Paying Tax in TH on foreign investment income?

[DUS]

Hello,

Quick question, if I may:

If you stay in Thailand "indefinitely" (on any of the long-term visa plus extensions of stay or Thailand Elite etc) and you have investment income back home in Europe do you have to declare this income in your "home country" although you are no longer a resident for tax purposes over there (whether that is back in the UK, Germany, France or somewhere else) or do you have to declare it in Thailand? I assume most of us will be operating on a "let sleeping dogs lie" basis and not declare that income anywhere but what is the legally correct way (if there is just one way of doing it)?

DUS

[Aussie69]

I would assume it is mandatory for the bank/trading firm or whoever the funds are held with in your home country to declare investment income. Unless you have immigrated elsewhere or changed citizenship I believe you are still a tax paying citizen (at least in Australia)

[DUS]

Yes, of course, you´re right. HMRC in the UK clearly states on their website:

You usually have to pay tax on your UK income even if you’re not a UK resident. Income includes things like:

• pension
• rental income
• savings interest
• wages

If you’re eligible for a Personal Allowance you pay Income Tax on your income above that amount. Otherwise, you pay tax on all your income.

The country where you live might tax you on your UK income. If it has a ‘double-taxation agreement’ with the UK, you can claim tax relief in the UK to avoid being taxed twice.

[Naam]

little do you know

[lkv]

little do you know

Oh well, where would the governments collect money from if everyone knew and did it?

But to answer the OP's question, in this particular case with Thailand, as long as "the profits are brought into Thailand next year", they are tax free.

In addition to that, the "smart money" is no longer held in Europe nowadays.

Edited June 15, 2016 by lkv

[DUS]

Oh,oh, no, I didn´t want this question to end up in yet another Hongkong Ltd or Singapore "tax haven" discussion. :-)))

The question´s been answered....... Thank you!

[SantiSuk]

No it hasn't - t has been 'answered' for Australia, but given that guy makes assumptions about elsewhere I doubt I would rely on his advice even re Australia ( - not flaming you mate - you are in massively good company when it comes to advice about complex areas on the internet). You asked about how Europeans are taxed - that would take a book since there is no Europe-wide tax regime. Which country do you want to know about? I can direct you to threads I have answered re the UK, if that is relevant.

[Retired UK Chartered Accountant, resident for tax purposes in Thailand. Non resident for tax purposes in the UK. Investor/saver (through the UK and Thailand)]

[al007]

No it hasn't - t has been 'answered' for Australia, but given that guy makes assumptions about elsewhere I doubt I would rely on his advice even re Australia ( - not flaming you mate - you are in massively good company when it comes to advice about complex areas on the internet). You asked about how Europeans are taxed - that would take a book since there is no Europe-wide tax regime. Which country do you want to know about? I can direct you to threads I have answered re the UK, if that is relevant.

[Retired UK Chartered Accountant, resident for tax purposes in Thailand. Non resident for tax purposes in the UK. Investor/saver (through the UK and Thailand)]

As another retired UK Chartered Accountant living in Thailand 9(yrs) on Marriage extension, for UK passport holders I comment as follows ( for some nationalities it is more complicated like USA passport holders have to file tax return for life)

I have a UK pension which is liable to Uk tax but just below the personal allowance so no tax

I have no other assets in the UK and so long as my circumstances do not change I do not need to file a uk tax return

In thailand pension income is tax free

I have a QROPS in gibraltar on which I pay 2.5% tax to the gibraltar government

Thailand tax rules say so long as income is not brought into the country in the years it is earnt no tax

I have a bank account and two stockbrokers accounts all outside the UK and Thailand, but with Thailand mailing addresses, and one of them in Singapore; so no tax to pay as long as I allow income to season for more than a year

I have no wish to either avoid or evade tax, I am very happy however only to pay a nominal amount

I am not an expert and if anyone believes what I say to be incorrect please let me know

[monkey4u]

No it hasn't - t has been 'answered' for Australia, but given that guy makes assumptions about elsewhere I doubt I would rely on his advice even re Australia ( - not flaming you mate - you are in massively good company when it comes to advice about complex areas on the internet). You asked about how Europeans are taxed - that would take a book since there is no Europe-wide tax regime. Which country do you want to know about? I can direct you to threads I have answered re the UK, if that is relevant.

[Retired UK Chartered Accountant, resident for tax purposes in Thailand. Non resident for tax purposes in the UK. Investor/saver (through the UK and Thailand)]

Are you sure you are not a retired TIAPP ( turd in a piss pot )

If you get interest from an investment in Aus You pay tax on it in Aus

You are Not working here so why even think your self funded retirement need to be taxed here

[SantiSuk]

Huh?

The retired turd in a pisspot I understand, is relevant and may even be correct.

The rest - I understand the words, but not their relevance to what I wrote.

[hugh2121]

Oh,oh, no, I didn´t want this question to end up in yet another Hongkong Ltd or Singapore "tax haven" discussion. :-)))

The question´s been answered....... Thank you!

How about Isle of Man or Channel Islands for UK citizens?

If you are classed as non resident you can thumb your nose at HMRC.

[TallGuyJohninBKK]

Oh,oh, no, I didn´t want this question to end up in yet another Hongkong Ltd or Singapore "tax haven" discussion. :-)))

The question´s been answered....... Thank you!

Since you didn't specify your question to a specific one country, I'm not sure how your question could have been answered here.

You asked about a bunch of different European countries, and most of the posts here have only dealt with UK rules. It probably would be more useful if you specified the particular country that applies to your situation.

[gandalf12]

I personally do not pay tax period. I am not doing anything illegal in what I do before anyone says anything so I will explain. In the UK I have just a bank account with little in it. I checked with the tax authorities and they told me declare everything but unless the total amount of the earnings is greater than any allowances you wont be paying tax. To date that has always been the case.

In bank deposits the bank will always as a matter of course deduct tax accrued from interest but in my case it is so insignificant it amounts to nothing.

[khunPer]

Normally it's said (officially written) that only foreign income taken into Thailand same year as it's earned, is taxable in Thailand – taken in later, following years, it's savings and not taxable in Thailand.

Concerning taxation abroad or in original home country, it's a question of local tax rules there, no general rules apply. If one work it out right, one can legally avoid most taxation, however tax from dividends may apply locally and within some double-taxation regulations, i.e. 15 percent.

Me, I never take-in foreign income to Thailand, before following year(s)...

Edit: Retirement pensions will normally/often be taxed in one's home country and only there when double-taxation regulation apply, which is fair enough, when one had tax-deductions when saving up the retirement pension...

Edited June 16, 2016 by khunPer

[SantiSuk]

I personally do not pay tax period. I am not doing anything illegal in what I do before anyone says anything so I will explain. In the UK I have just a bank account with little in it. I checked with the tax authorities and they told me declare everything but unless the total amount of the earnings is greater than any allowances you wont be paying tax. To date that has always been the case.

In bank deposits the bank will always as a matter of course deduct tax accrued from interest but in my case it is so insignificant it amounts to nothing.

No longer the case in the UK gandalf! New tax rules on savings interest applying this tax year do away with the need for banks to deduct and withold basic rate tax. Brits now receive gross interest on their UK savings. There is a savings interest allowance which results in the first 1,000 quid of gross interest being tax free.

Your experience is typical of UK pensioners here in Thailand I suspect. Many think they are not subject to UK tax, but in reality they may well be, but their income levels are not high enough to generate a tax liability. There's a world of difference between untaxable income, taxable income and tax paid

Normally it's said (officially written) that only foreign income taken into Thailand same year as it's earned, is taxable in Thailand – taken in later, following years, it's savings and not taxable in Thailand.

Concerning taxation abroad or in original home country, it's a question of local tax rules there, no general rules apply. If one work it out right, one can legally avoid most taxation, however tax from dividends may apply locally and within some double-taxation regulations, i.e. 15 percent.

Me, I never take-in foreign income to Thailand, before following year(s)...

Edit: Retirement pensions will normally/often be taxed in one's home country and only there when double-taxation regulation apply, which is fair enough, when one had tax-deductions when saving up the retirement pension...

Re the UK, first highlighted sentence is entirely correct. But then fall into the trap of trying to generalise. The second sentence would misinform Brits (thereare many on ThiaV) because:

• It's difficult to avoid pension income (state and private) being taxable in the UK if the pension arises from UK employment or is state pension (even when you are non-resident for tax purposes; the fact is, though, that most Brits with only modest pension income will pay no tax, because the tax system allows a reasonable level of income before taxation liability kicks in.
• ie 15% double taxation regulations would be wrong for the UK.There is a one-ninth taxation amount that used to impact the tax liability of residents for tax purposes (but some non residents did not effectively suffer this by dint of disregarded income rules). The one ninth is similar to a witholding tax - it's confusing to say it is double taxation. There is no longer any witholding tax, tax credit, double taxation or anything like that.

Sorry to be Mr Picky - my point is that it is unhelpful to provide Europe-wide generalisations on tax rules. An expert international tax consultant might be able to have a crack at that, but it would be so generalised and subject to ifs and buts that it still would be uninformative to anyone.

Edited June 16, 2016 by SantiSuk

[khunPer]

Normally it's said (officially written) that only foreign income taken into Thailand same year as it's earned, is taxable in Thailand – taken in later, following years, it's savings and not taxable in Thailand.

Concerning taxation abroad or in original home country, it's a question of local tax rules there, no general rules apply. If one work it out right, one can legally avoid most taxation, however tax from dividends may apply locally and within some double-taxation regulations, i.e. 15 percent.

Me, I never take-in foreign income to Thailand, before following year(s)...

Edit: Retirement pensions will normally/often be taxed in one's home country and only there when double-taxation regulation apply, which is fair enough, when one had tax-deductions when saving up the retirement pension...

Re the UK, first highlighted sentence is entirely correct. But then fall into the trap of trying to generalise. The second sentence would misinform Brits (thereare many on ThiaV) because:

• It's difficult to avoid pension income (state and private) being taxable in the UK if the pension arises from UK employment or is state pension (even when you are non-resident for tax purposes; the fact is, though, that most Brits with only modest pension income will pay no tax, because the tax system allows a reasonable level of income before taxation liability kicks in.
• ie 15% double taxation regulations would be wrong for the UK.There is a one-ninth taxation amount that used to impact the tax liability of residents for tax purposes (but some non residents did not effectively suffer this by dint of disregarded income rules). The one ninth is similar to a witholding tax - it's confusing to say it is double taxation. There is no longer any witholding tax, tax credit, double taxation or anything like that.

Sorry to be Mr Picky - my point is that it is unhelpful to provide Europe-wide generalisations on tax rules. An expert international tax consultant might be able to have a crack at that, but it would be so generalised and subject to ifs and buts that it still would be uninformative to anyone.

Sorry to say it, but you quoted my whole post, but completely disregarded the passus about retirement pension – would have been worth highligting also – could probably have saved your further comments...

[Aussie69]

Actually I wasn't making any declaration of knowledge of the situation, Australia or Europe, thus the use of the term 'assume'.

[SantiSuk]

Normally it's said (officially written) that only foreign income taken into Thailand same year as it's earned, is taxable in Thailand – taken in later, following years, it's savings and not taxable in Thailand.

Concerning taxation abroad or in original home country, it's a question of local tax rules there, no general rules apply. If one work it out right, one can legally avoid most taxation, however tax from dividends may apply locally and within some double-taxation regulations, i.e. 15 percent.

Me, I never take-in foreign income to Thailand, before following year(s)...

Edit: Retirement pensions will normally/often be taxed in one's home country and only there when double-taxation regulation apply, which is fair enough, when one had tax-deductions when saving up the retirement pension...

Re the UK, first highlighted sentence is entirely correct. But then fall into the trap of trying to generalise. The second sentence would misinform Brits (thereare many on ThiaV) because:

• It's difficult to avoid pension income (state and private) being taxable in the UK if the pension arises from UK employment or is state pension (even when you are non-resident for tax purposes; the fact is, though, that most Brits with only modest pension income will pay no tax, because the tax system allows a reasonable level of income before taxation liability kicks in.
• ie 15% double taxation regulations would be wrong for the UK.There is a one-ninth taxation amount that used to impact the tax liability of residents for tax purposes (but some non residents did not effectively suffer this by dint of disregarded income rules). The one ninth is similar to a witholding tax - it's confusing to say it is double taxation. There is no longer any witholding tax, tax credit, double taxation or anything like that.

Sorry to be Mr Picky - my point is that it is unhelpful to provide Europe-wide generalisations on tax rules. An expert international tax consultant might be able to have a crack at that, but it would be so generalised and subject to ifs and buts that it still would be uninformative to anyone.

Sorry to say it, but you quoted my whole post, but completely disregarded the passus about retirement pension – would have been worth highligting also – could probably have saved your further comments...

Yes - you are right. Sorry!

[fletchsmile]

you stay in Thailand "indefinitely" (on any of the long-term visa plus extensions of stay or Thailand Elite etc) and you have investment income back home in Europe do you have to declare this income in your "home country" although you are no longer a resident for tax purposes over there (whether that is back in the UK, Germany, France or somewhere else) or do you have to declare it in Thailand? I assume most of us will be operating on a "let sleeping dogs lie" basis and not declare that income anywhere but what is the legally correct way (if there is just one way of doing it)?

Simple answer is no there isn't just one way of doing it.

Different home countries have different rules. Strict enforcement of those rules varies. Also would depend on which taxes you're talking: income tax, capital gains tax in particular for investments. Then there's witholding tax, inheritance tax etc

One extreme: the US taxes their nationals on worldwide income and it's very difficult to shake Uncle Sam. The world's fiscal equivalent of herpes

Other extreme you get countries that don't care about worldwide income and care even less if you're not resident there and don't bring it into the country. Only what you get in their country from their country while resident there. Then a whole host in between.

You can complicate it further by having a home country, host country like Thailand and then introducing a third country where you hold the investments and a fourth where the underlying investment is and so on: eg UK national uses Singapore broker while living in Thailand to buy an underlying US equity investment

Edited June 16, 2016 by fletchsmile

[Naam]

You can complicate it further...

or perhaps you are lucky to be a German citizen, living in a country like Thailand that treats you taxwise (as far as your offshore income is concerned) extremely generously. plus there is no such thing like an obligation to declare anything neither to Thai nor to German authorities.

caveat: that is the status quo! but i am convinced that more and more countries, especially some greedy European countries (Germany and France being the frontrunners), will change their legislation and levy taxes no matter where their citizens reside.

[Penefattore]

caveat: that is the status quo! but i am convinced that more and more countries, especially some greedy European countries (Germany and France being the frontrunners), will change their legislation and levy taxes no matter where their citizens reside.

you can always move your assets to First Qo'noS Bank

Edited June 16, 2016 by Penefattore

[Naam]

caveat: that is the status quo! but i am convinced that more and more countries, especially some greedy European countries (Germany and France being the frontrunners), will change their legislation and levy taxes no matter where their citizens reside.

you can always move your assets to First Qo'noS Bank

they don't take earthling currencies. i would have to convert all my holdings into goldpressed Latinum

[fletchsmile]

You can complicate it further...

or perhaps you are lucky to be a German citizen, living in a country like Thailand that treats you taxwise (as far as your offshore income is concerned) extremely generously. plus there is no such thing like an obligation to declare anything neither to Thai nor to German authorities.

caveat: that is the status quo! but i am convinced that more and more countries, especially some greedy European countries (Germany and France being the frontrunners), will change their legislation and levy taxes no matter where their citizens reside.

No wonder Greece is in such a mess if some Germans are escaping from their reposnibilities of working hard, retiring late, saving for pensions, and paying high taxes etc to subsidise the Greeks. How are the Greeks supposed to live their lazy subsidised lifestyles if not all Germans are living up to their half of the EU agreement

[Tapster]

@SantiSuk and al007

If you gentlemen would be kind enough to give me your professional opinion (non-binding!), as "retired British chartered accountant", on a Thai tax question, I will be delighted to enroll you in my "free dental advice from retired British dentist" (non-binding!) service.

This is a query which I think might be of interest to others, as we're discussing Thai income tax.

I moved to LOS from South Africa in 2014 and am planning to stay indefinitely.

I am domiciled for tax purposes in South Africa and pay tax in SA on my worldwide income. (sounds grand, but it isn't!)

In the UK, the only tax I pay is on the rent from a London flat.

In order to detach myself completely from the SA Revenue Service, I need to contact the SA Reserve Bank and "officially emigrate". I'm planning to do that in the next few months.

Thai income tax rates seem quite lenient, so if I have to be taxed, it sounds better to be taxed here than the UK.

Do I just get myself an accountant here and have my worldwide income taxed in Thailand?

I imagine it might not be as simple as that, this being Thailand!

I can't say I'm looking forward to dealing with the arcane world of tax via the arcane world of the Thai language and laws, but I suppose it's mostly my fault for not speaking Thai.

If you have a minute to think about this query I'd be very grateful.

[Naam]

Do I just get myself an accountant here and have my worldwide income taxed in Thailand?

no!

[Ricardo]

Do I just get myself an accountant here and have my worldwide income taxed in Thailand?

no!

Agreed, if a retired UK Chartered Management-Accountant might interject, why not invest your worldwide-income via some convenient/reliable offshore-centre like Jersey, and bring whatever income is required to cover Thai living-costs into the country in the year after it arose offshore ?

No need to have an accountant here, if your transfers to Thailand arose in previous years, and aren't taxable here.