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[Tapster]

I have searched the forums for information on income tax in Thailand but have found nothing.

 

This is almost certainly because the new Thai Visa site is still indexing content and assigning links to it.

 

But I must ask a question, even if it turns out to have been covered before.

 

I am domiciled in Thailand . I never leave!

It normally follows (in the UK regulations, at least) that I should be paying a proportion of my income tax in Thailand.

Is this what people do here? 

Is this what I should be doing?

 

I started a similar thread (couldn't find it when I searched) and there was very little comment, except something like "on no account ever pay any tax in Thailand".

 

I had a small business in the UK, so I'm used to using an accountant.

 

My accountant in the UK knows that I'm in Thailand and when I am regarded as being domiciled here (this is just about to happen) surely he will wonder why there's no record of my Thai tax payments, as there was of my South African tax payments (where I was domiciled for seven years, before Thailand).

 

Helpful comments, please.        

[singa-traz]

Where does your income comes from?

 

[lopburi3]

Any money earned in Thailand and any money brought into Thailand during the year it is earned should be declared for tax payment here unless exempt due to tax treaty (often pensions are only taxed at source country) seems to be the current policy.  

[singa-traz]

That might help:
http://www.rd.go.th/publish/6045.0.html

[meatboy]

as the uk has a double taxation agreement with thailand you only pay tax on money earned here,eg.bank savings interest,which is reclaimable at the end of the thai tax yr.dec.31st.

money earned in the uk.is subject to uk.tax rules.

[Tapster]

Excellent points, all!

 

Thank you.

 

singa-traz' link was particularly helpful.

 

The Revenue Department of Thailand says:

 

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.

 

Unfortunately this isn't definitive.

 

What does 'as well as on the portion of income from foreign sources' actually mean?

 

It doesn't say 'any money brought into Thailand during the year it is earned should be declared for tax payment' as lopburi3 said above, however:

PWC, say ' any money brought into Thailand during the year it is earned should be declared for tax payment'.

and

Deloitte say 'any money brought into Thailand during the year it is earned should be declared for tax payment', which is the same thing,

......so where do the three of you get that important detail about being brought in in the year it is earned, please? It isn't on the Thai Revenue website.

 

 

 

 

[topt]

4 hours ago, Tapster said:

Excellent points, all!

 

Thank you.

 

singa-traz' link was particularly helpful.

 

The Revenue Department of Thailand says:

 

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.

 

Unfortunately this isn't definitive.

 

What does 'as well as on the portion of income from foreign sources' actually mean?

 

It doesn't say 'any money brought into Thailand during the year it is earned should be declared for tax payment' as lopburi3 said above, however:

PWC, say ' any money brought into Thailand during the year it is earned should be declared for tax payment'.

and

Deloitte say 'any money brought into Thailand during the year it is earned should be declared for tax payment', which is the same thing,

......so where do the three of you get that important detail about being brought in in the year it is earned, please? It isn't on the Thai Revenue website.

 

 

 

 

This has been discussed ad nauseum  in previous threads but as you mention with the changes maybe difficult to find the threads. As to the important detail one hopes that companies like PWC have got it right and nobody in all the previous threads going back a number of years has come up with anything that says otherwise. 

 

It is easy to obtain a thai tax reference but unless you are reclaiming tax on interest or need to pay some income tax why would you bother? You could always go and see if someone at your local revenue office can give you a definitive statement but unless they can give you a specific reference (which would likely be in Thai) you would still likely be without the cast iron proof you seem to crave

 

Most seem to accept that letting sleeping whatever's lie is probably the most sensible option.  

[chiang mai]

You say you're domiciled in Thailand and I wonder if you really are, many people would like to be domiciled elsewhere but it's not an easy test to pass. Chances are that if you have incoming arising in the UK or you have asserts there, you're probably not domiciled here.

 

 

[rwdrwdrwd]

18 hours ago, Tapster said:

Excellent points, all!

 

Thank you.

 

singa-traz' link was particularly helpful.

 

The Revenue Department of Thailand says:

 

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.

 

Unfortunately this isn't definitive.

 

What does 'as well as on the portion of income from foreign sources' actually mean?

 

It doesn't say 'any money brought into Thailand during the year it is earned should be declared for tax payment' as lopburi3 said above, however:

PWC, say ' any money brought into Thailand during the year it is earned should be declared for tax payment'.

and

Deloitte say 'any money brought into Thailand during the year it is earned should be declared for tax payment', which is the same thing,

......so where do the three of you get that important detail about being brought in in the year it is earned, please? It isn't on the Thai Revenue website.

 

 

 

 

Right at the top:

 

Quote

In general, a person liable to PIT has to compute his tax liability, file tax return and pay tax, if any, accordingly on a calendar year basis

The thai tax code is all relating to a specific calendar (and tax, since in Thailand this follows the calendar) year, hence if income is earned in a prior tax year it is irrelevant, since it is not regarded as income in the tax year being assessed - it is savings.

Edited August 25, 2016 by rwdrwdrwd

[rwdrwdrwd]

7 hours ago, chiang mai said:

You say you're domiciled in Thailand and I wonder if you really are, many people would like to be domiciled elsewhere but it's not an easy test to pass. Chances are that if you have incoming arising in the UK or you have asserts there, you're probably not domiciled here.

 

 

 

Wouldn't be tax resident though, since they state they 'never leave'. Simplest way to be 100% non resident is to spend an entire tax year out of the UK, comes under the first automatic overseas test at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/547118/160803_RDR3_August2016_v2_0final_078500.pdf
 

Quote

1.5 You were resident in the UK for 1 or more of the 3 tax years preceding the tax year, and you spend fewer than 16 days in the UK in the tax year. If an individual dies in the tax year this test does not apply

 

[chiang mai]

9 minutes ago, rwdrwdrwd said:

 

Wouldn't be tax resident though, since they state they 'never leave'. Simplest way to be 100% non resident is to spend an entire tax year out of the UK, comes under the first automatic overseas test at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/547118/160803_RDR3_August2016_v2_0final_078500.pdf
 

 

 

As I'm sure you know there's a big difference between domicile and residency tests, the latter are easy to pass whereas the former is very difficult and for inheritance tax purposes that can be the key test, especially if there are substantial onshore assets that can't be moved.

[rwdrwdrwd]

I don't actually know much about domicile/deemed domicile rules at all, since I have no property or assets back home - left very young many years back and tend to only research stuff in depth when I need to personally.

Just had a feeling the OP was using domicile/residence interchangeably given the reference to income tax and that they 'never leave' so thought I'd mention the above rule.

[wordchild]

5 hours ago, rwdrwdrwd said:

Right at the top:

 

The thai tax code is all relating to a specific calendar (and tax, since in Thailand this follows the calendar) year, hence if income is earned in a prior tax year it is irrelevant, since it is not regarded as income in the tax year being assessed - it is savings.

spot on!

[Tapster]

When I said that I'm "domiciled" in Thailand, I might have added "for tax purposes" to make it clearer.

 

The fact that I never, or rarely leave Thailand makes me domiciled here for tax purposes, as confirmed by rwdrwdrwd's useful link to HMRC's Residence Test.

 

 

19 hours ago, topt said:

....................You could always go and see if someone at your local revenue office can give you a definitive statement but unless they can give you a specific reference (which would likely be in Thai) you would still likely be without the cast iron proof you seem to crave

 

Most seem to accept that letting sleeping whatever's lie is probably the most sensible option.  

 

I don't know a country where tax laws are stated in imprecise language.

 

I'd like to know what is precisely meant by my quote above, from the Revenue Department of Thailand. It seems I may not get an answer.

 

However, PWC, Deloittes and all you guys say that I won't pay tax in Thailand as long as I:

 

1. Don't earn money in Thailand 
   and
2. Never bring money into Thailand in the year in which I earn it.
    

So, thanks all, I've got what I wanted. If I don't have to pay tax in Thailand, I'll arrange to pay my tax in the UK. I have to pay the tax somewhere. I don't think HMRC will just forget about me if I keep quiet!

 

OK, I'm off for a pint!

 

 

 

 

 

 

[chiang mai]

43 minutes ago, Tapster said:

When I said that I'm "domiciled" in Thailand, I might have added "for tax purposes" to make it clearer.

 

The fact that I never, or rarely leave Thailand makes me domiciled here for tax purposes, as confirmed by rwdrwdrwd's useful link to HMRC's Residence Test.

 

 

 

I don't know a country where tax laws are stated in imprecise language.

 

I'd like to know what is precisely meant by my quote above, from the Revenue Department of Thailand. It seems I may not get an answer.

 

However, PWC, Deloittes and all you guys say that I won't pay tax in Thailand as long as I:

 

1. Don't earn money in Thailand 
   and
2. Never bring money into Thailand in the year in which I earn it.
    

So, thanks all, I've got what I wanted. If I don't have to pay tax in Thailand, I'll arrange to pay my tax in the UK. I have to pay the tax somewhere. I don't think HMRC will just forget about me if I keep quiet!

 

OK, I'm off for a pint!

 

 

 

 

 

 

 

Useful trivia:

 

It was Lord Denning, Master of the rolls who said: "domicile is not a raincoat that can put on or discarded at will". What he intended was to say that domicile is where your long term permanent home is, not to be confused with residence, eg tax residency/non residency. There are many cases of where a UK person has left to live in another country and has done so for many years, the fact that their pension arises in the UK meant that they were still domiciled in the UK and subject to inheritance tax et al.

 

And, more meaningful:

 

The residency test is now multi faceted and you MUST read through it ALL to be safe. I like this version:

 

http://www.cambridgetax.co.uk/ctp/New_Residence_Rules.html

 

[wordchild]

1 hour ago, Tapster said:

When I said that I'm "domiciled" in Thailand, I might have added "for tax purposes" to make it clearer.

 

The fact that I never, or rarely leave Thailand makes me domiciled here for tax purposes, as confirmed by rwdrwdrwd's useful link to HMRC's Residence Test.

 

 

 

I don't know a country where tax laws are stated in imprecise language.

 

I'd like to know what is precisely meant by my quote above, from the Revenue Department of Thailand. It seems I may not get an answer.

 

However, PWC, Deloittes and all you guys say that I won't pay tax in Thailand as long as I:

 

1. Don't earn money in Thailand 
   and
2. Never bring money into Thailand in the year in which I earn it.
    

So, thanks all, I've got what I wanted. If I don't have to pay tax in Thailand, I'll arrange to pay my tax in the UK. I have to pay the tax somewhere. I don't think HMRC will just forget about me if I keep quiet!

 

OK, I'm off for a pint!

 

 

 

 

 

 

i think the issue maybe is the actual law is written in Thai  and there is a bit of  meaning lost in translation here,  in any event that is what my (native) Thai tax advisor  told me.

The point Rwdrwdrwd  makes above is key , income is only relevant if it relates to the current year, if it arose in a prior year and was not available to be taxed in Thailand during that prior year, it is not  taxable income, it has become capital/savings and any further reference to it ,as income, is redundant. . Thailand is not alone in attempting to distinguish between capital and income when it is brought in from out of country.Aspects of the taxation of non-doms in the UK make a similar distinction. The difference is this concession is available to all taxpayers not just a select group. All Thai citizens can be non doms!

 Actually what you say is untrue, you dont have to pay tax "somewhere" you can (with a modicum of effort) arrange your finances, perfectly legally,  so you pretty much dont pay ( income) tax "anywhere", welcome to the whacky, fun world that is  offshore life!

Edited August 25, 2016 by wordchild

[Naam]

4 hours ago, wordchild said:

income is only relevant if it relates to the current year, if it arose in a prior year and was not available to be taxed in Thailand during that prior year, it is not  taxable income, it has become capital/savings and any further reference to it ,as income, is redundant.

4 hours ago, wordchild said:

Actually what you say is untrue, you dont have to pay tax "somewhere" you can (with a modicum of effort) arrange your finances, perfectly legally,  so you pretty much dont pay ( income) tax "anywhere"

[Tapster]

@wordchild

 

I'll look into this exciting world of paying tax nowhere. 

 

Thank you for the post. 

If you have the time to give me some advice, please pm. 

 

[chiang mai]

Try to separate your residency (where you live) from the place where your income arises and you'll be on your way to tax freedom. Try not to earn more money in the country where you live than is tax free. If you have income arising in say the UK, whilst you are living in Thailand, try to move that income offshore to say IOM, Jersey, Guernsey or similar - income such as pension can be moved via QROPS and personal pensions can be put into a wrapper offshore - anything within the personal allowance limit is fine for now but things may change.  Finally, do not import income to Thailand in the year it was earned, otherwise it becomes taxable under Thai tax laws. And finally finally: if you want to avoid inheritance tax you'll need to change your domicile which is difficult but not impossible to do. Eliminating all onshore income is a start, not visiting for a really long time is another.

[Ricardo]

Yes, it really is quite hard to lose your UK-domicile, partly because HMRC won't tell you what you have to do to achieve that objective !

 

If your total-estate would be below the current Inheritance-Tax start-level (325k ?), then domicile is less relevant, but since the last government never did get round to raising the limit to a million pounds (as promised pre-election),  it may still be a factor for some UK-citizens now making their homes in Thailand.

 

http://www.moneysavingexpert.com/family/inheritance-tax-planning-iht  may help.

[wordchild]

On ‎24‎/‎08‎/‎2016 at 11:01 AM, lopburi3 said:

22 hours ago, Ricardo said:

Yes, it really is quite hard to lose your UK-domicile, partly because HMRC won't tell you what you have to do to achieve that objective !

 

If your total-estate would be below the current Inheritance-Tax start-level (325k ?), then domicile is less relevant, but since the last government never did get round to raising the limit to a million pounds (as promised pre-election),  it may still be a factor for some UK-citizens now making their homes in Thailand.

 

http://www.moneysavingexpert.com/family/inheritance-tax-planning-iht  may help.

HMRC don't make it easy for you to determine your position re UK  domicile I think partly because it suits them to be opaque but mainly because your domicile is based on case law (ie the history of other judgements) rather than based on statute. Things would be much easier if it was covered by statute eg as tax residency now is. Maybe they will get round to this eventually. 

    Having been through the hoops on this myself a few years back I would say that, though it is a little complex, the standard Brit expats view that it is impossible to loose your domicile is overly pessimistic. eg A long term Thai based expat who has cut most of their UK ties, has no property in the UK, limited close family and other social ties, rarely visits and lets say has married and started a family in Thailand,  also if they clearly intend to spend the rest of their life (and importantly) intend to be buried/cremated in Thailand. Such a person  would have a pretty strong case for having adopted a domicile of choice in Thailand.   Moreover if such a person were to organize  their affairs so that the HMRC would not need to be troubled on their death ie no UK probate required. Then HMRC would be in  the  position of having to challenge a will that may have already been executed in another jurisdiction, from a position of  being very likely to loose the case  and unless there were multi-millions  (or an important point of law ) involved then, I would suggest, they would be unlikely to do this.

 

 

Edited August 28, 2016 by wordchild

[Misty]

Tapster,   Regarding Thai tax requirements, are you retired and living on passive investment income generated elsewhere, or are you still working? 

[Tapster]

@Misty

Retired, not working, NHS pension and rental income from UK property.

 

Thanks, everyone for the opinions. I'm going to research the offshore thing in depth. 

 

Currently, I'm paying tax in the UK and South Africa, under the UK-SA double taxation agreement. Next year I will formally emigrate financially from South Africa and it is then that I will need to have my tax ducks in a row, so I have some time to research and plan.

 

[meatboy]

On 8/31/2016 at 10:25 AM, Tapster said:

@Misty

Retired, not working, NHS pension and rental income from UK property.

 

Thanks, everyone for the opinions. I'm going to research the offshore thing in depth. 

 

Currently, I'm paying tax in the UK and South Africa, under the UK-SA double taxation agreement. Next year I will formally emigrate financially from South Africa and it is then that I will need to have my tax ducks in a row, so I have some time to research and plan.

 

the wife is in the same boat as you.

NHS early retirement pension.

rental income from uk.property.

she fills in a self assestment tax form every yr.

as her uk.income is below the personel allowance she pays no tax.

on her property she can claim expences against her income before tax.

eg.gas certificate,electricians report [certificate]

landlords house insurance.

agents fee [collecting rents]

so you should check your position regarding your personel allowance.

by the sound of your post you are not state pensionable age.