Tax residency in Thailand and taxing overseas income

[Big Boy]

No

[KhunLA]

I'm surprised nobody has actually posted any info from the RD on what is expected. RD will be looking at all income from overseas, Thais and expats (anyone residing here 180 days of the year).

If being transferred into you bank account, then they have a record of your 'income'

There is penalties for not filing, whether tax is due or not.

DISCLAIMER: I am not a Tax Advisor ... due diligence on you part required

Some highlights from my reading:
First chore ... read the Thai DTA with your home country.

For us Yanks, our Soc Sec, VA bennies can only be taxed by the USA ... nuff said, ref; Article 20
If that is direct deposited into you Thai bank account, that will be noted in your bank's 'credit advise' used for you visa extension. Company pensions, I believe, are taxable income.
TH / USA DTA: https://www.irs.gov/pub/irs-trty/thailand.pdf

There are allowance to minimize your tax, for single & married folks:
https://sherrings.com/personal-tax-dedu ... iland.html

From different source:
a) Personal Allowance for self (PA1) - 60,000
b) Personal Allowance for wife (PA2) - 60,000
c) Over age 65 years exemption (OAE) - 190,000
d) 50% of pension income received, up to 100k (PD) - 100,000
e) In addition, the first 150,000 of assessable income is zero rated and free of tax (ZR)

59) Additional deductions and allowances exist for health or life insurance premiums paid in Thailand. A complete list of deductions, allowances and exemptions can be found in the link below:
https://www.rd.go.th/english/6045.html

Tax Schedule:
Taxable Income per year(Baht) Tax rate
a) 0 – 150,000 Exempt
b) 150,000 – 300,000 5%
c) 300,000 – 500,000 10%
d) 500,000 – 750,000 15%
e) 750,000 – 1,000,000 20%
f) 1,000,000 – 2,000,000 25%
g) 2,000,000 – 5,000,000 30%
h) Over 5,000,000 35%

TAX FILING ELLEGIBILITY (requirement)

53) “All persons earning income are required to file a tax return no later than 31 March of the following year for hard-copy filing and 8 April for on-line filing, except for individuals whose income from employment is THB 120,000 or less (for single persons) or THB 220,000 or less (for married persons) and in the case of having income from other sources (with or without employment income) of THB 60,000 or less (for single persons) or THB 120,000 or less (for married persons)”.
https://taxsummaries.pwc.com/thailand/i ... nistration

I would expect a new form, to be required when we do our Visa Extension, verifying our tax filing and or payment in 2025.

[Big Boy]

It looks as though my taxation code has been adjusted to cater for the amount of tax paid by my regular pension provided. So this does open a very grey area - although I am paying tax on my State Pension by stealth through my tax code, my State Pension is not being taxed directly.

Do you complete an annual tax return?

Should I be? I've never heard of anybody doing so before, but its quite likely I'm running with my head in the sand. I simply presumed that as my income was coming from the Gov't, the Gov't would know what they were paying me.

[Dannie Boy]

Until last year, I had always been asked to submit a UK tax return by HMRC, but the year before last I managed to spend more than 6 months in the UK in a tax year, so rather than use one of the proprietary software companies to submit my tax return, I was able to do it using the online HMRC portal. When I received my tax assessment, I also received a message from them saying that I no longer needed to submit a tax return, unless my financial circumstances changed. There was no mention about whether or not I had subsequently spent more or less than 6 months in the UK. This year I received a letter from HMRC regarding the 2023/24 tax year just as a reminder if I needed to submit a tax return - not saying that I needed to. Within the letter is a link where you can check whether you need to submit a return or not - I clicked on the link, answered the questions (none of which ask about days spent in the UK) and at the end was advised that I do not need to submit a return!!

https://hmrc.imicampaign.uk/externalacc ... 25FE5AC82A

[Big Boy]

Thanks DB, that link clarifies it/answers my question.

screenshot-www.gov.uk-2024.05.12-14_17_48.png (47.51 KiB) Viewed 1171 times

[caller]

Should I be? I've never heard of anybody doing so before.

Well, you have heard of one now - me!

As stated it depends on circumstances. Your P60 from an employer will only ever cover tax deducted by that employer. You mentioned this made it harder to prove tax 'paid' from state tax.

If you did an annual tax return - mine is of the self assessment variety - then that includes all income, earnings, tax etc, and a summary is provided that should satisfy the tax authorities here, should that ever be needed.

[Big Boy]

I'm fairly confident that my main pension will easily cover most costs of living here - that is taxed by UK and I have the proof. Even if I completed a form, it isn't going to show my State Pension as having been taxed, because it hasn't. My tax code will have been adjusted instead, and I pay extra tax on my main pension as a consequence.

In the event I need to make an exceptional spend, rather than confuse things, I'll most likely transfer it to my daughter who is well off the tax radar.

[Ratsima]

I'm surprised nobody has actually posted any info from the RD on what is expected. RD will be looking at all income from overseas, Thais and expats (anyone residing here 180 days of the year) <snip>

In other words, nothing has changed except the bit about when the income is earned. Those of us with income have always been required to file a tax return. Most don’t bother which has given the impression that this is a new law or regulation or whatever. It is not.

I file a return every year but only report Thai interest income, not my income from the US even though some of that was legally taxable (maybe).

[KhunLA]

I'm surprised nobody has actually posted any info from the RD on what is expected. RD will be looking at all income from overseas, Thais and expats (anyone residing here 180 days of the year) <snip>

In other words, nothing has changed except the bit about when the income is earned. Those of us with income have always been required to file a tax return. Most don’t bother which has given the impression that this is a new law or regulation or whatever. It is not.

I file a return every year but only report Thai interest income, not my income from the US even though some of that was legally taxable (maybe).

The impression I get also, and they simply never enforced it on expats. Now that they closed the loophole for Thais earning money, and transferring in, we're caught in the same net now.

So what ever they know about that's coming in, guessing that's the only thing they can base their tax on. Those who do have to pay, and also taxed in home country, supposedly will get a refund from one or the other. Guess that depends on who's taxes get filed first.

I'm too poor to get taxed in the USA, and all my income is exempt here. Anything else is already here. I'm going to ignore it for now, unless I hear of expats getting fined for not filing.

Then there's Imm, so not hard to make sure everyone has filed or paid, with just another form for extension.

[malcolminthemiddle]

59) Additional deductions and allowances exist for health or life insurance premiums paid in Thailand. A complete list of deductions, allowances and exemptions can be found in the link below:
https://www.rd.go.th/english/6045.html

I'm having difficulty reconciling the exemptions at this link posted by KhunLA with the exemptions listed in Section 42 of the legislation found here

https://www.thailandlawonline.com/reven ... ue-code#ii

For example income from inheritance?

Am I missing something?

[StevePIraq]

Having just spoke with my financial adviser, he has said not to worry as I can send up to 10m Baht a year tax free to my partner or up to 20m Baht a year tax free to a wife. Then she withdraws and gives to me, note not a bank transfer.
A Swiss friend has also advised the Swiss embassy has told him the same.

[Big Boy]

Did he explain how it works, because that is well in excess of the Thai income tax threshold?

[STEVE G]

Did he explain how it works, because that is well in excess of the Thai income tax threshold?


tax.png

It's covered by Gift Tax
https://www.expattaxthailand.com/gift-t ... 0threshold.

But there is technically a problem there:

When you give something away as a gift, you are expected to relinquish all benefits from that asset. If you continue to benefit from it in any way, this is known as a ‘gift with reservation’.

For tax planning purposes, it’s crucial to understand that you must not derive any benefit when gifting assets. For example, if an expat sends money from overseas to their Thai spouse and it covers their living expenses, it is not considered a gift. Attempting to bypass the tax regulations in this way is likely to be considered tax evasion, potentially resulting in severe penalties.

[Big Boy]

Attempting to bypass the tax regulations in this way is likely to be considered tax evasion, potentially resulting in severe penalties.

Exactly. The way I understood this regulation when first advised was the main intention was to tax monies from Thais working overseas to families at home. It was trying to block a hole in the tax regulations.

Earnings from Expats living here were just going to be a fortunate by-product of the system.

If that is correct, they will be watching ALL income from overseas, not just from Farangs. If somebody is being gifted ฿20M each year from the same benefactor, I would imagine a few warning bells may sound.

[Dannie Boy]

I wish I could gift my wife B20m a year!!


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