Is Rental Income considered work or not? Need WP?

[Shurup]

My friend is planning on buying some property in Thailand, she's planning to live here part time and part time back in Canada. While in Canada, she's planning to have the property occupied by renting it out.

Will these rental payments considered income whether she's in Thailand or in Canada and as such, will she officially need a Work Permit or no? Is there any chance to get into any sort of trouble doing this?

Another scenario.

If she bought 2 properties, one is full time rental property, and another property is for herself to live there full time or, like in the 1st example, live there part time and renting it out part time?

Ideas?

[PattayaPhom]

If she uses a third party or agent to facilitate the rental she isnt working. Rental income is taxable although the % of owners that do is minimal.

[noikrit]

Good question !! ..........

[Naam]

no work permit required when owning rental properties.

[falang07]

What bout the Thai Tax ID? Will they issue one for paying the tax?

[brianP]

Never go looking for taxes, they will find you, that's for sure.

[tx22cb]

Is she going to rent it locally in Thailand - i.e. advertise in Thailand, get tenants who are already in Thailand?

Or is she going to advertise it in on Canadian/US/international websites for holiday lets? If so, let the renters pay her in Canada with hard currency.

[Naam]

What bout the Thai Tax ID? Will they issue one for paying the tax?

of course they will.

[Naam]

Is she going to rent it locally in Thailand - i.e. advertise in Thailand, get tenants who are already in Thailand?

Or is she going to advertise it in on Canadian/US/international websites for holiday lets? If so, let the renters pay her in Canada with hard currency.

Tha income tax on rental property is quite fair @ 15%. the Thai taxman also accepts that the hard and soft furnishing of a condo or house is 40% of the rent, therefore not taxed but considered "compensation for value depreciation" if specified in the rental contract. most real estate agents are not aware of this.

[indyuk]

Is she going to rent it locally in Thailand - i.e. advertise in Thailand, get tenants who are already in Thailand?

Or is she going to advertise it in on Canadian/US/international websites for holiday lets? If so, let the renters pay her in Canada with hard currency.

Tha income tax on rental property is quite fair @ 15%. the Thai taxman also accepts that the hard and soft furnishing of a condo or house is 40% of the rent, therefore not taxed but considered "compensation for value depreciation" if specified in the rental contract. most real estate agents are not aware of this.

Hi I am confused by this wording,

"compensation for value of depreciation therefore not taxed but considered compensation for value depreciation"

In the UK we generally do not get a deductible for depreciation on the fabric of the building or it's furnishings.

would you clarify your statement please.

[flyingdoc]

Safest way would be to rent in Canada then there could not be any problem in LOS !

[thailandbeachisland]

Nobody will never know and she won't pay any tax just as everybody else, Thai or foreigners !

[Nemesis7]

No work permit required.

[crazydrummerpauly]

Is she going to rent it locally in Thailand - i.e. advertise in Thailand, get tenants who are already in Thailand?

Or is she going to advertise it in on Canadian/US/international websites for holiday lets? If so, let the renters pay her in Canada with hard currency.

Tha income tax on rental property is quite fair @ 15%. the Thai taxman also accepts that the hard and soft furnishing of a condo or house is 40% of the rent, therefore not taxed but considered "compensation for value depreciation" if specified in the rental contract. most real estate agents are not aware of this.

Hi I am confused by this wording,

"compensation for value of depreciation therefore not taxed but considered compensation for value depreciation"

In the UK we generally do not get a deductible for depreciation on the fabric of the building or it's furnishings.

would you clarify your statement please.

Mmm - it's a long time since i was closely involved with it, but i'm pretty sure that Furnished rented properties in the UK are taxed with a percentage of the rental income deducted for 'wear and tear'. The reason this is not so well known about now is that Furnished has given way to Unfurnished in the majority of properties for various reasons. [Having to have 'fire-resistant' labels on everything being one.]

Edited December 18, 2013 by crazydrummerpauly

[elliottm]

are there no activities in setting up & running a rental business that could be described as energy expended (mental or physical) under the broad catchment of 'work'? In addition to the Thai rental income, she would also need to pay tax on any income brought in from Canada if she stayed 180 days in Thailand.

[Arkady]

What bout the Thai Tax ID? Will they issue one for paying the tax?

of course they will.

If you go along to your friendly local tax office and ask them for a tax ID, they will surely oblige. You will need to complete a PNG90 annual tax return which is for income other than or in addition to salaries.

[weedywhaoo]

You do need to pay tax on rental income, both to the local tax authority and personal income tax.

Also don't forget that you need to inform immigration of your guests within 24 hours from arrival.

[Naam]

You do need to pay tax on rental income, both to the local tax authority and personal income tax.

Also don't forget that you need to inform immigration of your guests within 24 hours from arrival.

never heard of renting out property to "guests". the landlord reports only once to immigration when he's renting out plus of course any change of tenants. the guests of the tenant are none of his business.

[bimmerbob]

Is she going to rent it locally in Thailand - i.e. advertise in Thailand, get tenants who are already in Thailand?

Or is she going to advertise it in on Canadian/US/international websites for holiday lets? If so, let the renters pay her in Canada with hard currency.

Tha income tax on rental property is quite fair @ 15%. the Thai taxman also accepts that the hard and soft furnishing of a condo or house is 40% of the rent, therefore not taxed but considered "compensation for value depreciation" if specified in the rental contract. most real estate agents are not aware of this.

Hi I am confused by this wording,

"compensation for value of depreciation therefore not taxed but considered compensation for value depreciation"

In the UK we generally do not get a deductible for depreciation on the fabric of the building or it's furnishings.

would you clarify your statement please.

In the UK, the equivalent to depreciation deductibles are referred to as 'capital allowances'.

[Naam]

Is she going to rent it locally in Thailand - i.e. advertise in Thailand, get tenants who are already in Thailand?

Or is she going to advertise it in on Canadian/US/international websites for holiday lets? If so, let the renters pay her in Canada with hard currency.

Tha income tax on rental property is quite fair @ 15%. the Thai taxman also accepts that the hard and soft furnishing of a condo or house is 40% of the rent, therefore not taxed but considered "compensation for value depreciation" if specified in the rental contract. most real estate agents are not aware of this.

Hi I am confused by this wording,

"compensation for value of depreciation therefore not taxed but considered compensation for value depreciation"

In the UK we generally do not get a deductible for depreciation on the fabric of the building or it's furnishings.

would you clarify your statement please.

In the UK, the equivalent to depreciation deductibles are referred to as 'capital allowances'.

i think that deductible refers to the building not to furnishings. that's the case in Germany.

[djhotsox]

I would worry more about the Canadian Tax man IF she is "resident" of Canada.....IF so, she will be required to declare the income on her Canadian Income Tax return. And then when time comes to "dispose" of the properties, file any "gain" on the sales.

[Naam]

I would worry more about the Canadian Tax man IF she is "resident" of Canada.....IF so, she will be required to declare the income on her Canadian Income Tax return. And then when time comes to "dispose" of the properties, file any "gain" on the sales.

only if she feels like

[Shurup]

I would worry more about the Canadian Tax man IF she is "resident" of Canada.....IF so, she will be required to declare the income on her Canadian Income Tax return. And then when time comes to "dispose" of the properties, file any "gain" on the sales.

only if she feels like

^^^ What he said.

I don't think there's a way for them to find out, specially if she's renting it out trough her friends, friends of friends, etc, not officially through some Canadian company... Unless they send a tax man to follow her all the way from Canada... which is not happening.

[Shurup]

This topic has got me thinking. The issue I have, is that I was considering trying to get a Thai passport, but when me and the wife inquired, we were informed that I needed to be paying tax for at least 3 years. I explained to them that I do not work in Thailand, but overseas, and she said there was no exception. If I was to rent out my condo and declare the income, tax is tax right? Would just hate to pay tax on 70K Baht per month for 3 years only to find out that the tax had to come from a "company" of sorts. Thoughts?

Well, you better ask her who said - no exception. She'd know better.