New Rules Regarding Tax Payable In Thailand?

[sangfroid]

Does anyone have any knowledge about recent changes in Thai tax laws now being enforced by the Krom Samphakorn (Revenue department).??

I was summoned to the local office and asked many questions about my modest source of income.in Australia. I now am required to provide an official letter from the Australian Taxation Office proving that I paid tax in the last 2 Thai financial years and how much. This is a recent development according to the people at the office, and they are going to work through various countries as they go. Japan will be targetted soon. On her desk today the officer had a list of Australian names of people "living" here who are being looked at. It was extensive!! It looks as if they want tax to be paid by Farangs living here for more that 183 days per year even if the income id derived overseas.

The whole thing is very strange.

Any thoughts would be appreciated.

[CWMcMurray]

I guess it was only a matter of time....

After all-it has been on the books for many years that anyone living in Thailand for more that 180 days (ish) is considered a tax resident in Thailand.

It also states that tax payers need to pay income tax on any income generated overseas that are brought into Thailand the same calendar year as earned.

I would guess that Foreigners on extension of stay based upon Foreign income earned would be an easy place to start... as they have already sworn that they have earned income from overseas.

If this represents a change in the enforcement of tax regulations, then it appears that in order to avoid paying income tax, you would need to prove that the money was earned in a previous year or that you have already paid taxes on the money to a country that has a Tax treaty with Thailand that does not allow for double taxation of income.

[samran]

I guess it was only a matter of time....

After all-it has been on the books for many years that anyone living in Thailand for more that 180 days (ish) is considered a tax resident in Thailand.

It also states that tax payers need to pay income tax on any income generated overseas that are brought into Thailand the same calendar year as earned.

I would guess that Foreigners on extension of stay based upon Foreign income earned would be an easy place to start... as they have already sworn that they have earned income from overseas.

If this represents a change in the enforcement of tax regulations, then it appears that in order to avoid paying income tax, you would need to prove that the money was earned in a previous year or that you have already paid taxes on the money to a country that has a Tax treaty with Thailand that does not allow for double taxation of income.

That would be my take on it.

[Naam]

If this represents a change in the enforcement of tax regulations, then it appears that in order to avoid paying income tax, you would need to prove that the money was earned in a previous year or that you have already paid taxes on the money to a country that has a Tax treaty with Thailand that does not allow for double taxation of income.

that could cause big problems for some retirees who's income is tax free in the countries where it is generated but paid and transferred on a monthly basis to Thailand. the latter means no such claim as "earned in a previous year".

I guess it was only a matter of time...

indeed!

[Darrel]

I would guess that Foreigners on extension of stay based upon Foreign income earned would be an easy place to start... as they have already sworn that they have earned income from overseas.

Which to me always seemed one good reason to go via the 800K deposit route.

[InterestedObserver]

I would guess that Foreigners on extension of stay based upon Foreign income earned would be an easy place to start... as they have already sworn that they have earned income from overseas.

Foreign earned income and pensions are not the same thing. Thai income tax on pensions is excluded by taxation treaties, at least in the US treaty.

[englishinsiam]

But if we are in Thailand we can't officially work....

So how can they tax us if we can't work here?

I would happily pay Thai tax it's a darned sight less than UK tax.

[samran]

But if we are in Thailand we can't officially work....

So how can they tax us if we can't work here?

Well if you are resident in Thailand more than 181 days per year, you are a Thai resident for tax purposes. What is taxable includes:

- income earned in Thailand

- income earned offshore and bought into Thailand in the year it is earned.

You might have no income from Thai sources, but if you are overseas the other 5 months and 29 days and earn income there, then the Thai taxman wants his cut, less any tax already paid overseas which is exempted via a tax treaty.

Now, you can tell the UK government (I presume) that you are no longer resident in the UK for tax purposes. They'll waive whatever taxes are not applicable to UK non-tax residents, and you can instead hand taxes due over to the Thai tax man if you've brought those funds into Thailand in the year that they were earned.

All you need is a Thai Tax ID card, which anyone can get.

[doggie888888]

But if we are in Thailand we can't officially work....

So how can they tax us if we can't work here?

I would happily pay Thai tax it's a darned sight less than UK tax.

Besides "personal exertion" income i.e. salary, a taxpayer may have "passive" sources of income such as rental or dividends/interest. So you don't need to be working to be liable for taxes.

[rgs2001uk]

But if we are in Thailand we can't officially work....

So how can they tax us if we can't work here?

Well if you are resident in Thailand more than 181 days per year, you are a Thai resident for tax purposes. What is taxable includes:

- income earned in Thailand

- income earned offshore and bought into Thailand in the year it is earned.

You might have no income from Thai sources, but if you are overseas the other 5 months and 29 days and earn income there, then the Thai taxman wants his cut, less any tax already paid overseas which is exempted via a tax treaty.

Now, you can tell the UK government (I presume) that you are no longer resident in the UK for tax purposes. They'll waive whatever taxes are not applicable to UK non-tax residents, and you can instead hand taxes due over to the Thai tax man if you've brought those funds into Thailand in the year that they were earned.

All you need is a Thai Tax ID card, which anyone can get.

samran, this caught my attention,

"if you've brought those funds into Thailand in the year that they were earned."

What happens if the funds are brought into Thailand say the (tax) year after they were earned?

[samran]

But if we are in Thailand we can't officially work....

So how can they tax us if we can't work here?

Well if you are resident in Thailand more than 181 days per year, you are a Thai resident for tax purposes. What is taxable includes:

- income earned in Thailand

- income earned offshore and bought into Thailand in the year it is earned.

You might have no income from Thai sources, but if you are overseas the other 5 months and 29 days and earn income there, then the Thai taxman wants his cut, less any tax already paid overseas which is exempted via a tax treaty.

Now, you can tell the UK government (I presume) that you are no longer resident in the UK for tax purposes. They'll waive whatever taxes are not applicable to UK non-tax residents, and you can instead hand taxes due over to the Thai tax man if you've brought those funds into Thailand in the year that they were earned.

All you need is a Thai Tax ID card, which anyone can get.

samran, this caught my attention,

"if you've brought those funds into Thailand in the year that they were earned."

What happens if the funds are brought into Thailand say the (tax) year after they were earned?

They aren't taxable.

There is a thread laying about here somewhere where I point to the appropriate revenue department rule, chapter and verse on this. Try running a search. I know I made Naam a happy man after he saw that (after initially scoffing at my claims )

[sangfroid]

But if we are in Thailand we can't officially work....

So how can they tax us if we can't work here?

Well if you are resident in Thailand more than 181 days per year, you are a Thai resident for tax purposes. What is taxable includes:

- income earned in Thailand

- income earned offshore and bought into Thailand in the year it is earned.

You might have no income from Thai sources, but if you are overseas the other 5 months and 29 days and earn income there, then the Thai taxman wants his cut, less any tax already paid overseas which is exempted via a tax treaty.

Now, you can tell the UK government (I presume) that you are no longer resident in the UK for tax purposes. They'll waive whatever taxes are not applicable to UK non-tax residents, and you can instead hand taxes due over to the Thai tax man if you've brought those funds into Thailand in the year that they were earned.

All you need is a Thai Tax ID card, which anyone can get.

samran, this caught my attention,

"if you've brought those funds into Thailand in the year that they were earned."

What happens if the funds are brought into Thailand say the (tax) year after they were earned?

They aren't taxable.

There is a thread laying about here somewhere where I point to the appropriate revenue department rule, chapter and verse on this. Try running a search. I know I made Naam a happy man after he saw that (after initially scoffing at my claims )

[doggie888888]

But if we are in Thailand we can't officially work....

So how can they tax us if we can't work here?

Well if you are resident in Thailand more than 181 days per year, you are a Thai resident for tax purposes. What is taxable includes:

- income earned in Thailand

- income earned offshore and bought into Thailand in the year it is earned.

You might have no income from Thai sources, but if you are overseas the other 5 months and 29 days and earn income there, then the Thai taxman wants his cut, less any tax already paid overseas which is exempted via a tax treaty.

Now, you can tell the UK government (I presume) that you are no longer resident in the UK for tax purposes. They'll waive whatever taxes are not applicable to UK non-tax residents, and you can instead hand taxes due over to the Thai tax man if you've brought those funds into Thailand in the year that they were earned.

All you need is a Thai Tax ID card, which anyone can get.

samran, this caught my attention,

"if you've brought those funds into Thailand in the year that they were earned."

What happens if the funds are brought into Thailand say the (tax) year after they were earned?

They aren't taxable.

There is a thread laying about here somewhere where I point to the appropriate revenue department rule, chapter and verse on this. Try running a search. I know I made Naam a happy man after he saw that (after initially scoffing at my claims )

On a practical basis, how are the Thai tax authorities to determine which dollar was earned in what year if it all went into an account with a large balance? I can say the interest eaned in 2011 will be sent to Thailand in 2012 but in 2011 I am using funds saved in 2009 or before. Or will they assume every $ remitted to Thailand is earned in the same year?

Also, the OP says they are looking for letter from ATO to say taxes have been paid there for last 2 years... well, I declared myself non tax resident in Australia in 2006, and all the banks do is deduct withholding tax so I do not need to lodge a tax return in Australia. It's going to be a tad difficult to convince the ATO to write a letter to say they've received the withholding tax and it will be even more difficult to explain to Thai tax office why I fdon't have a tax return but already paid the tax on interest! Sigh, I think my life may become more complicated soon.....

[samran]

On a practical basis, how are the Thai tax authorities to determine which dollar was earned in what year if it all went into an account with a large balance? I can say the interest eaned in 2011 will be sent to Thailand in 2012 but in 2011 I am using funds saved in 2009 or before. Or will they assume every $ remitted to Thailand is earned in the same year?

Personally, I've always just used separate accounts so that there is an audit trail if I was ever audited.

While I've said in the past you've got a better chance of finding a virgin in Pattaya than getting audited, I think I might have just been proven wrong.

[sangfroid]

Thank you all very much for the advice. Now I have to find out what my status is.<BR><BR>I am a fully self funded retiree.(Australian) I pay no tax on my pension income as I get the low income allowance and another allowance for being fully self funded and for age. I do have monthly rental income from a property in Sydney. I pay minimal tax on this under the above conditions. None of my income comes toThailand, It is all deposited into my Aussie bank account and I draw it down here by means of a ATM card.<BR> <BR>The Revenue people are saying I am liable to pay tax here. although it is a shambles when I try to find out why. I speak good Thai (20 years here now). <BR><BR>I'll press on !!!<IMG class=bbc_emoticon alt="" src="http://static.thaivisa.com/forum/public/style_emoticons/default/dry.gif">

[jonnyscot]

Hi ,, what if someone lives less than 180 days in Thailand but has brought funds into thailand that were earned in the same tax year ?? are these funds then taxable??

this could concern some offshore workers as there is the option for some offshore workers to claim UK tax relief via the seamans deductions route or possibly non resident depending on his circumstances..

[QED]

Hi ,, what if someone lives less than 180 days in Thailand but has brought funds into thailand that were earned in the same tax year ?? are these funds then taxable??

this could concern some offshore workers as there is the option for some offshore workers to claim UK tax relief via the seamans deductions route or possibly non resident depending on his circumstances..

180 days makes you tax resident, less than that and you are non tax resident.

A non tax resident is only liable for tax on money earned in Thailand, a tax resident is liable for tax on money earned anywhere (if they bring it into Thailand in the same calendar year).

No problem for the offshore guys as long as they are here less than 6 months, or don't bring their money to Thailand

[55Jay]

I would guess that Foreigners on extension of stay based upon Foreign income earned would be an easy place to start... as they have already sworn that they have earned income from overseas.

Foreign earned income and pensions are not the same thing. Thai income tax on pensions is excluded by taxation treaties, at least in the US treaty.

Agreed on diff between "income" and "pension". For American citizens reading thread, government civilian and military pensions, and social security payments, seem to be safe.

Anyone interested can review the treaty at IRS dot gov site, pubs, treaties, then click on Thailand down in the country list. Pretty much diplo-legal ease but you can get the gist of it.

Being retarded Navy, felt my answer was found in Article 21 and Article 20 for those with social security. Need to eye screw the parts more on interest and dividends.

Regards,

HaHa J

[Darrel]

Thai income tax on pensions is excluded by taxation treaties, at least in the US treaty.

Not in the UK treaty. Nor indeed on most others, I suspect.

[Darrel]

Now, you can tell the UK government (I presume) that you are no longer resident in the UK for tax purposes. They'll waive whatever taxes are not applicable to UK non-tax residents, and you can instead hand taxes due over to the Thai tax man if you've brought those funds into Thailand in the year that they were earned.

All you need is a Thai Tax ID card, which anyone can get.

You dont need a Thai Tax ID card in order to be treated as non-resident for tax purposes by the UK authorities. You just have to leave and tell them you have done so.

However, even when you have left you are still liable to pay tax on all UK sources of income, minus your regular UK tax allowance. The only real exception is UK government bonds (gilts) which are 100% tax-free to non-residents. (Now is probably not a good time to buy these.)

[cloudhopper]

I would guess that Foreigners on extension of stay based upon Foreign income earned would be an easy place to start... as they have already sworn that they have earned income from overseas.

Which to me always seemed one good reason to go via the 800K deposit route.

Thanks for the heads up sangfroid that's some really good intel. Should prove interesting when they get to the US retirees who have sworn to an income without ever needing to prove it in any way...

[CWMcMurray]

I would guess that Foreigners on extension of stay based upon Foreign income earned would be an easy place to start... as they have already sworn that they have earned income from overseas.

Which to me always seemed one good reason to go via the 800K deposit route.

Thanks for the heads up sangfroid that's some really good intel. Should prove interesting when they get to the US retirees who have sworn to an income without ever needing to prove it in any way...

Not everyone using the income letter from the US is Lying, I am sure most can provide proof if requested.

[Jobo]

Does anyone know how the Thai Revenue Department would treat a farang retiree whose income is generated from within Thailand?

The income being derived from LTF/RMF and dividends from which WHT has already been deducted.

Is it still necessary to lodge a tax return and pay tax on my self funded retirement income?

[cloudhopper]

Not everyone using the income letter from the US is Lying, I am sure most can provide proof if requested.

Sounds like they might actually be so requested, and as already noted that can be a real PIA to comply with even for the vast majority of us US citizens who would never even consider exaggerating in any way.

So Darrel's point is well taken.

[Naam]

I would guess that Foreigners on extension of stay based upon Foreign income earned would be an easy place to start... as they have already sworn that they have earned income from overseas.

Which to me always seemed one good reason to go via the 800K deposit route.

i fully agree but a lot of people don't like to block cash with their Thai bank because they [think] they can achieve in their home countries a better yield with their capital. that might be the case but the appreciation of THB against most countries during the last years was not taken into consideration.

summary: until recently the above-mentioned attitude deserves to be called "penny-wise, pound-foolish".

[stat]

But if we are in Thailand we can't officially work....

So how can they tax us if we can't work here?

...

All you need is a Thai Tax ID card, which anyone can get.

Well how Do I get such a tax id (Pls see my other thread)? The question indeed is how are they going to distinguish which Dollar is earned in which year? My accounts are fully separated is this enough?

[cardholder]

But if we are in Thailand we can't officially work....

So how can they tax us if we can't work here?

...

All you need is a Thai Tax ID card, which anyone can get.

Well how Do I get such a tax id (Pls see my other thread)? The question indeed is how are they going to distinguish which Dollar is earned in which year? My accounts are fully separated is this enough?

If you fall into their radar, I imagine that the onus will be on YOU to prove. This seems only reasonable - as does your separate accounts system.

Has anyone got a link to samran's more detailed topic - the search facility on TV is not the best.......

[Nawtier]

Might be time to leave Los if they are going to hit me up for tax here.....

[samran]

But if we are in Thailand we can't officially work....

So how can they tax us if we can't work here?

...

All you need is a Thai Tax ID card, which anyone can get.

Well how Do I get such a tax id (Pls see my other thread)? The question indeed is how are they going to distinguish which Dollar is earned in which year? My accounts are fully separated is this enough?

If you fall into their radar, I imagine that the onus will be on YOU to prove. This seems only reasonable - as does your separate accounts system.

Has anyone got a link to samran's more detailed topic - the search facility on TV is not the best.......

here you go.

[sangfroid]

This Thai government website has information about the tax treaties in force with many countries.

http://www.rd.go.th/publish/765.0.html