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is transfer of money to support Thai wife subjected to income tax?


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I am staying on non IMM "O" yearly extension based on marriage.

Since several years I make therefore monthly transfers of minimum 40.000 Baht/month to my account here in Thailand

My Thai wife made exceptionally some money and she declared this to-day to the Thai tax authorities

Now the Thai tax authorities warned my wife that this is "income" and therefore I am subjected to tax...

My pension is already taxed in my home country and there is a treaty with Thailand to avoid double taxation.

What is the experience of other TVF members making money transfers to comply with Immigration Laws?

What if 2 months before applying for extension I deposit 400.000 Baht in my account : is this then also taxable income?

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Never heard of that before. I you are legally married it can't be counted as income for your wife, its a tax free family support payment. Someone is trying to pull a fast one on you  . To your last question, it is not subject to tax. 

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I have never been asked to show tax payments on my 40k baht income from abroad when I have applied for my extensions.

The only case where you have to show tax payment receipts and a annual tax return is when working here legally with a work permit.

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The 40K you transfer is paid into your Thai bank account.

Double taxation reciprocal agreements mean you don't pay tax in Thailand on your already taxed income.

What you give your wife is 'housekeeping' expenses.

 

I suspect your wife has received some money from a business adventure, investment or inheritance which she has declared. She probably submitted bank accounts including the 40K 'housekeeping' you supply.

She should have a separate bank account for any taxable income she may be subject to.

Total misunderstanding.

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I find it would be absolutely weird that they would think that transfers between married persons should be taxable!

 

I would try and make sure transfers to Thailand were not income in any case.

 

They have already come up with compulsory insurance, that does not insure, for Visas. I hope this is not the next mutation! ????

 

 

(I avoided being in Thailand more than the 180 days in 2018 when taking some Pensions (UK), as I thought it would be just to complicated to explain if required in Thailand. This however gave me about 5 years worth of Legitimate funds I could demonstrate against ongoing transfers to Thailand, as savings.

 

My intention was to remain UK tax resident,  whilst in discussion with HMRC on this subject, I asked about my pensions, that looking at the UK/TH Tax treaty, as they were pensions from Government Service, were covered under the treaty (1981 from memory). They advised that sometimes tax authorities require the tax to be paid, and then it should be refund immediately as it is covered under the treaty. The wording in the UK treaty is a bit vague about other pensions, compared with the US treaty which last time I looked was crystal clear that pensions were not taxable.

 

So as a plan, to avoid any future complications, assuming fortunate to have at least a years TH budget in Home country...

 

Not to transfer to Thailand from the account  that I receive current in year income remitted to in home country.  (That bank is very poor for doing SWIFT anyway)

Only show proof of income source from the previous year(s), or earlier.

Transfers come from savings, any "income" is purely in home country.

 

When I was practicing transfers to Thailand, I sent by SWIFT the amount of a pension from 12 months previously, though no direct link, but thought it may be easier to demonstrate source if called for in the future, for the 40k/month)  

 

I always wondered if I get the lottery up would I have to wait till the following January to send the wife's half ????. Just in case.

 

 

 

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17 hours ago, Tanoshi said:

Double taxation reciprocal agreements mean you don't pay tax in Thailand on your already taxed income.

Not necessarily. For example most (not all) UK pensions do not fall under the DTA. 

Depends on each country.

@UKresonant already mentions this above

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1 hour ago, topt said:

Not necessarily. For example most (not all) UK pensions do not fall under the DTA. 

Depends on each country.

@UKresonant already mentions this above

He's referring to the often misunderstood requirement to pay tax in Thailand after becoming resident for tax purposes after 180 days. That only applies to nationalities who's Country do not have a dual taxation reciprocal agreement with Thailand. 

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33 minutes ago, Tanoshi said:

He's referring to the often misunderstood requirement to pay tax in Thailand after becoming resident for tax purposes after 180 days. That only applies to nationalities who's Country do not have a dual taxation reciprocal agreement with Thailand. 

Read his comment again specifically regarding treatment of pensions. I was replying to your comment which is not 100% accurate and basically he was saying similar.

Perhaps I should have added that in practice it is not currently actioned by the Thai Revenue but it theoretically could be - if they could prove it was current calendar year income which would in many cases be impossible. And before anybody chips in yes I know it will be on the individual to prove the opposite. 

 

However if you have a specific DTA that works in your favour not an issue as you say :thumbsup:

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I get a pension from the NZ  govt. paid direct into my Thai account. It is not taxed in NZ as I have been out of the country for more than 180 days so I declare it here and "pay my tax". Every year the allowable deductions exceed my income so there is nothing to pay but I can show that I am a taxpayer should immigration ever ask. I have another income which is taxed in NZ so I do not declare that for my Thai tax. I am better off because I would be paying tax on  my pension income in NZ.

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1 hour ago, topt said:

Perhaps I should have added that in practice it is not currently actioned by the Thai Revenue but it theoretically could be - if they could prove it was current calendar year income which would in many cases be impossible.

Misunderstood!

That is in reference to a person resident for tax purposes for the required 6 months.

It is not applicable to income already taxed in your home Country, with whom Thailand has a reciprocal tax agreement with and then transferred to Thailand.

 

I'm registered for tax purposes, because I reclaim tax paid on the interest from my bank accounts.

Inland revenue can clearly see I transfer funds from the UK into my account, but it's not eligible for tax in Thailand, why - because the income wasn't earned in Thailand and the UK has a double taxation agreement with Thailand, so it isn't taxable here.

The interest on my Thai banks however is regarded as income derived in Thailand and automatically taxed @15%, however as this is below the 'personal tax allowance', I can reclaim it.

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I have no idea who is "Misunderstood"? However you still seem to be completely missing the point of my original comment 

53 minutes ago, Tanoshi said:

Inland revenue can clearly see I transfer funds from the UK into my account, but it's not eligible for tax in Thailand,

I presume you mean UK Inland Revenue and if so I don't understand the relevance however potentially it is eligible for tax in Thailand as per below -

56 minutes ago, Tanoshi said:

and the UK has a double taxation agreement with Thailand, so it isn't taxable here.

For the 3rd time this is not 100% correct. Pensions (other than certain govt. pensions which does not include the State pension) are not covered under the UK DTA with Thailand.

See here  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/710099/DT_Digest_April_2018.pdf

Scroll down for Thailand (page 34), heading "Other Pensions/Annuities and go to far right and read Note 4.......

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1 hour ago, topt said:

I have no idea who is "Misunderstood"? However you still seem to be completely missing the point of my original comment 

I presume you mean UK Inland Revenue and if so I don't understand the relevance however potentially it is eligible for tax in Thailand as per below -

For the 3rd time this is not 100% correct. Pensions (other than certain govt. pensions which does not include the State pension) are not covered under the UK DTA with Thailand.

See here  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/710099/DT_Digest_April_2018.pdf

Scroll down for Thailand (page 34), heading "Other Pensions/Annuities and go to far right and read Note 4.......

Read the very top line of that document that you posted the link to:

This Digest is only a guide to possible entitlement to double taxation relief for certain types of UK income received by non-residents of the UK who are residents of the territories listed in the table.

You are not a resident of Thailand, you only have temporary permission of stay.

 

If you are confused, I suggest you visit your local tax office who can explain why your foreign income is not taxable in Thailand. I'm lucky, the niece is the boss at mine and speaks good English.

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If I read this correctly & your wife made an income in Thailand obviously she would need to declare over a certain amount.

Monies you sent from abroad to your account I presume are "tax paid" at source so you can give some to her without further tax liability on her behalf.

Legally, if your money sent has never been taxed you may need further clarification as is a grey area

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34 minutes ago, Tanoshi said:

You are not a resident of Thailand, you only have temporary permission of stay.

As you yourself mentioned you are tax resident if spending over 180 days here in a calendar year. 

 

38 minutes ago, Tanoshi said:

If you are confused,

I'm not but thanks for asking.

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On 1/27/2021 at 9:07 AM, ubonjoe said:

I have never been asked to show tax payments on my 40k baht income from abroad when I have applied for my extensions.

The only case where you have to show tax payment receipts and a annual tax return is when working here legally with a work permit.

The renevue office has begun to to register retired people staying more than 180 days in Thailand for income tax of funds transferred from their home country, beginning with Danes and Fins, according to those Danes that have already been called to meeting at local revenue offices, and have posted in Danish language groups. Those that have paid income tax in their home country, and where there is a Double Taxation Agreement, are not being taxed in Thailand.

 

Anyone staying longer than 180 days is tax resident, and income from abroad is income taxable in Thailand, if transferred during same year as earned.

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On 1/27/2021 at 8:34 AM, fvw53 said:

Now the Thai tax authorities warned my wife that this is "income" and therefore I am subjected to tax...

My pension is already taxed in my home country and there is a treaty with Thailand to avoid double taxation.

What is the experience of other TVF members making money transfers to comply with Immigration Laws?

What if 2 months before applying for extension I deposit 400.000 Baht in my account : is this then also taxable income?

It seems indeed like the revenue office is going to tax income from foreign tax-residents, i.e. those staying longer than 180 days a year, as foreign income is taxable in Thailand when transferred during the same calendar year as earned.

 

However, if your home country has a Double Taxation Agreement with Thailand, and you have already paid tax in your home country, you shall not be taxed again in Thailand, but the authorities might wish to see documentation. They have already started with Danes and Finns, according to those Danes that have been called to meeting in the local revenue office.

 

Savings are not due to be income taxed, also savings transferred from abroad.

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8 hours ago, Tanoshi said:

He's referring to the often misunderstood requirement to pay tax in Thailand after becoming resident for tax purposes after 180 days. That only applies to nationalities who's Country do not have a dual taxation reciprocal agreement with Thailand. 

No, that is unfortunately wrong. 

You are tax resident when you stay more than 180 days, but the DTA avoid double taxation and clear numerous tax matters between the two states...

Quote

Personal Income Tax in Thailand

Under section 41 of the Revenue Code an individual Thai citizen or foreigner who lives in Thailand for one or more periods totaling at least 180 days in any tax (calendar) year is, for tax purposes, deemed a resident of Thailand and subject to tax on all assessable income derived from sources within the country, whether paid within or outside Thailand, and on assessable income derived from foreign sources to the extent that it is brought into Thailand in a year in which income is received

 

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TIT so confusion and misdirection abounds, even from the Thai authorities. But.....

 

First the DTA with the UK does not cover most, including UK state, pensions. It does cover UK government pension payments or pensions paid because you were in the UK government's employ. DTAs with other countries may be different. I've read it several times to reach that conclusion.

 

Next a common mistake is to confuse fiscal residency with immigration residency. Defining an individual's fiscal residency can be complicated but in simple terms if you spend more than 180 days a year in Thailand, as applies in many countries, you are most likely fiscally resident for tax purposes. Residency in Thailand for immigration purposes is possible but rarely granted to foreigners who instead are only granted, if the conditions are met, temporary stays of up to 1 year at a time.

 

It seems though that in practice the Thai revenue authorities are not interested in pension payments received from abroad and if these are your only income source in Thailand. Working legally in Thailand with a work permit would interest them. Working illegally could get you deported.

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7 hours ago, KIWILEE said:

I get a pension from the NZ  govt. paid direct into my Thai account. It is not taxed in NZ as I have been out of the country for more than 180 days so I declare it here and "pay my tax". Every year the allowable deductions exceed my income so there is nothing to pay but I can show that I am a taxpayer should immigration ever ask. I have another income which is taxed in NZ so I do not declare that for my Thai tax. I am better off because I would be paying tax on  my pension income in NZ.

You are lucky, so lucky, my home country can unfortunately still claim tax on my retirement pension, and my home country is number one in the World, when it comes to highest income taxation...????

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1 hour ago, Kalasin Jo said:

First the DTA with the UK does not cover most, including UK state, pensions. It does cover UK government pension payments or pensions paid because you were in the UK government's employ. DTAs with other countries may be different. I've read it several times to reach that conclusion.

 

Next a common mistake is to confuse fiscal residency with immigration residency.

This is what I have been trying to say so thanks for responding.

1 hour ago, Kalasin Jo said:

It seems though that in practice the Thai revenue authorities are not interested in pension payments received from abroad

This has always been my understanding until I saw @khunPer comments above

1 hour ago, khunPer said:

They have already started with Danes and Finns, according to those Danes that have been called to meeting in the local revenue office.

Is this one specific office or several and any reason why they would start with Danes and Finns. Is it because they are using their respective DTAs in some way? I presume they were not just reclaiming tax on withheld bank interest?

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3 hours ago, topt said:

This is what I have been trying to say so thanks for responding.

This has always been my understanding until I saw @khunPer comments above

Is this one specific office or several and any reason why they would start with Danes and Finns. Is it because they are using their respective DTAs in some way? I presume they were not just reclaiming tax on withheld bank interest?

There are reports from both down south in Krabi and up north at Isaan, information about the revenue office start with Danes and Finns comes from the revenue officers.

 

My speculation: Probably because it's very easy to get income tax information from these States, and Nordic countries in general, sharing of tax information is a base for a DTA, as it was posted that the revenue officer already had the 2019 home-country tax-statements.

 

No tax would be claimed from already withheld-taxed retirement pensions, but the the income needed to be registered, the posters said.

 

In reply to "in practice the Thai revenue authorities are not interested in pension payments received from abroad"...

I was registering for a tax ID early last year (2020), which was extremely difficult where I live, as I have no work income; i.e. retirement extension. I needed to be registered tax-payer, as I according to the DTA can get withheld tax returned from dividends, when being tax-resident in Thailand; i.e. only pay 10 percent Thai-tax of Danish dividends, instead of 27 percent, when the money is transferred into Thailand same year as earned. At one point, in my effort to convince the local revenue office to register me for income-tax, they called "someone important" in the head office up in Bangkok, who was extremely interested in my retirement pension and taxation of same.

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12 hours ago, KIWILEE said:

I get a pension from the NZ  govt. paid direct into my Thai account. It is not taxed in NZ as I have been out of the country for more than 180 days so I declare it here and "pay my tax". Every year the allowable deductions exceed my income so there is nothing to pay but I can show that I am a taxpayer should immigration ever ask. I have another income which is taxed in NZ so I do not declare that for my Thai tax. I am better off because I would be paying tax on  my pension income in NZ.

Why do you bother declaring this pension here, they would never know it was not taxed in NZ? Tax has nothing to do with immigration. 

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5 hours ago, khunPer said:

The renevue office has begun to to register retired people staying more than 180 days in Thailand for income tax of funds transferred from their home country, beginning with Danes and Fins, according to those Danes that have already been called to meeting at local revenue offices, and have posted in Danish language groups. Those that have paid income tax in their home country, and where there is a Double Taxation Agreement, are not being taxed in Thailand.

 

Anyone staying longer than 180 days is tax resident, and income from abroad is income taxable in Thailand, if transferred during same year as earned.

How does the tax office know about these Danes? 

The bank, or immigration tells them? 

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13 minutes ago, Neeranam said:

How does the tax office know about these Danes? 

The bank, or immigration tells them? 

The revenue office had their Danish 2019 tax statements with a Thai address registered in the official Danish address-database. Sharing tax-information is part of a Double Taxation Agreement, so that might be why; or it could be from the Thai immigration authorities (how the tax office knows it that is my speculation)..

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16 hours ago, natway09 said:

If I read this correctly & your wife made an income in Thailand obviously she would need to declare over a certain amount.

Monies you sent from abroad to your account I presume are "tax paid" at source so you can give some to her without further tax liability on her behalf.

Legally, if your money sent has never been taxed you may need further clarification as is a grey area

 Message from OP  :   my Thai wife was warned that I ....and not she ....need to pay tax on the monthly transfer of  my pension (minimum 40,000 THB) I transfer to support her.   She was told so at the occasion she declared the money she made for herself one time and for the first time in our marriage of more than 30 years.

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7 hours ago, fvw53 said:

 Message from OP  :   my Thai wife was warned that I ....and not she ....need to pay tax on the monthly transfer of  my pension (minimum 40,000 THB) I transfer to support her.   She was told so at the occasion she declared the money she made for herself one time and for the first time in our marriage of more than 30 years.

I am presuming that your wife told them that you sent her the money? Why would she do that when its not something she earned and therefore should be nothing to do with them.  

I would suggest that if followed through to make sure she tells them it is  not "income" but comes from your savings and tell her not to say anything to them about it being a regular pension payment. If you are also using it for your extension then use that argument as well.

 

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17 hours ago, Neeranam said:

How does the tax office know about these Danes? 

The bank, or immigration tells them? 

Speculation;- Did the Danish Embassy a couple of years ago stop income verification (as per USA, UK, Australia) then reinstated a facility using data from their Pension / Tax Databases. Perhaps someone took an interest in the amount of information available??? 

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20 hours ago, khunPer said:

There are reports from both down south in Krabi and up north at Isaan, information about the revenue office start with Danes and Finns comes from the revenue officers.

 

My speculation: Probably because it's very easy to get income tax information from these States, and Nordic countries in general, sharing of tax information is a base for a DTA, as it was posted that the revenue officer already had the 2019 home-country tax-statements.

 

No tax would be claimed from already withheld-taxed retirement pensions, but the the income needed to be registered, the posters said.

 

In reply to "in practice the Thai revenue authorities are not interested in pension payments received from abroad"...

I was registering for a tax ID early last year (2020), which was extremely difficult where I live, as I have no work income; i.e. retirement extension. I needed to be registered tax-payer, as I according to the DTA can get withheld tax returned from dividends, when being tax-resident in Thailand; i.e. only pay 10 percent Thai-tax of Danish dividends, instead of 27 percent, when the money is transferred into Thailand same year as earned. At one point, in my effort to convince the local revenue office to register me for income-tax, they called "someone important" in the head office up in Bangkok, who was extremely interested in my retirement pension and taxation of same.

The Danish Thai treaty explicitly allows the pension to be taxed in both states.

 

It was my understanding that Thailand pensions are income exempt from Thai tax.

Thus to apply a tax on a foreign pension would put an extra burden on the pension recipient that did not exist for a Thai national. This would appear to be contrary to the treaty non discrimination clause .

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