Setting Up Offshore Company

[rewopnadia]

I am an IT consultant who works for an Australian company. I spend a lot of time in Thailand and work remotely from there.

I am looking at moving to Thailand more permanently. I want to set up my own company and subcontract back to my employer in Australia. I have been thinking about setting up the company in Thailand but someone advised me that it may be more tax efficient to set up company in Singapore?

My gross salary would initially stay the same if I set my own company. I would just invoice the company in Australia monthly (instead the way it's done now where I'm paid a salary from the company).

Any advice on this subject is greatly appreciated,

Regards,

Aidan

[richardt1808]

Interesting one.

First question is what visa you would be using to stay in Thailand ? If you are travelling frequently, then maybe this isn't an issue but if you don't travel much, then setting up a Thai company would allow you to register as an employee of the company and get a work permit.

I don't know much about Singapore taxes, but I would assume that in order to run a business there, you would require some kind of presence - at least a registered address. Then, you would be subject to tax on the income there with very little overhead. If you created the company in Thailand, you would be able to claim for significant deductions such as office rental, travel, equipment etc and just draw the minimum salary of around 50K which wouldn't attract much tax at all.

I'm not going to get into the requirements for setting up a Thai company as you may already be familiar with them. Anyway, lets see what other comments are forthcoming.

Cheers

[Naam]

I am looking at moving to Thailand more permanently. I want to set up my own company and subcontract back to my employer in Australia. I have been thinking about setting up the company in Thailand but someone advised me that it may be more tax efficient to set up company in Singapore?

an offshore corporation is usually established to pay ZERO taxes. based on the intentions you describe it would be "suicidal" to establish your company in Thailand, be a minority shareholder, have no rights, pay taxes and deal with the headaches of Thai bureaucracy EXCEPT if you need the company to provide a work permit and therefore legal residence for you in Thailand.

my advice: use a Singapore domiciled fiduciary service (dozens to choose from) and negotiate the fees to set up and handle a real tax free offshore corporation registered e.g. in Brunei, BVI or dozen other locations. initial cost varies between USD 2,500 and 5,000; annual fees USD 2,000-3,500 (both depending on the services you require). your corporate account in Singapore -to which your remuneration is transferred to from Australia- will not be taxed as you are not conducting any business in Singapore but the headache of working in Thailand without a work permit is yours.

[kudroz]

Merely incorporating in Singapore, Brunei or in BVI will not do anything for you since the services you plan on selling will be rendered (performed) in Thailand thus subject to Thai income tax.

If you want to minimize taxation you would be better off choosing another place to live and perform your services. Thailand is a good place if you have worldwide source income, e.g. capital gains from foreign stock exchanges, because Thailand doesn't impose tax unless such income is remitted to Thailand in the same year it is earned.

Dubai has no income taxes and have free trade zones where you can go establish your company relatively easy. If your consultation business is a one-man show, then it's probably not a good solution because of the costs involved.

Incorporating and living in Singapore sounds like a much better choice. Singapore has a one level taxation system where Singapore eligible dividend income is not taxed in the hands of shareholders. Startup companies have essentially zero tax on the first 3 years of operations for profits up to S$100,000 and roughly 4.25% on the next S$200,000. Profits over S$300,000 are taxed at a flat rate of 17%.

Easy to get an Employment Pass (comes with a visa) and the government is very pro-business.

Edited May 25, 2010 by kudroz

[Naam]

Merely incorporating in Singapore, Brunei or in BVI will not do anything for you since the services you plan on selling will be rendered (performed) in Thailand thus subject to Thai income tax.

only if the OP is brain amputated careless and tells the authorities

[kudroz]

Merely incorporating in Singapore, Brunei or in BVI will not do anything for you since the services you plan on selling will be rendered (performed) in Thailand thus subject to Thai income tax.

only if the OP is brain amputated careless and tells the authorities

You don't just become subject to taxation because you tell the Revenue Department. Taxation is not "opt-in". Is this amateur hour or something?

[Treborz]

Hi Aidan

I work for a Fiduciary services provider based in Guernsey but we have a Hong Kong office. We look after many companies that operate in the way you intend.

I would seriously recommend you seek professional tax advice before deciding which route to take.

If the advice you receive confirms you can structure it this way then I would be more than happy to pass on the contact details of our Hong Kong office. They will be able to incorporate a HK, Singapore or BVI Company for you.

Regards

Rob

Edit - I should add that I would in no way benefit from any direct referral and if this is construed as an advertisement then please remove it. I will send a PM.

Edited May 25, 2010 by Treborz

[Naam]

Merely incorporating in Singapore, Brunei or in BVI will not do anything for you since the services you plan on selling will be rendered (performed) in Thailand thus subject to Thai income tax.

only if the OP is brain amputated careless and tells the authorities

You don't just become subject to taxation because you tell the Revenue Department. Taxation is not "opt-in". Is this amateur hour or something?

shall we discuss your professional theories or my amateurish reality?

[kudroz]

Merely incorporating in Singapore, Brunei or in BVI will not do anything for you since the services you plan on selling will be rendered (performed) in Thailand thus subject to Thai income tax.

only if the OP is brain amputated careless and tells the authorities

You don't just become subject to taxation because you tell the Revenue Department. Taxation is not "opt-in". Is this amateur hour or something?

shall we discuss your professional theories or my amateurish reality?

Taxation is not opt-in in Thailand. This is not a professional theory - it's a fact and the law. In the case of the OP to not disclose his Thai source income to the Revenue Department would be tax evasion. Furthermore, because he is Australian, he needs to establish significant residential ties abroad and severe his residential ties in Australia to become effectively a non-resident in Australia for tax purposes. While I will admit that the odds of getting caught in Thailand for tax evasion are low - it is the very opposite in Australia.

[Naam]

You don't just become subject to taxation because you tell the Revenue Department. Taxation is not "opt-in". Is this amateur hour or something?

Taxation is not opt-in in Thailand. This is not a professional theory - it's a fact and the law.

no, it is not. the OP has not mentioned the time span he is planning to spend in Thailand and he has not defined what he means by "working remotely". of course the hair splitters in Thaivisa, and that applies to some renowned lawyers too, consider nearly any action as "work" and might tell you that sex with your wife in your thai home, fixing a broken tap in one of your bathrooms or a phone call from Thailand to your bank in <insert location> with the instruction "change x-GBP into y-USD" is considered work, requires a work permit and any profits based on the action are taxable.

another unprofessional claim is (although mentioned a zillion times here) is the fairy tale that offshore income/capital gains are only taxed if brought into Thailand the same year it was earned.

quote Kudroz: "Thailand is a good place if you have worldwide source income, e.g. capital gains from foreign stock exchanges, because Thailand doesn't impose tax unless such income is remitted to Thailand in the same year it is earned."

this fairy tale was spun some years ago by a reputed international company which renders business advice to companies as well as individuals and has been repeated (as already mentioned) in Thaivisa ad nauseam. reality is that thai tax codes/laws do NOT list this clause anywhere notwithstanding the fact that, to the best of my knowledge, nobody pays presently taxes on any proceeds derived from offshore income. the reason is perhaps that the tax authorities don't care, but that might change any time. nevertheless, my thai acquantaincies, who hold the bulk of their liquid assets in Hong Kong or Singapore, make sure that no records are kept in their homes and any instructions to their banks are submitted in an utmost secure way.

summary: this is the prevailing reality and not theory.

[kudroz]

this fairy tale was spun some years ago by a reputed international company which renders business advice to companies as well as individuals and has been repeated (as already mentioned) in Thaivisa ad nauseam.

Let me tell you what is not a fairy tale and that is well documented in the Revenue code.

The OP said that he wish to live in Thailand and work remotely (assumably from Thailand) for an Australian company. Such income is taxable under Section 41 of the Revenue Code. If a Thai person does IT consulting from home for an Australian company, that Thai person has to pay taxes. Why would it be different for a foreigner living here? Freelancers (Thai or foreign) working from Thailand are subject to taxation under Section 41 of the Revenue Code.

By not reporting such income he would be committing a crime and could be, although unlikely, imprisoned and fined under Section 37(2) of the Revenue Code.

Again, those are facts and the law - not theory. But I must say that I'm very entertained reading your very limited understanding - or reckless views on being an outlaw in Thailand.

my thai acquantaincies, who hold the bulk of their liquid assets in Hong Kong or Singapore, make sure that no records are kept in their homes and any instructions to their banks are submitted in an utmost secure way.

If it's all fairy tales and bubble gum, why do they make sure no records are kept in their homes and transmitting their bank instructions in an utmost secure way?

Edited May 26, 2010 by kudroz

[Naam]

If it's all fairy tales and bubble gum, why do they make sure no records are kept in their homes and transmitting their bank instructions in an utmost secure way?

your problem is that you either need reading glasses or your grasp of english (which is my third language) is rather limited. the fairy tale is "no taxes if not transferred in the same year as earned".

but whatever, live in peace and may the income tax be with you.

[huawei]

if you have a work permit and are deemed to be resident in Thailand,anywork undertaken overseas and paid overseas then remitted to Thailand within that same financial year is taxable. If outside for more than a year - not taxable.I was a little suprised when informed by my accountant, but he insisted that if the monies remitted can be proven to be generated through working and are remitted in that year they must be declared in my accounts for audit and tax purposes, I just left it overseas..i see no logic in this.

[kudroz]

if you have a work permit and are deemed to be resident in Thailand,anywork undertaken overseas and paid overseas then remitted to Thailand within that same financial year is taxable. If outside for more than a year - not taxable.I was a little suprised when informed by my accountant, but he insisted that if the monies remitted can be proven to be generated through working and are remitted in that year they must be declared in my accounts for audit and tax purposes, I just left it overseas..i see no logic in this.

Absolutely correct. I have had the same advice - even in writing from KPMG in Bangkok. This was also confirmed in a meeting with the Revenue Department at their office in Bangkok.

To the OP:

This is no fairy tales. This is a really bad subject area for amateur hour advice. Research my posts here on Thaivisa; I have often discussed this subject in other discussions. Invest a little money to receive competent advice. Avoid the service providers and consult with a reputable tax attorney or accounting firm. They usually have partners in their office who have dealt with the relevant tax authorities and have first hand experience on that exact topic. You can print this thread and bring it to them. I'm confident they will confirm everything I've mentioned is correct.

[Naam]

I have had the same advice - even in writing from KPMG in Bangkok. This was also confirmed in a meeting with the Revenue Department at their office in Bangkok.

thai tax law counts, everything else is irrelevant. thai tax law does not recognise "writings" from KPMG or oral bla-bla confirmations from officials of any rank of the Revenue Department. the latter can only confirm that presently taxation of offshore income brought into Thailand under certain circumstances is not enforced. nothing more, nothing less. period!

[kudroz]

I have had the same advice - even in writing from KPMG in Bangkok. This was also confirmed in a meeting with the Revenue Department at their office in Bangkok.

thai tax law counts, everything else is irrelevant. thai tax law does not recognise "writings" from KPMG or oral bla-bla confirmations from officials of any rank of the Revenue Department. the latter can only confirm that presently taxation of offshore income brought into Thailand under certain circumstances is not enforced. nothing more, nothing less. period!

I don't believe they pro-actively seek people not reporting foreign income remitted to Thailand in the same year it is earned. The taxation system in Thailand, like in most countries, is a self-assessment regime. Failure to report assessable income is a crime under Section 37(2) of the Revenue Code of Thailand.

If you are audited by the tax authorities, they will certainly poke around and will definitely enforce the tax laws to collect their due. The likelihood of being audited for foreigner keeping a low profile who has never filed a return in Thailand is low. Although, the people I've dealt with in the Revenue Department (not the clerks) are very much clued in on to this stuff.

People who are keeping a low profile and flying under the radar are taking a risk. I don't think the government is actively seeking them, but if someone were to report them to the right people at the Revenue Department - all bets are off. It depends how you choose to live your life. I, for one, don't want to be an outlaw and much rather structure my affairs to avoid taxation, or pay little, by using legal ways. To each his own.

Edited May 27, 2010 by kudroz

[kudroz]

thai tax law does not recognise "writings" from KPMG or oral bla-bla confirmations from officials of any rank of the Revenue Department.

I have been involved in several audits over the years (Thailand and elsewhere). Opinion letters from a reputable tax attorney or accountant goes a long way. Furthermore, Thai tax regulations says that certain penalties can be avoided if you have relied on reputable professional advice. It is also possible to obtain advance tax rulings from the Revenue Department. Those advance rulings are binding but usually pertains to transfer pricing issues.

In the case of the OP, there are no ambiguities and his income would not be of foreign source; his income would be of Thai source and subject to taxation in Thailand.

Naam, do yourself a favor and go have a chat with the tax officials in Chonburi - not in Pattaya. I can put you in touch with people there who deal regularly with transfer pricing issues and know very well about this subject. It might dispel the illusions you have about all this stuff.

[hansum]

Im after a good bit of amateur advice before paying a professional for a similar situation.

Im English and am starting a contract in Kahzakstan 28 days on 28 days off.

Ive got to work via a limited company to invoice my employer ... ive currently a UK ltd company.

Anyway i will be living in Thailand on my time off .... ive already filled out the P85 form for leaving the UK .... but as i'll be the only employee of my company i'll be paying company National Insurance for employing myself and also NI in the salary im paying myself .... also i believe that if i return to the UK within 5 years i maybe liable to pay all that tax i avoided whilst away backdated

So where would be my best bet to set up a company (ie offshore or in a tax haven) and what are the pitfalls i need to look out for ... advice by people in a similar situation would be more then welcome.

Edited May 27, 2010 by hansum

[DMC1]

Im after a good bit of amateur advice before paying a professional for a similar situation.

Im English and am starting a contract in Kahzakstan 28 days on 28 days off.

Ive got to work via a limited company to invoice my employer ... ive currently a UK ltd company.

Anyway i will be living in Thailand on my time off .... ive already filled out the P85 form for leaving the UK .... but as i'll be the only employee of my company i'll be paying company National Insurance for employing myself and also NI in the salary im paying myself .... also i believe that if i return to the UK within 5 years i maybe liable to pay all that tax i avoided whilst away backdated

So where would be my best bet to set up a company (ie offshore or in a tax haven) and what are the pitfalls i need to look out for ... advice by people in a similar situation would be more then welcome.

Do you really need to invoice through your UK ltd company? - ask the company you work for as I know from experience that this may not be necessary or there may be a way around it. Could you not just get your earnings paid straight into a Thai bank account? I appreciate that if you think you may return to the UK at some stage then you may want to keep up your NI payments etc. I don't intend to!!

[Khun Jean]

Simple.

BVI, registered address and bank account in Hong Kong, Thai Ltd + bank account + address. European + Thai customers (5% ).

Thai Ltd send invoice to european customer. they pay to Thai bank. BVI company send invoice to thai ltd. paid to Hong Kong bank.

2 people on thai payroll, 1 work permit. low saleries = low taxes.

thai company income - invoices from BVI - operating costs = low profits = low taxes.

BVI company income - low anual costs = high profits = no tax.

[hansum]

Im after a good bit of amateur advice before paying a professional for a similar situation.

Im English and am starting a contract in Kahzakstan 28 days on 28 days off.

Ive got to work via a limited company to invoice my employer ... ive currently a UK ltd company.

Anyway i will be living in Thailand on my time off .... ive already filled out the P85 form for leaving the UK .... but as i'll be the only employee of my company i'll be paying company National Insurance for employing myself and also NI in the salary im paying myself .... also i believe that if i return to the UK within 5 years i maybe liable to pay all that tax i avoided whilst away backdated

So where would be my best bet to set up a company (ie offshore or in a tax haven) and what are the pitfalls i need to look out for ... advice by people in a similar situation would be more then welcome.

Do you really need to invoice through your UK ltd company? - ask the company you work for as I know from experience that this may not be necessary or there may be a way around it. Could you not just get your earnings paid straight into a Thai bank account? I appreciate that if you think you may return to the UK at some stage then you may want to keep up your NI payments etc. I don't intend to!!

Sorry, i can invoice from a ltd. company anywhere in the world so basically i need to know where i best to do this and how to go about it ... so that big brother UK govt dont know about it but what im doing is legal.

[kudroz]

Im after a good bit of amateur advice before paying a professional for a similar situation.

Im English and am starting a contract in Kahzakstan 28 days on 28 days off.

Ive got to work via a limited company to invoice my employer ... ive currently a UK ltd company.

Anyway i will be living in Thailand on my time off .... ive already filled out the P85 form for leaving the UK .... but as i'll be the only employee of my company i'll be paying company National Insurance for employing myself and also NI in the salary im paying myself .... also i believe that if i return to the UK within 5 years i maybe liable to pay all that tax i avoided whilst away backdated

So where would be my best bet to set up a company (ie offshore or in a tax haven) and what are the pitfalls i need to look out for ... advice by people in a similar situation would be more then welcome.

Do you really need to invoice through your UK ltd company? - ask the company you work for as I know from experience that this may not be necessary or there may be a way around it. Could you not just get your earnings paid straight into a Thai bank account? I appreciate that if you think you may return to the UK at some stage then you may want to keep up your NI payments etc. I don't intend to!!

Sorry, i can invoice from a ltd. company anywhere in the world so basically i need to know where i best to do this and how to go about it ... so that big brother UK govt dont know about it but what im doing is legal.

You can do it with a company in Seychelles or BVI. In your case you can do it legally because you will be performing your work, presumably, on an offshore oil rig which has special arrangements with the government or your employer is doing the tax withholding and what you're getting is not taxable. You setup your offshore company and invoice the company who hires your service monthly.

What you want to make sure is that you become a non-resident of the UK. If you will be keeping a house/car or have kids/spouse in the UK it can be tricky. You want to show that your natural abode and your residential ties are stronger in another country than the UK. A long term rent, a long-term visa and purchasing a car could go a long way to demonstrate your intent of living here and not going back to the UK. This is dealt on a case by case basis depending on the particulars of your circumstances.

[kudroz]

Simple.

BVI, registered address and bank account in Hong Kong, Thai Ltd + bank account + address. European + Thai customers (5% ).

Thai Ltd send invoice to european customer. they pay to Thai bank. BVI company send invoice to thai ltd. paid to Hong Kong bank.

2 people on thai payroll, 1 work permit. low saleries = low taxes.

thai company income - invoices from BVI - operating costs = low profits = low taxes.

BVI company income - low anual costs = high profits = no tax.

What you are advising here is very dangerous because of the Transfer Pricing rules. The Revenue Department are actively seeking company abusing this and cracking down on them. To do this efficiently you have to invoice your related companies at fair market value and cannot invoice for bogus reasons - simply avoid taxes in Thailand. This is definitely an effective way to reduce taxes, and multi-nationals do this all the time. The caveat is that it needs to be well thought of and documented - at fair market value and follow the Thai Revenue Department new guidelines on Transfer pricing enacted a few years ago.

Edited May 28, 2010 by kudroz

[Khun Jean]

Correct. OECD.org is a good website to find information about Tax treaties, transfer pricing etc.

In our case it is the BVI that did the highest investments and development of products. The Thai part is just a reseller of those products and for good measures also does some renting out of real estate to have Thai customers. The advantage of the Thai company is that it provides a work permit and future possibilities to expand business in Thailand.

[tgw]

If one can work from home = playing on the computer.

Pick your game, Flight Simulator, Sim City or whatever... and a VPN.

And get a good offshore service provider + bank account... in Singapore or Switzerland.

Officially live from the monthly allowance your rich parents give you (spoiled child, you...) or from the fortune you inherited from your parents after their death.

No reason for taxes.

[TravelerEastWest]

I have had the same advice - even in writing from KPMG in Bangkok. This was also confirmed in a meeting with the Revenue Department at their office in Bangkok.

thai tax law counts, everything else is irrelevant. thai tax law does not recognise "writings" from KPMG or oral bla-bla confirmations from officials of any rank of the Revenue Department. the latter can only confirm that presently taxation of offshore income brought into Thailand under certain circumstances is not enforced. nothing more, nothing less. period!

Naam,

Kudroz is giving very good advice (I am going to start reading his posts very carefully) - I do not know him and have not studied recent transfer pricing issues but going to companies like KPMG and talking to the tax partners or senior managers is the only way to go most of the time for really good tax advice on complicated matters. Some times law offices can help but usually Tax partners in accounting firms are the best information source.

I have read several of your posts and I understand that practical real life results are import to you and I agree with you 100%.

First, there will be a few expat partners in these large accounting firms but mostly local partners and these people in addition to being smart are often former top Revenue officials or very close to the top Revenue officials.

They know the tax law far better than almost all Revenue agents or officials. Not just in Thailand but everywhere in the world. This is common knowledge in the tax world - not a secret.

To use a metaphor it is sort of like comparing a professional athlete with a high school player.

Regarding overseas income not being taxed if held overseas for more than a year - It is not a myth - yes, I understand that some Thai revenue officials especially outside of Bangkok may think so but again they have very little real training in the law and rarely at the graduate level as in a masters degree in taxation (or something similar) which in todays world is the basic minimum to even be taken seriously in the tax world. This goes for both accountants and lawyers.

[bankei]

Kudroz seems to know what he is talking about.

If the op is an Australian resident for tax purposes if won't matter where he resides, he will still be up for declaring the income in his tax return. There may be credits for tax paid overseas and there may be double tax agreements between Australia and Thailand - I am not sure. Australian residents are assessed on their worldwide income.

To become a non-resident for tax purposes (from Australia) he will need to satisfy the criteria which is complex, but it is determined on factors such as:

- where you are domiciled (eg you must intend to base your home permanently overseas).

- time spent in Australia

- where your 'home' is

Income tax (from Australia) will depend on a few factors, such as:

- type of income

- where the income is derived

- whether you are a resident for tax purposes (different rates than residents).

If you want to set up a company overseas then your company could still be deemed to be a resident of Australia if,

- it carries on a business in Australia, or

- it is controled in Australia - this would include being controlled by shareholders who are aussie residents.

Bankei

You should look at the double taxation agreements between thailand and australia (if there is one) and see if residency is defined.

[Naam]

"Regarding overseas income not being taxed if held overseas for more than a year - It is not a myth - yes, I understand that some Thai revenue officials especially outside of Bangkok may think so but again they have very little real training in the law and rarely at the graduate level as in a masters degree in taxation (or something similar) which in todays world is the basic minimum to even be taken seriously in the tax world. This goes for both accountants and lawyers."

Traveller,

i know it's not a myth but standard practice in Thailand. the same applies to retirees (like me) who are -for whatever valid or invalid reasons- not taxed although prevailing law does not provide any legal basis for that practice. besides thai culture, architecture, literature, poetry and being surrounded by >60 million smiling people who love Farangs my/our foremost concern was living in an either income tax free or at least low income tax jurisdiction.

but before we finally decided to settle in Thailand (2005) i wanted to confirm the hearsay by listening to the horse's mouth and paid a rather high ranking taxman (if i'm not mistaken he was the deputy of the authority) in the provincial capital Chonbury a visit. my original intention was to pay taxes for a couple of million Baht p.a., id est the estimated basic expenses i budgeted for living in the Kingdom (which i considered to be a very fair deal).

unlike my experience in the USA, where i had a hard time to convince the IRS that i am "entitled" to pay U.S. income tax (for personal reasons which are irrelevant to this topic) i failed and was bluntly told "no can do, you not pay income tax!" after finishing my cup of coffee i left with a polite wai but an uneasy feeling.

[Naam]

"...i left with a polite wai but an uneasy feeling"

i forgot to explain my uneasy feeling. in 1989, after a court case lasting 1½ years, the "Supreme Financial Court" of my home country Germany decided that i have to pay back taxes (although i worked and lived abroad) for the time i owned a home in Germany which quote: "at any time and in an unrestricted way was available to me and my family for living purposes". "fortunately" the local tax authority used its own interpretation of the court decision and did not take into consideration the full 10 years i owned the home but "only" 5½ years. needless to say that i paid i staggering amount equivalent to what a small fleet of Ferraris cost at that time, albeit without any additional penalty or interest.

now i am in a similar position. for house, cars and 6 years living expenses i brought into Thailand something like 40-45 mm Baht and this figure goes up every year. what if i face the same situation in a few years in Thailand which i faced 20 years ago in Germany?

once bitten, twice shy! will KPMG help me out if the sh*t hits the fan? can i refer to our learned friend Kudroz or the verbal information of the Chonbury taxman?

[kudroz]

i know it's not a myth but standard practice in Thailand. the same applies to retirees (like me) who are -for whatever valid or invalid reasons- not taxed although prevailing law does not provide any legal basis for that practice.

Again you are misinformed and confusing people. There is a legal basis supporting why most retirees are not taxed. It is based on the tax treaty between their country of origin and Thailand. Foreign pension type income remitted to Thailand is not assessable income. Retirees receiving this type of income have no filing requirements in Thailand.

Generally speaking, a retiree living in Thailand receives pension income. This type of income is sourced in the country it arise and also taxed in that same country. The OECD tax treaty model is clear; pensions and social security payments or any remuneration for consideration of past employment should be taxed only in the country where it arises.

Foreign interest income, capital gains, dividend income and other type of foreign income that is not the "pension type" is taxed if remitted to Thailand in the same year it is earned.

I am sympathetic to the situation you've had to deal with in Germany; I have had a similar situation in my home country myself with millions of dollars in back taxes. One thing that I've learned is not to bet against the odds of enforcement, but rather play by the rules and use legal ways to minimize taxation. If you rely on the word of someone at the Revenue Department who may or may not be still working there today... and you haven't gotten anything in writing (advance ruling letter from the RD or an opinion letter from a reputable attorney or accountant) you have put yourself at risk again.

One has to question your judgement here. One would think that after going through an ordeal like you have in the past - you would be more careful with your own affairs and advising others. I would argue that there are legal ways to minimize taxation by following the letter and spirit of the law. You are betting on the odds that you will not be discovered and that the law will not be enforced on you. Furthermore, not obtaining a proper advance ruling letter and counsel from professionals - with the amount you've mentioned - is careless at best.

Edited May 30, 2010 by kudroz