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

[Marzio]

IRS

(most people don't know about the 180 days rule)

And that's the point.

In this forum we are a tiny minority that looks for loopholes to tax optimize.

Tha vast majority of people will be considered tax resident in Thailand because they are really tax resident.

If you sum that to the fact that IRS will not require a Tax ID to claim treaty benefits on some items of income my explanation is that they want to make it easy for people to invest in specific US investments because at the end of the day they are still getting 15% US WHT!

 

[JustAnotherNomad]

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. "

Jesus Christ. Look at the form.
The form asks you to fill in your "permanent residence address". By this, they mean your tax residence address.
"But I don't have a tax residency address"
"Well, then fill in the address where you normally reside"

That doesn't mean that you can claim treaty benefits. It is completely beyond me how you could interpret this to mean that you can claim treaty benefits.
It's just an explanation of which address they want you to enter there, in case you have multiple residences.

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.

Yes, of course, if you don't know the rules, it means you get free money. That's how the world works!

What do you think is the meaning of "I certify that the beneficial owner is a resident of (country) within the meaning of the income tax treaty between the United States and that country."?
What do you think is the meaning of "Under penalties of perjury"?

By the way, the treaty itself says:

For the purposes of this Convention, the term "resident of a Contracting State" means any person
who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, citizenship,
place of management, place of incorporation, or any other criterion of a similar nature. The term also
includes that State and any political subdivision or local authority thereof. The term, however, does not
include any person who is liable to tax in that State in respect only of income from sources in that State.

This is a very lengthy definition of what tax residency means (=once you spend more than 180 days in Thailand, Thailand can tax any income that is remitted to Thailand the same year).

This was my last comment on this topic. It should be abundantly clear now. If you don't want to believe it, that's fine by me.

 

[Mercury]

This was my last comment on this topic. It should be abundantly clear now. If you don't want to believe it, that's fine by me.

If you are right then I suspect thousands of nonresident aliens worldwide investing in the US market are sadly "committing a crime", mistakenly filing the W8-BEN form in order to claim tax treaty benefits with the country they genuinely reside (they may not be tax resident without knowing it).

 

[JustAnotherNomad]

If you are right then I suspect thousands of nonresident aliens worldwide investing in the US market are sadly "committing a crime", mistakenly filing the W8-BEN form in order to claim tax treaty benefits with the country they genuinely reside (they may not be tax resident without knowing it).

People fill out tax forms without having a clue and make mistakes that could cost them dearly if discovered? Impossible.

Most people probably spend 183+ days in the country they are residing. In that case they would qualify for treaty benefits. Also, most countries have much lower thresholds for tax residency, it could be as little as 30 days.

 

[tyrexoid]

I've heard that even people who have lived in Malaysia for 20 years and are well-integrated are now moving. Seems like it's not a good place for foreigners anymore.



Yeah, but then you need substance somewhere else. Seems like Malta/Cyprus are the most interesting options, but then you're looking at 5% tax + substance + accounting.



Yes, I've thought about that, but:
1. How to find such a director?
2. If you get a local (e.g. a Thai director in Thailand) - would they really not care? I would think that it increases the risk.
3. If you do any kind of work for the company in the UAE, then there's a major risk that there's a taxable PE for the company. So I can't imagine a digital nomad visa would work.
4. The UAE doesn't have such a good tax treaty network, so in the end, the benefits might be very limited.

I'm a nomad, I'm just looking for a good base. I could also get residency in Paraguay - it wouldn't be tax residency, but it might be just as good as UAE residency, without the risks.
Or I could get residency in Thailand, get a local job and pay some tax there. Still no tax residency, but at least I enjoy living in Thailand.
I really like living in Dubai, especially because of its location close to Europe. You can go on weekend trips to Italy or France or Georgia, everything is so close. But I absolutely don't want to start submitting tax returns there. It's the wild west and there's no rule of law. Even if you could appeal a decision, lawyers are so expensive that it's never worth it.
I've also thought about getting residency in Qatar, but Qatar is extremely boring and they have very few tax treaties.

I was hoping that there may be some way to get a tax residency certificate from a country like Thailand while spending less than 180 days, because shorter absences would not be counted (like most high-tax countries do it).
I guess one last option would be residency in a country like China or Japan that don't tax you for the first 1-5 years or so in the country...

if you like Italy/France/Georgia location, why not Italy nomad visa or Montenegro? both are with 0% to 10% tax at the moment (MNE 0%, until 2025, Italy from 5 to 10 based on North/South location) pretty interesting options.

 

[JustAnotherNomad]

Can you tell me more about those options, especially Montenegro?
I looked briefly into Italy, don't remember exactly why it wasn't a good fit. Maybe high social security? Otherwise that could be interesting.

 

[tyrexoid]

If you are right then I suspect thousands of nonresident aliens worldwide investing in the US market are sadly "committing a crime", mistakenly filing the W8-BEN form in order to claim tax treaty benefits with the country they genuinely reside (they may not be tax resident without knowing it).

the issue here is that IRS in that text refers to people who simply live in some place 'all the time' but are confused by what tax resident term is, so they say 'wherever you always live', but it is relevant only to normies who just live all their life in same place, occasionally going to vacation abroad. which was 99% of all people, until recently. the digital nomad trend is relatively new, and the IRS wording is probably from 90s or even 70s, go figure... the nomads who stay a few months in each country or just travel a few years in a row, are in a confusing situation when not many 'existing rules' are defined for their use case. @JustAnotherNomad is correct about the fact he simply cannot use "his current address where he lives in the last few months" for example, if audited (and IRS does random audits, of course their thresholds are the 400k+ folks, since they spend audit time only on big fish to extract actually underreported $ and fill the chests, that's their job) they will demand proper documents, if any "discount" (deductions) was claimed. in my case I paid the US taxes in full, during my short 4 years living and working there, also for the year I left, because I was still tax resident, even though I could split that year in 'two' (before leaving and after leaving) but the hassle and risks of audit in 'special cases' just outweighs the few thousand bucks or whatever i could save on claiming double residency for that year. the accountant who filed my taxes also said it's better to overpay a bit that the small chance of getting into audit troubles with IRS, and 'deductions' especially if major sums involved, are algorithmic trigger for higher audit chance in the system there. so the less 'questionable/arguable deductions' the better my sleep is.

Can you tell me more about those options, especially Montenegro?
I looked briefly into Italy, don't remember exactly why it wasn't a good fit. Maybe high social security? Otherwise that could be interesting.

MNE recently created a new digital nomad visa, valid until year 2025 or smth. it can be made for 2 years and then extended up to another 2 years. zero tax, because they just want to bring people who earn $ abroad, and by living in the country they boost local economy by spending on rent/food/etc. their 'normal tax rate' for locals is 15% (was 9% until 2022), so giving nomads a benefit of 0% is still worth it, looks attractive and brings them free inflow of cash to the country, and costs them nothing, because nomads must have job outside of MNE. and Italy I just briefly read about it, they have that visa for a while, if you settle to live in North Italy they tax 10% flat, if in South it's 5% in most regions and 0% in Sardinia or smth like that, need to read in detail and check up to date info since it might change. Sardinia also gives 15k Euro towards property purchase if relocating to actually live there most of the year (become resident) in villages that are low population and need people to boost economy (it works only in villages of less than 3000 residents, so basically tiny remote towns, but these are all on the beach like let's say Przno, Sveti Stefan, in Montenegro - life is a dream , I love those places) haven't been in Sardinia but I browsed the map and saw it's quite nice. not like a 'village' in USSR or Asia (bamboo houses ) more like Greece and Cyprus.

check out this place for example Sveti Stefan · Montenegro , these are small villages between Budva and Bar in MNE on the coast line, lovely places. I live 5 minutes from there, but not in Budva itself (the city was a bit expensive for me so I bought a house in Przno, 10 minutes from city, instead)
not every small village of course has such a tourist hot spot like Sveti Stefan lol, but the vibe is same. I like the clean water. And in north of MNE there's Durmitor park, Zabljiak ski in winter, and mountains around there, they sell wild strawberries during summer, those tiny ones, my favorite berry ever ). For now I live in Thailand though, but MNE is awesome, maybe will go there again and make use of that visa as well. UAE made a nice nomad visa recently, 0 tax, not sure why the talk in the thread is bashing UAE, did I miss anything?

@JustAnotherNomad I found info about the visa in detail, "Digital nomads who hold D Visas or TRPs are exempt from therequirement to pay personal income tax in Montenegro andmay bring in qualifying dependents, who will be issued dependentpermits that enable them to reside in Montenegro." here https://assets.ey.com/content/dam/e...s-and-residence-permits-to-digital-nomads.pdf
lol google showed me a snippet because it indexed their PDFs, they're rated very high, probably a good folder with tax related info I wonder if it's intended or leaked to google crawlers by lousy admins ahah

 

[USDT]

what consequences can be expected if incorrect/incomplete tax residency information is provided in the W8-BEN form, assuming it does not result in underpayment of WHT?