Tax on income from foreign sources

[falang07]

In http://www.mazars.co.th/Home/Doing-Business-in-Thailand/Payroll/Personal-Income-Tax-in-Thailand, they say "A resident will be taxable on income from sources in Thailand on a cash basis regardless of where the money is paid, and on the portion of income that is brought into Thailand in the same year that it is earned. "

However, in http://www.rd.go.th/publish/6045.0.html (which is the official government page), it says only "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. "in the same year that it is earned" is omitted there. Does this mean this is no longer valid and the law was changed already?

Edited November 7, 2013 by falang07

[wordchild]

not heard about it if there has been a change and, this rule has been in place for a long time so it would be very major news. It is also important to remember that many Thais also make use of this convention when bringing in funds from overseas. It would not be just a farang issue.

FWIW i think its possible , in this document, something may have been lost in translation or maybe the phrase ("in the year in which it was earned") was considered redundant in this context as it is refering to "income" being brought into Thailand. Just bringing in your capital or savings would not be regarded as bringing in your income and therfore would not be subject to tax and so outside the scope of this document. The whole point of the same year rule (so i am told) is to make a distinction between people bringing in capital or savings and people bringing in their earnings, money that people bring in that they earned in prior years is regarded as capital not income.

Edited November 7, 2013 by wordchild

[developmentally challenged]

ever heard of double taxation treaties?

Edited November 7, 2013 by developmentally challenged

[Naam]

not heard about it if there has been a change and, this rule has been in place for a long time so it would be very major news. It is also important to remember that many Thais also make use of this convention when bringing in funds from overseas. It would not be just a farang issue.

FWIW i think its possible , in this document, something may have been lost in translation or maybe the phrase ("in the year in which it was earned") was considered redundant in this context as it is refering to "income" being brought into Thailand. Just bringing in your capital or savings would not be regarded as bringing in your income and therfore would not be subject to tax and so outside the scope of this document. The whole point of the same year rule (so i am told) is to make a distinction between people bringing in capital or savings and people bringing in their earnings, money that people bring in that they earned in prior years is regarded as capital not income.

the Thai version contains "in the year...". TV-member Samran copied and translated it several years ago because i had my own strong doubts.

[Naam]

ever heard of double taxation treaties?

double tax treaties do not cover tax free offshore income.

[falang07]

 

the Thai version contains "in the year...". TV-member Samran copied and translated it several years ago because i had my own strong doubts.

 

But the question is, does it contain it now? I would swear I have seen it in the English version before, too. It seems it has gone just recently, that is why I started this topic now.

[falang07]

 

ever heard of double taxation treaties?

double tax treaties do not cover tax free offshore income.

Of course, double tax treaties are useless in this case.

[falang07]

not heard about it if there has been a change and, this rule has been in place for a long time so it would be very major news...

It would be a big and serious news for many. I just wonder why it was removed from the English version, perhaps not to draw too much attention to it? One can only speculate. Also, I would really appreciate if anyone could confirm this is still present in the Thai version

[wordchild]

http://www.pwc.com/en_TH/th/publications/2013/thai-tax-2013-booklet.pdf this is the PWC 2013 Thai tax guide, they refer to the "same year" rule on the first page so if there has been a change they have missed it as well.

[Straight8]

OP qoutes "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"

My question then is, are we residents? I thought we are non-residents, tourists, providers, walking ATM's etc etc. Technically we are not residents, so income earned o/s is none of there business.

What am I missing here?

[brit1984]

OP qoutes "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"

My question then is, are we residents? I thought we are non-residents, tourists, providers, walking ATM's etc etc. Technically we are not residents, so income earned o/s is none of there business.

What am I missing here?

your missing the definition of resident for tax purposes

[Naam]

OP qoutes "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"

My question then is, are we residents? I thought we are non-residents, tourists, providers, walking ATM's etc etc. Technically we are not residents, so income earned o/s is none of there business.

What am I missing here?

what part of

A resident is any person living in Thailand for a cumulative 180 days or more in the calendar year.

did you miss?

[KamnanT]

OP qoutes "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"

My question then is, are we residents? I thought we are non-residents, tourists, providers, walking ATM's etc etc. Technically we are not residents, so income earned o/s is none of there business.

What am I missing here?

"Tax resident" and "Immigration resident" are distinct concepts. For immigration purposes, you are "temporarily resident" if you are in Thailand on a visa exempt entry, a Tourist Visa or a Non-Immigrant Visa. You are "permanently resident" if you have a Non-Quota Immigrant visa or a Quota Immigrant visa.

"Tax resident" is determined by a number of factors but as a broad simplification, if you are physically present in Thailand for 180 days or more during a calendar year, you are probably tax resident.

The two concepts are distinct. You could, for example, be illegally resident as far as Immigration is concerned (e.g. overstayed) but still tax resident and required, for example, to submit a Thai Personal Income Tax return.

[abrahamzvi]

Is interest on Capital earned outside Thailand and brought into Thailand, considered earned income and therefore liable for tax?

[topt]

Is interest on Capital earned outside Thailand and brought into Thailand, considered earned income and therefore liable for tax?

My take on it would be -

yes - if it is brought into Thailand in the same year it is paid to you

no - if you receive it in November 2013 and transfer it to Thailand in January 2014.

I would welcome a correction if anybody knows differently?

However how would anybody other than you know and who is going to actually check.......

[RickFarang]

Is interest on Capital earned outside Thailand and brought into Thailand, considered earned income and therefore liable for tax?

My take on it would be -

yes - if it is brought into Thailand in the same year it is paid to you

no - if you receive it in November 2013 and transfer it to Thailand in January 2014.

I would welcome a correction if anybody knows differently?

However how would anybody other than you know and who is going to actually check.......

What we are missing is the definition of earned income for Thai tax purposes.

[SiggiCM]

bullshit, if you are no resident in Thailand, if you not have a work permit, or thai company, you do have to pay any tax on your income, of course if you have income in thailand, but than it would be anyway illegaly without WP od company, because if they would ask you to pay tax they have t offer you also resident, sozial insurance, health insurance aso,

the 180 day rule counts only when you life and work 181 days in a country, not when you are tourist. How they find no residents and how they can force anybody to show any documents of income?

[falang07]

I think you misunderstood the whole concept, my effort is exactly the opposite, i.e. to become a tax resident of Thailand and not have to pay any taxes from the offshore income remitted in the following year.

[topt]

I think you misunderstood the whole concept, my effort is exactly the opposite, i.e. to become a tax resident of Thailand and not have to pay any taxes from the offshore income remitted in the following year.

OP it has been clearly stated if you remit income from offshore in the year after it has been earned you do not pay any taxes - whether you are tax resident or not.

And as already stated several times even if you remitted it in the same year who would know it was from that year or another year other than you.........

[Naam]

I think you misunderstood the whole concept, my effort is exactly the opposite, i.e. to become a tax resident of Thailand and not have to pay any taxes from the offshore income remitted in the following year.

OP it has been clearly stated if you remit income from offshore in the year after it has been earned you do not pay any taxes - whether you are tax resident or not.

And as already stated several times even if you remitted it in the same year who would know it was from that year or another year other than you.........

it is useless to bother with people who can't see the forest because of too many trees.

[falang07]

But only if I am tax resident in here, I can avoid to be a tax resident in Europe. Understand now? No tax residency in Europe, no taxes in there. Tax residency in here + remitted in the next year = tax haven on Earth

[falang07]

 

I think you misunderstood the whole concept, my effort is exactly the opposite, i.e. to become a tax resident of Thailand and not have to pay any taxes from the offshore income remitted in the following year.

OP it has been clearly stated if you remit income from offshore in the year after it has been earned you do not pay any taxes - whether you are tax resident or not.

And as already stated several times even if you remitted it in the same year who would know it was from that year or another year other than you.........

it is useless to bother with people who can't see the forest because of too many trees.

 

Indeed, what an irony

[falang07]

So once again for those who can not see the forest because of too many trees... :-) if I do not get a tax residency in here, I must still pay the tax in Europe from income earned all around the world, and then it does not matter if I remit it or no (and regardless when).

Edited November 13, 2013 by falang07

[krummi]

Can somebody elaborate on the clause "...and brought into Thailand"? Assume I work here and part of my salary is paid in Thailand and part of it abroad and I do not bring the earnings paid abroad into Thailand, then I only pay tax on earnings paid in Thailand?

[falang07]

No, you are one of those who can not see the forest, too This applies only to offshore earnings, not earnings from Thailand.

[GavinK]

Can somebody elaborate on the clause "...and brought into Thailand"? Assume I work here and part of my salary is paid in Thailand and part of it abroad and I do not bring the earnings paid abroad into Thailand, then I only pay tax on earnings paid in Thailand?

AFAIK earnings from your employment in Thailand are fully taxable in Thailand regardless of where they are actually paid. Otherwise everyone would be having their salaries paid offshore, including all the Thais...

[krummi]

Can somebody elaborate on the clause "...and brought into Thailand"? Assume I work here and part of my salary is paid in Thailand and part of it abroad and I do not bring the earnings paid abroad into Thailand, then I only pay tax on earnings paid in Thailand?

AFAIK earnings from your employment in Thailand are fully taxable in Thailand regardless of where they are actually paid. Otherwise everyone would be having their salaries paid offshore, including all the Thais...

Yes but then they would BRING it into Thailand to live from it. I understand your argument but then why to add this clause which makes the taxation rule ambiguous?

[GavinK]

Brought into Thailand does not refer to income earned in Thailand.

[beau thai]

No, you are one of those who can not see the forest, too This applies only to offshore earnings, not earnings from Thailand.

I have the same objective as you do-that is, leave european tax behind and receive tax free income. Turns out to be much more difficult than I thought and impossible for income arising in the european country, whether investment income, capital gains, or pensions. I suggest you consult a tax adviser in your European country before getting too far down this track.

But of course, I would be interested to hear if others have had more luck with shedding European Tax.

[wordchild]

No, you are one of those who can not see the forest, too This applies only to offshore earnings, not earnings from Thailand.

I have the same objective as you do-that is, leave european tax behind and receive tax free income. Turns out to be much more difficult than I thought and impossible for income arising in the european country, whether investment income, capital gains, or pensions. I suggest you consult a tax adviser in your European country before getting too far down this track.

But of course, I would be interested to hear if others have had more luck with shedding European Tax.

depends on which country I suppose, its relatively straightforward for the UK, if you are non resident, to avoid paying tax on certain types of investment income (ie shares or bonds even if UK sourced) however income from property and pensions (for Thai based expats) are still , in most cases, subject to UK tax. If you are non resident for 5 full tax years then any historic CGT obligation falls away. Also,in the case of the UK, as long as you meet the criteria it is not necessary to be tax resident in another country in order to be treated as a non resident for tax purposes in the UK.

The rule of thumb is get everything you can held offshore somewhere different from where you used to live and also different from where you live now and you will find tax planning in that situation can be very beneficial.

Edited November 14, 2013 by wordchild