Establishing Tax Residence In Thailand

[Khun Jean]

I have to correct my statement. It is not 'Domiciled' in HK but it has it's business address in Hong Kong.

For people thinking i don't pay tax, you are incorrect.

I pay income tax in the country i live in. Last year it was 'Austria', before that in the Netherlands and now in Thailand.

Corporate tax is where the savings are, and also not the need to incorpoate a business, not to mention about accounting, meetings etc.. when i decide to move and live somewhere else for a while. I get a salary and that is taxed. Thailand is cheaper than the other countries.

Next year i probably end up in Australia or New Zealand for the kids schooling. At that moment i still get a salary without having to start a business but of course this salary will be taxed in those countries.

You 'could' do it differently and pay no tax at all. I just feel that when i live in a country i should at least pay my part.

[cclub75]

some continental european EU states (and of course Thailand) do not accept BVI, Panama, Nauru or Brunei (the list is much longer) corporations as owners of real estate. any other financial assets = no problems at all.

Interesting. Could you provide some links about this issue, especially EU states ? I've never heard that.

[TCA]

Nope. For the Dutch it is important where you live.

My solution, i am a nomad too, is to have a BVI company domiciled in Hong Kong.

Problem solved.

Khun Jean or anyone else - could you please expand a bit on the advantages and costs of a BVI company and how and why you use it? I am in a similar position to the OP on a non imm O visa (employment prohibited) but have investment income (non EU currently paid to an Isle of Man account) which I'd like to shelter from UK tax, which I currently pay by reason of being UK domiciled ,resident and ordinarily resident for all my life. I moved to Thailand last year. Any tips appreciated. Thanks.

you open a BVI corporation via a provider (there are zillions of offers) through the internet. it takes about two weeks to get all necessary documents which enable you to open a corporate account. the income of the corporation which holds your assets is not taxed by EU, UK or any other country. however you are liable to pay income tax on your income according to the tax laws of the country you reside. presently it looks like that you don't pay any income tax in Thailand especially if you are "residing" as a retiree.

cost of establishing a BVI corporation is about 800-1,200 us-dollars (depending on required documents), running cost is 600-800 us-dollars per annum.

caveat: before you take any steps let the bank where you would like to open a corporate account give you in writing exactly what documents are required. different banks have different requirements. it will cost you an arm and a leg if you ask for additional documents which were not included in the original package!

another caveat is that banks where you would like to establish a corporate account will try to sell you their own highly overpriced setups and running cost.

p.s. Khun Jeans statement "BVI corporation domiciled in Hong Kong" is incorrect. A BVI corporation is domiciled in/on the British Virgin Islands as a Brunei corporation is domiciled in Brunei or a Singapore corporation in Singapore.

if you have additional questions please do not hesitate to ask. if possible not by PM but here in TVforum as there a bunch of other participants interested in this subject.

Thanks for the added info Naam. Very interesting indeed. For my own part however, I think because I have no tax (or employment) status in Thailand (I'm not of retirement age either), I will be unable to escape the clutches of the UK taxman (having not left the UK for a 'settled purpose' such as work). Perhaps though, a BVI company or similar corporate structure would enable me to take money in the form of dividends and save some tax, but this might be end up being more trouble than it's worth.

[thaitero]

you open a BVI corporation via a provider (there are zillions of offers) through the internet. subject.

So reccomendations of reliable and straightforward providers with 600 usd annual running costs would be nice hear...?

Good info pack you gave Naam ..Thanks al lot..

[Naam]

some continental european EU states (and of course Thailand) do not accept BVI, Panama, Nauru or Brunei (the list is much longer) corporations as owners of real estate. any other financial assets = no problems at all.

Interesting. Could you provide some links about this issue, especially EU states ? I've never heard that.

there are no links available Cclub. i speak from experience (my own and that of some of my friends). reference is made to Switzerland, France, Germany, Italy and the Benelux States. no problems exist if the offshore company has a registered branch office in these countries with an appropriate management. the refusal to let offshore companies buy immobile property is based on money laundering / terroristic activity suspicions. offshore companies do not disclose their shareholders or beneficiaries but publish only their nominee board members. it's all about preventing bin-Laden buying an office building in Frankfurt or a colombian drugdealer buying a mansion in France, etc.

[Naam]

you open a BVI corporation via a provider (there are zillions of offers) through the internet. subject.

So reccomendations of reliable and straightforward providers with 600 usd annual running costs would be nice hear...?

Good info pack you gave Naam ..Thanks al lot..

i think it is against forum rules to provide direct links. try to google keyword "panama offshore". in Panama dozens of notaries provide services to establish offshore companies in nearly any location of this planet. you name it, they have it. if you are not asking for a particular name and specifiy exactly what documents your bank requires you can have the whole package in less than 10 working days.

caveat: the old trick establishing an offshore company for one year, opening a bank account and then closing the company to save the running cost does not work anymore. most banks demand every year a statement that the company still exists.

[sayitaintso]

I have Netherlands nationality but I have never lived there and I was a resident of Andorra( a small tax free principality between Spain and France). Tax residence is not established on Nationality but on where you are physically present most of the year or where you perceive income or work.....thank you for the insight.

unless you are an american or eritrean, as those lucky to be citizens of either of those two countries are taxed based on citizenship rather than residency.

[thaitero]

In any event, it is possible to be a tax resident in Thailand without having a tax ID number or paying tax. Under the Revenue Code you become a tax resident automatically once you spend - I think - 180 days in Thailand in any one calendar year (based on the fact that a tax year in Thailand is a calendar year).

There's one caveat to that, however, which would relate to the visa he is on. I'm assuming he is on a retirement visa, in which case the above applies. If he were here on a tourist visa or VOA, this may not be the case.

So is it possible to have tax residence certificate if you spend in Thailand every year 7-8 months with 2-3 entry tourist visa..?

I think this tax residence certificate would be useful paper in many ways...for example to send it ( avoid withholding tax on the offshore savings of EU residents )to offshore and swiss banks.....And of course the main reason would be that my homecountry (finland) could not tax (international income) me any more since i am not any more tax resident there...

Is this kind of setup possible with tourist visa in Thailand?

[TCA]

you can just walk into any tax office in Thailand, explain your situation and get a tax number. hel_l, you can get a tax number in Thailand and not pay any tax - just say you need it.

Basically, I don't see the OP having any problem. If he has lived in Thailand more than one year, he will be a tax resident already.

There's one caveat to that, however, which would relate to the visa he is on. I'm assuming he is on a retirement visa, in which case the above applies. If he were here on a tourist visa or VOA, this may not be the case.

So is it possible to have tax residence certificate if you spend in Thailand every year 7-8 months with 2-3 entry tourist visa..?

I think this tax residence certificate would be useful paper in many ways...for example to send it ( avoid withholding tax on the offshore savings of EU residents )to offshore and swiss banks.....And of course the main reason would be that my homecountry (finland) could not tax (international income) me any more since i am not any more tax resident there...

Is this kind of setup possible with tourist visa in Thailand?

Does anyone have personal experience or first hand knowledge of the above?

[TCA]

Just bumping this to the top as I don't see any recent posts on the subject.

Has anyone from the UK (who is not working or retired in Thailand), found it useful to obtain a Thai tax ID for purposes of gaining Non UK residency status?

If so, is there any requirement to complete Thai tax returns after having registered?

Also, has anyone found any up to date confirmation as to that old chestnut for 180 day plus "residents" about only income derived in Thailand or remitted to Thailand from sources outside the country, being taxable in Thailand?

Edited July 8, 2008 by TCA

[PattayaParent]

To be non-resident for income tax purposes from UK you don't need to have a Thai Tax ID, only to have been out of the country (UK) for the qualifying period(s).

[TCA]

To be non-resident for income tax purposes from UK you don't need to have a Thai Tax ID, only to have been out of the country (UK) for the qualifying period(s).

It's not as simple as that if you're not retired or employed in your new country (as I am). You have to show "settled purpose" but it's unclear as to what that actually means. Something like buying a house would be an example but I'm not in that position yet, so looking for anything that could help. The legislation is vague and any tax expert just points to case law as examples.

So I'd like to know if anyone from the UK in the same position, has found it useful to obtain a Thai tax ID for purposes of gaining Non UK residency status and whether they have to file tax returns in Thailand.

And still none the wiser about whether only income from Thailand and brought into Thailand is taxable?