Thai Taxes - Guidelines 2016

[fleur3]

Yes you are resident for tax purposes in Thailand if you spend more than 180 days in Thailand

You should pay Thai taxation on income arising in Thailand (eg bank interest and any earnings arising in Thailand) to the extent it is payable under Thai tax rules - normally those who only earn interest do not pay additional taxation on interest, and indeed often recover the tax that may have been deducted at source by banks. This is because standard Thai tax allowances and nil rate bands mean that the first tranche of income arising in Thailand attracts a nil rate of tax. Very broadly speaking a single person might earn roughly 40,000 thai baht in a year before Thai taxation becomes payable. A married person may be able to earn as much as 50,000 baht if her/his spouse does not earn and if they are taking care of elderly relatives and have kids. Those numbers are just broadly indicative - do not rely on them without further research or without going to the Tax Office and getting and letting them do your tax return with you.

Earnings arising outside Thailand - includes inter-alia job income; rental income; pension income; investment income (ie interest and dividends) that does not come from activities in Thailand - is only taxable in Thailand to the extent that you bring it into Thailand in the same Thai tax year that you earned it. If you are able to show that you are not relying on current year income for current year spending in Thailand (ie you are living off 'capital' (= earnings of previous years)) you will not be taxed in Thailand for those foreign (to Thailand) earnings. In short, Thailand does not tax any of its residents on worldwide income that is not remitted in the same tax year. Unlike Americans and (to a lesser extent) Brits.

So, if you are confident that you can demonstrate that you are spending in Thailand out of prior year foreign earnings and not out of current year earnings you can 'stick your head over the parapet' and claim a tax refund. TMB were however right to sound a cautionary note - if you have stuff to hide or if you have current foreign earnings that you have used for current spending then you may be taking an unnecessary risk in claiming a tax refund.

Tax authorities are alive to the possibility of claiming tax on the foreign earnings of expats residing here. If you seek a small tax refund on the tax your Thai bank has deducted at source then maybe/probably Thai Revenue will not bother asking you about these non-Thai earnings. Indeed I have seen/heard reports of plenty of expats who have claimed smaller refunds with no further questions asked. However, in 2015 I claimed a 2014 tax year refund on interest of over 45,000 baht. My amphur tax office had no problem in entertaining that claim and helped me complete the return. But before they would pay it to me I was invited in by the provincial tax authority (to what turned out to be the regional tax investigation office!) for a grilling about what were my earnings back in the UK (my pensions and my investment activities and whether I was still doing work in the UK) and whether I needed to resort to any such earnings to fund my existence in Thailand. I am a retired accountant so I was unfazed by the surprise of finding myself in an investigation environment facing three inspectors (!) and I knew exactly where they were coming from, so my answers convinced them to seek no documentary evidence of my representations.

Up to you to decide how to go about dealing with Thai tax authorities, but once you have registered* you should know what the risks are if you have non-Thai earnings!

For those who do have non-trivial earnings arising outside Thailand and who do register for tax in Thailand I recommend that (if it is practicable) to corale all your non-Thai earnings in a dedicated foreign bank account used for that purpose only (which you the can clear out to your other banks, even Thai banks, once the relevant Thai tax year (calendar year) is completed). That way, if challenged it is a simple job to show that your earnings were kept away from Thailand until the following year

*You are obliged to register for Thai taxation if you are an over 180 day resident - up to you if you want to lie low, as some boast about doing! I'm guessing that if you do not register because you are confident that you have no Thai tax liability then you are unlikely to be hammered if you are found not to have registered. Conversely not registering when you have a Thai tax liability is likely to lead to additional charges and penalties if you are found out. Nothing personal implied Nontabury - just laying out the stall for the generality of ThaiV reader.

[fleur3]

could you please tell us where you can find the following remark

. If you are able to show that you are not relying on current year income for current year spending in Thailand (ie you are living off 'capital' (= earnings of previous years)) you will not be taxed in Thailand for those foreign (to Thailand) earnings. In short, Thailand does not tax any of its residents on worldwide income that is not remitted in the same tax year. Unlike Americans and (to a lesser extent) Brits.

thanks

[chefseph]

Just a quick question.

If I work for a number of years here and pay a considerable amount of tax and go back home do I get anything back?

Also if I work here indefinitely until I retire do I get something back?

For what it's worth I'm 33 married, been living in Thailand 3 years and been working last two. I pay roughly 150k yearly tax.

Thanks

[Fookhaht]

Just confirming: Social Security payments by foreign governments (our home country, in my case--USA), are exempt from Thai income taxes?

[Tywais]

Just confirming: Social Security payments by foreign governments (our home country, in my case--USA), are exempt from Thai income taxes?

Correct. US & Thailand have double taxation treaties.

[Fookhaht]

Just confirming: Social Security payments by foreign governments (our home country, in my case--USA), are exempt from Thai income taxes?

Correct. US & Thailand have double taxation treaties.

Thanks. A follow-up question...

I understand that with private retirement pensions (from my former USA company), the money cannot be brought into Thailand during the same year as received, in order to avoid taxation.

No such requirement for government Social Security benefits? Can be brought into Thailand and used during the same year?

[falang07]

read post #35 and check the corresponding double taxation treaty between your country and Thailand

[beninphuket]

My aussie mate and his aussie wife (properly married in Australia) are selling their condo for 13m THB. They bought it for 15m and registered it as foreign freehold 3 years ago.

They are now selling it and have been advised by their lawyer that, in addition to the standard transfer and SBT (which are all very straight forward), they will be liable to pay over 300k THB of personal income withholding tax (WHT) which they must pay to the land office on the day of registration.

They do not have any other income here in thailand, no business or work permits and have never paid any personal income tax. This is actually a net loss (in THB although the changes in the exchange rates over that time bring them out about even) of 2m THB.

How can WHT be applicable? If they are forced to pay it, can they claim it back, and how? I know a lot of people that this could apply to. Please help.

[JimGant]

Quote

Thanks. A follow-up question...

I understand that with private retirement pensions (from my former USA company), the money cannot be brought into Thailand during the same year as received, in order to avoid taxation.

No such requirement for government Social Security benefits? Can be brought into Thailand and used during the same year?

 

Yes, private retirement pensions (unlike government pensions/Social Security) *are* subject to Thai taxation if brought into Thailand in the year paid. This is per treaty, although the "in same year remitted" onus is purely a Thai ruling. The practical effect is, however -- your out of pocket taxation will be the same, with Thailand getting first dibs on taxation, but with the US paying that 'first dibs' via giving you a tax credit. Thus, for US taxpayers anyway, remitting money to Thailand in the same year earned isn't critical -- as far as total taxes paid in aggregate to both Thailand and the US. (Caveat: If we're talking large amounts of pension money, your Thai taxes would be higher than US taxes on same -- and you would only be allowed a tax credit on your US taxes up to the amount of US taxes assessed. Thus, yes in this case, you'd be out some money -- so best to play the 'remit in different year' game.)