Income Tax In Thailand

[smilingjim]

It means that if you have foreign source income during one tax year, and during that same tax year you bring foreign money into Thailand - they will assume such money to be taxable up to the amount you declared in foreign source income for that same calendar year.

It is very easy to implement if you do not lie on your tax assessment return.

The advice I always gave to people who had capital and income is that they kept separate bank accounts as follows:

1) An interest bearing capital account (their savings)

2) A separate account into which all interest earned from the above is paid(income)

3) An account into which pension/earnings is paid(income).

You make sure you use the first one to remit money from during the relevant tax year as you don't have to declare it or pay tax on it.

You only resort to the other 2 if the 1st isn't sufficient.

A lot of ex-pats I have met here seem to be blissfully unaware that they should complete a Thai Tax Return if they are resident here (more than 180 days), unless their income is very low.

[Naam]

"It is the form Canadian have to fil when they want to be recognized as non-resident."

****

are we talking about canadians or various citizens in general? the basic procedure concerning avoiding to pay income tax is that you inform your relevant authority that you are leaving the country for good. the only country which still is trying to tax you when living abroad is the Greatest Nation on Earth™ (aka U.S.A.). but even this hurdle can be overcome.

[Naam]

"Dividends and Interest income paid by Swiss companies are subject to withholding taxes."

****

that is correct! but who would be stupid enough to maintain a swiss bank account and/or portfolio and having his income taxed because it is derived from Switzerland? those with a partial lobotomy?

[kudroz]

"It is the form Canadian have to fil when they want to be recognized as non-resident."

****

are we talking about canadians or various citizens in general? the basic procedure concerning avoiding to pay income tax is that you inform your relevant authority that you are leaving the country for good. the only country which still is trying to tax you when living abroad is the Greatest Nation on Earth™ (aka U.S.A.). but even this hurdle can be overcome.

I was reffering to governments (without specifics) I didn't mention anything pertaining to UK nationals. UK is one country out of many and every country treat this issue differently.

Canada for one, ask you if you have established residence in another jurisdiction and if this tax jurisdiction levy taxes on worldwide income and certain issues may arise if your motivaton is believed to be tax avoidance.

Edited October 22, 2006 by kudroz

[kudroz]

"Dividends and Interest income paid by Swiss companies are subject to withholding taxes."

****

that is correct! but who would be stupid enough to maintain a swiss bank account and/or portfolio and having his income taxed because it is derived from Switzerland? those with a partial lobotomy?

It doesn't matter if you bank in Switzerland or not. There will be a 35% tax withholding on Dividends and Interest income regardless where it's paid (35% or the DTA rate). Also there are withholding taxes on interest from swiss bank deposits (generally speaking in Swiss Franc).

The bottom line is your original assumption was wrong and you criticized my original post without grounds whatsoever. Please move along.

Edited October 22, 2006 by kudroz

[younghusband]

It means that if you have foreign source income during one tax year, and during that same tax year you bring foreign money into Thailand - they will assume such money to be taxable up to the amount you declared in foreign source income for that same calendar year.

It is very easy to implement if you do not lie on your tax assessment return.

The advice I always gave to people who had capital and income is that they kept separate bank accounts as follows:

1) An interest bearing capital account (their savings)

2) A separate account into which all interest earned from the above is paid(income)

3) An account into which pension/earnings is paid(income).

You make sure you use the first one to remit money from during the relevant tax year as you don't have to declare it or pay tax on it.

You only resort to the other 2 if the 1st isn't sufficient.

A lot of ex-pats I have met here seem to be blissfully unaware that they should complete a Thai Tax Return if they are resident here (more than 180 days), unless their income is very low.

This is useful information.I have one question.If one is

a) a Thai resident spending more than 180 days per year here

without any Thailand sourced or derived income

c) funding living expenses in Thailand from capital earned in previous years (on lines smiling jim's example above)

does one still have to fill in and submit an annual Thai tax return?

I put this question to a advisor of a leading accounting firm.He said that strictly speaking one should do but it would be very unusual to do so if all one was doing was submitting a nil return.On balance his advice was not to bother unless there was actually some tax to be paid.I have taken his advice but am a little uneasy.Are there any penalties for not submitting a tax return for example?

[kudroz]

This is useful information.I have one question.If one is

a) a Thai resident spending more than 180 days per year here

without any Thailand sourced or derived income

c) funding living expenses in Thailand from capital earned in previous years (on lines smiling jim's example above)

does one still have to fill in and submit an annual Thai tax return?

I put this question to a advisor of a leading accounting firm.He said that strictly speaking one should do but it would be very unusual to do so if all one was doing was submitting a nil return.On balance his advice was not to bother unless there was actually some tax to be paid.I have taken his advice but am a little uneasy. Are there any penalties for not submitting a tax return for example?

I tried myself to file apply for a "Tax ID" in order to file a return. They refused to give me one because I do not have a work permit. I tried to explain that I am liable to taxes here because I aggregate a stay of more than 183 days for this year - but they smile and don't want to be bothered.

I think it'd be safer to submit a nil return regardless, I will meet soon with Sunbelt to have them assist me in obtaining a Tax ID so I can file a nil return here in Thailand.

[Naam]

"It doesn't matter if you bank in Switzerland or not. There will be a 35% tax withholding on Dividends and Interest income regardless where it's paid (35% or the DTA rate). Also there are withholding taxes on interest from swiss bank deposits (generally speaking in Swiss Franc)."

*****

i must admit that i have met hardly anybody before who had more of "no idea" than you as far as banking is concerned. i have been banking in Switzerland from 1981 till 2004 (a mere 23½ years) with a variety of assets in my portfolio and never paid a single penny of taxes. amonst other assets my portfolio included fixed deposits in CHF on which no taxes whatsoever are levied. there was however a time in the 70s when "negative" taxes were levied on CHF deposits.

after moving to Thailand i switched my holdings to the same swiss bank but location Singapore.

nota bene: Switzerland, respectively swiss banks levy only taxes on holdings which belong to residents of the European Union. notwithstanding this fact, there are tax liabilities in countries where your income is derived from. e.g. if you hold U.S. shares the IRS taxes the dividends with 15% witholding tax if you are a resident of a country that signed a double tax agreement with the U.S. and another 15% is levied if that is not the case.

having said so i am moving along

[sting01]

This is useful information.I have one question.If one is

a) a Thai resident spending more than 180 days per year here

without any Thailand sourced or derived income

c) funding living expenses in Thailand from capital earned in previous years (on lines smiling jim's example above)

does one still have to fill in and submit an annual Thai tax return?

I put this question to a advisor of a leading accounting firm.He said that strictly speaking one should do but it would be very unusual to do so if all one was doing was submitting a nil return.On balance his advice was not to bother unless there was actually some tax to be paid.I have taken his advice but am a little uneasy. Are there any penalties for not submitting a tax return for example?

I tried myself to file apply for a "Tax ID" in order to file a return. They refused to give me one because I do not have a work permit. I tried to explain that I am liable to taxes here because I aggregate a stay of more than 183 days for this year - but they smile and don't want to be bothered.

I think it'd be safer to submit a nil return regardless, I will meet soon with Sunbelt to have them assist me in obtaining a Tax ID so I can file a nil return here in Thailand.

Be careful, because I think a tax ID can be removed after 2 or 3 years of nil return. Ask Sunbelt about that also

[kudroz]

"It doesn't matter if you bank in Switzerland or not. There will be a 35% tax withholding on Dividends and Interest income regardless where it's paid (35% or the DTA rate). Also there are withholding taxes on interest from swiss bank deposits (generally speaking in Swiss Franc)."

*****

i must admit that i have met hardly anybody before who had more of "no idea" than you as far as banking is concerned. i have been banking in Switzerland from 1981 till 2004 (a mere 23½ years) with a variety of assets in my portfolio and never paid a single penny of taxes. amonst other assets my portfolio included fixed deposits in CHF on which no taxes whatsoever are levied. there was however a time in the 70s when "negative" taxes were levied on CHF deposits.

after moving to Thailand i switched my holdings to the same swiss bank but location Singapore.

nota bene: Switzerland, respectively swiss banks levy only taxes on holdings which belong to residents of the European Union. notwithstanding this fact, there are tax liabilities in countries where your income is derived from. e.g. if you hold U.S. shares the IRS taxes the dividends with 15% witholding tax if you are a resident of a country that signed a double tax agreement with the U.S. and another 15% is levied if that is not the case.

having said so i am moving along

Oh lala... You are some work. Now, I will make you lose face - again - so please be gone for good after this.

Like I said multiple times previously, Switzerland levy a withholding tax on Dividends and Interest income sourced in Switzerland. The withholding tax rate is 35% unless prescribed otherwize in the DTA (Double Tax Agreement/Treaty) with certain countries.

The 7 countries below, have a DTA with Switzerland with a prescribed rate of 0% withholding taxes on Interest Income sourced in Switzerland. (But, you are liable to pay taxes on that money in your country of residence/domicile.)

- Denmark

- Finland

- Germany

- Iceland

- Ireland

- Norway

- United Kingdom

So if Dr. Naam didn't pay withholding taxes in Switzerland all these years, it was because he benefited from a DTA with his country of residence. But, he is more than likely liable to pay taxes in his home country on that income (unless in some rare cases of domicile for example). Most of the DTA with Switzerland will have a rate of 5%-35% withholding taxes on Interest Income (unless in some case of related to loans of related companies).

So Mr. Naam, you got served now. To add to the farce, you can tell your friends that you got schooled by a 24yo kid who didn't finish high-school and speaks english as a second language. kthxbye

Edited October 22, 2006 by kudroz

[kudroz]

Just for the record, I'd like to add that my previous statement (the one below) is indeed correct. Dr. Naam confused quite a few things I'm affraid.

I.e. : If you have interest income from savings you have in Switzerland, and you keep the interest income outside of Thailand, you will not be liable to pay taxes in Thailand. Although, you will be liable to pay withholding taxes in Switzerland on such interest income.

The above statement pertains to one who is resident of Thailand for tax purposes.

Edited October 22, 2006 by kudroz

[Naam]

"So Mr. Naam, you got served now. To add to the farce, you can tell your friends that you got schooled by a 24yo kid who didn't finish high-school and speaks english as a second language."

tsss... tsss. tsss... kudroz why getting angry? that you are a rather uninformed kid (as far as withholding taxes in Switzerland are concerned) you have already proven several times and... by the way english is my second language too as i am a bloody german.

to close that chapter quoting you:

" If you have interest income from savings you have in Switzerland, and you keep the interest income outside of Thailand, you will not be liable to pay taxes in Thailand."

= TRUE!

"Although, you will be liable to pay withholding taxes in Switzerland on such interest income."

= FALSE! if you are not a resident in one of the states of the European Union. if you are then presently the swiss tax authorities are deducting 15% witholding tax effective july 1, 2005. this tax will be increased in steps till it reaches 35% in 2011.

quote: "The EU withholding tax is not deducted from individuals who reside outside the European Union. Thus, for example, a resident of Jersey or of Switzerland, would not pay the tax, even though these countries have signed the agreement with the EU. Neither Jersey nor Switzerland is in the European Union."

NOR IS THAILAND A MEMBER STATE OF THE EUROPEAN UNION!

quote:

"The transitory provisions of the Withholding Tax

The Countries that would be applying the transitory provisions, instead of exchanging information will retain withholding tax as follows:

15% in the first three years (1.7.2005 – 30.6.2008),

20% in the next three years (1.7.2008 – 30.6.2011), and

35% after 1.7.2011.

With regard to the distribution of their withholding tax, the Directive provides that all Countries that are withholding it will retain 25% of all receipts at their end and will transfer the remaining 75% to the Member State where the beneficiary owner is resident.

With regard to double taxation, the Directive provides that the Member State where the beneficiary owner is resident, and therefore where he normally pays his tax dues, should ensure that tax is not paid more than once when applying the withholding tax rates."

and now back to highschool and a bit harder studying than before

[kudroz]

Oh god, you really don't get it - do you? You are describing to me, what I told you in my post #28, #29 which you probably didn't bother reading.

You are confusing the "EU Savings Directive" commonly called "EU Withholding Taxes" and "Withholding Taxes".

- A resident of Thailand will not be subject to the EU Savings Directive, because Thailand is not a member state of the EU.

- A resident of Thailand is subject to a 35% Withholding Tax on Interest Income paid by a Swiss entity.

Now you are probably wondering: "But, if there is a Withholding Tax in Switzerland, why all the years I banked there I didn't have to pay any?"

Because you were a resident of one of the 7 countries I listed above, who have a DTA with Switzerland which prescribes a Withholding Tax of 0%.

The EU Savings Directive is a new law that is notwithstanding of the DTA. Therefore, these EU countries which had prescribed rate of 0% in a DTA - is overuled by the EU Savings Directive.

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To Dr. Naam:

Please stop confusing people, this thread was great before you stepped in. You didn't ask me to clarify my statement, but you blantly called me out and said I was bull. It would have been in the general interest of everyone in this thread if you would have kept your ego out of it, or if you had researched the topic a little more. (which is why I doubt you've been banking there for almost 24 years in Switzerland... if that's truly the case and you didn't know about the above, you're an imbecile.)

[samran]

Mod Warning:

Keep the abuse out of this thread.

[Naam]

"imbecile"

------

nice having met you Mr. Imbecile, my name is Dr Naam

p.s. you still post rubbish² but my time is too valuable for a rebuttal. don't worry... be happy!

[samran]

And that, as we say, is that.

Nothing being added to the knowledge pool.

Topic closed. Take your flamethrowers elsewhere.