Thailand 0% tax

[liroyb]

It looks to me that in order to⁤ consider income ‘’foreign-sourced’’, territorial taxation system doesn’t really care if/when you incorporate (except Thai company⁣ of course), as long as you can prove that the work that created the overseas⁢ income was performed outside the country’s borders. I wonder if it makes any difference if︀ you use the same principles without incorporate:

What if you hire someone as individual (independent︁ contractor that hire sub-contractor as manager), and that manager is based in UAE. Would it︂ matter if you did not incorporated in such case?

 

[taoasher]

Also interested in this setup.

I guess one would need to consult a good tax‌ advisor in TH for this to be bulletproof.

To what extent would the manager need‍ to run ops etc

 

[Radko]

That's the reality of constantly traveling, but social media has romanticize traveling⁣ making it look glamours, very glamours.

This is not︀ true!

 

[tyrexoid]

btw what do you mean by "prove that︀ work which created overseas income was performed outside country borders" do the tax authorities actually︁ ask for a proof when submitting the taxes, about where the work was performed? in︂ which form does one submit such proof for example? employment contracts of people you employ︃ abroad or what? (but then isn't "management" of the people is 'work' ? it's really︄ tricky both ways, the authorities can easily 'consider' anything as work, just because you reside︅ and manage, and the same way the person can say "it's not work, it's management/ownership︆ of a company" and go figure if he only owns or actively manages his people︇ abroad... I think the only correct solution is a local reputable legal agent who will︈ advice and arrange everything personally, based on situation, otherwise it's risky, depends on the total︉ income I guess though, with small freelancers who barely afford Pad Thai and write blog︊ posts or something like that for 'work' probably they barely scratch the tax brackets anyway︋ so there's not much risk apart of a tiny tax bill of all funds deposited︌ in Thai bank accounts, but the larger funds, the larger the risks of a 'fine'︍ that'll cost a lot, but that's just a guess, I haven't submitted my first tax︎ return yet, will do in April next year).

 

[zzzzzz]

It's true for most developed countries.‌ Check FATCA bilateral agreements between country X and USA, section "Article 2" where reporting is‍ detailed.

Information is exchanged:
1. from country X to USA (personal accounts of US citizens⁠ at FI in country X)
2. from USA to country X (personal accounts of tax⁤ residents in country X at FI in USA)

 

[jafo]

Use photoshop to avoid this! Go around the darkweb to learn⁣ more.

 

[Radko]

I'm talking about whether the IRS, under the automatic exchange of⁣ information (FATCA) reports accounts in a US bank where the beneficiary of that US account⁢ is a nonresident alien, and a non US citizen. In these cases, accounts held by︀ foreigners in the US, the IRS only reports if you earn more than $10 in︁ interest per year.
It doesn't report capital gains, etc.

Hope this helps to understand it:︂

This is also related.

https://www.americanexpatfinance.co...document-implementing-tax-info-exchange-texts

 

[zzzzzz]

There are no capital gains⁣ in depository bank account. FATCA is not CRS, so read each agreement with specific country,⁢ not a blog post.

 

[Wellington]

Every decision comes down to a personal level,‍ the people on the other end make the decision.

I've recently imported 5 pieces of⁠ art stored in the UK Tax Free zone into Thailand, they are part of a⁤ collection each is unique but the same as in artist, price paid etc.

In Thailand⁣ i've had tax rates for each one that has come in of various values from⁢ 10% - 200%.

It all comes down to the whim of the inspector.

FACTA happens as︂ standard, you sign a piece of paper (in recent years stating you are not or︃ connected in any capacity to the US).

 

[Wellington]

I've never really looked at the perks of the Elite Visa (it was a means‌ to an end - not dealing with paperwork).

Apparently it's tax free in country?

Elite Visa holders are exempt from paying taxes on their foreign income, providing significant savings,‍ especially in Thailand's progressive tax system, where higher earners pay a higher tax rate.Mar 9,⁠ 2566 BE

BUT Thailand is already 'tax free' for anyone of residence if they structure⁤ based on the proceeding tax year.

Am i missing something there?

FYI (i am a⁣ long term holder, but that was never sold to me as a plus).

 

[Radko]

Yes, Thailand is a tax free country for foreigners if they earn︁ foreign income.

The Elite Visas allow you to live in Thailand temporarily or permanently.

I'm not sure what you're asking...

 

[zzzzzz]

So is everybody WITHOUT Thai Elite visa (tax non-residents, tax residents who︁ don't remitt in 1 year)...

 

[Mercury]

https://www.belaws.com/thailand/pit-for-thai-and-foreign-sourced-income/
Income will be classed as Thai-sourced income when it comes from⁤

Work performed in Thailand
Business in Thailand
Business of an employer in Thailand
Property located⁣ in Thailand

Income earned from the activities mentioned above will also be considered foreign-sourced income,⁢ but when the activities used to earn the income take place outside of Thailand.

Foreign-sourced income will only be subject to PIT in Thailand when the following conditions have︀ been met:

The individual is a Thai resident
The individual brings income into Thailand in︁ the same calendar year it is received

Someone will be considered a tax resident of︂ Thailand when:

a person has lived in Thailand for at least 180 days or more︃ in a year.

Tax residents will be liable to pay tax on both income:

sourced in Thailand and also;
foreign sources brought into Thailand (non-tax residents are subject to tax︄ only on Thai-sourced income).

Foreign-sourced income will only be subject to PIT when the foreign︅ income is remitted into Thailand in the same year as it is earned. Any income︆ remitted into Thailand over a year previously will be exempt from PIT.

Whatever the visa︇ you hold, the issue remains always back to what the definition of Foreign Sourced Income︈ in Thailand is. That leads to what the definition of Work Performed in Thailand is:︉

https://www.legal.co.th/resources/v...tion-law/what-legal-definition-work-thailand/
From Thai Department of Employment Section 5: "Work" means the use of physical strength︊ or knowledge for engaging in an occupation or a job with or without an intention︋ to obtain wages or any other benefit except the work prescribed in the notification of︌ the Minister.

If Thailand would strictly apply its own Tax and Labour Law, then basically︍ almost everything (including any online business, email/call) performed while being in Thailand is considered as︎ work, and consequently considered as taxable local Thai-Sourced Income.

But who cares coz it is️ not enforced.

 

[Wellington]

Ah so that's the nugget.

You can remit‍ same year....

I wasn't aware of that (Elite), i always knew about tax free following⁠ year.

 

[zzzzzz]

Nope. Thai Elite (PE - privilege entry visa) doesn't give you any tax benefits. It's just‍ a permission for long term stay that gives you an option to make permanent homebase⁠ (and tax residency) in Thailand.

 

[Wellington]

So again it comes⁠ back to my statement:

 

[bnpsu]

Are there any best-practices on how to "not remit" money in the same year? How‌ would you differentiate your savings vs income etc?

 

[Radko]

Have two‍ different accounts, some people are doing that just in case they are asked to show⁠ when they made the money.

 

[zzzzzz]

What exactly is‍ remittance for them, international wire transfer? What if you bring cash in Thailand or pay⁠ groceries with foreign debit card, or use Wise which does local transfers to Thai bank⁤ account?

 

[Radko]

I wouldn't worry too much about⁠ bringing cash (don't bring too much of course, cash is always suspicious) or paying with⁤ a foreign debit card.

Mainly, if you want to do things by the book, that⁣ money that you make today outside of Thailand should stay outside of Thailand for 1⁢ year, after that you can bring that money and not pay taxes.

Probably better to︀ have two separate accounts, one with the money that you make now, and another account︁ with the money that you made a year ago, and you can transfer, or spend︂ that money as you need to (if they ever check your finances you'll be fine︃ - better to be safe than sorry right?)