Thailand 0% tax

[Mercury]

It seems apparently that some categories of LTR Visa are entitled to an income tax exemption on foreign-sourced income (meaning 100% passive income from abroad) regardless of the year it is remitted in Thailand.
To be confirmed with BOI/Revenue Department.

Thailand Long-Term Resident (LTR) Visa: A Guide to Tax Benefits and Eligibility

The Long-Term Resident (LTR) Visa program to attract high-potential individuals tp Thailand.

www.belaws.com

Income Tax Exemption

Wealthy Global Citizens, Wealthy Pensioners, and Work-from-Thailand Professionals eligible for the LTR Visa are entitled to an income tax exemption for income derived from a post or business conducted abroad or arising from assets located abroad that has been brought into Thailand.

It’s important to note that the tax concessions provided by the LTR Visa program are subject to rules and conditions prescribed by the Revenue Department.

Please note that this exemption does not apply to Highly Skilled Professional LTR holders.

Thailand Long Term Resident Visa Tax

On 28 Sep 2022, Thailand's Director-General of Revenue Notification (No 427) was gazetted specifying the rules and conditions for the Thailand Long Term Resident (LTR) Visa

sherrings.com

For Wealthy Citizen, Retired and Work-from-Thailand foreigners who come and reside in Thailand under an LTR Visa:

A right to exemption from tax on income that's derived from a post or an office outside Thailand or business outside Thailand or property outside Thailand and brought into Thailand (i.e. an exemption from the Foreign Source Income Law)

 

[Berti]

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.

I think there is something wrong with this article. Foreign sourced income is never taxed in Thailand when it is brought to Thailand after 1 year. Even when you are tax resident in Thailand.
See point 2.9:

https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2023/01/TIES-Thailand.pdf

 

[Mercury]

I think there is something wrong with this article. Foreign sourced income is never taxed in Thailand when it is brought to Thailand after 1 year. Even when you are tax resident in Thailand.
See point 2.9:
https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2023/01/TIES-Thailand.pdf

Read carefully.

If by Foreign-sourced income you mean "Salaries receive from employment exercises outside of Thailand" it's indeed not taxed when remitted in Thailand after 1 year as KPMG mentions, because work is not physically performed in Thailand.

However, any income derived from "work" performed while being physically in Thailand is taxable because it will be treated as Thai-sourced income even if paid abroad and not remitted in TH.

All is about the exact Thai definition of Foreign-sourced income.

 

[wellington]

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

If you are audited...

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?)

I had a discussion with a OTC desk which is part of a larger localised exchange.

Even stablecoins are acceptable, as the wallet(s) track the transactions, thus as its USD equivalent (or CHF, EUR, GBP etc) then its easier to show it has sat there for a year, and the profit is non-existent as they usually do it 10 basis points below real-live rates at the time.

 

[Berti]

Read carefully.

If by Foreign-sourced income you mean "Salaries receive from employment exercises outside of Thailand" it's indeed not taxed when remitted in Thailand after 1 year as KPMG mentions, because work is not physically performed in Thailand.

However, any income derived from "work" performed while being physically in Thailand is taxable because it will be treated as Thai-sourced income even if paid abroad and not remitted in TH.

All is about the exact Thai definition of Foreign-sourced income.

Of course

 

[Mercury]

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.

Money don't have to stay outside of Thailand for 1 year.
To the extreme, foreign-sourced income can be made and paid on your foreign account on December 31st, then be transferred the next day on January 1st. It will be tax free.

I had a discussion with a OTC desk which is part of a larger localised exchange.

Even stablecoins are acceptable, as the wallet(s) track the transactions, thus as its USD equivalent (or CHF, EUR, GBP etc) then its easier to show it has sat there for a year, and the profit is non-existent as they usually do it 10 basis points below real-live rates at the time.

Crypto regulation is still blur in TH, hence I will not dare transferring crypto to cash out in Thailand as everything is forever in the blockchain and can be easily tracked back.
To each their own.

But still, no enforcement as for now.

 

[jafo]

I will not dare transferring crypto to cash out in Thailand as everything is forever in the blockchain and can be easily tracked back.

Tracked back to what? An address?

Who is to say that we are the owner of that crypto address?

Who is to say that the person owning that crypto in e.g. Monaco is not lending it out to us or just paying something for us?

I've had things paid for friends & family members from the wallets of people I deal with. Meaning, the wallet is NOT even mine. I don't even know if the wallet belongs to the person I asked....just like when my cousin asked for a refurbished iPhone...I didn't ship it, I didn't buy it and I didn't pay for it... I have NO idea if my supplier in Shenzhen paid for it or his supplier or who shipped it.... and I don't care.



I have so many questions and none of them can be answered ...

 

[Radko]

Money don't have to stay outside of Thailand for 1 year.
To the extreme, foreign-sourced income can be made and paid on your foreign account on December 31st, then be transferred the next day on January 1st. It will be tax free.


Crypto regulation is still blur in TH, hence I will not dare transferring crypto to cash out in Thailand as everything is forever in the blockchain and can be easily tracked back.
To each their own.

But still, no enforcement as for now.

So according to you, after December 31st, basically at the start of the new year whatever money you made the previous year can be transferred to TH and you'll be doing things according to the law, so no taxes whatsoever... NICE if it's like that, even easier, although keeping your money out the country for 1 year is not that big of a deal unless you make very little money and you need it right away to survive in TH.
No wonder so many people go to live to Thailand, but I'm sure all those digital nomads living in TH are not waiting at all to spend the money they make working online from some coffee shop in Chiang Mai.

Isn't it wonderful that we have tax heaven countries to choose from so we can all enjoy all the money that we make and not have some useless government stealing our money in exchange for nothing, maybe a ridiculous pension...

 

[Mercury]

So according to you, after December 31st, basically at the start of the new year whatever money you made the previous year can be transferred to TH and you'll be doing things according to the law, so no taxes whatsoever... NICE if it's like that, even easier, although keeping your money out the country for 1 year is not that big of a deal unless you make very little money and you need it right away to survive in TH.
No wonder so many people go to live to Thailand, but I'm sure all those digital nomads living in TH are not waiting at all to spend the money they make working online from some coffee shop in Chiang Mai.

Isn't it wonderful that we have tax heaven countries to choose from so we can all enjoy all the money that we make and not have some useless government stealing our money in exchange for nothing, maybe a ridiculous pension...

Yes, Thai tax year is the calendar year.
Again, if you stick to the law it's not "whatever money you made the previous year(s)" abroad, it's true passive income (dividend, interest, capital gain, pension, ...) or income for work you have done being physically outside of Thailand.

Tracked back to what? An address?

Who is to say that we are the owner of that crypto address?

Who is to say that the person owning that crypto in e.g. Monaco is not lending it out to us or just paying something for us?

I've had things paid for friends & family members from the wallets of people I deal with. Meaning, the wallet is NOT even mine. I don't even know if the wallet belongs to the person I asked....just like when my cousin asked for a refurbished iPhone...I didn't ship it, I didn't buy it and I didn't pay for it... I have NO idea if my supplier in Shenzhen paid for it or his supplier or who shipped it.... and I don't care.



I have so many questions and none of them can be answered ...

I will not trust local KYCed exchanges to keep your data safe from the Revenue Department if they require it.

If Thailand is really willing to enforce tax law and granted you are TH tax resident, they will see you have received and sold crypto whatever where it came from, and not declared it.
Then, RD will ask you to justify this money with all the associated paperwork. If it's convincing enough you could be fine, else will have to pay tax accordingly with penalties.

The issue with crypto is all the information is accessible within a mouseclick at anytime hence temptingly easy to enforce any related tax law. And this not only relevant to Thailand.

 

[Marketint]

https://twitter.com/x/status/1703588575026254246

0 tax is over now

 

[backpacker]

https://twitter.com/x/status/1703588575026254246

0 tax is over now

This will be quite expensive for many, considering the high tax rates in Thailand.

 

[wellington]

Rules/Law changed on a whim over the weekend, time to leave...

https://aseannow.com/topic/1306896-thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/

 

[Sols]

A change like that usually has a grace period of at least one year so people have a chance to get their affairs in order. Some will stay, though I'm sure most will leave.

 

[wellington]

A change like that usually has a grace period of at least one year so people have a chance to get their affairs in order. Some will stay, though I'm sure most will leave.

Comes into force in 2024.

Based on this, awaiting Elite to get back to me, i will have to leave 35% tax basically makes the boredom of the Caymans feel pleasurable.

 

[Sols]

Comes into force in 2024.

If I understand correctly, that means income 2023 is not affected, but income from 2024 (reportable in 2025) has worldwide taxation applied.

So the time to act is now but you may be fine if you leave later but still manage to qualify as tax non-resident in 2024. IIRC, Thailand has a pretty simple 180-day rule and usually no other checks.

 

[Jbb1]

https://twitter.com/x/status/1703588575026254246

0 tax is over now

Bad news…

 

[Radko]

https://twitter.com/x/status/1703588575026254246

0 tax is over now

Wow, this is going to change things.

I wouldn't stay in Thailand, much less pay for one of those new and super expensive Elite Visas, what a shame!

This will help a lot of people....

 

[Mercury]

Bad news…

Bad news indeed, however:

Firstly, the English translation of the document indicates that changes are related to income tax under section 41, paragraph 2 of the Revenue Code, referring to assessable income due to "work duties or business conducted abroad or because of assets located abroad according to Section 41, paragraph 2 ...".

Section 41 refers to "A taxpayer who in the previous tax year derived assessable income under Section 40 from an employment, or from business carried on in Thailand, or from business of an employer residing in Thailand, or from a property situated in Thailand shall pay tax in accordance with the provisions of this Part, whether such income is paid within or outside Thailand."

So, to my understanding, capital gains (other than property) and investment income (dividend, interest) from source situated outside of Thailand and not remitted the year it has been received will not be affected, hence still not taxable.

Section 38_64

Improve Thailand's economy and society through good governance, modern tax collection and attentive services

www.rd.go.th

Secondly, by 2024 anything can and will change 10 times.
Freaking out is a bit early. This is Thailand.

 

[AtMo]

I think just staying in Thailand for less than 180 days per year would be fine.
Stay the rest of the time in other SEA countries.

 

[Radko]

Anyone knows if it's possible to live in Thailand and never bring any money, just paying everything with a foreign debit or credit card?

What happens if you withdraw money from an ATM, with your foreign debit or credit card?