Thai tax residency certificate without spending 180+ days in the country?

[Mercury]

Without a tax certificate it's already game over because you can't access the DTT

Official sources?
Because it seems, at least for US, IRS does not confirm your assertion since a residence tax certificate is not a must to benefit from double tax treaties. See my post #38.

 

[Marzio]

Official sources?

Is US-TH treaty good enough for you?

The term "resident of a Contracting State" means any peson who under the laws of that state, is liable to tax..."

This means that if you aren't liable to tax you aren't considered a resident.

A tax certificate demonstrate that you are liable to tax under the laws of the state.

Beside that you are mixing stuff together.

I was talking about fighting a tax residency claim from another state and you are talking about claiming treaty benefits.

If you are claiming treaty benefits, you are generally required to provide an ITIN if you do not provide a tax identifying number issued to you by your jurisdiction of tax residence on line 6.

However, an ITIN is not required to claim treaty benefits....

The fact that IRS doesn't require an ITIN for specific items of income doesn't mean that you don't need a tax ID the be considered resident of a contracting state.

 

[Mercury]

The term "resident of a Contracting State" means any peson who under the laws of that state, is liable to tax..."

This means that if you aren't liable to tax you aren't considered a resident.

I will quote IRS again: " Your permanent residence address is the address in the country where you claim to be a resident for purposes of that country’s income tax. If you are completing Form W-8BEN to claim a reduced rate of withholding under an income tax treaty, you must determine your residency in the manner required by the treaty. Do not show the address of a financial institution, a post office box, or an address used solely for mailing purposes.
If you do not have a tax residence in any country, your permanent residence is where you normally reside. "

How then do you explain this IRS statement?

To me, but I may be wrong and as it's written post tax treaties, IRS statement prevails over DTA.

A tax certificate demonstrate that you are liable to tax under the laws of the state.

Indeed, it's one more residence proof among others but it's not a must as you mentioned.

 

[Marzio]

IRS statement prevails over DTA

The reverse is true: DTA always prevail over local rules.

IRS it's a tax agency, DTA are between goverments.

How then do you explain this IRS statement

Withholding taxes are US money so if IRS decided that doesn't need Tax ID for a limited number of items of income it's their choice and obviously the other Contracting State doesn't care eithter.

I repeat myself: the fact that IRS doesn't require an ITIN for specific items of income doesn't mean that you don't need a tax ID to be considered resident of a contracting state.

 

[gekkof]

You can use Shelter, Iglu, Sponsoredworkpermit etc. and let them permanently hire you. The cheapest option I found was 10k THB per month on top of your salary from min. 75k THB / month. Additionally, you get a Visa for Thailand which will initially cost you ~40k THB. I calculated it and fees + taxes added up to ~18% so not a bad deal.

 

[wellington]

Is it possible to obtain a Thai tax residency certificate without spending 180+ days in the country, for example if you get a local job and pay some tax?

Got my TIN in Thailand in 2012 [was building a 100m$ property dev].

These days i think you can ask for it but they will do it on your visa, if you don't have a long-term visa i doubt they will give, in addition, TIN's only work if you actually plan to pay tax in Thailand rather than elsewhere as CRS came in so everything gets reported to your home nation regardless of TIN location (by Thailand as they are lazy).

 

[Mercury]

Tax treaty benefits.

Which countries are you referring about?

It will be very useful to get the list of these specific countries A that require a mandatory tax residence certificate from and when residing in country B (meaning if you can't provide one you will be de facto considered non tax resident in country B by country A regardless of all the other supporting documents you may provide) to benefit from tax treaties.

 

[troubled soul]

"if you are married to a Thai citizen, you can count the days your spouse spends in Thailand towards your own residency requirement."

May be this will help

 

[Mike Forman]

"if you are married to a Thai citizen, you can count the days your spouse spends in Thailand towards your own residency requirement."

May be this will help

Better pay taxes than to marry a Thai citizen, it will cost you less in the end (with the very few exceptions aside)

 

[backpacker]

I will quote IRS again: " Your permanent residence address is the address in the country where you claim to be a resident for purposes of that country’s income tax. If you are completing Form W-8BEN to claim a reduced rate of withholding under an income tax treaty, you must determine your residency in the manner required by the treaty. Do not show the address of a financial institution, a post office box, or an address used solely for mailing purposes.
If you do not have a tax residence in any country, your permanent residence is where you normally reside. "

How then do you explain this IRS statement?

To me, but I may be wrong and as it's written post tax treaties, IRS statement prevails over DTA.


Indeed, it's one more residence proof among others but it's not a must as you mentioned.

The problem is that @Marzio cites from the DTT whereas your citation is from form W-8BEN.
At the end, both of you are correct

In fact, for a non-US stock market investor the IRS statement has more relevance than the DTT.
The DTT is bilateral, the IRS statement unilateral. In case of a stock market investor, the unilateral statement is reliable source.

Of course, from a purely legal point of view a DTT always prevails.
But here it is simply practicality: For the purpose of W-8BEN you can and have to rely on what the IRS writes regarding its use case.

 

[JustAnotherNomad]

Also, when filing a W-8BEN form providing a Tax Residence Certificate is nowhere a requirement.

Correct. Because giving incorrect information is a crime, whether they ask for it or not.
Permanently residing in a country doesn't mean you're entitled to treaty benefits. In the form, you can give you permanent address and still check the box for not claiming treaty benefits, which would be the correct choice.

For the purpose of W-8BEN you can and have to rely on what the IRS writes regarding its use case.

He quoted from the instructions for how to fill out the form. The instructions were about which address to enter.
Nowhere does the IRS say that having a permanent home is a sufficient substitute for tax residency.
You give them the address for you main residence and then you check "I'm not claiming treaty benefits" if you don't have a tax residency. You cannot claim treaty benefits if you're not a tax resident, even if it's your permanent residence. Hope that helps.

 

[Mercury]

Correct. Because giving incorrect information is a crime, whether they ask for it or not.
Permanently residing in a country doesn't mean you're entitled to treaty benefits. In the form, you can give you permanent address and still check the box for not claiming treaty benefits, which would be the correct choice.

That's your own interpretation. Fair enough.

IRS says: " Your permanent residence address is the address in the country where you claim to be a resident for purposes of that country’s income tax. If you are completing Form W-8BEN to claim a reduced rate of withholding under an income tax treaty, you must determine your residency in the manner required by the treaty. Do not show the address of a financial institution, a post office box, or an address used solely for mailing purposes.
If you do not have a tax residence in any country, your permanent residence is where you normally reside. "

My interpretation:
The sentence " If you do not have a tax residence in any country, your permanent residence is where you normally reside. " is in the same paragraph, so directly correlated and in line with the above content describing residence criteria for claiming tax treaty benefits. It is not an independent statement.

From what I understand, it is proper and plain English although I'm not English native, there is no matter to further interpretation nor reading between the lines:
No tax residence anywhere = you can lawfully pursue and fill the form with the place you normally reside (keeping supporting documents if asked at a later time) and therefore claim treaty benefits.

Anyway, in front of a judge you could always print out this 2021 IRS Instructions for Form W-8BEN doc stating you've simply followed the instructions. Then they might indeed explain you what is not written

 

[backpacker]

He quoted from the instructions for how to fill out the form. The instructions were about which address to enter.

Correct.
Note: I replied to post #43 only.

then you check "I'm not claiming treaty benefits"

At least on "Form W-8BEN (Rev. 10-2021)" I am unable to find this wording!

Hope that helps.

Read the last subparagraph of my post #50.

-------------------------------------------------------------------

Then they might indeed explain you what is not written

In today's world a "nomad" is best advised to avoid individual stocks. Withholding taxes in many countries are insane (see for instance Switzerland).
Tax efficient ETF's or mutual funds save a lot of headache and do quite a good job.

 

[JustAnotherNomad]

That's your own interpretation. Fair enough.

You can believe what you want.

If you are completing Form W-8BEN to claim a reduced rate of withholding under an income tax treaty, you must determine your residency in the manner required by the treaty.

You literally quoted it yourself.
The form itself states "I certify that the benificial owner is a resident of ______ within the meaning of the income tax treaty between the United States and that country".
But sure, of course, the instructions for filling out that form mean you can put anything there as you like, of course.

At least on "Form W-8BEN (Rev. 10-2021)" I am unable to find this wording!

Sorry, I only recalled the electronic version, as used by e.g. IBKR. I believe on the paper form, you would simply leave Part II blank or not submit the form at all.

Read the last subparagraph of my post #50.

Read the form itself, as above. You have to certify that you are a tax resident of the country (i.e. that you are entitled to treaty benefits). The treaty itself stipulates that this means you are considered tax resident by the other country. You cannot claim treaty benefits if you are not a tax resident of the other country, even if that's where you live.

 

[backpacker]

not submit the form at all.

Now we are talking.
As a matter of fact, many broker force clients to fill out form W-8BEN, specifically the ones in Singapore.
Even somebody who won't trade in US stocks will be forced to fill out the form in its entirety. Of course, such a person will in practice not claim a penny (he/she does not own US-stocks at all) but it is still an embarrassment.

Read the form itself, as above.

Again: Read the last subparagraph of my post #50
Tip: I do not claim anything

 

[jafo]

As a matter of fact, many broker force clients to fill out form W-8BEN, specifically the ones in Singapore.

#Bingo! I have yet to encounter a financial institution that doesn't make me sign this POS document. Even in Russia and China at banks, I had to sign this ( but I sign with my left hand)

 

[JustAnotherNomad]

IBKR for example will make you fill it out digitally. You can choose that you aren't claiming treaty benefits, which would be the correct choice.

 

[Mercury]

Read the form itself, as above. You have to certify that you are a tax resident of the country (i.e. that you are entitled to treaty benefits). The treaty itself stipulates that this means you are considered tax resident by the other country. You cannot claim treaty benefits if you are not a tax resident of the other country, even if that's where you live.

You keep ignoring this IRS wording: " If you do not have a tax residence in any country, your permanent residence is where you normally reside. "

I'm wondering why on earth would IRS write such a misleading statement in the same "residence conditions to claim tax treaty benefits" content? Are they so dumb or just want to intentionally confuse potentially poor English speaking foreigner claimants?

If the rule is what you say then why IRS didn't write it clearly with no possible interpretation?

For instance as a simple footnote: "However you won't be able to claim tax treaty benefits without effective tax residence."

 

[Marzio]

Your permanent residence address is the address in the country where you claim to be a resident for purposes of that country’s income tax. If you are completing Form W-8BEN to claim a reduced rate of withholding under an income tax treaty, you must determine your residency in the manner required by the treaty. Do not show the address of a financial institution, a post office box, or an address used solely for mailing purposes.
If you do not have a tax residence in any country, your permanent residence is where you normally reside. "

I'm wondering why on earth would IRS write such a misleading statement

Imho it's not misleading, they are probably targeting those who don't know where they are tax resident.

With that perspective in mind read last sentence first, and first sentence second.

"If you do not have a tax residence in any country, your permanent residence is where you normally reside. Your permanent residence address is the address in the country where you claim to be a resident for purposes of that country’s income tax "

My interpretation: if you don't know where you are tax resident, it is where you reside permanently.

It's not "Hey if you don't have a tax residency who cares.....IRS is ok with giving away free money"

 

[Mercury]

Imho it's not misleading, they are probably targeting those who don't know where they are tax resident.

That could be, but in that case why not clearly write it like you did?

My interpretation: if you don't know where you are tax resident, it is where you reside permanently.

OK then following your interpretation, in case of a Thai resident, if he doesn't know he's TH tax resident (most people don't know about the 180 days rule) then IRS will anyway consider him as tax resident in Thailand because this is where he states he normally (there's a nuance between normally and permanently) resides. Outcome remains the same: tax treaty will apply.