To What Extent Do You Guys Pay Income Tax?

[Dancali]

I've been looking into the income tax situation with Thailand and I'm still trying to get a feel for it.

I know that many of you are well established and pay all the taxes you are supposed to. But I'm sure there are also many who don't pay enough or ANY taxes.

I'm no tax expert, but here is my impression: anybody who is in Thailand for more than 180 days with any money coming in owes taxes. If you're retired and bringing in your pension every month, that money is taxable. If you're earning any money, that's taxable. If you're just a long time "tourist" on indefinite 30 day visa hops living off of the interest on your foreign investments, any money you withdraw from the atm is taxable. I suppose that if you can claim that the money you bring into the country came from earnings in previous years you might not technically owe taxes, though I don't know if they'd really buy this.

The information is pretty clear on the government tax site:

http://www.rd.go.th/publish/6000.0.html

You become a "resident" for tax purposes if you stay for more than 180 days.

"A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless where the money is paid, as well as on the portion of income from foreign sources that is brought into Thailand. " My emphasis added.

1. Do they ever check foreigners at the border about their taxes? I was aware of 5 teachers who worked for an english camp yet were stuck with 30 day visa hops indefinitely (I figure there must be thousands in a similar position). Would the border ever check if they paid income taxes?

2. If one wants to pay taxes, how do they?

3. What if one is possibly not entirely legit in their visa status? Could they still pay tax without making any government body too interested in them?

4. Should one even worry about this if they are under the radar for most intents and purposes? For example, what if one has no employment in Thailand but stays here on business visas to export product to the west?

Personally, I would pay income taxes on any money I brought into the country as long as I didn't get bothered by the government. Besides, I think I could likely deduct this from my US income taxes as well.

[lopburi3]

First there are tax treaties in place that exempt various incomes depending on the country involved (US government pension for example is taxed at source).

Second the working understanding is that savings earned in a previous tax year and then brought into Thailand is not subject to tax.

If you want to pay tax you get a tax ID number and file a tax return just as in most any country.

[Tornado]

Offshore company - no tax!

[phormio]

I know of Thai professionals who work as consultants. They have good jobs pulling in 100K+baht/month . Since they're consultants , the companies they work for are not withholding or reporting their income to the Thai Govt. So they just don't pay any Thai income tax at all. with an income of 1.2Million+baht per year, they should be paying around 30% in income tax.

In the US they withhold income from your wages and report your income to the IRS. Hard to get around - but their are ways - through partnerships, etc.

[rcjoop]

As Lop. pointed out it really depends on the tax treaty in place.

I have been searching for an electronic version of the Dutch-Thai tax treaty for a long time, but could not find it as it is rather old (1975) and only the recent treaties are online on Dutch government sites.

In the end I had a friend, who works at the min. of finance, copy everything in their library in The Hague and mail it to me. The day after she put it in the mail I stumbled across the link below.

http://www.rd.go.th/publish/7485.0.html

Here many tax treaties are online available. In the Dutch version there are some typo’s but the content is correct. There are three versions of the treaty and the English version will be used if disputes would arise and differences between the Thai and Dutch version would complicate things.

So much for high-tech Holland and low-tech Thailand

[brianbrain]

Last time I renewed my B visa I was asked to show a receipt for payment of Thai taxes. At that time I hadn't paid anything. I contacted my employer and they paid taxes on my behalf and then gave me a receipt to take to immigration. I have no idea how my taxes were calculated or if they were even calculated correctly. Anyway, the nice people at immigration were quite satisified.

[daveh]

...

If you're just a long time "tourist" on indefinite 30 day visa hops living off of the interest on your foreign investments, any money you withdraw from the atm is taxable.  I suppose that if you can claim that the money you bring into the country came from earnings in previous years you might not technically owe taxes, though I don't know if they'd really buy this.

The information is pretty clear on the government tax site:

http://www.rd.go.th/publish/6000.0.html

You become a "resident" for tax purposes if you stay for more than 180 days.

"A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless where the money is paid, as well as on the portion of income from foreign sources that is brought into Thailand. "  My emphasis added.

<{POST_SNAPBACK}>

'

I don't think the part you emphasized refers to ATM withdrawals. It refers to income from foreign sources. Meaning, if you live in Thailand and do some consulting work for a foreign company and they pay you. Or maybe you went to a foreign country to do some consulting work getting paid while there, then you still owe taxes on that money you earned. But taking your money out of the bank is not income.

[Dancali]

Last time I renewed my B visa I was asked to show a receipt for payment of Thai taxes. At that time I hadn't paid anything. I contacted my employer and they paid taxes on my behalf and then gave me a receipt to take to immigration. I have no idea how my taxes were calculated or if they were even calculated correctly. Anyway, the nice people at immigration were quite satisified.

<{POST_SNAPBACK}>

Please excuse my ignorance, but what was entailed when you renewed your B visa? Do you mean an extension of stay? Do you mean when you came back in for a new 3 month stamp?

On perhaps a related point, the departure card mentions how you must have a tax clearance card to leave the country if you stay for more than 90 days, which shouldn't trip anybody up who simply leaves and reenters before the 90 day entry stamp runs out.

[Dancali]

...

"A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless where the money is paid, as well as on the portion of income from foreign sources that is brought into Thailand. "  My emphasis added.

<{POST_SNAPBACK}>

'

I don't think the part you emphasized refers to ATM withdrawals. It refers to income from foreign sources. Meaning, if you live in Thailand and do some consulting work for a foreign company and they pay you. Or maybe you went to a foreign country to do some consulting work getting paid while there, then you still owe taxes on that money you earned. But taking your money out of the bank is not income.

<{POST_SNAPBACK}>

Money from the atm is not necessarily income, but presumably it comes from somewhere. The way I read it, if you make $50,000 in America while living in Thailand, that's irrelevent. However, if you were to withdraw $1,000 of this by atm per month to live on, that would be "income from foreign sources that is brought into Thailand". If you absolutely earned no money that year and simply withdrew money from the atm then that clearly would not be taxed as it is not income for the year.

[daveh]

Money from the atm is not necessarily income, but presumably it comes from somewhere.  The way I read it, if you make $50,000 in America while living in Thailand, that's irrelevent.  However, if you were to withdraw $1,000 of this by atm per month to live on, that would be "income from foreign sources that is brought into Thailand".  If you absolutely earned no money that year and simply withdrew money from the atm then that clearly would not be taxed as it is not income for the year.

<{POST_SNAPBACK}>

It sounds like it would be best for you to describe your situation to a Thai tax attorney to be sure what you have to do.

[stroll]

If you want to pay tax .....

<{POST_SNAPBACK}>

[astral]

First there are tax treaties in place that exempt various incomes depending on the country involved  (US government pension for example is taxed at source).

Second the working understanding is that savings earned in a previous tax year and then brought into Thailand is not subject to tax.

If you want to pay tax you get a tax ID number and file a tax return just as in most any country.

<{POST_SNAPBACK}>

Lopburi has it all here.

If you stay more than 180 days in calendar year you are liable for tax, with the exceptions listed above.

I have tax id card. Each year I make a declaration showing that the money I have brought in was already taxed in the UK,

and is therefore exempt, under the Dual Taxation agreement between the UK and Thailand.

This means I pay tax on my income in the Uk and not here, but keep both sides off my back.

If you are working here, then you have no option.

Offshore company does not help. If you bring the money in, it becomes liable for tax!! Keep you savings overseas.

Most offshore companies are in juridictions that will not have dual tax agreements with Thailand.

[Dancali]

On perhaps a related point, the departure card mentions how you must have a tax clearance card to leave the country if you stay for more than 90 days, which shouldn't trip anybody up who simply leaves and reenters before the 90 day entry stamp runs out.

<{POST_SNAPBACK}>

I just came across this in the thai visa tax section:

Tax certificate is no longer required

The tax certificate was scrapped in 1991 and is not required anymore, although mentioned in your Arrival card (TM-card).

There are two exceptions to this ruling, whereby tax clearance certificates might still be necessary:

Foreigners who are liable for taxes due as assessed by the assessment official prior to or at the time of departing from Thailand.

Foreigners who are responsible for filing income tax returns and paying taxes for juristic companies or partnerships established under a foreign law but doing business in Thailand.

So it looks like nothing is required but it's possible somebody will ask you about taxes when leaving the country. I will be sure to keep a record of my us taxes paid for the year before if such a thing ever arises.

[Baht Simpson]

If you're retired and bringing in your pension every month, that money is taxable. If you're earning any money, that's taxable

If you're retired it seems that tax on pensions is only liable in your home country.

ARTICLE 18

PENSIONS AND ANNUITES

1. Subject to the provisions of paragraph 2 of this Article and paragraph 1 of Article 19, pensions and other similar remuneration paid in consideration of past employment to a resident of one of the States and any annuity paid to such a resident, shall be taxable only in that State.

2. However, such income may also be taxed in the other State in so far as it is charged as such against profits derived in that other State by an enterprise of that other State or by an enterprise having permanent establishment therein.

3. The term "annuity" means a stated sum payable periodically at stated times during life of during a specified or as certainable period of time under an obligation to make the payments in return for adequate and full consideration in money or money's worth.

This is taken from The Netherlands section, although curiously there is no Pensions and Annuities clause in the UK section. I shall investigate.

[bkkharry]

Been living here in Thailand for the last 4 years on my retirement income from the US, pay them 20% of my income evey year. Then file my income tax electronicly and have the refund check deposited into my US bank account. No complaints- as a side point my reirement check can not be deposited in a foreing bank, so the money goes into my account in the US, usually atm what i need each month, then when my visa come due, wire transfer the money needed to top off my bankaccout to obtain my visa extenson each year. Works very well.

[rcjoop]

If you're retired and bringing in your pension every month, that money is taxable. If you're earning any money, that's taxable

If you're retired it seems that tax on pensions is only liable in your home country.

ARTICLE 18

PENSIONS AND ANNUITES

1. Subject to the provisions of paragraph 2 of this Article and paragraph 1 of Article 19, pensions and other similar remuneration paid in consideration of past employment to a resident of one of the States and any annuity paid to such a resident, shall be taxable only in that State.

2. However, such income may also be taxed in the other State in so far as it is charged as such against profits derived in that other State by an enterprise of that other State or by an enterprise having permanent establishment therein.

3. The term "annuity" means a stated sum payable periodically at stated times during life of during a specified or as certainable period of time under an obligation to make the payments in return for adequate and full consideration in money or money's worth.

This is taken from The Netherlands section, although curiously there is no Pensions and Annuities clause in the UK section. I shall investigate.

<{POST_SNAPBACK}>

This interpretation is not correct.

Pensions are taxed in the state of residence, an exeption is made for government related pensions, those are taxed at the source, see other articles.

The treaty does not say if incomes are taxed but determines which state has the right to do so but no obligation.

[brianbrain]

Last time I renewed my B visa I was asked to show a receipt for payment of Thai taxes. At that time I hadn't paid anything. I contacted my employer and they paid taxes on my behalf and then gave me a receipt to take to immigration. I have no idea how my taxes were calculated or if they were even calculated correctly. Anyway, the nice people at immigration were quite satisified.

<{POST_SNAPBACK}>

Please excuse my ignorance, but what was entailed when you renewed your B visa? Do you mean an extension of stay? Do you mean when you came back in for a new 3 month stamp?

On perhaps a related point, the departure card mentions how you must have a tax clearance card to leave the country if you stay for more than 90 days, which shouldn't trip anybody up who simply leaves and reenters before the 90 day entry stamp runs out.

<{POST_SNAPBACK}>

I work on a yearly-renewable contract. Before starting this job I obtained a 90 day non-immigrant “B” visa from Penang. When this visa expired, I had it extended at immigration for the remainder of the contract period. i.e. no need to leave and re-enter the country. After the one year period expired, my employer renewed the contract and I duly visited immigration. It was at this point they wanted to see a tax receipt. Having presented the said receipt, immigration stamped my passport to give me another year in Thailand. Really, it has all been very hassle free, including the work permit.

[tuky]

non imm O (spouse) paying tax in an obscure country, decent amount of income all paid into a Thai bank account. Tax applicable? Any thoughts appreciated.

[lopburi3]

non imm O (spouse) paying tax in an obscure country, decent amount of income all paid into a Thai bank account. Tax applicable? Any thoughts appreciated.

<{POST_SNAPBACK}>

As has been said - if you have "income" deposited in a local bank you should be paying tax on it as income. If, however, your income is deposited in an overseas savings account in the year earned and later you bring in this "savings" you are not expected to pay tax on it.

Immigration is not going to question you if the money you use to support your wife is current earnings or savings.

[astral]

Immigration is not going to question you if the money you use to support your wife is current earnings or savings.

<{POST_SNAPBACK}>

Immigration may not ask, but the tax man will,

if he happens to notice you.

[stroll]

non imm O (spouse) paying tax in an obscure country, decent amount of income all paid into a Thai bank account. Tax applicable? Any thoughts appreciated.

<{POST_SNAPBACK}>

I'd say Lopburi is the legal brain, but further to that, tax is applicable either in the country where you work, or where you receive the income, or where you reside, one or more of these, depending on the specific legislations and possible mutual agreements. Practically speaking, for Thailand, it has been OK for many, including myself, to transfer funds from a private account abroad, different from the one you receive payment from employment. Of course this leaves the question of taxation elsewhere (australia for you?), but as a frequent taveller you should be able to find a solution, i.e. bank account as non-resident in some Micky Mouse country( excuse the term )into which your salary could be paid.

Also, are you staying in Thailand long enough in one year for taxation to be a consideration?

[sua yai]

I'm getting a bit mixed up over this. I've been in Thailand for 6.5 yrs, with the occasional visit home. Certainly, more than 180 days in each year.

Are you suggesting that the income I receive from my property in London and that I access through ATMs here is taxable?

If so, I would feel rather aggreived, as at 46, not married, not working etc, all the Thai authorities seem willing to identify me as is a tourist. Surely a person, not living here as much as myself, but nevertheless lucky enough to be able to come over for 181 days in a year, would not even consider paying taxes on the money that they choose to spend in Thailand.

[manjara]

A friend of mine, has a contract from Singapore, money paid to UK, working some other country and living, more than 180 days, in Thailand. Is he liable for just the money brought into Thailand?

If the money was paid to an offshore company in Vanuatu, instead of the UK, with an anonymous bank account in Latvia/Lithuania having an ATM card, who would pay tax, where?

just a thought....

[grahamb]

A friend of mine, has a contract from Singapore, money paid to UK, working some other country and living, more than 180 days, in Thailand. Is he liable for just the money brought into Thailand?

 

If the money was paid to an offshore company in Vanuatu, instead of the UK, with an anonymous  bank account in Latvia/Lithuania having an ATM card, who would pay tax, where?

just a thought....

<{POST_SNAPBACK}>

I looked into this type of situation before I moved here. IIRC, the tax consultant said that I could do this to avoid paying tax on the income earned outside Thailand. The income earned inside Thailand (i.e. the 180 days he is living and I assume working in Thailand) would be taxable in Thailand. Again, IIRC, she said that the Thai income would have to be paid in Thailand to become taxable so that is slightly different from the example you gave.

In the end, I couldn't set up this type of arrangement so I didn't investigate it any further. There are others replying to this thread who have way more knowledge on this than I do so please feel free to correct me if I'm wrong!

[bkk_mike]

I'm getting a bit mixed up over this. I've been in Thailand for 6.5 yrs, with the occasional visit home. Certainly, more than 180 days in each year.

Are you suggesting that the income I receive from my property in London and that I access through ATMs here is taxable?

If so, I would feel rather aggreived, as at 46, not married, not working etc, all the Thai authorities seem willing to identify me as is a tourist. Surely a person, not living here as much as myself, but nevertheless lucky enough to be able to come over for 181 days in a year, would not even consider paying taxes on the money that they choose to spend in Thailand.

<{POST_SNAPBACK}>

Double taxation agreement is pretty specific on this. - Income from property is taxable in the country where the property is located.

So, as long as you're paying the applicable tax in the UK (after allowances for mortgage interest, other expenses from letting, wear and tear, etc., as well as your personal tax allowance, etc.) - then you wouldn't be taxed in Thailand on income already taxed in the UK.

[JimGant]

astral,

I have tax id card. Each year I make a declaration showing that the money I have brought in was already taxed in the UK, and is therefore exempt, under the Dual Taxation agreement between the UK and Thailand. This means I pay tax on my income in the Uk and not here, but keep both sides off my back.

You mean you file every year with Thai tax authorities a declaration that you owe them nothing? Plus, you have a tax id card?

Sounds like in the past you did have to pay Thai taxes -- thus the tax id card. Otherwise, I'm a bit confused.

If all your worldwide income is taxed by the UK, and you have the tax return to prove it, why would you file with the Thais? Should they come knocking on your door, all's you have to do is show your UK tax return (and maybe a copy of the tax treaty). But the chance of them knocking on your door seems nil if you're talking about money earned (and taxed) abroad(?).

Just curious. I've read a lot of your posts -- and you definitely have your sh-- together. So, there must be an explanation......

[manjara]

I looked into this type of situation before I moved here. IIRC, the tax consultant

...

In the end, I couldn't set up this type of arrangement so I didn't investigate it any further. There are others replying to this thread who have way more knowledge on this than I do so please feel free to correct me if I'm wrong! 

<{POST_SNAPBACK}>

www.privacy4u.net, but I can't vouch for their reliability as I haven't done it yet. I mean, my friend hasn't done it yet....

The plan would be to set up a Thai company and pay myself the minimum Thai qualification wage, to get the relevant visas etc. The offshore compnay would pay the Thai company for my services and have the rest of the earnings offshore with a global ATM card so I can reach the rest of the money if and when I need it.

As my contracts pay substantially more than 40k baht/month, and I only need a relatively small amount in Thailand, that seems to be the best approach. Very little of the work I do is in Thailand, I just come back when I'm not working (weekends etc), but that is more than 180 days (this year anyway)

The thing I'm interested in is how the thai authorities can track ATM withdrawals, surely that would not be practical, even if they were from a named account, rather than an anonymous one?

[Dancali]

I looked into this type of situation before I moved here. IIRC, the tax consultant

...

In the end, I couldn't set up this type of arrangement so I didn't investigate it any further. There are others replying to this thread who have way more knowledge on this than I do so please feel free to correct me if I'm wrong! 

<{POST_SNAPBACK}>

www.privacy4u.net, but I can't vouch for their reliability as I haven't done it yet. I mean, my friend hasn't done it yet....

The plan would be to set up a Thai company and pay myself the minimum Thai qualification wage, to get the relevant visas etc. The offshore compnay would pay the Thai company for my services and have the rest of the earnings offshore with a global ATM card so I can reach the rest of the money if and when I need it.

As my contracts pay substantially more than 40k baht/month, and I only need a relatively small amount in Thailand, that seems to be the best approach. Very little of the work I do is in Thailand, I just come back when I'm not working (weekends etc), but that is more than 180 days (this year anyway)

The thing I'm interested in is how the thai authorities can track ATM withdrawals, surely that would not be practical, even if they were from a named account, rather than an anonymous one?

<{POST_SNAPBACK}>

I don't think they'd be able to track atm withdrawals, but they might not believe you're only pulling in 40k/month and audit your business and/or request your income tax forms from whichever country you're from. This is all likely paranoid speculation, but it's possible.

The fact that you do lots of your business out of Thailand could perhaps justify having only 40K/month taxed, but I really don't know enough.

[bkk_mike]

...

If you're just a long time "tourist" on indefinite 30 day visa hops living off of the interest on your foreign investments, any money you withdraw from the atm is taxable.  I suppose that if you can claim that the money you bring into the country came from earnings in previous years you might not technically owe taxes, though I don't know if they'd really buy this.

<{POST_SNAPBACK}>

'

I don't think the part you emphasized refers to ATM withdrawals. It refers to income from foreign sources. Meaning, if you live in Thailand and do some consulting work for a foreign company and they pay you. Or maybe you went to a foreign country to do some consulting work getting paid while there, then you still owe taxes on that money you earned. But taking your money out of the bank is not income.

<{POST_SNAPBACK}>

Taking it out of the ATM doesn't turn it into income if it's savings.

However if it is income, it does turn it into income brought into Thailand...