Residency and tax.

[overherebc]

Can someone settle a point.

Do you have to be an official 'resident' in Thailand to be liable for tax on monies brought into Thailand in the year they were earned or does physical presence in Thailand for more than 6 months in the year mean tax is due?

[elviajero]

If someone stays in Thailand more than 180 days in any tax year they are automatically considered 'resident for tax'. Their immigration status is irrelevant.

 

Here is a link to the Thai Revenue Department; http://www.rd.go.th/publish/6045.0.html

Edited December 26, 2017 by elviajero

[simoh1490]

9 minutes ago, elviajero said:

If someone stays in Thailand more than 180 days in any tax year they are automatically considered 'resident for tax'. Their immigration status is irrelevant.

 

Here is a link to the Thai Revenue Department; http://www.rd.go.th/publish/6045.0.html

What if somebody who is resident by virtue of the 180 day rule, has a non-resident bank account in Thailand?

[elviajero]

19 minutes ago, simoh1490 said:

What if somebody who is resident by virtue of the 180 day rule, has a non-resident bank account in Thailand?

I’m not sure what your question is?

 

Types of bank account have no bearing on ‘tax residency’.

[Harveyboy]

58 minutes ago, elviajero said:

If someone stays in Thailand more than 180 days in any tax year they are automatically considered 'resident for tax'. Their immigration status is irrelevant.

 

Here is a link to the Thai Revenue Department; http://www.rd.go.th/publish/6045.0.html

does this mean i i move here permanently on a pension i would have to declare and pay tax also would this apply to any cash i may have in the bank

[Maestro]

As I see it, the opening post of this topic also poses the question whether a foreigner who resides in Thailand less than 180 days within a calendar year is liable to pay income tax in Thailand on income brought into Thailand during the same year that income is earned.

 

The principal question, though, would appear to be whether Thai law requires such person to file a tax return and declare the said money transfers as income because even this is the case the liability to pay tax is still dependent on whether any taxable income remains after deduction of the part of income that is tax-exempt and other allowed deductions.

[Harveyboy]

33 minutes ago, Maestro said:

As I see it, the opening post of this topic also poses the question whether a foreigner who resides in Thailand less than 180 days within a calendar year is liable to pay income tax in Thailand on income brought into Thailand during the same year that income is earned.

 

The principal question, though, would appear to be whether Thai law requires such person to file a tax return and declare the said money transfers as income because even this is the case the liability to pay tax is still dependent on whether any taxable income remains after deduction of the part of income that is tax-exempt and other allowed deductions.

so how does this work i have used bank transfers to buy a property  so there is a paper trace  now i bring money out with me each time i go back that amount being below what im required  to declare on either leaving my country and below what im required to declare here in Thailand this does away with transfer costs  this money i put into my bank so over quite a few years i have money ..this ok 

[rockingrobin]

2 hours ago, Harveyboy said:

does this mean i i move here permanently on a pension i would have to declare and pay tax also would this apply to any cash i may have in the bank

AFAIK , pension income is assessable , but tax exempt under a ministerial regulation

[elviajero]

2 hours ago, Harveyboy said:

does this mean i i move here permanently on a pension i would have to declare and pay tax also would this apply to any cash i may have in the bank

It is highly unlikely that you would have a tax liability on pension income received from abroad. The cash in the bank would depend on it's origin.

 

The Thai Revenue Department certainly don't seem interested in pursuing foreign retirees for tax. It is effectively a self assessment system and you should declare any tax liability yourself. In order to know your tax liability you would probably need an accountant.

 

Personal Income Tax (PIT) is a direct tax levied on income of a person. A person means an individual, an ordinary partnership, a non-juristic body of person and an undivided estate. 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.

[rockingrobin]

28 minutes ago, elviajero said:

It is highly unlikely that you would have a tax liability on pension income received from abroad. The cash in the bank would depend on it's origin.

 

The Thai Revenue Department certainly don't seem interested in pursuing foreign retirees for tax. It is effectively a self assessment system and you should declare any tax liability yourself. In order to know your tax liability you would probably need an accountant.

 

Personal Income Tax (PIT) is a direct tax levied on income of a person. A person means an individual, an ordinary partnership, a non-juristic body of person and an undivided estate. 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 revenue code , section 42 (17) directs to ministerial regulation 126 for the purposes of income exempt of tax

[overherebc]

3 hours ago, Maestro said:

As I see it, the opening post of this topic also poses the question whether a foreigner who resides in Thailand less than 180 days within a calendar year is liable to pay income tax in Thailand on income brought into Thailand during the same year that income is earned.

 

The principal question, though, would appear to be whether Thai law requires such person to file a tax return and declare the said money transfers as income because even this is the case the liability to pay tax is still dependent on whether any taxable income remains after deduction of the part of income that is tax-exempt and other allowed deductions.

The discussion at the time was just on the one point.

Someone said 'you must be 'resident' and others said it doesn't matter, just being here for more than 180 days was enough no matter what your visa status or residency was.

Tax returns etc didn't come into it, yes by law required etc, but that wasn't questioned.

[Maestro]

6 hours ago, Harveyboy said:

so how does this work i have used bank transfers to buy a property  so there is a paper trace  now i bring money out with me each time i go back that amount being below what im required  to declare on either leaving my country and below what im required to declare here in Thailand this does away with transfer costs  this money i put into my bank so over quite a few years i have money ..this ok 

 

This is OK, perfectly legal and no question about income tax assessment arising from it in Thailand. You could even make occasional or periodic bank transfers stating "for personal expenses" as the reason for the remittance.

[Get Real]

This is out of what I believe I know.

 

As far as your visa status, that is absolutely irrelevant to paying tax in Thailand.

You stay over 180 days per year, your considered as a person that shall pay tax in Thailand.
You stay under 180 days per year there is no tax to be payed in Thailand.

Regarding the source of your income, there is also different how this rule will be applied.

Pension is what I know not taken into consideration for an amount that you need to pay tax for.
Regarding money on your bank account or an income from other source, it has to do with when that money was earned.
If the money was earned the calendar year before the one you transferred it to Thailand, it will not be an amount taken into consideration for as a taxable income in Thailand.
If the money was earned the samr calendar year that you transfer the money to Thailand, it is considered an amount that shall be taxable in Thailand.

I am sure another poster can clarify this if I am wrong, or cement the facts as I see them above.

[simoh1490]

Income that is paid directly into a bank account in Thailand in the year it was earned, salary and pension, for example, is technically liable to Thai tax but the Thai Revenue is not actively trying to tax those payments, nor are the banks set up to collect such tax.

 

Money that is transferred from overseas, from a savings or current account, could be regarded as savings or if income is paid into that account, it could be seen as income. That's a grey area for which there is no simple solution - if I hold 50,000 in my overseas account and every month my pension provider pays 500 into that account and subsequently I transfer 10,000 to Thailand, who is to say the transfer comprises savings or income. I've read somewhere that a system of FIFO/LIFO can be used for such things, first in first out, but that seems very messy and I doubt very practical.

 

My guess is that whilst Thailand Revenue is not currently interested in such payments, at some point they may be. When that time comes they will probably be interested in regular monthly remittances since they are easy to spot and interpret, sporadic, infrequent and irregular transfers are just too problematic from a tax perspective, unless the account holder chooses, of course, to declare them as income, voluntarily.

 

 

[Harveyboy]

9 hours ago, Maestro said:

 

This is OK, perfectly legal and no question about income tax assessment arising from it in Thailand. You could even make occasional or periodic bank transfers stating "for personal expenses" as the reason for the remittance.

just to add the money i have in my account is joint account with my wife would this be looked into as much as it being in my name only.. we pay tax on the interest yearly  ..i have a single account keeping enough to prove my status when applying for my visa ..i read in one of the posts proof of where the money came from ie earnings in my country the money came from sale of my house obviously there are records of this would this stand to be taxed tks for any info 

 

[overherebc]

Just to throw another spanner in the works.

Income from pensions, could it be argued that the money was earned during the period you were investing and now you are just drawing on that sum that was realised maybe 5 or 10 years before.

eg. Invested yearly sums until 2005. At that point you have your cash value or you can take as monthly payments. All has been saved and all interest gained/earned up to 2005. You don't start taking payments until much later.

In 2017 you are only taking money that was earned a good few years before.

Just askin' 

Edited December 27, 2017 by overherebc

[persimmon]

Presumably money that is brought into Th. from another country will have been taxed already,so there may be a treaty in place to avoid " double taxation ".

[Harveyboy]

1 minute ago, persimmon said:

Presumably money that is brought into Th. from another country will have been taxed already,so there may be a treaty in place to avoid " double taxation ".

yes all the money had gone thru the system back home ..but as i never bought in over the limit i never declared it just bought it in changed it for baht and banked it 

[GOLDBUGGY]

6 hours ago, Get Real said:

This is out of what I believe I know.

 

As far as your visa status, that is absolutely irrelevant to paying tax in Thailand.

You stay over 180 days per year, your considered as a person that shall pay tax in Thailand.
You stay under 180 days per year there is no tax to be payed in Thailand.

Regarding the source of your income, there is also different how this rule will be applied.

Pension is what I know not taken into consideration for an amount that you need to pay tax for.
Regarding money on your bank account or an income from other source, it has to do with when that money was earned.
If the money was earned the calendar year before the one you transferred it to Thailand, it will not be an amount taken into consideration for as a taxable income in Thailand.
If the money was earned the samr calendar year that you transfer the money to Thailand, it is considered an amount that shall be taxable in Thailand.

I am sure another poster can clarify this if I am wrong, or cement the facts as I see them above.

No doubt this Tax Law is rather confusing. It can be interpeted several different ways. But back tracking some it goes like this:

 

Any money earned and owned by you, prior to moving to Thailand, is your free and clear. So no problems transfering money to buy a Condo or such, as it is not considered for tax purposes. 

 

They have 2 catigories for Personal Income Taxes in Thailand. Either being a "Resident" or being a "Non-Resident". To be a Non-Resident means that you actually resided in Thailand less than 180 Days. But this does not mean you are not subject to taxes. You are required to pay Income Taxes on all money earned in Thailand. That is stardard for most countries. Go work in the USA for 3 months and you will find the same. 

 

The other catigory is being a "Resident". To be a Resident for Income Tax purposes in Thailand you have had to live in Thailand in the tax year for 180 days or more. If that is the case then Thailand is considered your home. You are subject to all income earned in Thailand as well as all world wide income. Part of the confusion lies in when or if you bring this money into Thailand. How would they know this money was earned money, or money from you previous savings account?  Well, and as far as I can tell, they wouldn't know. 

 

Generally speaking, most people who  live in Thailand longer than 180 days a year work in Thailand also. Even Overseas Work where you work a 28 //28, with travel time you would be in Thailand less than 180 days a year, so a "Non-Resient", and not have to declare this income. But this doesn't address the many people living here on Pensions, Stocks and Bonds, Dividends, or Saving Accouunts. That is the Grey Area. 

 

Many of these payment have withholding tax from the country they are earned. Thailand has many tax treaties with many different countries. So as long as you are paying income Taxes to somebody else on this income, you shouldn't be liable to taxes in Thailand also. But???

[TravelerEastWest]

"If the money was earned the calendar year before the one you transferred it to Thailand, it will not be an amount taken into consideration for as a taxable income in Thailand.
If the money was earned the samr calendar year that you transfer the money to Thailand, it is considered an amount that shall be taxable in Thailand."

 

Basically the above is what I have always understood to be true - with some exceptions.

 

I think the concept is simple the money from a prior year is savings not income.
 

[GOLDBUGGY]

26 minutes ago, TravelerEastWest said:

"If the money was earned the calendar year before the one you transferred it to Thailand, it will not be an amount taken into consideration for as a taxable income in Thailand.
If the money was earned the samr calendar year that you transfer the money to Thailand, it is considered an amount that shall be taxable in Thailand."

 

Basically the above is what I have always understood to be true - with some exceptions.

 

I think the concept is simple the money from a prior year is savings not income.
 

How can anyone tell the difference between money earned that year, or money saved from years before? Better yet, how do you prove that if cornered by the Taxation Department? 

 

Perhaps the safest way is that if you are working in Thailand full time and live here of 160 days a year, but also have money from other sources, just live off your money you earn here, and dont touch or move any money into Thailand then. If you don't bring any money into Thailand , you can't be taxed on it.  Or I don't think so? A very Grey Area!

[simoh1490]

On the subject of pension income:

 

I receive pension income from the UK State pension and also from the US equivalent, the US Social Security system (SSc). When the US SSc wanted information about my UK pension so they could adjust my US payment, they got the information directly from the UK Pension service and ignored anything I told them. So it will be with the Thai tax service when they want details of UK earnings and payments they will get it directly from The UK Revenue, not from you or I. The message is that trying to argue that a payment isn't income, may not be workable. Confirmation of that is that my bank, HSBC UK, has already obtained details of my Thai tax payer ID number or TIN.

Edited December 27, 2017 by simoh1490

[khunPer]

To my knowledge it's normally the 180-day rule that matters about taxation; however one can continue to be taxable, or partly taxable, to one's original home-country even not staying there 180 days. 

 

Numerous countries have double-taxation agreements, in that case you'll not be double-taxed; fx. if you receive a retirement pension from your home-country, and that is taxed in your home-country, then it will not also be taxed in Thailand, if your home-country has a double-taxation agreement with Thailand. In principle one can have taxed retirement pension transferred to Thailand, same year as it's earned; a retirement pension might also be considered as kind of savings.

 

Some money earned in Thailand will be always taxed in Thailand; i.e. withheld-taxed interest from fixed bank accounts, and dividends from investments, etc.; but it should however be possible to claim that tax back, if one has no other Thai income, and the the taxable amount is under the minimum amount for taxation. I've never used it, so have no experience, but numerous others have posted about it...

[KiChakayan]

Has anyone heard of a retiree paying income tax in Thailand?

[rockingrobin]

50 minutes ago, KiChakayan said:

Has anyone heard of a retiree paying income tax in Thailand?

Retirees do pay tax in Thailand, there is a higher allowance granted to persons of a certain age group. I think it is 190,000 baht.

Pension income is tax exempt , see ministerial regulation 126 on the Thai revenue website.

[LivinLOS]

21 hours ago, rockingrobin said:

AFAIK , pension income is assessable , but tax exempt under a ministerial regulation

Do you have any link or source of that information. 

 

The tax code does explicitly include pensions, not merely covering it in income but names it as a source that is taxable under the Thai tax code. 

 

I have yet to see any ministerial exemption, only a lack of enforcement. I always think this presents a additional risk to anyone using the monthly pension declaration system as they are effectively declaring they do not have savings and rely on drip feeding money in, in a way the tax code says is taxable. 

[LivinLOS]

5 hours ago, persimmon said:

Presumably money that is brought into Th. from another country will have been taxed already,so there may be a treaty in place to avoid " double taxation ".

That isnt how double taxation works. Because money was taxed previously does not exempt someone from paying more tax on another event, only one can be offset against the others liability 'within that tax year' for income. We are all paying sales taxes, on money we are already tax on.. 

Secondly, many pensions are not taxed at source, or were at reduced tax to defer consumption v savings. The entire point of a pension.
 

[LivinLOS]

3 hours ago, GOLDBUGGY said:

How can anyone tell the difference between money earned that year, or money saved from years before? Better yet, how do you prove that if cornered by the Taxation Department? 

If I was in that position, I would simply maintain 2 bank accounts outside of Thailand.. Fill account A one year, fill account B the next, and only take money into Thailand from the account which was not being filled that calender year. 

Simple, easy to verify, and provably not 'earned in the year it was remitted'.

[LivinLOS]

3 hours ago, khunPer said:

Numerous countries have double-taxation agreements, in that case you'll not be double-taxed; fx. if you receive a retirement pension from your home-country, and that is taxed in your home-country, then it will not also be taxed in Thailand, if your home-country has a double-taxation agreement with Thailand.

Again that isnt what DTA agreements state.. A DTA agreement does not claim you have 'paid tax' and it is hence tax free in perpetuity against all future claims. 

A DTA agreement broadly speaking allows you to offset one tax obligation, against another jurisdictions tax obligation, within the tax year it is earned. So if you have Thai sourced income and need to declare it to Thailand and pay Thai taxes on it, while still being tax resident of the UK (or vice versa) you can offset one against the other within that year / same time period. 

 

If you had for example UK property income, and paid UK taxation on it, while resident of Thailand, and remitted that income to Thailand within that year, that would be covered by a DTA and would not incur a second tax obligation.  

[LivinLOS]

10 hours ago, simoh1490 said:

My guess is that whilst Thailand Revenue is not currently interested in such payments, at some point they may be. When that time comes they will probably be interested in regular monthly remittances since they are easy to spot and interpret, sporadic, infrequent and irregular transfers are just too problematic from a tax perspective, unless the account holder chooses, of course, to declare them as income, voluntarily.

Even easier are those falangs actively declaring that remit 65k per month, on a legal declaration witnessed by thier embassy !!! 

It seems like too easy a revenue source for a future government not to impose to be honest.. Whats any farang going to do, vote against that government :)