Capital Gains Tax Law In Thailand

[SCOTT FITZGERSLD]

Governments around the world, with help from banks, are

imposing more and more laws and regulations on money

flows between accounts and countries, with heavy punishments

for what they define as "money laundry", which defer from country to country

(for example, in thailand tax evasion is not considered a reason for

money laundry, but in the U.S. and EU , laundrying money from tax evasion can lead

to money laundry persecution with up to 10 years jail punishment !!).

 

So it is very important to check one's legal position when

comes to money transfers or even stock trading.

That is why i would like to ask here about the thai law regarding capital gains

from other countries.

 

The thai law states that capital gains, for thai tax resident (anyone who

stayed in thailand for more than 6 months in a year, regardless the visa),

WON'T BE TAXED if the profit was not transfer to thailand in that same year in was gained.

I tried to understand what it means, even with the help of tax expert, but not sure.

For example, let's say i purchased 100K worth of security in one year. than the

investment gained 200% in few months , and now it is worth 300K.

So if transfered into thailand, in that same year, 150K, will there be capital

gain tax on that amount? and what about the other 50K amount

which i did not transfer into thailand in that same year?

will they become tax free (in thailand) and they can be sent to thailand, tax free, 

in the next year / years?

[dimitriv]

23 minutes ago, SCOTT FITZGERSLD said:

For example, let's say i purchased 100K worth of security in one year. than the

investment gained 200% in few months , and now it is worth 300K.

So if transfered into thailand, in that same year, 150K, will there be capital

gain tax on that amount? and what about the other 50K amount

which i did not transfer into thailand in that same year?

 

I you transfer 150K into Thailand this sum consists of the 100K you invested and 50K profit. According to the law you have to pay tax over the 50K.  If you made (earned) the 100K you invested in that same year also you will have to pay tax over 150K.

 

If you transfer money into Thailand it is better to only transfer money that was made in previous years.

 

 

 

[SCOTT FITZGERSLD]

8 minutes ago, dimitriv said:

 

I you transfer 150K into Thailand this sum consists of the 100K you invested and 50K profit. According to the law you have to pay tax over the 50K.  If you made (earned) the 100K you invested in that same year also you will have to pay tax over 150K.

 

If you transfer money into Thailand it is better to only transfer money that was made in previous years.

 

 

 

really? that is interesting...but how will they know when i made it? will

they demand to show them all the bank records?

AND what if i open a trading account in a thai bank, will the same

ONE YEAR = TAX apply?

[UKresonant]

Before the end of the  Thai Tax year (calendar) , place the money with your currency service, or in an isolated account, and get them to send to Thailand  it at the start of the next year?

I think if in Thailand the 50k would be taxed as income if you were here more than 180days. (I've only glanced at that subject though).

 

 

[SCOTT FITZGERSLD]

how about buying foreign investment / securities via thai banks?

 

i saw that SCB offer offshore investment account, with quite

god fees, and access to stock markets in many countries.

does anyone know if those foreign trading accounts are allowed also for

foreigners on retirement extention? and if other thai banks offer them?

http://www.scbs.com/en/product/product-offshore/

[dimitriv]

1 hour ago, SCOTT FITZGERSLD said:

really? that is interesting...but how will they know when i made it? will

they demand to show them all the bank records?

AND what if i open a trading account in a thai bank, will the same

ONE YEAR = TAX apply?

 

The problem with Thailand is that until very recently, or maybe even now, they do not exchange bank info with other countries. So as a foreigner living in your own country you could hide money in Thailand. I think the law is still based on that. They don't know what happens abroad. I think this is changing slowly. When opening a bank account they asked if I am a US citizen. It seems that they started to exchange information. At least with the US.

 

If you have some savings, enough to live for a year this system is very nice. The money you make this year you keep outside Thailand. And transfer next year if you need it for living expenses. You pay no tax this way.

 

This system is like heaven. It allows you to pay no tax. It is already nice that it works this way. I would not try to push the limits more. 

 

If you have a trading account in Thailand it is not foreign income.

 

I am not a specialist in tax matters. In my own country profits you make with investments can be taxed in different ways. If you are passive it can be income from investment, if you are trading all day and it is like a job they can tax it as salary (much higher). I don't know what they do with this in Thailand.

 

 

 

[saengd]

There is no capital gains tax in Thailand, gains from the sale of immovable property are taxed at the standard rates of income tax.

 

Any income, not just capital gains, that is transferred by tax residents into Thailand during the year it was earned potentially is liable to tax. In practise the tax authorities are not set up to capture that income, nor do they appear to be interested in it. Part of the problem is trying to separate income earned in any particular year, from existing savings, did the funds come from the top of the stack or the bottom of the stack, most would argue from the bottom.

[SCOTT FITZGERSLD]

18 minutes ago, saengd said:

Part of the problem is trying to separate income earned in any particular year, from existing savings

THAT is indeed the problem, how do they decide / search if it was earned the same year it was sent?

from what i read, a tax resident in thailand must pay taxes on income earned ALL OVER THE WORLD, besides capital gains .

so the question is, what is defined as capital gains? say i hold a stock for two years, than sell at

a profit and transfer to thailand the same year i sold - will it be considered taxable income?

AND how will they decide if it was earned the same year?

ohhh, thailand, so easy, and yet so blurry.

[dimitriv]

4 minutes ago, SCOTT FITZGERSLD said:

THAT is indeed the problem, how do they decide / search if it was earned the same year it was sent?

from what i read, a tax resident in thailand must pay taxes on income earned ALL OVER THE WORLD, besides capital gains .

so the question is, what is defined as capital gains? say i hold a stock for two years, than sell at

a profit and transfer to thailand the same year i sold - will it be considered taxable income?

AND how will they decide if it was earned the same year?

ohhh, thailand, so easy, and yet so blurry.

 

You are really making it too complicated. Just keep the money abroad ????   Or use an investment account or bank account abroad with a debit credit card. Use that to pay in the Big-C, in a restaurant. Your money goes directly from the foreign bank account to the supermarket or restaurant.  It will never be on your Thai bank account. There is no way they can track this.

 

 

[SCOTT FITZGERSLD]

Just now, dimitriv said:

 

You are really making it too complicated. Just keep the money abroad ????   Or use an investment account or bank account abroad with a debit credit card. Use that to pay in the Big-C, in a restaurant. Your money goes directly from the foreign bank account to the supermarket or restaurant.  It will never be on your Thai bank account. There is no way they can track this.

 

 

problem is, as you mentioned, that banks abroad report foreign accounts to the country where i am tax resident. Banks abroad demand to know where i am tax resident and than report my account to that country. Thailand does not report. not yet. that is why i prepfer to move to thailand, to register thailand as

my tax residency and than to feel more free about my bank accounts abroad.

it is not me who make things complicated, it is the global system who becomes more and more

like financial concentration camp.

even using your card to pay in another country might be considered, technically, money laundry.

[dimitriv]

2 minutes ago, SCOTT FITZGERSLD said:

problem is, as you mentioned, that banks abroad report foreign accounts to the country where i am tax resident. Banks abroad demand to know where i am tax resident and than report my account to that country. Thailand does not report. not yet. that is why i prepfer to move to thailand, to register thailand as

my tax residency and than to feel more free about my bank accounts abroad.

it is not me who make things complicated, it is the global system who becomes more and more

like financial concentration camp.

even using your card to pay in another country might be considered, technically, money laundry.

 

Banks exchange the account balance you have at the end of the year. If they report this to Thailand this info will be useless for them with current laws. You are allowed to have money abroad. There is no wealth tax. The balance can grow each year. But for Thailand this is not important because this money is abroad and not taxed anyway. So they will only receive useless data.

 

I am planning to follow the rules. I have enough savings to survive for a year. So money I make I can keep abroad for at least a year. 

 

I don't know where you are from. But some banks in my home country told me that they will cancel my accounts when I officially move to a country outside the EU. They claim that administrative expenses (reporting the account balances to countries all over the world) are too high. Other banks had no problems with this.

 

 

 

[tjo o tjim]

Seems hard to enforce the law on anything other than a property sale with funds repatriated immediately.  A brokerage account (especially with margin) would make it impossible to track.

[saengd]

8 hours ago, SCOTT FITZGERSLD said:

THAT is indeed the problem, how do they decide / search if it was earned the same year it was sent?

from what i read, a tax resident in thailand must pay taxes on income earned ALL OVER THE WORLD, besides capital gains .

so the question is, what is defined as capital gains? say i hold a stock for two years, than sell at

a profit and transfer to thailand the same year i sold - will it be considered taxable income?

AND how will they decide if it was earned the same year?

ohhh, thailand, so easy, and yet so blurry.

There is no global income requirement along the same lines as the US system, the taxation implications only exist when the income is remitted.

 

Once again, there is no capital gains tax in Thailand.

 

If you make profit overseas on a stock you've held for two years and then you remit funds to Thailand, those are two separate actions that are not necessarily linked. It is most likely in that scenario that the funds you remitted were savings and it was pure coincidence that you sold stock at the same time as the remittance was received. The most important part of the picture is that the Thai tax authorities are not actively pursuing this type of tax income, nor are they geared up to do so. You really are over thinking the issue by trying to overlay the functioning of the US Revenue system, onto your circumstances in Thailand.

[SCOTT FITZGERSLD]

On 10/18/2019 at 1:45 AM, saengd said:

There is no global income requirement along the same lines as the US system, the taxation implications only exist when the income is remitted.

 

Once again, there is no capital gains tax in Thailand.

YES THERE IS a global income tax requirement in thailand.

maybe you want to check for updates on line.

 

and yes there is capital gain tax in thailand. 

a thai tax resident will pay 37% on his profits from stock trading, but limits apply.

 

seems like you dont know what you are talking about.

thailand tax laws are ever changing, like in most other countries.

 

Thailand taxes worldwide income, just as the US does. But unlike the US, only residents are taxed on their worldwide income while non-residents are taxed only on the income earned in Thailand.

[topt]

6 hours ago, SCOTT FITZGERSLD said:

YES THERE IS a global income tax requirement in thailand.

maybe you want to check for updates on line.

 

and yes there is capital gain tax in thailand. 

a thai tax resident will pay 37% on his profits from stock trading, but limits apply.

 

seems like you dont know what you are talking about.

thailand tax laws are ever changing, like in most other countries.

 

Thailand taxes worldwide income, just as the US does. But unlike the US, only residents are taxed on their worldwide income while non-residents are taxed only on the income earned in Thailand.

Your questions have been well covered by other posters but as usual you are creating arguments where none need exist. 

You ask a question, wait for feedback and then proceed to give your view irrelevant of what you have been told even when, in the past, you have been proved wrong.

 

Nothing on Thai tax law has changed that much in the past year. If you really want a cut and dried solution I suggest you find another country other than Thailand to move to. I could imagine that the the lack of certainty prevalent in every facet of Thai bureaucracy will probably end up driving you insane........ 

Thailand has said it will adopt CRS at some point in the future so if your idea is to avoid that reporting that is another reason to look elsewhere.......

 

[dimitriv]

11 hours ago, SCOTT FITZGERSLD said:

YES THERE IS a global income tax requirement in thailand.

maybe you want to check for updates on line.

 

and yes there is capital gain tax in thailand. 

a thai tax resident will pay 37% on his profits from stock trading, but limits apply.

 

seems like you dont know what you are talking about.

thailand tax laws are ever changing, like in most other countries.

 

Thailand taxes worldwide income, just as the US does. But unlike the US, only residents are taxed on their worldwide income while non-residents are taxed only on the income earned in Thailand.

 

I didn't want to reply...  But you make a mess of it.

 

>> Thailand taxes worldwide income, just as the US does. But unlike the US, only residents are taxed on their worldwide income while non-residents are taxed only on the income earned in Thailand.

 

That is 100% true. But there is 1 addition missing:

 

"If such income is considered foreign sourced income (income derived from work performed outside of  Thailand, business conducted outside of Thailand, or property situated outside of Thailand) it will be taxed in Thailand only if: i. an individual is a Thai tax resident; and ii. such individual brings such income into Thailand in the same calendar year that he receives it."

 

So your quote is right, if you bring the money into Thailand in the same calender year.

 

Mazars has a nice explanation with examples:  https://www.mazars.co.th/Home/Doing-Business-in-Thailand/Tax/Thai-sourced-income-and-residence-rules

 

 

 

 

 

[saengd]

13 hours ago, SCOTT FITZGERSLD said:

YES THERE IS a global income tax requirement in thailand.

maybe you want to check for updates on line.

 

and yes there is capital gain tax in thailand. 

a thai tax resident will pay 37% on his profits from stock trading, but limits apply.

 

seems like you dont know what you are talking about.

thailand tax laws are ever changing, like in most other countries.

 

Thailand taxes worldwide income, just as the US does. But unlike the US, only residents are taxed on their worldwide income while non-residents are taxed only on the income earned in Thailand.

It seems your ability to read and comprehend is constrained:

 

Your so called capital gains are taxed at the rate of personal income....READ sherrings on this point where they write, "Thailand does not have specific capital gains tax law. Instead, income derived income derived from capital gains is dealt with under income tax law"!

https://sherrings.com/capital-gains-personal-income-tax-thailand.html

 

Second, the global income law does not apply to you because you are either (capable of being) a non-resident or a resident who remitted funds in a year other than in the year the funds were earned. The global income rule only applies to residents, as has been said several times.

 

If you still don't understand these points then I can't help you further and suggest you make an appointment with Sherrings or PWC in Bangkok to provide you with information you can believe!

[SCOTT FITZGERSLD]

WOW, so many nervous guys here...i only asked a question...

no need to get so irrtated....

 

what i did not understand is how i will be taxed if i will earn capital gains

by trading stocks in an account outside of thailand, vs. an account in thailand.

say for example, as a thai tax resident (anyone who stay in thailand more than 6 months a year,

regardless of the visa he hold or does not hold, is considered a tax resident in thailand) who

earned , say, 100,000 USD by trading stocks in a bank account in singapore,

and keep it there for two years, i do not have to pay tax on them because i did not

bring the profits into thailand in the same year they were earned.

but say i earn the 100,000 USD by trading stocks in a THAI bank account ,

A bank account based in thailand, than will the profits will be taxed as if they were

generated INSIDE THAILAND?

In that case, thai tax laws hurt thai financial industry, because thai tax resident will prefer

to trade stock = gain on capital in account based OUTSIDE OF THAILAND,

so they will not be taxed in thailand (if not withdrawn into thailand in the same year).

This way Thailand can be semi tax heaven, because it does not tax profits from capital

in accounts based outside thailand...i guess they do it because of security issues for high net

worth people...if it is true...otherwise...why would they do it ?

Just wondering...

 

[SCOTT FITZGERSLD]

On 10/20/2019 at 11:30 PM, dimitriv said:

 

I didn't want to reply...  But you make a mess of it.

 

>> Thailand taxes worldwide income, just as the US does. But unlike the US, only residents are taxed on their worldwide income while non-residents are taxed only on the income earned in Thailand.

 

That is 100% true. But there is 1 addition missing:

 

"If such income is considered foreign sourced income (income derived from work performed outside of  Thailand, business conducted outside of Thailand, or property situated outside of Thailand) it will be taxed in Thailand only if: i. an individual is a Thai tax resident; and ii. such individual brings such income into Thailand in the same calendar year that he receives it."

 

So your quote is right, if you bring the money into Thailand in the same calender year.

 

Mazars has a nice explanation with examples:  https://www.mazars.co.th/Home/Doing-Business-in-Thailand/Tax/Thai-sourced-income-and-residence-rules

 

 

 

 

 

thanks for the link. but it makes things even more puzzling.

as exaplained in the link, THAIALND will tax only income sent into thailand IN THE SAME CALENDAR YEAR.

so for example, if i made millions selling something online or trading securities,

and the profits are paid into an account outside thailand on 31 december , and than

i sent them into thailand on the 1 january of the next CALENDAR year, than i will not

have to pay any taxes on those gains, even if i am considered thai tax resident....

 

i think i need GIN AND VODKA RED BULL now.

[wordchild]

22 hours ago, SCOTT FITZGERSLD said:

thanks for the link. but it makes things even more puzzling.

as exaplained in the link, THAIALND will tax only income sent into thailand IN THE SAME CALENDAR YEAR.

so for example, if i made millions selling something online or trading securities,

and the profits are paid into an account outside thailand on 31 december , and than

i sent them into thailand on the 1 january of the next CALENDAR year, than i will not

have to pay any taxes on those gains, even if i am considered thai tax resident....

 

i think i need GIN AND VODKA RED BULL now.

All of this is accurate , according to Thai tax law.
Incidentally, other countries make similar distinctions (for taxation purposes) between funds brought into country during the current tax year= income, and funds brought in the following tax year= capital ie assets (so therefore  not subject to tax).

A line need to be drawn somewhere, I guess:

eg: aspects of the U.K. taxation of U.K  resident “non Dom’s” is actually quite similar to  the Thai system. The (big) difference is that , under Thai taxation law, all individuals, including Thai residents and citizens, can benefit from this  overseas income concession.

  “ There are non so blind as those who will not see” (Jonathan Swift)

[SCOTT FITZGERSLD]

22 hours ago, wordchild said:

All of this is accurate , according to Thai tax law.
Incidentally, other countries make similar distinctions (for taxation purposes) between funds brought into country during the current tax year= income, and funds brought in the following tax year= capital ie assets (so therefore  not subject to tax).

A line need to be drawn somewhere, I guess:

eg: aspects of the U.K. taxation of U.K  resident “non Dom’s” is actually quite similar to  the Thai system. The (big) difference is that , under Thai taxation law, all individuals, including Thai residents and citizens, can benefit from this  overseas income concession.

  “ There are non so blind as those who will not see” (Jonathan Swift)

INTERESTING.

Thanks for your reply.

but than how about if a thai tax resident is doing his trading in a thai bank account?

than any profits will propably be taxed as income , because the bank account

is in thailand.

than, why would anyone use thai bank account to do his trading  / investing?

you better keep all your assets and financial trading  / investing in banks 

outside thailand, and than it will be considered income sourced from outside

thailand, and than wont be taxed in thailand (if not transferred into thailand in the 

same calendar year)...??

does not make sense to me....

[dimitriv]

2 hours ago, SCOTT FITZGERSLD said:

INTERESTING.

Thanks for your reply.

but than how about if a thai tax resident is doing his trading in a thai bank account?

than any profits will propably be taxed as income , because the bank account

is in thailand.

than, why would anyone use thai bank account to do his trading  / investing?

you better keep all your assets and financial trading  / investing in banks 

outside thailand, and than it will be considered income sourced from outside

thailand, and than wont be taxed in thailand (if not transferred into thailand in the 

same calendar year)...??

does not make sense to me....

 

I believe that the territorial tax system is based on the idea that things are taxed in the country because the country contributed to that profit. If you rent out a house in Thailand and make a profit by doing so than Thailand helped to create that profit. The house is in the country, which need a government to exist. To go to the house you use Thai roads, the house has Thai electricity etc. Without Thailand there would be no house in Thailand and no way to make a profit.

 

If you have a house in another country and you make a profit then Thailand did not contribute anything. Even if Thailand did not exist you would still have that house and make the same profit. So you will not pay tax.

 

It seems like an honest system to me. Much more honest than the US tax system that wants their citizens living abroad to pay tax, even if they did not visit the US for years and the US did not contribute anything.

 

>> does not make sense to me....

 

It is Thailand. Even if the law says that you have to pay tax it does not mean that people will do it. I heard that only 7% of the people pay tax. There is a reason why banks withhold the tax on interest and transfer that money to the government. This is a recent change. And probably they do this because Thai people were not paying.

 

 

 

 

 

 

 

 

 

 

 

[wordchild]

On 10/29/2019 at 12:17 PM, SCOTT FITZGERSLD said:

INTERESTING.

Thanks for your reply.

but than how about if a thai tax resident is doing his trading in a thai bank account?

than any profits will propably be taxed as income , because the bank account

is in thailand.

than, why would anyone use thai bank account to do his trading  / investing?

you better keep all your assets and financial trading  / investing in banks 

outside thailand, and than it will be considered income sourced from outside

thailand, and than wont be taxed in thailand (if not transferred into thailand in the 

same calendar year)...??

does not make sense to me....

Well, there are plenty of things in this world that don’t make sense to me either.

Nevertheless , Thai taxation law has evolved, I presume, because of a variety of pressures/interests  and for  a variety of reasons. It is what it is.

 BTW, for a local investor who invests (In the Thai stock market) via a Thai Bank or Stockbroker, there would be no applicable capital gains tax anyway, because of the concession that applies  to investing in SET listed securities. There is no taxation (In Thailand) for any gains made from investing in the Thai market. So investing via an overseas account would be pointless, for local investors in the SET.
  

[SCOTT FITZGERSLD]

19 hours ago, wordchild said:

Well, there are plenty of things in this world that don’t make sense to me either.

Nevertheless , Thai taxation law has evolved, I presume, because of a variety of pressures/interests  and for  a variety of reasons. It is what it is.

 BTW, for a local investor who invests (In the Thai stock market) via a Thai Bank or Stockbroker, there would be no applicable capital gains tax anyway, because of the concession that applies  to investing in SET listed securities. There is no taxation (In Thailand) for any gains made from investing in the Thai market. So investing via an overseas account would be pointless, for local investors in the SET.
  

acctually Thailad makes one of the best investment worldwide, in the past 20 years.

if you invested in Thailand fund in the bottom of the 1998 asian crisis, than your annualised profit

would be around 12-12% a year, much better than most countries incl. USA.

 

 

[SCOTT FITZGERSLD]

On 10/29/2019 at 5:16 PM, dimitriv said:

only 7% of the people pay tax.

only 7% of the people pay tax because 90% of the population earns minimum wage, if

they are employed at all, and in thailand there is no tax for annual gains below

certain amount,

 

however, we are expats must consider tax regulations also in other countries, because these days

many countries , and banks will not allow transactions

or payments out of thailand if you do not have the proper documents proving that

you did pay this or that.

 

recently i tried to transfer around 50K EUR to my bank in my home country, in europe.

the bank asked me for the following documents:

1. letter from accontant confirming that the amount was taxed.

2. letter from the tax authorities in that country confirming i paid the tax.

3. letter of recommendation from the paying bank (showing money movements, to

prove that i am not a terrorist / criminal / whatever the bank does not like).

4. prove to where the money comes from (to eliminate the case of laundring money

which came from illegal activities, the bank will still investigate, even after

i showed them accountant papers, where the money came from...)

 

that's is the mess FATCA  / CRS created in the world today, and you better take it very

seriously, because even if the law in your country allows one kind of business,

the law in another country might see this activity as illegal and than prosecute you

for money laundry, which can result in confiscation of all your assets and your as* thrown

to many years in jail.