Thailand 0% tax

[Mercury]

is it only for extension, or for initial application to this type of visa as well? What about bank statements from abroad, they don't consider it?

It is indeed for the extension.

Before applying for 1 year extension, you need first to get a 90-day non-immigrant O visa that you can get in any Thai embassy/consulate abroad. Financial requirements will vary according to each consulate (e.g.: "Applicant’s bank statement showing at least THB 400,000 or equivalent in other currencies for the past 2 months", "Applicant's recent bank statement during the past 6 months", ... ).

It is also possible to convert your current visa or visa exemption into a non-immigrant O visa within Thailand.
Financial requirement (Bangkok Chaeng Wattana immigration office): need to show 400K THB in a Thai bank account on the day you apply. You need at least 15 remaining days on your visa or visa exempt stamp to apply.

 

[yngmind]

So I can share dividends from my offshore company without any penalty? And I would get a paper telling me that I presented my taxes properly?

I want to move the funds from an offshore company to my personal account so I can buy properties in my home country (or other contries if I like them) and I'm pretty sure that when I appear with a bunch of money from nowhere they are going to ask, so I want to show them that I already taxed that money (although it is 0% tax, but is not the same as tax evasion).

PD: I'm going to move from country to country each 6 months or so, so no permanent tax residency for a while, but I'm afraid that when I end my digital nomad adventure my country asks me for the money I have in my account when buying properties and I'm not able to show them that they have not the right to tax me for that money.

I'm afraid it doesn't work like that. If you aren't a tax resident anywhere, you will be a tax resident of your home country.

It will work if you are a citizen of Saint Kits or something similar with 0 tax. I guess double citizenship also might work in that case. Your home country passport + 0% tax passport.

Thailand doesn't have CFC rules, so you are allow to manage the company from within Thailand, with your business and team team being foreign.

That's interesting, I have found an interesting document - https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2018/09/thailand-2018.pdf

Look:

"All income of companies registered under Thai law are subject to corporate income tax. Companies
registered under foreign law and carrying on business in Thailand are taxed on their net profits arising from
their business activities in Thailand.
"

I will hire a Thai lawyer, I have no idea what they mean by carry on business in Thailand.

Conducting business means to engage in any activity in pursuit of gain including activities carried on by a person through officers, agents and employees as well as activities carried on by a person on that person’s own behalf.

No CFC rules also don't mean that you won't be subject to a corporate tax.

Haha, I've asked the chatgpt those questions, the answers are very accurate, it's hard to google it yourself, but the bot gave me a perfect reply

.

I'm afraid it doesn't work like that. If you aren't a tax resident anywhere, you will be a tax resident of your home country.

It will work if you are a citizen of Saint Kits or something similar with 0 tax. I guess double citizenship also might work in that case. Your home country passport + 0% tax passport.

That's interesting, I have found an interesting document - https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2018/09/thailand-2018.pdf

Look:

"All income of companies registered under Thai law are subject to corporate income tax. Companies
registered under foreign law and carrying on business in Thailand are taxed on their net profits arising from
their business activities in Thailand.
"

I will hire a Thai lawyer, I have no idea what they mean by carry on business in Thailand.

Conducting business means to engage in any activity in pursuit of gain including activities carried on by a person through officers, agents and employees as well as activities carried on by a person on that person’s own behalf.

No CFC rules also don't mean that you won't be subject to a corporate tax.

Haha, I've asked the chatgpt those questions, the answers are very accurate, it's hard to google it yourself, but the bot gave me a perfect reply

.

 

[itsmemario123]

I'm afraid it doesn't work like that. If you aren't a tax resident anywhere, you will be a tax resident of your home country.

It will work if you are a citizen of Saint Kits or something similar with 0 tax. I guess double citizenship also might work in that case. Your home country passport + 0% tax passport.

Oh, yeah. I've read about the "perpetual traveller" thing, but nowadays is harder to apply. So I guess that is better to always be a tax resident somewhere.

 

[bnpsu]

So I can share dividends from my offshore company without any penalty? And I would get a paper telling me that I presented my taxes properly?

I want to move the funds from an offshore company to my personal account so I can buy properties in my home country (or other contries if I like them) and I'm pretty sure that when I appear with a bunch of money from nowhere they are going to ask, so I want to show them that I already taxed that money (although it is 0% tax, but is not the same as tax evasion).

PD: I'm going to move from country to country each 6 months or so, so no permanent tax residency for a while, but I'm afraid that when I end my digital nomad adventure my country asks me for the money I have in my account when buying properties and I'm not able to show them that they have not the right to tax me for that money.

From what I understand (not tax advice): On a Thai elite visa, you don't have a work permit, so you are not allowed to do any work. If you have a foreign company and your entire operation is foreign, then you can bring the funds into the Kingdom tax free, the following calendar year tax free.

If you sit there in thailand and work, it may be taxible:

Broken Flag Theory - The Taxation of Digital Nomads in Thailand

The flag theory is a highly vivid concept which has been developed more than sixty years ago. It describes the strategic approach of (in the figurative sense) planting flags in different countries to allocate different aspects of taxation, regulations, and economic framework.

www.linkedin.com

 

[backpacker]

If you aren't a tax resident anywhere, you will be a tax resident of your home country.

No, this is outright wrong !
First of all it depends on the law of your country of citizenship. Then, if there are no specific caveats in the tax laws of your country of citizenship, there is no need to be a tax resident of any country at all. Only conditon: Sever all ties your country of citizenship!
The above is valid for most countries on Planet Earth.

 

[wellington]

is it only for extension, or for initial application to this type of visa as well? What about bank statements from abroad, they don't consider it?


FATCA is a one way reporting, voluntary one btw, there's a form a financial institution will ask you to sign if they comply with FATCA and you sign it but voluntarily. There's no reporting from US towards other countries, only one direction, from countries to the US. As far as I know. (US will get tired of reporting all its financial accounts to all other countries it's practically impossible, and US also would never do it, since it undermines national security... they'll do such thing only if they'll become a 3rd world country after war with China lol, so China will get reports from all other countries into itself, but won't report its own people to other countries since nobody can force it to do so, just as example)

Never really looked into FACTA (non-American) but by default does Thai banks report to FACTA for Non-US Citizens?

No, this is outright wrong !
First of all it depends on the law of your country of citizenship. Then, if there are no specific caveats in the tax laws of your country of citizenship, there is no need to be a tax resident of any country at all. Only conditon: Sever all ties your country of citizenship!
The above is valid for most countries on Planet Earth.

For a Brit this includes not holding pounds.

 

[backpacker]

For a Brit this includes not holding pounds.

Every country has different domestic laws how to determine if and when a non-resident citizen is tax resident of the country of citizenship.
In Switzerland it is sufficient to be a member of the local Jodler club ->

The Swiss regulation is an extreme most people do not anticipate from an otherwise quite liberal country.
Quite similar in it's extreme to what you say about the UK.

To conclude: A perpetual traveller has to do his homework and must be vigilant. However, tax residency is easy to achieve in most countries (UAE, Cyprus and Philippines come to mind) and I doubt one would want to live a nomadic lifestyle until the end of his/her days.

 

[JackAlabama]

Every country has different domestic laws how to determine if and when a non-resident citizen is tax resident of the country of citizenship.
In Switzerland it is sufficient to be a member of the local Jodler club ->

The Swiss regulation is an extreme most people do not anticipate from an otherwise quite liberal country.
Quite similar in it's extreme to what you say about the UK.

To conclude: A perpetual traveller has to do his homework and must be vigilant. However, tax residency is easy to achieve in most countries (UAE, Cyprus and Philippines come to mind) and I doubt one would want to live a nomadic lifestyle until the end of his/her days.

Well, being part of such a club is quite a strong tie indicating "center of life interests". Afaik thats what they focus on.
On the other hand, you can bank there as long as you like while not being tax resident.

 

[zzzzzz]

Never really looked into FACTA (non-American) but by default does Thai banks report to FACTA for Non-US Citizens?

No.

1. Thailand reports to USA: details about USA citizens that have accounts at FI in Thailand.
2. USA reports to Thailand: details about Thailand residents that have accounts at FI in USA.

No, this is outright wrong !
First of all it depends on the law of your country of citizenship. Then, if there are no specific caveats in the tax laws of your country of citizenship, there is no need to be a tax resident of any country at all. Only conditon: Sever all ties your country of citizenship!
The above is valid for most countries on Planet Earth.

This works if you don't use any FI and have no legal income. The minute you step into a bank, they will ask: where is your tax residency?

You: Nowhere.
Bank: Wrong answer.

 

[yngmind]

No.

1. Thailand reports to USA: details about USA citizens that have accounts at FI in Thailand.
2. USA reports to Thailand: details about Thailand residents that have accounts at FI in USA.

Yeah, I feel it works that way.

The country where you're a resident won't report your bank accounts to another country.

But a foreign country where you aren't a resident, will report your banks to a country where you're a resident.

 

[zzzzzz]

Yeah, I feel it works that way.

The country where you're a resident won't report your bank accounts to another country.

But a foreign country where you aren't a resident, will report your banks to a country where you're a resident.

I'm talking about FATCA and countries that have signed FATCA agreement.

CRS is a different beast and reports to every country where you have tax residence indicia. USA is not part of CRS.

 

[wellington]

Every country has different domestic laws how to determine if and when a non-resident citizen is tax resident of the country of citizenship.
In Switzerland it is sufficient to be a member of the local Jodler club ->

The Swiss regulation is an extreme most people do not anticipate from an otherwise quite liberal country.
Quite similar in it's extreme to what you say about the UK.

To conclude: A perpetual traveller has to do his homework and must be vigilant. However, tax residency is easy to achieve in most countries (UAE, Cyprus and Philippines come to mind) and I doubt one would want to live a nomadic lifestyle until the end of his/her days.

I pay swiss wealth tax lol in that respect

 

[backpacker]

I pay swiss wealth tax lol in that respect

Great. That means you are free to continue enjoying the local Jodler club

 

[itsmemario123]

From what I understand (not tax advice): On a Thai elite visa, you don't have a work permit, so you are not allowed to do any work. If you have a foreign company and your entire operation is foreign, then you can bring the funds into the Kingdom tax free, the following calendar year tax free.

If you sit there in thailand and work, it may be taxible:

Broken Flag Theory - The Taxation of Digital Nomads in Thailand

The flag theory is a highly vivid concept which has been developed more than sixty years ago. It describes the strategic approach of (in the figurative sense) planting flags in different countries to allocate different aspects of taxation, regulations, and economic framework.

www.linkedin.com

Oh, that's true. Thank you for the input. Worth to take into account.

 

[yngmind]

Hey guys.

I visited a law firm today here in Bangkok.

What they told me are kind of the same things we have discussed already.

It works until it doesn’t.

They told me they couldn’t guarantee it would work in the future.

Legally you are liable for corp tax because of the PE, but in reality, no one care.

You can’t legally work on a Thai elite visa, and running your business from Thailand is also considered working in Thailand, but they don’t care that you run your business on a Thai Elite Visa.

It’s not legal or tax advice.
Please do your own research and consult with your lawyer, don't take tax advice from a random guy on the forum.

 

[RealDude]

Hey guys.

I visited a law firm today here in Bangkok.

What they told me are kind of the same things we have discussed already.

It works until it doesn’t.

They told me they couldn’t guarantee it would work in the future.

Legally you are liable for corp tax because of the PE, but in reality, no one care.

You can’t legally work on a Thai elite visa, and running your business from Thailand is also considered working in Thailand, but they don’t care that you run your business on a Thai Elite Visa.

It’s not legal or tax advice.
Please do your own research and consult with your lawyer, don't take tax advice from a random guy on the forum.

Did they also hint at what penalties to expect should Thailand crack down?

 

[yngmind]

Did they also hint at what penalties to expect should Thailand crack down?

Haven't asked them, but I never heard that someone was caught using that scheme.

 

[zzzzzz]

If you sit there in thailand and work, it may be taxible:

Broken Flag Theory - The Taxation of Digital Nomads in Thailand

The flag theory is a highly vivid concept which has been developed more than sixty years ago. It describes the strategic approach of (in the figurative sense) planting flags in different countries to allocate different aspects of taxation, regulations, and economic framework.

www.linkedin.com

Put 10 lawyers in one room and each one will have it's own opinion. What matters is the opinion of taxman, and until doing something on your laptop in Thailand is not considered as work... everything is fine.

 

[RealDude]

Imprisonment
In Thailand, another common penalty for not sticking to tax laws is imprisonment. Even a minor offense such as forgetting to deduct withholding tax on a single invoice can result in one month of jail time.

Article - Taxation in Thailand: Common Mistakes, Penalties, and How to Avoid Them

Find out Everything you need to know about taxation in Thailand, including common mistake, penalties and how to avoid them!

thethaiger.com

 

[wellington]

I'm afraid it doesn't work like that. If you aren't a tax resident anywhere, you will be a tax resident of your home country.

That's false, UK Citizens only pay tax on UK in-come when Non-Resident.

Meaning they could be on a boat in the middle of the indian ocean making millions a year and they can't be taxed on it as they are not a tax resident anywhere and those funds are not generated in the UK.

To offset any risk then you'd have the funds in non Sterling, and non UK accounts.

This is why the yachting industry is full of Brits, the oil industry likewise.

Where the oil/gas industry is concerned all these chaps go to Thailand and sit feet in sand drinking their mai tais tax free (even when earning the income in the same year).