New Income method - Gross or net income?

[Stevemercer]

I looked through the current threads on the new income method for retirement/marriage extensions, but couldn't find an answer to the above.

 

Under the old method (statement from embassy) one could use one's gross income (before tax). The new method (monthly bank deposits) seems to rely on net (after tax) income.

 

For example, my gross income exceeds the monthly income requirements. However, my net income (after paying 33% tax at the overseas rate) is below the monthly income requirements. Tax is automatically deducted from my income before it is deposited in my bank account.

 

Does anyone know if it is still possible to rely on gross income (this would mean using my yearly tax statement to this effect)?

[aamarsngh11]

Difficult to answer as nationality would change situation, believe under Visa section there is a pinned article with requested info.

Sent from my SM-G950F using Tapatalk

[ubonjoe]

The rules state you have to transfer 65k baht income from outside the country every month. I am certain they will insist on seeing that amount.

You could ask your local immigration about showing that part of your income had been deducted to pay taxes on your income to find out if they would accept it.

[Jingthing]

Two answers --

If you're a national what has an embassy that still issues income letters, there is no change. If you've been using gross income and you can get an embassy letter showing that amount, then gross is still OK.

If you're a national under the new police order (that can no longer get a letter) the rough answer is NET because it's not based on income claim it's based on the requirement to import at least 65K baht per month. That doesn't distinguish between gross and net. Just send the money!

Supposedly the combination method can still be used under the new police order, but it's not mentioned, and I'll believe it when I see it.

Edited January 13, 2019 by Jingthing

[Jingthing]

2 minutes ago, ubonjoe said:

The rules state you have to transfer 65k baht income from outside the country every month. I am certain they will insist on seeing that amount.

You could ask your local immigration about showing that part of your income had been deducted to pay taxes on your income to find out if they would accept it.

Good answer, but I reckon the answer would be no. The police order is clear about the required income import -- 65K monthly.

[ubonjoe]

15 minutes ago, Jingthing said:

Supposedly the combination method can still be used under the new police order, but it's not mentioned, and I'll believe it when I see it.

It is not a new police order it is only amending police order 138/2557 sections 2.18 and 2.22 to detail the proof of income. The combination option was never mentioned in clause 2.22 in that police order.

The combination option is shown in clause  2.22 of police order 327/2557.

"(5) Must have an annual earning and funds deposited with a bank totaling no less than Baht 800,0000 as of the filing date."

 

[Jingthing]

1 minute ago, ubonjoe said:

It is not a new police order it is only amending police order 138/2557 sections 2.18 and 2.22 to detail the proof of income. The combination option was never mention in that police order.

The combination option is shown in clause  2.22 of police order 327/2557.

"(5) Must have an annual earning and funds deposited with a bank totaling no less than Baht 800,0000 as of the filing date."

 

You're right and I was already aware but I'm talking about real life future enforcement in the various offices and honestly you don't know exactly how that is going to shake out, indeed nobody does.

For example consider exchange rates, there are so many possible complications. Someone doing a full 65K suppose one month it dips to 63K, but the total of the 12 tops 12 x 65. Then what? Automatic combo method only, or not? There are scads of potential enforcement complications with this new system. 

[ubonjoe]

16 minutes ago, Jingthing said:

You're right and I was already aware but I'm talking about real life future enforcement in the various offices and honestly you don't know exactly how that is going to shake out, indeed nobody does.

For example consider exchange rates, there are so many possible complications. Someone doing a full 65K suppose one month it dips to 63K, but the total of the 12 tops 12 x 65. Then what? Automatic combo method only, or not? There are scads of potential enforcement complications with this new system. 

You did write this which indicated to me you thought it was no longer available.

35 minutes ago, Jingthing said:

Supposedly the combination method can still be used under the new police order, but it's not mentioned, and I'll believe it when I see it.

The complications of doing the combination option is an individual problem that should be planned if they only had a fixed amount of income that was close to the 65k baht income. I might only require putting 2 or 3k baht in the bank monthly to save some for the money in the bank side of the combination option plus the extra 20k baht needed above the annual income of 780k baht.

[Pattaya46]

31 minutes ago, Jingthing said:

If you're a national what has an embassy that still issues income letters, there is no change.

If you've been using gross income and you can get an embassy letter showing that amount, then gross is still OK.

Is there many countries who use/used Gross income ?

Seems to me - from previous discussions on this forum - these were mainly "English countries" (UK, USA, AU?...) doing so.

Seems also that most European countries are doing embassy letters on Net income.

[robblok]

4 hours ago, Pattaya46 said:

Is there many countries who use/used Gross income ?

Seems to me - from previous discussions on this forum - these were mainly "English countries" (UK, USA, AU?...) doing so.

 Seems also that most European countries are doing embassy letters on Net income.

I am not 100% sure but I believe the Dutch Embassy office did gross income. They ask for tax forms and these show gross income. BUT I havent done it for years so I can't be sure.

[jackdd]

Am i the only person who would have never thought that you you are supposed to write the gross income on the income affidavit?

It doesn't say it explicitly, but imho writing the gross income on never made sense because everybody has different tax rates, and Thai immigration want to see that you have enough money to spend.

So everybody who used to write his gross income on the form probably did it wrong. Is there any country which explicitly said gross income?

 

Now with changes the situation is clear anyway, you need to transfer 65k per month into Thailand so you need to have at least 65k net income.

[Pattaya46]

1 hour ago, jackdd said:

Am i the only person who would have never thought that you you are supposed to write the gross income on the income affidavit? //

No, surely not the only one.

Several threads on this subject on this forum in the past. A part of members thinking it was cheating while the other group affirming that as "net" was not mentioned, "gross" was acceptable. 

Happen that most members on this forum are from UK and USA, so the conclusion was always seriously biased  

[D3030]

15 minutes ago, Pattaya46 said:

No, surely not the only one.

Several threads on this subject on this forum in the past. A part of members thinking it was cheating while the other group affirming that as "net" was not mentioned, "gross" was acceptable. 

Happen that most members on this forum are from UK and USA, so the conclusion was always seriously biased  

Pretty much, at least the U.S. Embassy were just affirming the amount you put down is what you make.  Honest people normally would not straight out lie, so if their gross income got them over the required amount to get a one year extension, then I don't see that as cheating or lying.

 

But since there is a specific amount that needs to be deposited in a Thai bank, some people just can't to it.  As in, some of their income is used to pay for other things/bills back their home country, leaving them with not enough funds to transfer into a Thai bank; Some don't actually make enough; And some just refuse to open a Thai bank account.

 

All I know, the word put out by the U.S. Embassy, they gave 2 reasons why they stopped issuing income affidavits.  One was because the Thai Government wanted them to actually verify income; The other was, Americans complaining they thought it was an inconvenience to get an income affidavit every year.

[elviajero]

13 hours ago, Stevemercer said:

Under the old method (statement from embassy) one could use one's gross income (before tax). The new method (monthly bank deposits) seems to rely on net (after tax) income.

You were never supposed to declare gross income, that was a loophole.

 

13 hours ago, Stevemercer said:

Does anyone know if it is still possible to rely on gross income (this would mean using my yearly tax statement to this effect)?

No. They aren’t interested in what is on paper, but what is received by your bank. They will want to see the minimum of 40/65K transferred to your bank in Thailand. If you’re applying as a retiree you could cover the shortfall by depositing a lump sum in you Thai bank for 3 months before you apply.

 

e.g. If you’re transferring 50K pm that equates to 600K pa. and you could deposit 200K in your bank to cover the shortfall.

[elviajero]

8 hours ago, jackdd said:

Am i the only person who would have never thought that you you are supposed to write the gross income on the income affidavit?

It doesn't say it explicitly, but imho writing the gross income on never made sense because everybody has different tax rates, and Thai immigration want to see that you have enough money to spend.

So everybody who used to write his gross income on the form probably did it wrong. Is there any country which explicitly said gross income?

 

Now with changes the situation is clear anyway, you need to transfer 65k per month into Thailand so you need to have at least 65k net income.

No you’re not. I argued that point for years. It was a convenient, for some, loophole that is now closed to anyone not using the embassy certification.

 

 

[SheungWan]

If gross is =65k and net transfer is =64k, then no go.

Edited January 13, 2019 by SheungWan

[Stevemercer]

OK, thanks very much for the replies and comments. I'll look to beg or borrow to make up enough for the bank savings method. At least I still have some credit in that regard.

[wwest5829]

16 hours ago, ubonjoe said:

The rules state you have to transfer 65k baht income from outside the country every month. I am certain they will insist on seeing that amount.

You could ask your local immigration about showing that part of your income had been deducted to pay taxes on your income to find out if they would accept it.

Agreed, Joe. Seems rather unambiguous to me. 65,000 if Retirement Visa deposit every month/ 40,000 if marriage Visa. That is what I am planning on upon extension request come June. I am thinking the certification letter from bank accompanied by the Passbook should do the trick.

[Formaleins]

Let's see, how difficult can this be - "MONEY PAID INTO A THAI BANK"  now, I wonder, is this Gross or Net?

[Time Traveller]

17 hours ago, ubonjoe said:

The rules state you have to transfer 65k baht income from outside the country every month. I am certain they will insist on seeing that amount.

You could ask your local immigration about showing that part of your income had been deducted to pay taxes on your income to find out if they would accept it.

I highly doubt that the money has to be transfered from outside the country into thailand each month. 

What about people whose income is from within Thailand?

In anycase, transferring money each month to thailand is NOT evidence of income is it?

The only thing it demostrates is just that you have money you can transfer around between countries. Again, Thai immigration totally have no clue whatsoever, and just opening up more loopholes for the scammers.

 

Edited January 14, 2019 by Time Traveller

[Time Traveller]

have to ask the OP this, but 65k THB is about USD$2k per month or $24k per year, What country in the world would put you in the 33% tax bracket for an income so low?

Most countries would barely even register on the income tax scale for $24k per year income on pension or investment income

[Pattaya46]

27 minutes ago, Time Traveller said:

// Again, Thai immigration totally have no clue whatsoever, and just opening up more loopholes for the scammers.

 

Apparently you are the one who has no clue... This amendment is not made to close loopholes, but made to allow people from UK, US, AU... to continue to stay here despite their embassy's decision.

[jackdd]

33 minutes ago, Time Traveller said:

What about people whose income is from within Thailand?

If the income is in THB they could never legally use this income for their extension of stay, so no changes for them

[Lemonltr]

I gather, maybe wrongly, that the 'income' method does not now apply to those unable to get embassy letters but proof of bank deposits in a Thai bank does. If I have for example 300.000 seasoned in a Thai bank I ought to be able to use the combination method and bring in less than 65.000 monthly from this month till renewal in November but I'm so nervous about that. Will I be turned down? 

As I see it it would be better if they dropped the 65.000 monthly requirement for those people and asked for ANNUAL deposits/bank holdings to the value of 800.000 baht. That way we could calculate during the year. 

[Time Traveller]

11 minutes ago, Pattaya46 said:

Apparently you are the one who has no clue... This amendment is not made to close loopholes, but made to allow people from UK, US, AU... to continue to stay here despite their embassy's decision.

ok, so you can have no income, just transfer 65k each month to Thailand, so it appears there is income, and immigration are satisfied?

What about people whose income comes from WITHIN thailand with Thai tax returns?

[Time Traveller]

11 minutes ago, jackdd said:

If the income is in THB they could never legally use this income for their extension of stay, so no changes for them

I used it for 10 years. So try again.

[Pattaya46]

3 minutes ago, Time Traveller said:

What about people whose income comes from WITHIN thailand with Thai tax returns?

I suppose there will be no change for them;

They will continue to show their Thai tax document instead of an embassy letter.

[JackThompson]

13 hours ago, jackdd said:

Am i the only person who would have never thought that you you are supposed to write the gross income on the income affidavit?

It doesn't say it explicitly, but imho writing the gross income on never made sense because everybody has different tax rates, and Thai immigration want to see that you have enough money to spend.

In that case, the rule would be 30K/mo or, at most, 40K/mo income, which is more than enough.

 

Quote

So everybody who used to write his gross income on the form probably did it wrong. Is there any country which explicitly said gross income?

If someone asks my income, I would never think to give them "gross adjusted" or "after income/property taxes" or, "after mortgage-payment," or something.  The Thai requirement simply states "income."

 

Gross Income was all that was ever expected.  They wrote the rules, and clearly could have written them differently if they wanted some sort of "net after.... " income. 

 

We have this "transfer 65K monthly" situation ONLY as a workaround for those whose embassy-letters are now gone - not because it was always expected that those with qualifying "incomes" (gross) would need to transfer that much to live in a relatively inexpensive country (why many are here in the first place).

 

Quote

Now with changes the situation is clear anyway, you need to transfer 65k per month into Thailand so you need to have at least 65k net income.

If you cannot get an income-letter any more, and do not have 800K sit in a bank for 3-mo, then, yes. 

 

If one does not have 65K income above and beyond all passport-country expenses (taxes, mortgage-payments, etc), they now need to pay some of those expenses out of their Thai bank account.  In the case of the OP, as the taxes are taken-out before he gets the money, he will need to remit some money back, to re-send, in order to cover the shortfall

 

18 hours ago, Stevemercer said:

For example, my gross income exceeds the monthly income requirements. However, my net income (after paying 33% tax at the overseas rate) is below the monthly income requirements. Tax is automatically deducted from my income before it is deposited in my bank account.

 

Does anyone know if it is still possible to rely on gross income (this would mean using my yearly tax statement to this effect)?

If you cannot get an embassy-letter any more, I see two possible workarounds:

 

• Use the "combo method" - so put some money in a Thai bank account and season it for 3 months.  The amount in the Thai account will need to "make up the difference" between your Monthly-Transferred total for the year, and 800K Baht.  To do the math, take what you actually get transferred monthly in baht, and multiply by 12.  Subtract this amount from 800K.  The result is the amount you need to have seasoned for 3-mo in a Thai bank account.  I would add a little extra, to cover exchange-rate fluctuations.

- OR -

• Transfer 65K Baht into your account every month manually.   Because your "net after taxes" income does not reach that threshold, such that your passport-country source bank-account will be depleted over time, you could periodically send back what you need to cover the tax-difference.  Dee Money is one way to send money out of a Thai account to a bank-account in another country.

Edited January 14, 2019 by JackThompson

[roath]

5 hours ago, elviajero said:

No you’re not. I argued that point for years. It was a convenient, for some, loophole that is now closed to anyone not using the embassy certification.

 

 

Lots of people without either a legal or accounting background making assumptions as to what should and shouldn't constitute income. If the Thai government wanted people to declare net income (after tax and deductions) they were always quite capable of doing so. They didn't so it wasn't a loophole. It was simply complying with their requirements.

 

If you are self-employed, for example, your net income will vary from period to period and will only anyway be capable of calculation after two years when the tax return is filed and income is calculated at that point. It's not as simple for everyone as people think (and I suspect that those people will have had normal jobs where they were paid monthly and paid tax monthly). 

 

Even saying after tax isn't always helpful as some taxes (e.g. National Insurance in the UK) isn't actually compulsory (the additional payments anyway) so should that be included or not.

 

Likewise, even establishing (if you are self-employed) what is your actual income as opposed to income declared for tax (i.e.; after deductions) could vary significantly

 

so lots of keyboard warriors saying that other people were cheating when it simply (in many cases) exposed their narrow mindedness (as to what other people do) and ignorance (as to law, modes of taxation, and accounting etc)

 

The new system has at least a simplicity in that you either transfer 65K a month into Thailand or you don't. It would just be useful to know if a) that is a minimum monthly figure (e.g. so if you transfer 820k baht a year into your account, but not in equal amounts, that won't qualify) and b) confirmation that the combination method is still available (it seems it will as it hasn't been removed, but as always, clarification is better than supposition)

 

 

 

 

[roath]

52 minutes ago, jackdd said:

If the income is in THB they could never legally use this income for their extension of stay, so no changes for them

Only for those on retirement visas, although in theory, it's possible that you could obtain that level of income from interest in a Thai account, or from dividends from investments in Thai companies, neither of which avenues would require a work permit