Clarify 40,000 Baht Per Month Income For Marriage Extension

[Nickthegreek]

As my marriage day rapidly approaches I am trying to get my affairs in order..

I would just like to make sure this is correct, as I have read many threads about this income per month.

I am from the UK and currently have two businesses,one is a LTD company and the other is in my wifes name.

Immigration tell me that the joint income to convert my B visa to an O visa is 40,000 baht per month.

I want to clarify that this is before deductions,ie tax,rent etc..or is that a nett figure? once all that has been paid.. and I will then be able to get an extension of stay as per my current work permit allows..I will also no loner be working..!!

Many thanks in advance

[sweetchariot]

It is a gross or taxable income (or net profit). Rent for your business obviously needs to come out before you arrive at this figure, but tax and personal rents are irrelevant.

[Phil Conners]

I'm quite sure it's your (personal) income, not your company's turnover, that needs to be 40K. Whether it's your income before or after tax would be interesting to know...

Edited January 26, 2008 by Phil Conners

[CaptHaddock]

I don't understand the 40k baht per month requirement. If I were to settle in Thailand with my Thai wife, my retirement income from investments would exceed the 40k baht per month requirement. Would that income then be taxed by Thailand? After a while, my wife would also work and would probably earn more than the 40k baht per month. I expect that her income would certainly be taxed, but my retirement income then cease being taxed?

[lopburi3]

Only income brought into Thailand in the year earned is normally taxed for a foreigner - and in some cases there are also tax treaties. So most would not be paying tax here. What you need to do is meet the requirements of your Embassy is provide a letter of income. Your wife most surly will be subject to tax.

[Nickthegreek]

Sorry for the late response,I have been busy.

I am not sure I have explained myself properly.

I intend to switch both of the businesses into my wifes name and then she will pay tax and I will not work.

This is what immigration tell me we can do and then pay tax in my wifes name..

I hope that makesd it clearer?

[lopburi3]

As long as your wife has a tax record of payment on personal income of 40k or more per month you should be good.

[Nickthegreek]

As long as your wife has a tax record of payment on personal income of 40k or more per month you should be good.

Hi Lopburi,

This is whats confusing me.immigration say that business needs to turn over 40,000 per month and after deductions she can pay tax and I can still have the visa extension,based on marrige and that my wife is supporting us both, its just seems a little low to me.

Or are immigration saying that a business is equivalent to a personal income and as long as it produces in excess of 40,000 baht per month,then OK?

Edited February 16, 2008 by Nickthegreek

[simon43]

If your wife's business is a sole-trader, then the company profit is effectively her own personal income and taxable as such. My wife owns our hotel as a sole-trader, and therefore the business profit is treated as her own personal salary and tax paid accordingly. But this tax is payable on a 6-monthly basis, not a monthly basis.

Simon

[Nickthegreek]

If your wife's business is a sole-trader, then the company profit is effectively her own personal income and taxable as such. My wife owns our hotel as a sole-trader, and therefore the business profit is treated as her own personal salary and tax paid accordingly. But this tax is payable on a 6-monthly basis, not a monthly basis.

Simon

Hi Simon,

That clears that the imcome issue..Simon can you tell me if the figure is net of rent fuel and light etc? or this is a gross figure before these,it may not be an issue for you with a hotel,but would help if you know,one of the posters here says it must be nett,immigration have told me otherwise..

Nick

[torrenova]

If you bring in 40k from outside then that is fine. If someone works and earns 40k then logic would dictate that it is 40k earnings or salary but as it appears to be tax receipts which are the key documents, 40k income would not be tax paid on 40k after deductions. I do not think we have had that clarified 100% here as yet.

[Nickthegreek]

If you bring in 40k from outside then that is fine. If someone works and earns 40k then logic would dictate that it is 40k earnings or salary but as it appears to be tax receipts which are the key documents, 40k income would not be tax paid on 40k after deductions. I do not think we have had that clarified 100% here as yet.

Hi Torrenova,

Well I guess then its as clear as mud..Thanks for your input,I will go with immigrations suggestions and hope that they have it right..

Regards

Nick

[jstumbo]

Hi Torrenova,

Well I guess then its as clear as mud..Thanks for your input,I will go with immigrations suggestions and hope that they have it right..

Regards

Nick

I think basically you have to look at it like this. If you certify through your embassy that you have 40K per month income then that is OK. Or you can have your wife getting a salary from a Thai company, and that gross income that she receives as a salary needs to be over 40K. If it is a sole proprietor type of business that she is running, then the business has expences, and these need to be deducted from the sales. Then the profit left over needs to be more than 40K because this is essentially your wifes salary. It would not be the amount before rent and everything is taken out because that all has to do with the business, and they are interested in personal income, which is what would be left over at the end.

[kriswillems]

As long as your wife has a tax record of payment on personal income of 40k or more per month you should be good.

Hi Lopburi,

This is whats confusing me.immigration say that business needs to turn over 40,000 per month and after deductions she can pay tax and I can still have the visa extension,based on marrige and that my wife is supporting us both, its just seems a little low to me.

Or are immigration saying that a business is equivalent to a personal income and as long as it produces in excess of 40,000 baht per month,then OK?

If you call to BKK immigration, they will tell you the biggest number on your yearly or half-yearly tax declaration should be >40K month (I called). It's up to you to believe them or not.

[Nickthegreek]

As long as your wife has a tax record of payment on personal income of 40k or more per month you should be good.

Hi Lopburi,

This is whats confusing me.immigration say that business needs to turn over 40,000 per month and after deductions she can pay tax and I can still have the visa extension,based on marrige and that my wife is supporting us both, its just seems a little low to me.

Or are immigration saying that a business is equivalent to a personal income and as long as it produces in excess of 40,000 baht per month,then OK?

If you call to BKK immigration, they will tell you the biggest number on your yearly or half-yearly tax declaration should be >40K month (I called). It's up to you to believe them or not.

Thanks,

Immigration in Ayutthaya told me the same thing,I guess it must be right..!!!

I will go with and hope that its all ok..

Thanks

[torrenova]

I think basically you have to look at it like this. If you certify through your embassy that you have 40K per month income then that is OK. Or you can have your wife getting a salary from a Thai company, and that gross income that she receives as a salary needs to be over 40K. If it is a sole proprietor type of business that she is running, then the business has expences, and these need to be deducted from the sales. Then the profit left over needs to be more than 40K because this is essentially your wifes salary. It would not be the amount before rent and everything is taken out because that all has to do with the business, and they are interested in personal income, which is what would be left over at the end.

A person receiving a salary from a business would be able to claim the statutory deductions which would mean their taxable salary was way below 40k per month.

A sole proprietor can claim, according to the business, up to 85% of turnover as expenses. Now what is left would also be subject to the personal deductions as you rightly say, the 15% left would be the "salary". However, you run into VAT issues and the like as well as business expenses which makes it cheaper to earn the 40k unless you fiddle the numbers and let's face it, to earn 40k per month at 85% deductions you need (40,000*12)/(1-0.85) = 3,200,000. At 75% you need 1.92m tunrover.

As I stated before, my information is that the way to go about it is to go to immigration and ask them what they want (from the amphur). Then go to the amphur and ask what they need to give you what immigration want. Make the arrangement and go back to immigration to sort it out.

The problem is that in order to get the paperwork, it is understood, but not clarified, that you have to pay for a ficticious previous 12 months. There appears no solution to the couple who marry now and earn 40k. They seem to be in limbo.

I would like someone to have a go at immigration and the amphur to clarify what a married couple who now with to avail themselves of ths provision are supposed to do if they did not earn 40k last year.

[kriswillems]

As I stated before, my information is that the way to go about it is to go to immigration and ask them what they want (from the amphur). Then go to the amphur and ask what they need to give you what immigration want. Make the arrangement and go back to immigration to sort it out.

Agree 100%

The problem is that in order to get the paperwork, it is understood, but not clarified, that you have to pay for a fictitious previous 12 months. There appears no solution to the couple who marry now and earn 40k. They seem to be in limbo.

If think they would accept the income before marriage too. Paying tax on a fictitious income just to obtain a visa looks illegal to me. Further on you also need business registration papers and in case of fraud (fake business) you might get a huge problem.

I would like someone to have a go at immigration and the amphur to clarify what a married couple who now with to avail themselves of ths provision are supposed to do if they did not earn 40k last year.

If they did not have 40K and the foreign husband would be younger than 50, they are in big problems. The immigration rules for young married couples are much too strict in my opinion.

This is what the foreign husband would need to do with the tight family budget:

- travel to a Thai embassy every 3 months and get a non-immigrant-O visa (single entry)

OR

- travel to a Thai embassy in some specific countries, or in his home country and HOPE to get a multiple entry non-immigrant-O visa. He would need to do this once every 15 months. And besides that he would need to go to the border every 3 months.

I think everyone can see this is a serious attack on the rather small family budget and on the happiness of the young couple.

[CosmicSurfer]

You might not believe this .. BUT.. It's true.

My Wife is an "Accounting Department Manager"

We also have our own company, in her name.

The rule for Immigration is 40,000 Baht per month (average) on Yearly Taxable "Income".

A "Sole-Proprietorship" business is included as part of your wife's income, on all Profit after Business Taxes..

Calculation of Business Taxes have 2 options -

Real documented Expenses... OR

Deduct a Set 80% from your Business Income and Pay tax on the 20% balance.

(This is then combined with any additional Income your Wife has.)

The second path is what we have chosen...

Example.. If her Company has income of 1 Million Baht, the First 800,000 is Claimed as Expenses automatically, leaving a Taxable Company Income of 200,000 baht... This is added to her Salary from her job of 300,000 baht = Yearly Taxable income of 500,000

1,000,000 - Actual Business Income

-800,000 - 80% Allowed Expense Deduction

200,000 - Business income after 80% Set Expense Deduction

300,000 - Salary Income from Full Time job

500,000 - Yearly Taxable Income

-30,000 - Wife's Standard Deductions

-30,000 - Husband's Standard Deduction

-100,000 - Standard Income deduction

340,000 - Pay Tax on this portion at Standard increasing rates depending on Total Income amount (10% + 20% +37%)

The unbelievable part, under this scenario is that if out of your 1 Million Baht Business Income your actual expenses are LESS than 800,000 Baht, then this surplus money money is NOT TAXED at all. (Claimed 800K.. actual Expenses 500K = 300K not taxed.. Merry Xmas)

It's yours... ENJOY.

Isn't Thailand a wonderful country !!!!!!

NOW.. back to the Immigration Issue... The Number used is the Yearly Taxable Income

(Based on your Wife's Yearly Income Tax Filing (Form Pho.Ngo.Dor 90)

In my Example above this is 500,000 Bht.

500,000/ 12 Months = 41,667 Monthly Income.

To get your Yearly extension, you need to bring the TAX PAID Pho.Ngo.Dor 90 to Immigration.

This means you can only apply for your after February when you pay the tax and receive back the stamped form.

The longer you can hold out the better, (doing 3 month Border Runs) The yearly tax form is for the last Tax years income (2007)... But Valid all the Filing Year (2008)... so if you only apply for the extension in October 2008, the extension will be good for a calendar year until October 2009.

Clear

That's it.. Done

CS

Edited February 24, 2008 by CosmicSurfer

[torrenova]

But surely the 200k left from the 80% deduction is liable first to corporation tax and then distributable as a dividend only ?

If I read you right, you are saying that a sole proprietor takes the effective dividend income as salary before paying any corporate taxes ?

It does not avoid tax.

I agree with your 100k+30+30+(15k for any kids up to 3)+loans+insurance+investments etc. as deductibles.

[Maestro]

But surely the 200k left from the 80% deduction is liable first to corporation tax and then distributable as a dividend only ?

Not in the case of a sole proprietorship. All taxable profit is added to the proprietor’s personal income for the purpose of calculating his/her personal taxable income.

--

Maestro

[CosmicSurfer]

But surely the 200k left from the 80% deduction is liable first to corporation tax and then distributable as a dividend only ?

Not in the case of a sole proprietorship. All taxable profit is added to the proprietor’s personal income for the purpose of calculating his/her personal taxable income.

--

Maestro

Right...

A Sole-Proprietorship is NOT a corporation, it's just a 'Registered" Company, and doesn't carry any of the Protections of a corporation.

This provision is an attempt of the Thai government to stimulate small business start-up and growth.. also a way to collect some tax, rather than none, from all the small shop keepers and stall owners.

But it works for me too.. Or rather my wife.

CS

[rainman]

I did my renewal last year based on 40k+ foreign income from my overseas company, they never asked for any tax receipts.

[rainman]

And even if you were asked for tax receipts in Thailand for foreign income, couldn't you just say that you save your foreign income in a bank account in your home country and send to Thailand whatever you need that month for living? I don't think Immigration states anywhere that you need to send your entire foreign income to Thailand every month.

[CosmicSurfer]

I did my renewal last year based on 40k+ foreign income from my overseas company, they never asked for any tax receipts.

The Original Post and theme of this Thread is 40K income Earned IN THAILAND, by your Thai spouse (or combined You and your souse).

This is taxable.

Foreign income earned by you is another ball of wax.. different rules apply.

CS

[rainman]

Ah, excuse me. I'm tired

[meatgrowler]

I did my renewal last year based on 40k+ foreign income from my overseas company, they never asked for any tax receipts.

The Original Post and theme of this Thread is 40K income Earned IN THAILAND, by your Thai spouse (or combined You and your souse).

This is taxable.

Foreign income earned by you is another ball of wax.. different rules apply.

CS

As apoint of interest,does anyone know what the british embassy in bangkok require when it comes to proof of 40k baht monthly from england?....if i was receiving £800 per month from the rental of a flat,would this be enough?...how many months bank statements would they require?...could this statements be printed form my online banking whilst i was staying thailand for the first 12/15 months of my first non o visa?.....thank all

[rainman]

I don't think the Embassy wants to see anything. They will simply notarize your word. They may also write, like my Embassy, that they are not responsible for the statement you provide them with and won't guarantee the contents. Thai Immigration seems to accept that. They did at least for me last year.