A Taxing Question!

[maksida]

I have a non-imm O visa, which specifically prohibits employment (and therefore taxes on that employment) within the Kingdom.

I have not been resident in the UK for nearly twenty years. I am in the process of selling a house in France (where I used to live until five years ago) and in order to pay a reduced capital gains tax of 20% instead of the maximum 30%, I need to show the French authorities that I am fiscally resident (anywhere) outside France. I cannot get the necessary paperwork from the UK (even though I have an address there) because I haven't been resident for more than the required 183 days in the (or any) year.

Is it possible to get a form from the Thai tax people to say that I am fiscally resident here, based on my almost continuous stay over four years?

I'd really appreciate any informed advice anyone is able to give me on this, as the difference in 20 and 30% tax is considerable!

Many thanks in advance.

[BigJohnnyBKK]

Are you retired? What is the basis for your visa? I have no idea of what being "fiscally resident" might mean, being American I guess that's not relevant to our tax system.

I personally doubt the Thai government would certify anything other than what your passport would show, that you actually live here and that you don't work.

[mogandave]

You can’t just use the physical presence to show residency for tax purposes?

[loong]

You need some sort of certificate of residence when applying for a driving licence etc in Thailand.

You get these from the immigration department.

Would this do with a certified translation to French?

[ThailandInvestmentGuide]

I have no idea of what being "fiscally resident" might mean, being American I guess that's not relevant to our tax system.

I think he means "tax resident", which you are after 6 months. The best proof of that would be copies of tax returns lodged in Thailand. Have you lodged and returns here? I don't think the residency certificate from imigration would help as (from memory) that doesn't say when residency commenced, it only confirms your address. You also need to check other possible implications of declaring your tax residency in Thailand, just to make sure there are no unintended consequences that might nullify the benefit you are seeking on this occasion.

[BigJohnnyBKK]

I think he means "tax resident", which you are after 6 months.

I think it's possible this isn't not a relevant term for US citizens, who are obligated to file wherever they live reporting all assets/accounts and income from all sources, unless they formally renounce their citizenship.

Are you suggesting that someone living here should file a tax return even if they're forbidden from working?

[maksida]

This has nothing to do with Immigration or Visa matters. I have a slip of paper certifying that I am resident, which I used to get my driving license. But the French tax authorities require a certificate (in the standard, bilingual form they recognise - I have an example) from the Thai tax authorities, not Immigration. I have no idea who to approach, nor even if such a piece of paper exists. I have never earned any money in Thailand (my visa specifically prohibits employment), and so have never registered for income tax here. I am technically resident in Thailand (the 183 days a year rule applies). I understand this is a very specialised and difficult area, and I'm really hoping to get a contact with someone who can both offer expertise and speaks English!

[ThailandInvestmentGuide]

Are you suggesting that someone living here should file a tax return even if they're forbidden from working?

I am not "suggesting", it is the law. Further, you can be living in Thailand and earn income without falling foul of the work permit laws (for e.g. passive income)

Clearly I don't know this individual's circumstances - other than the little info he has provided - so I am not in a position to say what he should or shouldn't do in this regard

Postscript: Just read the post above which appeared while I was typing this. I would suggest just going into your local tax office and explaining your situation to them. Before doing so though I would be inclined to do a little homework on Thai tax laws in relation to lodgement of returns. There is a good free booklet in the Price Waterhouse Thailand site (http://www.pwc.com/th/en/tax/assets/2012/thai-tax-2012-booklet.pdf)

Edited November 1, 2012 by ThailandInvestmentGuide

[BigJohnnyBKK]

I am not "suggesting", it is the law. Further, you can be living in Thailand and earn income without falling foul of the work permit laws (for e.g. passive income)

"The law" doesn't help me - who's law, Thailand's?

Are you saying all the expats living here, supporting families, retired whatever are supposed to be filling out Thai tax returns every year even if they don't work and have no income?

I am technically resident in Thailand (the 183 days a year rule applies).

Where does this rule come from, what jurisdiction? I've never heard of such a rule.

[Naam]

I am not "suggesting", it is the law. Further, you can be living in Thailand and earn income without falling foul of the work permit laws (for e.g. passive income)

"The law" doesn't help me - who's law, Thailand's?

Are you saying all the expats living here, supporting families, retired whatever are supposed to be filling out Thai tax returns every year even if they don't work and have no income?

I am technically resident in Thailand (the 183 days a year rule applies).

Where does this rule come from, what jurisdiction? I've never heard of such a rule.

this rule is Thai law and... SURPRISE! it does exist even though you never heard of it.

PERSONAL INCOME TAX

An individual Thai citizen or alien who lives in Thailand for one or more periods totaling

at least 180 days in any tax (calendar) year is, for tax purposes, deemed a resident of

Thailand and subject to tax on all assessable income derived from sources within the

country, whether paid within or outside Thailand, and on assessable income derived from

foreign sources to the extent that it is brought into Thailand in the year in which income is

received. A non-resident individual is subject to tax only on assessable income from Thai

sources, regardless of payment location. Non-juristic partnerships (unregistered ordinary

partnerships) and non-juristic bodies are also subject to personal income tax.

Individual taxable income includes money and all other employment benefits received.

Examples of taxable income are:

• Wages paid in Thailand.

• Wages paid abroad as a result of work in Thailand.

• Income (wages, interest, dividends, etc.) from abroad brought into Thailand in the

year earned. This applies only to those who reside in Thailand for a total of 180 days or

more in that taxable calendar year.

• Vacation pay earned in Thailand.

• Housing and meal allowances or their value.

• School fees for dependents paid for by employer.

• Cost of home leave for taxpayer and dependents.

• Any other benefit received or obligation paid for by employer.

• Taxes paid by employer for employee, including taxes paid on taxes.

• Capital gains arising from transfer of assets, except proceeds of sale of movable

property acquired by bequest or acquired with no intention to trade or make profit, as well

as those from selling securities listed on the Stock Exchange of Thailand, but not in the form

of debentures or bonds.

• Pensions and retirement pay brought into Thailand.

• Royalties.

• Interest on a deposit with a bank in Thailand that is repayable on demand of not more

than Baht 20,000.

Assuming that concrete proof is available, some examples of non-taxable income are

listed below:

• Bona fide gifts and inheritance.

• Income earned abroad by a person who does not reside in Thailand for a total of 180

days or more in the year the income is brought into Thailand.

• Moving expenses received by an employee to assume employment for the first time

or to return to his place of origin at termination of employment.

• Per diem or transportation expenses spent by an employee exclusively and wholly for

carrying out his/her duties.

• Medical expenses paid by an employer for an employee and his/her family.

• Compensation for wrongful acts, sums derived from insurance or from a funeral

assistance scheme.

• Inheritance.

• Scholarships.

The tax due is assessed on the net taxable income at progressive rates ranging from 10%

to 37% as illustrated below. All figures are in Thai baht.

Allowable Deductions

Standard deduction 40% of the wages up to a maximum of 60,000

Personal deductions:

For the income earner 30,000

For the spouse 30,000

For each child (maximum of three) 15,000

School allowance for each child studying in Thailand 2,000

Other deductions provided for in the Revenue Code are:

Official Tax Table of Rates

On income after deductions Rate Amount Cumulative

First 100,000 0% 0 0

Next 400,000 10% 40,000 40,000

Next 500,000 20% 100,000 140,000

Next 3,000,000 30% 900,000 1,040,000

Over 4,000,000 37%

[meom]

I think the OP would need to get a Thai Tax ID first.

Check with the Revenue Department.

[Naam]

This has nothing to do with Immigration or Visa matters. I have a slip of paper certifying that I am resident, which I used to get my driving license. But the French tax authorities require a certificate (in the standard, bilingual form they recognise - I have an example) from the Thai tax authorities, not Immigration. I have no idea who to approach, nor even if such a piece of paper exists. I have never earned any money in Thailand (my visa specifically prohibits employment), and so have never registered for income tax here. I am technically resident in Thailand (the 183 days a year rule applies). I understand this is a very specialised and difficult area, and I'm really hoping to get a contact with someone who can both offer expertise and speaks English!

i am well aware about that EU nonsense Maksida. you have to bite the bullet and claim that the money of your last transfer was earned in 2012 and that you are liable to pay income tax on it. the tax authorities will still try to put you off but you have to insist. if you have a Thai friend let him accompany you to the taxman's office. makes things easier.

as far as the certifying document is concerned what the Frogs ask from you... you are between a rock and a hard place. best what you can obtain is a tax number, a few lines in Thai and of course a copy of your filed return which has to be translated into French.

good luck!

[Naam]

Are you saying all the expats living here, supporting families, retired whatever are supposed to be filling out Thai tax returns every year even if they don't work and have no income?

Where does this rule come from, what jurisdiction? I've never heard of such a rule.

how does an expat live in Thailand and support families without having an income?

[astral]

There are dual tax agreements so you may not need to actually pay any tax in Thailand

but the possession of a tax id card and record of tax may help your case that you are resident.

[taxout]

What you want is this document:

http://www.rd.go.th/...sh/21978.0.html

Technically, it's for purposes of the Thai-French Tax Treaty, but it should serve your purposes equally well.

If there's a problem with that one, you can try for this one, which is simpler:

http://www.rd.go.th/...sh/21980.0.html

But it only shows that you are taxable in Thailand, not that you are resident in Thailand.

Edited November 1, 2012 by taxout

[BigJohnnyBKK]

how does an expat live in Thailand and support families without having an income?

Stressfully.

[maksida]

Thanks for all the replies. To clarify - I am not trying to evade tax, and I fully intend to declare this income to the Thai Revenue. I always thought (incorrectly) that I was still legally a resident of the UK (as I have an address and am registered with the Inland Revenue) and expected to pay tax on it there (after paying the French their appalling capital gains tax). The 180 day residency rule was pointed out to me by an accountant in the UK. It seems I'm not the only person ignorant of this!

I don't see how I can get the paperwork the French need (tip - if you ever think Thailand is inefficient, overly bureaucratic, or frustrating, buy a house in France and learn the meaning of cauchemar) so the capital gains tax bullet will have to be duly bitten.

[IamNotaNumber]

how does an expat live in Thailand and support families without having an income?

Out of capital?

[TerryLH]

"I have a non-imm O visa, which specifically prohibits employment (and therefore taxes on that employment) within the Kingdom."

The Revenue Department doesn't care if you are working legally or not. If you earn money here, you are supposed to file with them.

As someone mentioned above, depending on your specific circumstances, you might not owe anything, but are still expected to file.

Terry

[Douggie Style]

<p>As residency is a fundamental of the jurisdiction to tax, most tax/revenue offices should have a process.

google 'certificate of tax residence xxcountryxxx'

good luck,

cheers Douggie

PS

The RD department does provide a certificate here http://www.rd.go.th/...sh/21978.0.html

(This is suitable for tax residency)

Edited November 1, 2012 by Douggie Style

[IamNotaNumber]

Various possibilities here.

If the OP has filed a tax return in the UK (even as a non-resident) giving his address in Thailand then HMRC should be able to provide a document confirming this. For many countries this would be enough but, knowing what French bureaucracy is like, I suspect that this would not satisfy them. Might be worth a try though.

He may also have the possibility of back-declaring for income tax in France for the last 5 years, if the house was empty and available for his use during that time. I know several French people who live here but retain fiscal residency in France due to the benefits it gives them. Of course the French tax liability on income may outweigh the potential saving on CGT.

He could go to the local Thai tax office and try to make declarations for the last 5 years. I dont know whether they would allow this (I see no obvious reason why not) but they certainly will accept them for the two previous years, which is at least a 40% reduction for the French tax people. In my experience the local Thai tax people are extremely helpful (though it might be a good idea to have someone along who speaks both English and Thai). Presumably he has visa stamps in his passport indicating the time spent here?

Of course this may leave him open to paying tax here, if he has sent money from income here in the same year in which it was earned, as mentioned previously.

If the French house was his main French residence, the tax liability in France should only be for the capital gain that accrued during the time when he was not resident in France, ie the last 5 years, minus allowable expenses (agent's fees, building work) of course. Given the state of the market this liability may be minimal.

Certainly a residence certificate from Thai immigration is meaningless; they only show where you are living on the day of application.

I thought that crétin Hollande had scrapped the 20% rate for non-residents anyway? That country is doomed. They just dont know it yet.

[IamNotaNumber]

To clarify - I am not trying to evade tax, and I fully intend to declare this income to the Thai Revenue.

What income? The question seems to be about French CGT, not income.

Maybe you should be more specific if you want helpful answers.

[1bbcd5]

Thanks for this post guys I was going through the same thing.

[maksida]

To clarify - I am not trying to evade tax, and I fully intend to declare this income to the Thai Revenue.

What income? The question seems to be about French CGT, not income.

Maybe you should be more specific if you want helpful answers.

Maybe you should read my posts? I have been very specific. Some of the replies here haven't quite taken into account all the details I've posted here, which go as far into my private life as I want to on a public forum. There have been some helpful answers (for which, thanks), and some not so helpful, as is the way of an internet forum.

[Eff1n2ret]

There are loads of us who live in Thailand but pay UK tax. We're called pensioners. Although I have spent no more than three weeks in any of the last 3 years in the UK, that must be my "fiscal residence", and I've got tax returns to prove it. I don't see that because they have my Thai address on them that makes any difference. If the OP has been fortunate enough to arrange his affairs so that he pays little or no tax anywhere, he's in a better league than any of us, who are not equipped to advise him. Maybe this is a case where he'll have to pay up and look cheerful.

[IamNotaNumber]

To clarify - I am not trying to evade tax, and I fully intend to declare this income to the Thai Revenue.

What income? The question seems to be about French CGT, not income.

Maybe you should be more specific if you want helpful answers.

Maybe you should read my posts? I have been very specific.

I just did. I see no mention of yours regarding income, apart from the one that I quoted.

So I ask again, what income? And what does it have to do with the topic?

By the way, I lived and worked in France for 35 years, was an employee for a while then ran two very successful businesses. By dint of some planning and research I managed to sell up, house and all, and leave without paying a bean in CGT (100% legally ). That may mean that I know more about French CGT than anyone else posting here.

But hey, maybe you know better. Or maybe not.