Wondering About Paying Tax On Income Brought Into Thailand

[justinb]

Howdy, long-time lurker here, decided to post.

Last year I spent most of my time in thailand on a non-imm O visa with my thai wife. I started an internet-based business in the US several years ago that is doing well and is where I draw my income from. I have several employees in the US who manage the company. I bring money into Thailand from that business, which is how we live.

My understanding is now that I've spent more than 180 days in thailand in a given year, I'm supposed to pay tax on that money which was earned last year and which I brought into the country. Technically I hear this applies only to money that is brought in in the actual year you earned it, but frankly it doesnt matter since the taxes paid will be deducted dollar for dollar from my US taxes, rather than try to prove which dollar came from which account and was earned when, I can just pay tax on all the money I brought in. It will make no difference on my total tax due to US & Thai combined.

I'm not sure how to go about doing it. Has anyone here already done this, have experience with it? Recommend doing it alone, or getting a law firm to help?

Also that "tax payment certificate" thing is history, right? I dont want to be a prisoner here, needing to get certificates from the government every time I leave the country.

Frankly I doubt they would notice or keep track of specifically how many days I've been here, but I'd rather stay on the up and up and pay the tax, I just really hope I dont have to start getting "tax payment certificates" every time I leave the country.

Anyone with any knowledge experience, would be helpful - thanks.

Justin

[JohnC]

If the US has a double taxation agreement with Thailand then you need take no further action as money received has already been taxed/

[TerryLH]

Don't open a can of worms if you don't need to.

If the dollar amount you pay is the same, pay in the US. You have to file there anyway, but not here. Makes no sense to file two places if it's not required.

Depending on what state you're from, you might save on state taxes by living here.

Yes, the 'tax certificates' are no longer required.

[exeter]

I would leave things as they are, presumably you pay taxes in the USA leave it at that, I am sure the Thai govt would be delighted to help you out if you have too much money but the knock might be that a lot other people are going to get sucked into the box you might be opening, let sleeping dogs lie.

[justinb]

Thanks, interesting responses. Looks like there is a treaty on double taxation:

http://www.thailawforum.com/database1/double-taxation.html

I read through the treaty text, I think there is room for debate but seems quite reasonable to say that none of the money I bring in to thailand is taxable based on the treaty.

I would rather avoid opening any cans of worms unnecessarily, of course. However, in some ways I wonder if I wouldnt be better off just filing some kind of return and paying tax on the money brought into thailand. I spend about 7 months a year here, I havent calculated exactly, but more than half the year, and life with my wife and new baby. Isnt there a chance someone will wonder, well where are the tax returns? These people must have money to live on somehow. It seems there is a law that requires condominiums to report to the local thai authorities (immigration?) when someone takes up residence here.

The total tax due as I mentioned wont change as there would be a dollar-for-dollar reduction in US taxes based on whatever I pay overseas in income tax. Would just be a matter of paperwork.

I guess at this point my main question is which is the safer route, stay off the radar entirely, at the risk of the state at some point wondering why they aren't getting their dues (whether strictly speaking, owed or now), or on the other hand is the greater risk opening an unnecessary can of worms and finding myself in thai bureaucratic quicksand?

I'd talk to a thai tax lawyer, but frankly my gut instinct on that is that they'll agree that I need to pay some kind of tax, and they'l be happy to sell me their services in helping me do so. It won't make them money to say I'm ok and dont need to file, so I dont expect an objective answer from them.

Thanks for any ideas.

J

[Maestro]

My understanding is now that I've spent more than 180 days in thailand in a given year, I'm supposed to pay tax on that money which was earned last year and which I brought into the country. Technically I hear this applies only to money that is brought in in the actual year you earned it, but frankly it doesnt matter since the taxes paid will be deducted dollar for dollar from my US taxes, rather than try to prove which dollar came from which account and was earned when, I can just pay tax on all the money I brought in. It will make no difference on my total tax due to US & Thai combined.

It is correct that regardless of the number of days you lived in Thailand in a calendar year, you are technically liable to Thai income tax only for foreign-earned income you bring into Thailand during the same year that you earned it. Since there is probably no way of telling when you earned the money you are transferring to Thailand you can pretend that it was earned during an earlier year and you can just forget about the Thai tax situation. Nobody in Thailand will ever ask you when you earned it.

The payment order form of your US bank probably has a field to indicate the reason for the payment. It is a good idea always to complete that field, in your case by writing truthfully "personal expenses"

[TerryLH]

" Isnt there a chance someone will wonder, well where are the tax returns?"

What maestro said.

A popular myth is that we are all rich and have money to burn here.