Defining Remittance in Thailand & Living From Offshore Company

[flyinglow]

Hey guys,

Have been toying with the idea of changing my country of residence from Cyprus to Thailand for a variety of lifestyle and taxation reasons.

I understand that there's a lot of uncertainty about the recently announced changes to their tax system, however wanted to ask a couple of questions assuming the worst case scenario and interpretation of the provisions.

1) Does Thailand have CFC & CMC rules? I am planning to appoint a nominee director in Cyprus, and will be the 100% shareholder residing in thailand on an education visa ideally. My company would have no ties to Thailand, save myself as the shareholder residing there.

2) Assuming the above situation is fine, how does the remittance factor actually work? If I change residency on Wise & Revolut for example, and pay dividends from my company to these accounts, would Thailand see this as remittance? Or is remittance only when sending to a Thai bank account? Ideally would be spending 180 days there, remitting about 10-20k EUR for living expenses, and then travelling to my home country of Australia to live for a few months and then travel around where ever using the funds in the 'foreign accounts'. So would the worst case scenario here be paying tax on 20k EUR?

Thanks

 

[TheCryptoAnt]

flyinglow said:
1) Does Thailand have CFC & CMC rules? I am planning to appoint a nominee director in Cyprus, and will be the 100% shareholder residing in thailand on an education visa ideally. My company would have no ties to Thailand, save myself as the shareholder residing there.
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No, theres no CFC rules even after the changes.

flyinglow said:
2) Assuming the above situation is fine, how does the remittance factor actually work?
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Supposedly yes, but until some time has passed we cant know for sure what they are actually gonna care about.

flyinglow said:
If I change residency on Wise & Revolut for example, and pay dividends from my company to these accounts, would Thailand see this as remittance?
Click to expand...

No

flyinglow said:
Or is remittance only when sending to a Thai bank account?
Click to expand...

atm yeah this is the case.

flyinglow said:
Ideally would be spending 180 days there, remitting about 10-20k EUR for living expenses, and then travelling to my home country of Australia to live for a few months and then travel around where ever using the funds in the 'foreign accounts'. So would the worst case scenario here be paying tax on 20k EUR?
Click to expand...

yeah I think so.

=====

In paper, the situation is fucked.
In practice, you are likely to circumvent all of this by just using a foreign card cause at the end of the day this is still Thailand.

 

[wellington]

If you purchase insurance - do overseas
If you pay rent - see if you can pay via booking, agora, airbnb etc overseas
If you grocery shop buy vouchers - travelers card overseas

That takes out usually a chunk of your expenditure.

You may pay more with these overseas providers but it's not remittance.

Now for the deductions = usually 60k plus no tax before 150k

-25,000 a month for the 6 months tax free

Then you will pay minimal tax but have to f**k around with revenue department

If flying in - fly in with 200k THB and that covers any other costs

Should be fine for the average person that comes in for a long holiday annually

Poa-ma.com used to do my insurances domestically now it's done via their parent company overseas for example.

That saves roughly 600,000 thb annual remittance now.

I don't rent so don't have concerns that end.

We also acquired adjacent land the moment the news hit about the tax and begun growing vegetables / fruit which is one of our grocery main costs saving annually around 200,000 - THB 250,000 THB for the house home food costs

My overseas credit card gives me vouchers for expenditure / points - that supplements domestic grocery shopping at three chains

Saving 150,000 THB annually

Etc look for ways to structure things differently to not remit capital as it's “remittance based” not capital growth based✅

Last edited: Jan 16, 2024

 

[banafinfodafuggiano]

TheCryptoAnt said:
No, theres no CFC rules even after the changes.



Supposedly yes, but until some time has passed we cant know for sure what they are actually gonna care about.



No



atm yeah this is the case.



yeah I think so.

=====

In paper, the situation is fucked.
In practice, you are likely to circumvent all of this by just using a foreign card cause at the end of the day this is still Thailand.
Click to expand...

You'll be paying Tax in Australia unless you can prove to ATO that you are a Fiscal resident of Thailand (or Cyprus). If you travel a few months to Australia (over 45 Days) then you are not going to have a good time with their new Tax system policies.

 

[wellington]

banafinfodafuggiano said:
You'll be paying Tax in Australia unless you can prove to ATO that you are a Fiscal resident of Thailand (or Cyprus). If you travel a few months to Australia (over 45 Days) then you are not going to have a good time with their new Tax system policies.
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Lot of Aussies complaining about ATO currently, even if non-resident in the country for something like 20 yrs.

Doesn't make a lot of sense to me really why they are so hungry for tax.

 

[TheCryptoAnt]

banafinfodafuggiano said:
You'll be paying Tax in Australia unless you can prove to ATO that you are a Fiscal resident of Thailand (or Cyprus). If you travel a few months to Australia (over 45 Days) then you are not going to have a good time with their new Tax system policies.
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Probably yeah, as the ATO is quite aggressive, but that wasnt his question.

 

[flyinglow]

banafinfodafuggiano said:
You'll be paying Tax in Australia unless you can prove to ATO that you are a Fiscal resident of Thailand (or Cyprus). If you travel a few months to Australia (over 45 Days) then you are not going to have a good time with their new Tax system policies.
Click to expand...

In the case of the old rules - 6 months in Thailand + tax treaty tie-breaker will cover it

In the case they bring in new rules, when applying the factor tests I'm not a resident anyway. No economic connection, no kids going to school there etc. Only one I tick is having Aussie passport

No guarantee they even bring the new rules in, they've been on the table since like 2016. Honestly I rather they bring them in, so much more clarity on tax residency

 

[Liam13]

flyinglow said:
Hey guys,

Have been toying with the idea of changing my country of residence from Cyprus to Thailand for a variety of lifestyle and taxation reasons.

I understand that there's a lot of uncertainty about the recently announced changes to their tax system, however wanted to ask a couple of questions assuming the worst case scenario and interpretation of the provisions.

1) Does Thailand have CFC & CMC rules? I am planning to appoint a nominee director in Cyprus, and will be the 100% shareholder residing in thailand on an education visa ideally. My company would have no ties to Thailand, save myself as the shareholder residing there.

2) Assuming the above situation is fine, how does the remittance factor actually work? If I change residency on Wise & Revolut for example, and pay dividends from my company to these accounts, would Thailand see this as remittance? Or is remittance only when sending to a Thai bank account? Ideally would be spending 180 days there, remitting about 10-20k EUR for living expenses, and then travelling to my home country of Australia to live for a few months and then travel around where ever using the funds in the 'foreign accounts'. So would the worst case scenario here be paying tax on 20k EUR?

Thanks
Click to expand...

I am also residing in Cyprus and currrently considering Thailand. I am thinking of the Elite visa for 5 or 10 years. Please correct me, but I understood that you can stay as long as you want with the Elite visa and you are not considered tax resident unless you explicitly apply for one from the Ministry of finance...?

 

[A2934]

Liam13 said:
Please correct me, but I understood that you can stay as long as you want with the Elite visa and you are not considered tax resident unless you explicitly apply for one from the Ministry of finance...?
Click to expand...

The Elite visa (or any other visa) does not change that you will become tax resident if staying in Thailand more than 179 days in a calendar year.

 

[JackAlabama]

Liam13 said:
I am also residing in Cyprus and currrently considering Thailand. I am thinking of the Elite visa for 5 or 10 years. Please correct me, but I understood that you can stay as long as you want with the Elite visa
Click to expand...

yes. The price just got like 5x more expensive for the 20y and 50% for the 5y option.

Liam13 said:
and you are not considered tax resident unless you explicitly apply for one from the Ministry of finance...?
Click to expand...

no, stay for 180 days / y and youre in. But you can plan around this in many ways.

 

[A2934]

JackAlabama said:
But you can plan around this in many ways.
Click to expand...

How can you plan around this apart from being there only less than 180 days? Or of course not having any taxable income

 

[Radko]

Liam13 said:
I am thinking of the Elite visa for 5 or 10 years.
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Why don't you look into the new LTR (Long-Term Resident visa), you can stay in Thailand for 10 years, Tax exemption for overseas income, no reporting every 90 days, only once per year, multiple re-entry permit, permission to work in Thailand, fast track service at international airports in Thailand.

All that at a fraction of the cost, no need to spend all that money on the Elite Visa.

 

[Liam13]

Radko said:
Why don't you look into the new LTR (Long-Term Resident visa), you can stay in Thailand for 10 years, Tax exemption for overseas income, no reporting every 90 days, only once per year, multiple re-entry permit, permission to work in Thailand, fast track service at international airports in Thailand.

All that at a fraction of the cost, no need to spend all that money on the Elite Visa.
Click to expand...

Thats probably one option I've missed while searching, I will look into it!

 

[pomo]

Liam13 said:
Thats probably one option I've missed while searching, I will look into it!
Click to expand...

to qualify there are basically three options (I excluded one which involved working for a Thai company as it doesn't have the tax exemption):

1. Show $1M+ funds and invest $500k in Thailand
2. Be over 50 years and have $80k/y in passive income
3. Have $80k/y in active income from a publicly listed company (or a private one with turnover of $150M+)

First one doesn't make sense imo, second is best if you can qualify. Third probably not your situation.

 

[Radko]

pomo said:
to qualify there are basically three options (I excluded one which involved working for a Thai company as it doesn't have the tax exemption):

1. Show $1M+ funds and invest $500k in Thailand
2. Be over 50 years and have $80k/y in passive income
3. Have $80k/y in active income from a publicly listed company (or a private one with turnover of $150M+)

First one doesn't make sense imo, second is best if you can qualify. Third probably not your situation.
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Or, If you have an annual income of $40K for the past two years and you can also make an investment of $250K in foreign direct investment, Thai property or Thai government bonds. Plus health insurance.

 

[pomo]

Radko said:
Or, If you have an annual income of $40K for the past two years and you can also make an investment of $250K in foreign direct investment, Thai property or Thai government bonds. Plus health insurance.
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Right, that's a special case of the wealthy pensioner category (#2) so comes with the 50 year age requirement as well.

 

[Liam13]

Context: I calculate my networth in USD to avoid debates 🙂
Let's say I invest 500k usd in Thai bonds, I see the 10 year bond are yielding 2.5%. We can assume the THB will depreciate by 20% over 10 years, net loss in USD is 18.5% after 10 years, equivalent of ~ 90k USD.
Maybe more interesting to just pay USD 40k for the 10 year elite visa?

 

[Radko]

Liam13 said:
Context: I calculate my networth in USD to avoid debates 🙂
Let's say I invest 500k usd in Thai bonds, I see the 10 year bond are yielding 2.5%. We can assume the THB will depreciate by 20% over 10 years, net loss in USD is 18.5% after 10 years, equivalent of ~ 90k USD.
Maybe more interesting to just pay USD 40k for the 10 year elite visa?
Click to expand...

Do you really think the THB will depreciate by 20% over the next 10 years? More likely the USD will depreciate as well, for sure I don't see the USD strengthening that much given the Federal debt.

Ideally you should try to qualify for the $80K income requirements during the last two years, and not have to invest in Thai bonds, that's my plan!

 

[pomo]

Radko said:
Do you really think the THB will depreciate by 20% over the next 10 years? More likely the USD will depreciate as well, for sure I don't see the USD strengthening that much given the Federal debt.

Ideally you should try to qualify for the $80K income requirements during the last two years, and not have to invest in Thai bonds, that's my plan!
Click to expand...

Liam13 said:
Context: I calculate my networth in USD to avoid debates 🙂
Let's say I invest 500k usd in Thai bonds, I see the 10 year bond are yielding 2.5%. We can assume the THB will depreciate by 20% over 10 years, net loss in USD is 18.5% after 10 years, equivalent of ~ 90k USD.
Maybe more interesting to just pay USD 40k for the 10 year elite visa?
Click to expand...

There's also the opportunity cost of what you could earn keeping it in USD and other investments. Also consider how much you want to remit to Thailand, if any tax on that and how much.

Personally, I went with elite until I reach 50 as I calculated it was "cheaper". After I may try the LTR based on annual income if it's still there...

 

[Liam13]

Radko said:
Do you really think the THB will depreciate by 20% over the next 10 years? More likely the USD will depreciate as well, for sure I don't see the USD strengthening that much given the Federal debt.

Ideally you should try to qualify for the $80K income requirements during the last two years, and not have to invest in Thai bonds, that's my plan!
Click to expand...

It is for sure hard to predict. My point is that when you convert 500k USD into THB, any rounding error over 10 years can far exceed the 40k of the elite visa.