Income Tax

[bob a job]

Hi

I need some advice.

Do I have to pay income or any other Tax in Thailand?

I ask this as I don’t want a problem 10 years down the road,

when im retired here.

Im trying to avoid all income Tax round this globe if I can.

I work out side of Thailand.

I'm paid out side of Thailand.

I'm not taxed at source.

I stay in Thailand about 190 days a year total.

This is on a tourist visa renewed very 4 weeks

when I return back from work.

My income is transferred to me from Switsiland to my personal

Uk bank account, then by me to my Thai Bangkok bank account.

every 3 months. ( I could just use an ATM machine over here

but a bit exspensive long term)

Any idea any one.

Thanks

[Sumitr Man]

Hi:

If you have not already done so, I suggest you read this: http://www.rd.go.th/publish/6000.0.html

That said, given:

(1) you reside in Thailand for more than 180 days per tax year (01 Jan - 31 Dec); AND

(2) you bring money into Thailand that has been paid to you in the same tax year as the year in which you bring such into Thailand; THEN

it is likely that you will be liable to pay income tax in Thailand.

To avoid having to pay this income tax:

(i) you need to lessen the number of days you stay in Thailand to 180 days minus 1; OR

(ii) you need to ensure that funds you bring in to Thailand have been paid to you in a tax year prior to the year in which you brought them into Thailand. The rationale for this second reason is that the Thai Revenue Department deems that this money would have been taxed elsewhere - even if such is not the case.

Notwithstanding this, you reside in Thailand on a tourist visa. Consequently, it is extremely unlikely that the Thai Revenue Department is going to audit you. Having said that, given that you plan to retire here, and/or if you are ever asked to account for how you survive in Thailand when making a renewal application for a visa to visit Thailand (as is the right of the Thai immigration department to do such), the net result of either being that you are audited by the Thai Revenue Department, it would be likely, given your stated personal circumstances, that you would currently be liable to Thai income tax.

SM

[bob a job]

Hi:

If you have not already done so, I suggest you read this: http://www.rd.go.th/publish/6000.0.html

Hi Sumitr Man

Had a look at the web site, thanks for that man.

Sounds like the best thing to do at present, is like you said

Keep the days down to less than 180 per year,

that’s easy done have a holiday some place once a year with the Gf.

Then transfer money once a year over here so its last years money i'm using

in the Tax mans eye, if ever questioned.

So I will carry on as a tourist every 4 weeks.

Thanks again for the advice

[Indo-Siam]

Practically speaking - forget about Thai income tax. Going and coming, 30 days at a time - the Thai authorities could care less about you. Thousands of oil industry workers spend their "down time" in Thailand.

Thailand Revenue Department would not know what to do with you - if you wlked in and explained your situation, they would probably tell you to go away and not bother them.

Immigration (or Revenue) Depratment does not have a computer somewhere crunching arrival and departure dates (or bank account info) trying to identify people who marginally pass the 180 day line.

So - do not sweat it. Forget about Thai taxes.

Cheers!

Indo-Siam

[Sumitr Man]

Indo:

Until 2 years ago I would have agreed with you 100%. Indeed, I would still agree with you today.

However, the provisio I would add is this:

in the last 2 years the Thai Revenue Department has really jacked itself up and got its act together. So far this applies particularly to companies/corporates in Thailand. However, it will not be too long before their attention is turned to individuals paying tax in Thailand.

Therefore, provided you wish to consider a long-term future in Thailand, my recommendation would always be (1) see an accountant/tax specialist (neither of which am I); (2) make sure your tax affairs are in order - after all, you don't want the authorities to have another reason to give you a hard time.

Of course, if you only intend to stay here short-term, then this is not going to be a problem and you can continue to ignore the situation. But, my experience to-date in Thailand is: "never rely on the attitudes of today to determine the policy tomorrow."

Just my 2c worth (and not worth a lot more).

Plus, [provided you get good tax advice] there are loads of ways to minimise tax in Thailand

SM

[dutch]

May be this sounds a little bit stupid, but I give it a try.

What if everybody in the world avoids tax paying?

You spent 50% of the year in Thailand,using its infrastructure and other benefits.

Who is gonna pay for that?

I know you most probably follow the rules that are there but ......

I lived in Holland-Germany-France-Indonesia and now Thailand.

I paid my taxes (although I try to pay less within the law) in all of these countries.

Please don't consider this as an attack, but more as an opening to the question;who is paying for all?

[Sumitr Man]

Dutch:

those of us who cannot avoid it. IOW, the middle-class [of which I am one - but only just - listen to the missus and I'm still working-class ]!

SM

Edited March 15, 2005 by Sumitr Man

[Thetyim]

What if everybody in the world avoids tax paying?

Then I would be a fool to be the only one.

[Sumitr Man]

A timely article in today's Bangkok Post

http://www.bangkokpost.com/Business/15Mar2005_biz22.php

How a professional tax planner can help

DOUGLAS T. BROWN

Q How can I save money on income taxes and do I need someone to help me figure it out?

A. The question of needing professional assistance almost always depends on the amount of time, effort and commitment you are willing to spend to learn what you need to know. The alternative is to pay someone for his or her services to simply provide you with that information tailored to your individual needs.

Since something like tax planning could save you a significant amount of money, it may make sense to find someone to help you when you are already busy with the rest of your life. It is a matter of balancing your time and resources.

There are a number of ways now in Thailand to save on the amount of income tax you would ordinarily owe. First, it is helpful to understand the Thai income tax structure. Each portion of your taxable income is taxed at a different rate. The table above reflects the tax you pay on each separate portion of your income after you have deducted any personal allowances and deductions.

So for example, if you can reduce your taxable income from 1,200,000 to 1,000,000 baht, you end up saving 60,000 baht in taxes. This is because you reduced your taxable income by 200,000 baht and that income would have been taxed at 30%.

One area where a professional can help is in making sure you are taking advantage of your current deductions and allowances and determining what additional things you can be doing to take advantage of other tax-savings opportunities.

Common allowances that can reduce your taxable income include allowances for children, education, life insurance premiums, mortgage interest, social insurance contributions, charitable contributions, and contributions made to an approved provident fund or long-term equity fund. You should be sure you are taking any of these allowances that apply so that you pay the least tax permitted by law.

Besides making sure you are taking all of your permitted allowances to reduce your taxable income, you can consider additional ways to benefit from the income tax laws. One of the most popular ways now to reduce your income taxes is by taking advantage of a Provident fund through your employer, investing in a Retirement Mutual Fund (RMF), or investing in a Long-Term Equity Mutual Fund (LTF). By making these investments you are benefiting from both the income tax savings that result from the contribution and the potential growth of your investment over time. You win two ways.

However, investing in an RMF or LTF is an area where professional advice can make a difference. It is not an easy decision.

You can contribute a maximum of 15% or 300,000 baht of taxable income to both the RMF and LTF and these contributions reduce your current taxable income. However, there are important differences to consider.

For example, an RMF needs to be contributed to annually, the funds should not be withdrawn prior to age 55 to avoid a penalty, and the fund manager has some discretion to invest in stocks, bonds, money market instruments and bank deposits. The LTF, on the other hand, does not require annual investments, the funds should not be withdrawn prior to five years to avoid a penalty and the fund manager must invest at least 65% in stocks. The tax savings may be the same upon contribution, but the other requirements or operations are quite different.

What might work best for you depends on your investment needs, potential tax savings and taking into account your other resource needs. You may be able to make the best decision, but if you are not sure, finding professional assistance can help.

Douglas T. Brown, is a Certified Public Accountant, Personal Financial Specialist and Certified Financial Planner. He can be contacted at [email protected].

[bob a job]

May be this sounds a little bit stupid, but I give it a try.

What if everybody in the world avoids tax paying?

Why pay if i don't need to!!!!!!!

Not me man.

I pay enough in Thailand looking after the GF and family.

and i know Thailand does not look after them.

Sod the Tax man, the income tax collected goes on What??

Toxic and his mates.

[bob a job]

Practically speaking - forget about Thai income tax.

Hi Man

Thanks for your reply

looks like i just need to keep an eye on what changes are made

over the years to the Thai Tax system. and ajust as of when.

thanks

Made in the shade.

[Upcountry]

A bit of irony here. Last year I filed my US income taxes with my Thai address. This year they thoughtfully mailed me a foreign filer's form.

In order to file Thai taxes, I have to make two trips to the Tax offices, as well as to a former employer. Nobody sent me anything. I didn't expect the tax form, but I'm surprised that I have to jump through hoops to get my tax statement from the school.

I have a non-imm visa, and a certain amount of income in the US. I've also transferred some money over here via cash advance to a debit card.

From what I can tell my US income may be taxable there, and my Thai income taxable here (in both cases not much for 2004). The gray area seems to be cash advances. It's very strange to me that I should be taxed on that, but it seems that this would happen only if I opened my mouth and asked about it.

I've read about the tax treaty. The only worrisome part in terms of not mentioning stuff is my visa (married to a Thai) and longer-term status. It doesn't seem fair to be taxed on advances, some of which I needed to satisfy the bank balance needed to renew my visa.

[sniffdog]

As Indo-Siam said, I don't think the Thai Revenue Department cares much for people working outside employment.

I used to work in a company for two years. The tax was deducted from my salary and paid to the revenue department. The funny thing was that I worked illegal (without a work permit).

There used to be a time (around 15-20 years) that you were required, if you had stayed over 90 days, to get a 'Tax Clearance Form' at the revenue department. Without one you were not able to leave. Getting one was not difficult, you had just to tell them that there was an agreement with my home country. Waiting for your turn 2 hours, form within 5 minutes.

[bob a job]

As Indo-Siam said, I don't think the Thai Revenue Department cares much for people working outside employment.

I used to work in a company for two years. The tax was deducted from my salary and paid to the revenue department. The funny thing was that I worked illegal (without a work permit).

There used to be a time (around 15-20 years) that you were required, if you had stayed over 90 days, to get a 'Tax Clearance Form' at the revenue department. Without one you were not able to leave. Getting one was not difficult, you had just to tell them that there was an agreement with my home country. Waiting for your turn 2 hours, form within 5 minutes.

<{POST_SNAPBACK}>

Thanks for all the advice guys

[Nepal4me]

Say you stay in Thailand on a tourist visa, purchase a condo and rent it out for 50,000 baht/mo. The renter or the renter's company paid you directly via a personal check or company check which you then deposited into your Thai personal bank account.

1. If you didn't report this income, what are the odds of it being found out by the Thai authorities?

2. What might the penalty be for this type of knowing omission?

3. I wonder what percentage of people doing this (there must be a ton of them) actally report this income?

[Sumitr Man]

1. If you didn't report this income, what are the odds of it being found out by the Thai authorities?

minimal / almost zero [at this time] - assuming you could do it.

2. What might the penalty be for this type of knowing omission?

back tax plus 1.5% per month surcharge (I think there may be a maximum, but would need to check the Revenue Code)

3. I wonder what percentage of people doing this (there must be a ton of them) actally report this income?

You could be right