Tax On Income Brought Into Thailand

[MartinThai]

Hi,

I have been offered employment for early next year at a Thai Government department – a public company. I only want to work a day or so a week and initially I had troubles with the minimum Thb50,000 per month ruling to be issued with a Work Permit. The Lawyer at the government agency spoke and met with the Department of Labor staff and have found that the minimum income ruling does not apply to an income derived as a result of work at a public company. So far, so good – I can work just a few days a week.

It may well be that I will be earning an income under the tax threshold of Thb150,000 per annum (just Thb12,500 per month) with no tax payable however, I will still be issued a Thai Tax ID Card, and, be required to submit a Personal Tax Income return each year. This would also be the procedure through which to claim back any withholding tax credits that the employer is required to deduct from salary payments.

However, my employment income goes no-where near supporting a lifestyle in Thailand. So the extra funds required for the balance of living costs will be sources from Australia.

I have a self-funded superannuation retirement annuity (or pension, as commonly referred to). I usually gain access to those funds by making cash withdrawals from an Australian account as over-the-counter transactions at any Thai bank, or other money changer facilities.

Here is my concern and a question. On Section 1 of Revenue Department's schedule on Personal Income Tax, the definition of a Taxable Person is: [Taxpayers are classified into "resident" and "non-resident". "Resident" means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand].

Additional funds to supplement living costs over and above a Thai income whether accessed by ATM or over-the-counter bank transactions on a foreign account are still "[funds] brought into Thailand".

That is my first question; can anyone with relevant experience confirm that this is indeed the case - that I am tax liable on those funds brought into Thailand from Australia to supplement living costs in Thailand (while being a tax payer in Thailand).

If I was ever audited by the Revenue Department, my Thai bank account is mostly in-active (I just leave a moderate amount parked there in case of some unforeseen medical expenses) so they would assume either that I have additional income from within Thailand, or that I am bringing funds into Thailand via ATM or other transactions upon a foreign account. The auditing agent could only say, "Please explain" as there is no paper-trail either way. They could perhaps estimate my living costs; subtract my Thai income and come up with an amount on which I am tax liable. The only possible way out is again referring to the original definition by the Revenue Department when it mentions; "…. portion of income from foreign …". Manual transactions upon a foreign account may perhaps be regarded as gaining access to my own "savings" for the purpose of supplementing personal expenses and not an "income" brought into Thailand. I have seen something along the lines of the Revenue Department are not being interested in funds earnt in a previous tax year. I really have trouble with this concept – how can I demonstrate that funds were earnt from a previous tax year if my savings and my monthly pension income are all lumped together in the same Australian account.

I'm wondering if it is all worthwhile – if I'm only going to earn such a small income at the expense of risking unknown tax consequences then maybe it's best to not work at all, and stay under any taxation radar as a long stay resident. Even being a tourist staying for a substancial period in Thailand may still qualify some as a "resident for taxation purposes" staying beyond the 180 days accumulative presence in Thailand qualifying point. So maybe better to not advertise ones presence to Thai Revenue Department by way of being issued with a Thai Tax ID Card – a requirement for any income earner in Thailand.

My wanting to work is not really a financial issue; I want to use some of the skills in my working life before retiring to more fully participate in this country – to connect with the social aspects normally associated with a working environment. I would happily work a day a week for no income at all however, no visa category that allows me to volunteer at a Thai Government agency – I would simply not be issued a Work Permit for such a proposed activity.

I hope someone with some experience and knowledge in taxation matters can assist me to clarify the situation – thank you in advance.

[nong38]

Well I am no expert but it seems to me that in offering to work and going through the proper channels you might be opening up a pandoras box to the revenue department, it would be better off financially for you to have second thoughts about working as you will likely be worse off then you thought you will be. Once these agencies have a lead they just keep banging away and all your calculations go out the window.

[asiawatcher]

From experience, income generated from a super fund has been taxed on the way out in Australia (at 15% if I remember). It is therefore taxed income and cannot be double taxed as it is capital to be used, not income. There was a double tax treaty so suggest you can talk to the Aus Embassy and see if they can shed some light on it.

[GeorgeO]

From experience, income generated from a super fund has been taxed on the way out in Australia (at 15% if I remember). It is therefore taxed income and cannot be double taxed as it is capital to be used, not income. There was a double tax treaty so suggest you can talk to the Aus Embassy and see if they can shed some light on it.

Agreed. My view on this is that the "income" from foreign sources refers to a situation where "expats" are living and working in Thailand and receiving sizeable remuneration packages from their home country.

It is well-known, even by the Thai authorities, that with the exception of the US, companies in most countries can exempt their overseas employees from home country tax since the remuneration is earned overseas. This is the type of income that the Thai authorities wish to focus on.

Funds transferred into Thailand from your home country would not be regarded as income, otherwise I, and many others like me who stay here on retirment visas, would find that all of the money we are bringing in annually to support ourselves would be subject to taxation..

[SantiSuk]

I suspect that the correct answer is that you should declare it as income on your income tax return but then also seek a deduction of tax payable by claiming relief under the double taxation treaty. In theory the Thai Revenue could ask for documentation to check that your remitted income has indeed come from sources that were subject to Australian Tax (but would be unlikely to do so, unless you are a 'big fish')

That's how it normally works but you would need to check with the Thai taxing authorities or a tax accountant. Your prospective employer might help.

It is quite clear from the Australian/Thai double taxation treaty that earned income can only be taxed in one country even if you are deemed to be a resident of both Thailand and Australia. That's a good result because high rates of income tax kick in at relatively low thresholds in Thailand and there would be a danger of incremental tax being payable in Thailand without the 'no double-taxation' provision

All Thai double taxation treaties are accessible from this page of the Thai Revenue Department website http://www.rd.go.th/publish/766.0.html. You should read the Australian one.

[i'm a retired UK chartered accountant but not a tax accountant and I am only starting to research the tax implications of living in Thailand myself].

Edited December 18, 2010 by SantiSuk

[wordchild]

there is no tax due on capital brought into Thailand. To avoid any issues with overseas income do not bring it into the country in the year in which you earn it, that is the rule in Thailand (as it is in many other countries).

Many people get around this issue through useing an offshore savings a/c (eg say singapore) as a buffer between their overseas income and Thailand expeniture. If you want to be safe and abide by the letter of the law then remit your income from Oz to that a/c and then periodicaly remit (or withdraw via atm) "savings" from that a/c to support your life in Thailand. As long as you do not remit funds which were earned in the current year there is no need to declare it and no tax to pay.perfectly legal. No idea how they could ever check on the exact source of the funds even if they wanted to but that is the rule.

Edited December 18, 2010 by wordchild

[JolyonB]

I have taken expensive tax advice and the answers here are generally correct. You are liable to tax on remiitances i you are here 180 days, but in general if you can show it comes from previuos year (ie you had the cash already, it is not taxable. Obviosly any tax already paid on current year income is deducable per the relevant Double Tax Treaty

[MartinThai]

Thank you all for the noteworthy responses – I am most impressed. All responses so far are welcomed and considered carefully.

I did actually get an email response from a high profiled and well-known Thai tax agency in Phuket who, from his "a little un-clear" written English reply, would seem to be a Thai national professional. I goes something along the lines of:

"Thank you for your interest in our tax advisory service.

From the information you provided in your email, I believe that the amount of fund that you will bring into Thailand from Australia (through ATM withdrawal) is only to cover your personal expense. Therefore, the amount should not be significant that you need to concern about paying personal income tax on those fund from Australia.

So, you do not have to worry about that. You only have to pay tax on the income you earned in Thailand (i.e. your salary in Thailand only)."

Not at all clear and seems to be saying that because I'm not a high-flyer then don't need to be concerned rather than stating anything significant – except for the point that the funds are only to cover personal expenses.

I live entirely in a cash environment – I have a Thai bank account but hardly ever used. I simply withdraw Thb50,000 at a time from over-the-counter transactions when required. So maybe in future it would be wise to keep all ATM and over-the counter cash advance receipts in case I am ever scrutinized at a later time.

Another Op commented along the lines that perhaps the correct way was to declare those incoming funds as an income but to seek a deduction of tax payable by claiming relief under the double tax treaty. I am a little nervous about saying more than needs to be known by the Thai Revenue people. I am maybe more inclined to just keep quiet and let them contact me if they have a query about the submitted taxation return and how I may be financing my lifestyle over and above the small income from the employer – maybe only about Thb150,000 a year. I hope that tax officials may not regarded this as tax evasion but more as a "naive farang acting upon advice from the above Tax Agent". But then again that Op is a professional Chartered Accountant – so I should consider his advice further and more carefully.

Another Op did mention that Thai Revenue are not interested in pension incomes but no mention of the reasoning behind that line of thinking.

Still another Op mentioned along the lines that to stay within the letter of the law to have Australian funds first go to an off-shore account as a buffer as a buffer between their overseas income and Thailand expenditure. And that as long as you do not remit funds which were earned in the current year there is no need to declare it and no tax to pay and that this approach is considered perfectly legal. I'm not really sure how I can demonstrate that those funds were earned from a previous tax year. At this time I have just the one Australian account that a pension income goes into and from which I make withdrawals from by way of ATM and over-the-counter transactions in Thailand for my living cost here. I cannot say which is old money or new money – it just a savings account. Maybe that Op can elaborate a bit more, please.

In fact a few Ops have mentioned about if able to demonstrate these funds are earnings from a previous tax year then they are not taxable – but as I said before I really have trouble with this concept and how to implement it. Is it that by way of me withdrawing funds from a savings account in Australia enough proof that these are already taxed funds? The Superannuation fund makes a monthly deposit into that same savings account (less tax of course). That would satisfy that Op's suggestion that the funds were sourced from cash I already had in hand.

As you can see I'm a bit naive, or not the full baht, when it comes to financial instruments.

I must say thank you to each and every one of you who have responded - lots of food for thought and maybe we are all on a similar path and learning from each other's experiences; attitudes and financial skills. I welcome previous and yet to come new responses from those who can add their comments into the mix on this most relevant topic.

[wordchild]

the Thai tax rules on foreign income (often called the remittance basis ) are not particularly unusual. Many countries (eg the UK for non-doms) apply a similar distinction between funds brought into country as current year earnings and funds brought in as capital.The bottom line is that, from what you have said , you have no reporting or taxation obligation (other than your Thai income) ,relax!

[wordchild]

Most working expats in Thailand make use to some extent of this (remittance) concession. I know one or two who are very careful of the audit trail of any funds they bring into the country . most dont bother to any great extent. I have never heard of anyone having any issues over this with the thai tax authorities .

[TravelerEastWest]

the Thai tax rules on foreign income (often called the remittance basis ) are not particularly unusual. Many countries (eg the UK for non-doms) apply a similar distinction between funds brought into country as current year earnings and funds brought in as capital.The bottom line is that, from what you have said , you have no reporting or taxation obligation (other than your Thai income) ,relax!

As above - relax - you are worrying too much.*

The odds of you being audited are small. Showing that the money came into your savings account combined with a very simply form of first in first out accounting will show that the money is not from the current year and non taxable.

As an example in year 1 through 5 you had $10,000 income 5 x $10,000 = $50,000 less say $25,000 living expenses tax etc. So in Year 6 off you go to Thailand with $25,000 in the savings account all with taxes paid for a prior year.

In year 6 you with draw funds and have funds added net of tax. as long as you take out less than $25,000 you are fine. And so on in future years...

* However, worrying is not easy to stop doing - if you do not need the money why not volunteer? Ask the government agency to take care of the paperwork. For a volunteer I am sure they can make it happen - this is Thailand....

Edited December 18, 2010 by TravelerEastWest

[MartinThai]

Good point about volunteering however, it is a Thai Government agency and I know they are only interested in doing things by the book. When last I met my future boss (I will report directly to the associate director) I mentioned about volunteering – he was interested. He called their Lawyer to join our meeting to take notes to investigate afterwards. Something was mentioned about a non-imm "O" visa category – there are many sub-classes. However, they were not beaming with confidence as a Government agency would not qualify in the same manner as does teaching at a Temple or school or an AGO – I will still need a Work Permit.

It is actually a Government agency under the umbrella of the Ministry of Science and Technology that is building a large research telescope at Doi Inthanon next year. Before retiring I worked at a major observatory in Australia for 2 decades – I have significant engineering experience within a telescope operations environment. They have no experience at all – none. !!. They want me to be involved in the commissioning and operational phases – maybe a day or two a week for 3 to 5 years.

So, I come back to the question; how can I volunteer at a Thai Government agency and to do it properly with a Work Permit.

Any input or ideas are really welcome. And again, thanks for all the great input so far.

[AnnyLing]

the Thai tax rules on foreign income (often called the remittance basis ) are not particularly unusual.

I apologise for bursting a bubble as there are no Thai tax rules on foreign income as described in TV several times. Official Thai tax laws do not mention with a single word any exclusions be it *earned in another calendar year* or *transferred...*. It is correct that this is the practice since years but the reality is that the tax authorities can abandon that practice any time in single cases or summarily. And the possibility that the actual tax laws could be applied retroactively for several years is quite scary.

[KarenBravo]

It states a "resident of Thailand".

Do you have "resident" status? I doubt it. Shouldn't be a problem.

[AnnyLing]

It states a "resident of Thailand".

Do you have "resident" status? I doubt it. Shouldn't be a problem.

what part of more than 180 days is it that you don't understand?

Taxpayers are classified into "resident" and "non-resident". "Resident" means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

below the government link to Thai Income Tax. Can anybody show me those exclusions mentioned???

http://www.rd.go.th/...ish/6045.0.html

[samran]

It states a "resident of Thailand".

Do you have "resident" status? I doubt it. Shouldn't be a problem.

what part of more than 180 days is it that you don't understand?

Taxpayers are classified into "resident" and "non-resident". "Resident" means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

below the government link to Thai Income Tax. Can anybody show me those exclusions mentioned???

http://www.rd.go.th/...ish/6045.0.html

you are actually giving false information. Just because it isn't mentioned on the english version of the Thai Revenue Department website, doesn't mean it doesn't exist.

I've been told by the RD that my foriegn income is of no concern to them so long as it isn't remitted to Thailand. Straight from the horses mouth.

See top of page 6 of the link below

http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/TIES/Documents/THAILAND_2010_TIES.pdf

KPMG - as you know a globally respected accounting firms such as KPMG do know their stuff. They and most of the other big accounting firms say the same thing: As long as it isn't remitted in the year it is earned, then it isn't taxable.

I've been working under this arrangement myself for almost 5 years - paid by a multinational. The revenue department don't tax the portion of my offshore income.

The OP will be FINE!!

[AnnyLing]

you are actually giving false information. Just because it isn't mentioned on the english version of the Thai Revenue Department website, doesn't mean it doesn't exist.   I've been told by the RD that my foriegn income is of no concern to them so long as it isn't remitted to Thailand. Straight from the horses mouth.  See top of page 6 of the link below  http://www.kpmg.com/...D_2010_TIES.pdf  KPMG - as you know a globally respected accounting firms such as KPMG do know their stuff.

   You are referring to the existing practice already mentioned by me *It is correct that this is the practice since years...*.     KPMG works and informs its clients according to this practice and the *horses mouth* did nothing but confirm it.     Nevertheless it is important do know and i repeat that official Thai Tax Law does not mention the exclusions. If you are able to proof that the Thai Version mentions the exclusions I will admit that my information is false.

[samran]

you are actually giving false information. Just because it isn't mentioned on the english version of the Thai Revenue Department website, doesn't mean it doesn't exist.   I've been told by the RD that my foriegn income is of no concern to them so long as it isn't remitted to Thailand. Straight from the horses mouth.  See top of page 6 of the link below  http://www.kpmg.com/...D_2010_TIES.pdf  KPMG - as you know a globally respected accounting firms such as KPMG do know their stuff.

   You are referring to the existing practice already mentioned by me *It is correct that this is the practice since years...*.     KPMG works and informs its clients according to this practice and the *horses mouth* did nothing but confirm it.     Nevertheless it is important do know and i repeat that official Thai Tax Law does not mention the exclusions. If you are able to proof that the Thai Version mentions the exclusions I will admit that my information is false.

ok...understand your point.

But what makes you think that this will change? Seems to me that it is highly speculative that things might change, when we are trying to tell the OP what the recognised proceedures are now. Where is your evidence that things will change?

[AnnyLing]

you are actually giving false information. Just because it isn't mentioned on the english version of the Thai Revenue Department website, doesn't mean it doesn't exist.   I've been told by the RD that my foriegn income is of no concern to them so long as it isn't remitted to Thailand. Straight from the horses mouth.  See top of page 6 of the link below  http://www.kpmg.com/...D_2010_TIES.pdf  KPMG - as you know a globally respected accounting firms such as KPMG do know their stuff.

   You are referring to the existing practice already mentioned by me *It is correct that this is the practice since years...*.      KPMG works and informs its clients according to this practice and the *horses mouth* did nothing but confirm it.       Nevertheless it is important do know and i repeat that official Thai Tax Law does not mention the exclusions.    If you are able to proof that the Thai Version mentions the exclusions I will admit that my information is false.

ok...understand your point.

But what makes you think that this will change? Seems to me that it is highly speculative that things might change, when we are trying to tell the OP what the recognised proceedures are now. Where is your evidence that things will change?

Thats a misunderstanding, I did not mention anything about a change. Just wanted to point out the legal situation which might or might not change any time. KMPG and other *wise* consultants will not reimburse any of its clients in case they are hit with huge backtaxes for several years. Murky Thai tax laws are one of the reasons why my husband and me moved from BKK to Singapore where the law is the law and not open to interpretations.

[MartinThai]

I appreciate you arguing the point as it helps me and I'm sure others to learn more of the finer details. However, I've heard the same thing many times that, "… as long as funds are not remitted in the same year…", and, ".. earning from a previous tax year .." things will be fine.

The term "remitted" in my understanding indicates a transfer into one's account here in Thailand from an account elewhere – a remittance may indicate a regular salary or income from an off-shore source.

In my case I'm simply accessing my savings from an Australian account by way of over-the-counter or ATM transactions. Is that a "remittance", and, does access my savings mean it's an "income" into Thailand from a foreign source.?

My real dilemma is; when it comes time to complete a Tax Return in Thailand is there any real need to mention how or where extra funds are coming from – those extra funds being the difference between a very modest Thb150,000 per annum from the Thai employer and the overall cost of supporting a lifestyle here. The tax officials processing the Tax Return will know that there must be an extra "income" or source of funds - but let them (the Thai Revenue Dept.) ask me for ratification if they wish to know.

I can demonstrate these facts; the funds will come from an Australian account that has only one source of incoming funds – a private Australian superannuation pension. If I keep that pension's tax schedule and my recent Australian Tax Returns on-hand, I can show that tax has been paid on incoming funds into that account (directly at the Super Fund before they make their deposit into my account) and the annual Statement of Earnings (Group Certificate) from that Super Fund is mentioned in the Australian Tax Return and processed through the Australian Tax Office.

Is this a sufficient method of demonstration - maybe they are not interested in being presented with English printed pension schedules and foriegn Tax Returns.

The real trouble I have is with the concept or term, "… to demonstrate that these funds are earning from a previous tax year..". I don't really even understand what this means. My Super income goes into the same account as what I draw my living costs from – really simple – maybe too simple perhaps, to demonstrate that I've paid tax already. !!

Am I on the right side of accountancy procedures and tax laws by arranging my finances this simple way or do you have an alternative suggestion to stay on the right side of the Thai Revenue people.

Thanks for the debate – I'm sure it's helping more people than just me – thanks.

[samran]

you are actually giving false information. Just because it isn't mentioned on the english version of the Thai Revenue Department website, doesn't mean it doesn't exist.   I've been told by the RD that my foriegn income is of no concern to them so long as it isn't remitted to Thailand. Straight from the horses mouth.  See top of page 6 of the link below  http://www.kpmg.com/...D_2010_TIES.pdf  KPMG - as you know a globally respected accounting firms such as KPMG do know their stuff.

   You are referring to the existing practice already mentioned by me *It is correct that this is the practice since years...*.      KPMG works and informs its clients according to this practice and the *horses mouth* did nothing but confirm it.       Nevertheless it is important do know and i repeat that official Thai Tax Law does not mention the exclusions.    If you are able to proof that the Thai Version mentions the exclusions I will admit that my information is false.

ok...understand your point.

But what makes you think that this will change? Seems to me that it is highly speculative that things might change, when we are trying to tell the OP what the recognised proceedures are now. Where is your evidence that things will change?

Thats a misunderstanding, I did not mention anything about a change. Just wanted to point out the legal situation which might or might not change any time. KMPG and other *wise* consultants will not reimburse any of its clients in case they are hit with huge backtaxes for several years. Murky Thai tax laws are one of the reasons why my husband and me moved from BKK to Singapore where the law is the law and not open to interpretations.

OK, understand again.

It comes down to a level of risk adversion you have...and I guess the amount you have at risk. For me, the vauguries of the law don't bother me, but it is different for others.

As we have both acknowledged, the situation *now* and for a long while before is that overseas remittances are not taxed, so long as they are bought in at the correct time. Many respected tax firms have attested to this point.

As what happens in future - no one knows, and we take our own risks on that front. In my view it is unlikey and it isn't something that it is likely to be change in my opinion, simply because it will not be in the interest for the business class to have this happen (both Thai and expat). Your view may/may not be different.

[wordchild]

you are actually giving false information. Just because it isn't mentioned on the english version of the Thai Revenue Department website, doesn't mean it doesn't exist. I've been told by the RD that my foriegn income is of no concern to them so long as it isn't remitted to Thailand. Straight from the horses mouth. See top of page 6 of the link below http://www.kpmg.com/...D_2010_TIES.pdf KPMG - as you know a globally respected accounting firms such as KPMG do know their stuff.

You are referring to the existing practice already mentioned by me *It is correct that this is the practice since years...*. KPMG works and informs its clients according to this practice and the *horses mouth* did nothing but confirm it. Nevertheless it is important do know and i repeat that official Thai Tax Law does not mention the exclusions. If you are able to proof that the Thai Version mentions the exclusions I will admit that my information is false.

this is a complete red herring! funds brought into the country from external savings are defined as the bringing in of capital not income so of course there is no reference to this in the rules on income tax (Engish or Thai version), because it is not income! Many other countries make exactly the same distinction, it is not unique to Thailand.

Edited December 20, 2010 by wordchild

[wordchild]

I appreciate you arguing the point as it helps me and I'm sure others to learn more of the finer details. However, I've heard the same thing many times that, "… as long as funds are not remitted in the same year…", and, ".. earning from a previous tax year .." things will be fine.

The term "remitted" in my understanding indicates a transfer into one's account here in Thailand from an account elewhere a remittance may indicate a regular salary or income from an off-shore source.

In my case I'm simply accessing my savings from an Australian account by way of over-the-counter or ATM transactions. Is that a "remittance", and, does access my savings mean it's an "income" into Thailand from a foreign source.?

My real dilemma is; when it comes time to complete a Tax Return in Thailand is there any real need to mention how or where extra funds are coming from those extra funds being the difference between a very modest Thb150,000 per annum from the Thai employer and the overall cost of supporting a lifestyle here. The tax officials processing the Tax Return will know that there must be an extra "income" or source of funds - but let them (the Thai Revenue Dept.) ask me for ratification if they wish to know.

I can demonstrate these facts; the funds will come from an Australian account that has only one source of incoming funds a private Australian superannuation pension. If I keep that pension's tax schedule and my recent Australian Tax Returns on-hand, I can show that tax has been paid on incoming funds into that account (directly at the Super Fund before they make their deposit into my account) and the annual Statement of Earnings (Group Certificate) from that Super Fund is mentioned in the Australian Tax Return and processed through the Australian Tax Office.

Is this a sufficient method of demonstration - maybe they are not interested in being presented with English printed pension schedules and foriegn Tax Returns.

The real trouble I have is with the concept or term, "… to demonstrate that these funds are earning from a previous tax year..". I don't really even understand what this means. My Super income goes into the same account as what I draw my living costs from really simple maybe too simple perhaps, to demonstrate that I've paid tax already. !!

Am I on the right side of accountancy procedures and tax laws by arranging my finances this simple way or do you have an alternative suggestion to stay on the right side of the Thai Revenue people.

Thanks for the debate I'm sure it's helping more people than just me thanks.

Strictly speaking remitting funds to a Thai bank a/c and withdrawing from an ATM while in the country amount to the same thing.

If you want to be belt and braces (and you seem too),open another a/c with your OZ bank. Fund it say in December at the end of the Thai tax year, then for your first year ( from the following Jan) only use those funds to draw-on while in Thailand. Keep records of money that you transfer in during the year and thereafter ensure that you dont withdraw (in Thailand) more than you put in in the previous year. That way you can clearly demonstrate that all you are doing is spending your OZ savings.

Edited December 20, 2010 by wordchild

[thaihome]

the Thai tax rules on foreign income (often called the remittance basis ) are not particularly unusual.

I apologise for bursting a bubble as there are no Thai tax rules on foreign income as described in TV several times. Official Thai tax laws do not mention with a single word any exclusions be it *earned in another calendar year* or *transferred...*. It is correct that this is the practice since years but the reality is that the tax authorities can abandon that practice any time in single cases or summarily. And the possibility that the actual tax laws could be applied retroactively for several years is quite scary.

It seems to me that Article 18 of the Thai-Australia Tax Treaty would apply as the OP described the funds as a private Australian superannuation pension. As it is a private fund, Section 19 does not apply.

TH

AGREEMENT BETWEEN THE KINGDOM OF THAILAND AND AUSTRALIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

ARTICLE 18 PENSIONS AND ANNUITIES

1. Subject to the provisions of Article 19, pensions and annuities paid to a resident of one of the Contracting States shall be taxable only in that State.

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

[MartinThai]

Both the previous responses are helpful; my so-called private Superannuation fund is as a result of working at, and subsequent retirement from, an employer - not Government. It is an Allocated Pension and taxed at it's source. Payments will stop when the balance falls to zero - but it does fall within the definition as quoted by the provisions of Article 19; that is – [The term "annuity" means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time under an obligation to make the payments …..] So in effect, it is protected by the tax treaty.

The other recent response from Khun wordchild was also helpful and mentioned the method to structure an account ("to demonstrate that funds are not from the current tax year", or, "that I am using my own savings") by already having funds in that account for a year before drawing upon them. Is this what you are saying.? Can I re-state your proposal (in my own words) and see if it matches what you are suggesting. ?

Here goes: Start a new account this month (Dec) at my Oz bank. From January (2011) put in an amount to fund a whole year in Thailand (maybe about Aust$30,000) then what?. I interpret your statement there on as: Allow the monthly pension deposits to go into that account, and, also can start using that account for ATM and over-the-counter transactions in Thailand but never let the withdrawals exceed the deposits (in other words the balance should never drop below the initial lump-sum deposit).

Is that the gist of what you are saying, or, am I still missing something.? Sorry if I'm a bit thick in these matters.

I would appreciated it if I am corrected, if I still have not quite got the concept down pat.

Someone else suggested an off-shore account – I'm not sure how this would prove what I'm trying to demonstrate, if ever audited.

[wordchild]

Both the previous responses are helpful; my so-called private Superannuation fund is as a result of working at, and subsequent retirement from, an employer - not Government. It is an Allocated Pension and taxed at it's source. Payments will stop when the balance falls to zero - but it does fall within the definition as quoted by the provisions of Article 19; that is – [The term "annuity" means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time under an obligation to make the payments …..] So in effect, it is protected by the tax treaty.

The other recent response from Khun wordchild was also helpful and mentioned the method to structure an account ("to demonstrate that funds are not from the current tax year", or, "that I am using my own savings") by already having funds in that account for a year before drawing upon them. Is this what you are saying.? Can I re-state your proposal (in my own words) and see if it matches what you are suggesting. ?

Here goes: Start a new account this month (Dec) at my Oz bank. From January (2011) put in an amount to fund a whole year in Thailand (maybe about Aust$30,000) then what?. I interpret your statement there on as: Allow the monthly pension deposits to go into that account, and, also can start using that account for ATM and over-the-counter transactions in Thailand but never let the withdrawals exceed the deposits (in other words the balance should never drop below the initial lump-sum deposit).

Is that the gist of what you are saying, or, am I still missing something.? Sorry if I'm a bit thick in these matters.

I would appreciated it if I am corrected, if I still have not quite got the concept down pat.

Someone else suggested an off-shore account – I'm not sure how this would prove what I'm trying to demonstrate, if ever audited.

not quite , best to fund the a/c this year ie in Dec then you can start to use those funds from Jan and they will be classed as savings. After the first year should be easy to maintain. However as i and others have said this is way beyond what most other expats do here, but good for you in wanting to get it right!

[wordchild]

The balance can drop below the initial deposit (that you made in DEC) just dont end up spending more than that deposit over the course of the first year; thereafter dont spend more than the funds you deposited during the previous year. ie Keeping it simple ; put in 30k OZ in dec 2010, jan-dec 2011 in Thailand withdraw and spend 29,999 OZ. Again in dec 2011 put in 30 k OZ Jan to dec 2012 withdraw and spend 29999 k OZ in Thailand ; result , to paraphrase Mr Micawber virtuous tax free happiness .

Edited December 20, 2010 by wordchild

[Naam]

KPMG - as you know a globally respected accounting firms such as KPMG do know their stuff. They and most of the other big accounting firms say the same thing: As long as it isn't remitted in the year it is earned, then it isn't taxable.

that is correct Samran but... may i draw your attention to two other "globally respected accounting firms" who "knew their stuff"?

Arthur Andersen (Enron scandal 2002)

quote: "Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms among PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG, providing auditing, tax, and consulting services to large corporations. In 2002, the firm voluntarily surrendered its licenses to practice as Certified Public Accountants in the United States after being found guilty of criminal charges relating to the firm's handling of the auditing of Enron..."

Ernst & Young (Lehman 2008)

quote: "WAS the collapse of Lehman Brothers in 2008 aided by a fraudulent cover-up of balance-sheet shenanigans? Andrew Cuomo, New York’s outgoing attorney-general and incoming state governor, thinks so, and has filed suit against Ernst & Young, Lehman’s auditors.

Mr Cuomo alleges that E&Y committed fraud by signing off on an accounting manoeuvre used by Lehman, known as Repo 105. Under this scheme, towards the end of each quarter Lehman temporarily swapped some of its assets for cash with another bank or investor, but booked this as if it were a permanent sale of the assets. By doing this, it and the other banks that used this manoeuvre in the run-up to the credit crunch made themselves look less indebted in their quarterly results."

:jap:

[samran]

KPMG - as you know a globally respected accounting firms such as KPMG do know their stuff. They and most of the other big accounting firms say the same thing: As long as it isn't remitted in the year it is earned, then it isn't taxable.

that is correct Samran but... may i draw your attention to two other "globally respected accounting firms" who "knew their stuff"?

Arthur Andersen (Enron scandal 2002)

quote: "Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms among PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG, providing auditing, tax, and consulting services to large corporations. In 2002, the firm voluntarily surrendered its licenses to practice as Certified Public Accountants in the United States after being found guilty of criminal charges relating to the firm's handling of the auditing of Enron..."

Ernst & Young (Lehman 2008)

quote: "WAS the collapse of Lehman Brothers in 2008 aided by a fraudulent cover-up of balance-sheet shenanigans? Andrew Cuomo, New York’s outgoing attorney-general and incoming state governor, thinks so, and has filed suit against Ernst & Young, Lehman’s auditors.

Mr Cuomo alleges that E&Y committed fraud by signing off on an accounting manoeuvre used by Lehman, known as Repo 105. Under this scheme, towards the end of each quarter Lehman temporarily swapped some of its assets for cash with another bank or investor, but booked this as if it were a permanent sale of the assets. By doing this, it and the other banks that used this manoeuvre in the run-up to the credit crunch made themselves look less indebted in their quarterly results."

:jap:

Love your work Dr.Naam, but I'll take your $1000, and raise you another $2000....

For everyone's consideration, I shall present you with text from the Thai Revenue Department website:

http://www.rd.go.th/publish/552.0.html

(feel free to press the translation button that firefox offers you).

Specifically

2. เงินได้เกิดจากแหล่งนอกประเทศไทย หมายถึง เงินได้ที่เกิดขึ้นหรือเป็นผลสืบเนื่องจากมี

2.1 หน้าที่งานที่ทำในต่างประเทศ หรือ

2.2 กิจการที่ทำในต่างประเทศ หรือ

2.3 ทรัพย์สินที่อยู่ในต่างประเทศ

* เงื่อนไข ผู้มีเงินได้เกิดจากแหล่งนอกประเทศในปีภาษีที่ล่วงมาแล้วจะต้องเสียภาษีเงิน ได้ ในประเทศไทยก็ต่อเมื่อเข้าองค์ประกอบทั้ง 2 ประการ ดังต่อไปนี้

(1) ผู้มีเงินได้เป็น ผู้อยู่ในประเทศไทย ในปีภาษีนั้นชั่วระยะเวลาหนึ่งหรือหลายระยะเวลา รวมทั้งหมดถึง 180 วัน และ

(2) ผู้มีเงินได้ นำเงินได้นั้นเข้ามาในประเทศไทยในปีภาษีนั้นด้วย

ในการเสียภาษีเงินได้บุคคลธรรมดาบางกรณี ถ้าเกี่ยวข้องกับบุคคลของบางประเทศที่มี อนุสัญญาภาษีซ้อน* หรือ ความตกลงเพื่อป้องกันการเก็บภาษีซ้ำซ้อนกับประเทศไทยจำเป็นต้องพิจารณาถึง ความ ตกลงหรืออนุสัญญาว่าด้วยการเว้นการเก็บภาษีซ้อนระหว่างประเทศไทยได้ทำความ ตกลงไว้ด้วย

So, the regulation, in the original Thai, on the revenue departments website.

Anyone prepared to call my hand?

Edited December 30, 2010 by samran

[Naam]

So, the regulation, in the original Thai, on the revenue departments website.

* The terms of the income from sources outside the country in the preceding tax year will have to pay tax in the country

when he and two elements of the following reasons.

(1) the money is. Who live in Thailand In the short period taxable year or period of time. Total of 180 days.

(2) The money has brought the money into Thailand in the tax year itself.

In some cases, loss of personal income tax. If the person concerned of the few countries that have * Double taxation

convention or agreement to avoid double taxation with Thailand needs to consider the Agreement or the Convention

on the Avoidance of Double Taxation between Thailand and has an agreement with them.