or some personal income taxes over there, that is also a complete different subject as well not related to Thailand itself.

 

NDN is entirely correct on this point. The remitted funds remain the property of the remitter/gifter, until they are deposited into the giftee's account, the giftee HAS to take possession before the gift is considered to be made. If the giftee's account is in Thailand and the remitter/gifter has remitted assessable income to that account, the gifter remains liable for tax on that remitted income, no matter that it is owned for 5 nanoseconds or five years. The assessability to tax by the receiver of the Gift, IS A SEPARATE ISSUE that is covered quite clearly by TRD Gift Tax rules.

 

Were the Gift made outside Thailand, the tax status of the giver of the gift would not be an issue. If the receiver of the gift were to remit the gifted funds from overseas, to their own account, the remittance might initially come under scrutiny for assessment, but could be avoided and explained by declaring it as a gift.

 

There is no issue with the Thai tax implications of receiving a gift, the Gift Tax rules explain the potential liabilities and benefits to the giftee quite well. The only issue is with the tax status of funds that are remitted and of the person who remits them. If the remitted funds are not assessable, there is no issue. If however the funds are assessable, the concept that transferring them to another person, also transfers substantial tax liabilities on those funds, which are then negated by Gift Tax rules, is alien. The concept is such a massive loop hole that its potential for abuse is sufficient to negate the Thai tax liabilities of any Thai tax resident with overseas income. Thai tax residents owning rental property overseas would no longer need to file Thai tax returns twice a year to declare rental income and pay Thai stepped tax rates on that income. All they would have to do is to remit the rental income to another person and claim it was a gift. Capital Gains realised overseas could be remitted to third parties at the rate of 10 or 20 million baht per year, based on their relationship and no Thai tax liability would arise, because it was claimed to be a gift. Freelance untaxed income, earned overseas, could be remitted to another person in Thailand and the income would remain untaxed, because it was a Gift............none of those things are a credible or viable scenario.

[chiang mai]

A useful reminder of what the Gift Tax law is and why:

 

The Gift Tax Law in Thailand encompasses various regulations enacted under the Thai Revenue Code (the “TRC”) within the provisions governing Personal Income Tax, and was amended in 2015 (B.E. 2558) to address the issue of individuals attempting to evade estate tax obligations by transferring their wealth before they pass away. 

 

According to such regulations, receiving assets from another person is classified as taxable income under Section 40 (8) of the TRC. As such, individuals who receive assets from another person must declare their taxable income in their personal income tax return. This requirement also extends to non-Thai residents who stay in Thailand for more than 180 days.

 

https://www.nishimura.com/en/knowledge/publications/understanding-the-regulations-and-Implications-of-thailands-gift-tax-law

[sometimewoodworker]

9 hours ago, NoDisplayName said:

The remittance to the wife doesn't become property of the wife until it is deposited in the wife's account.  At that point, gift tax rules apply to the beneficiary.

I believe that is a correct statement.

9 hours ago, NoDisplayName said:

If you remit assessable funds, you are liable for tax.

Here we need to understand the definition and exactly how the remittance system is interpreted.

 

It is my belief that funds in transit through financial institutions such as banks (most travel this way) into Thailand are not considered remittances until they arrive at a persons account. This would make sense as otherwise it is virtually impossible to define. There are some who have a rabid belief that this is not the case.

 

If I am correct then since the funds are being transferred from overseas (via Wise but SWIFT would also work) into the account of the recipient and are specifically a gift, the recipient has no tax liability (see gift tax rules) the sender has no liability as they have not received a remittance.

 

So at exactly what point does an overseas remittance become a remittance?

I contend that it must be at the point of receiving into a person’s (or companies) account in Thailand.

 

We have some posters who believe that the funds in transit through the financial system have tax liabilities during the transit not only at the point of receipt.

 

There are proposed law changes that will stop the Thai tax system from being a remittance one but until, or if, this ever happens it is my belief that I have a correct understanding and an overseas transfer as a gift is a legitimate legal tax minimisation strategy and it is non assessable for anyone in Thailand, subject, of course, to gift tax limits.

[chiang mai]

One more thing:

 

If Gift Tax does indeed transfer the tax liability of assessable gifted income (subsequently negated by Gift Tax rules), why is gifted income not regarded/listed as exempt income on the tax forms or in the TRD Code....a rhetorical question of course!