Thailand 0% tax

[liroyb]

Seychelles company, hire manager.

Receive funds into Thailand (Div/income) following tax year.

Tax free.

Elite Visa is ok, but consider it just a toll for no dealing with immigration like normies, as for the tax, there was talk that crypto would be tax free with the elite visa but never transpired, but if have structure offshore like described above then tax free.

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 if you use the same principles without incorporate:

What if you hire someone as individual (independent contractor that hire sub-contractor as manager), and that manager is based in UAE. Would it 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]

yeah man but not everybody likes traveling every few months.
Ive been a nomad since covid and this is getting old already.

I never sleep in my own bed, chairs are usually trash, wifi sucks, water pressure is off, etc... Theres always something that goes wrong.

What you just said indicates you havent actively tried this life before.

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

Personal accounts of non-resident aliens in USA are reported to other countries via FATCA since 2014.

This is not true!

 

[tyrexoid]

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 if you use the same principles without incorporate:

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

btw what do you mean by "prove that work which created overseas income was performed outside country borders" do the tax authorities actually ask for a proof when submitting the taxes, about where the work was performed? in which form does one submit such proof for example? employment contracts of people you employ abroad or what? (but then isn't "management" of the people is 'work' ? it's really tricky both ways, the authorities can easily 'consider' anything as work, just because you reside and manage, and the same way the person can say "it's not work, it's management/ownership of a company" and go figure if he only owns or actively manages his people abroad... I think the only correct solution is a local reputable legal agent who will advice and arrange everything personally, based on situation, otherwise it's risky, depends on the total income I guess though, with small freelancers who barely afford Pad Thai and write blog posts or something like that for 'work' probably they barely scratch the tax brackets anyway so there's not much risk apart of a tiny tax bill of all funds deposited 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 tax return yet, will do in April next year).

 

[zzzzzz]

This is not true!

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]

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)

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

 

[Radko]

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)

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 by foreigners in the US, the IRS only reports if you earn more than $10 in interest per year.
It doesn't report capital gains, etc.

Hope this helps to understand it:

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)

This is also related.

EU says it ‘deplores lack of FATCA reciprocity,’ in document implementing tax info exchange texts

In an 18-page document mostly containing formal texts having to do with the implementation of EU requirements for the exchange of tax information, the European Parliament has devoted several paragraphs to criticizing the 2010 U.S. tax evasion-prevention law known as FATCA, saying that it "deplor...

www.americanexpatfinance.com

 

[zzzzzz]

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 by foreigners in the US, the IRS only reports if you earn more than $10 in interest per year.
It doesn't report capital gains, etc.

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]

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

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.

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

FACTA happens as standard, you sign a piece of paper (in recent years stating you are not or 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]

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).

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

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

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

 

[zzzzzz]

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).

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

 

[Mercury]

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?

What is the difference between Personal income tax for Thai and foreign-sourced income

Residents of Thailand are taxed on both Thai and foreign-sourced income, whereas, non-residents are only taxed on Thai-sourced income.

www.belaws.com

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 have been met:

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

Someone will be considered a tax resident of Thailand when:

a person has lived in Thailand for at least 180 days or more 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 tax only on Thai-sourced income).

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


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

What is the Legal Definition of Work in Thailand? - Integrity Legal - Law Firm in Bangkok | Bangkok Lawyer | Legal Services Thailand

Information on how the Thai Ministry of Labor defines employment activity.

www.legal.co.th

From Thai Department of Employment Section 5: "Work" means the use of physical strength or knowledge for engaging in an occupation or a job with or without an intention to obtain wages or any other benefit except the work prescribed in the notification of the Minister.

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

But who cares coz it is not enforced.

 

[wellington]

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

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]

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.

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]

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.

So again it comes back to my statement:

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).

 

[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]

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

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

 

[zzzzzz]

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

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]

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?

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