Thailand 0% tax

[ekman]

Tax free salary means that Estonia doesn't impose taxes on salaries paid offshore.

Dividends, salary and directors' fee

It is time to get paid for all the hard work you have put into your company. What to consider when taking out dividends or paying yourself a salary, directors' fee? The following comments are about...

learn.e-resident.gov.ee

For the purposes of the following guidelines, a director = management board member of the Company.

Estonian rules provide that directors’ fees paid by an Estonian company to a non-resident director are always subject to 20% personal income tax. Tax treaties follow the same logic and normally allocate the taxing rights to the country where the company resides. This means that since the company is established in Estonia, then all directors’ fees are taxed in Estonia, no exceptions.

As director/board member, can you take "normal salary" from Estonian company without paying director's fee?

 

[Mercury]

Heres a quite thorough article about the amendment: The Revenue Department Closes Loopholes, Tightening Tax Collection on Foreign Income - MPG

Specifically, this amendment focuses on individuals who possess assessable income arising from employment, business activities conducted abroad, or properties situated outside Thailand. Under the revised framework, these individuals will be subject to personal income tax obligations in Thailand only when their assessable income is brought into the country. However, if an income earner has already paid taxes in their country of income origin, provided there is a Double Tax Agreement in place between Thailand and that country, the income earner can utilize the taxes paid in the country of origin as a tax credit, following the provisions outlined in the respective Double Tax Agreement.

Dividend, interest, capital gain other than property are not cited as assessable income.

If all types of assessable income were taxable, why would they be so specific then?

 

[wellington]

The new rule will only affect money that is remitted into Thailand.

In other words, they just removed the clause that allowed to delay transferring money into Thailand in order for it to be tax-free, but income that is not remitted into Thailand will remain untaxed.

Thailand: New interpretation of foreign-sourced income brought into Thailand by Thai tax residents

Foreign-sourced income brought into Thailand from 1 January 2024 onwards will be subject to Thai individual income tax

kpmg.com

This was already known, but now you have the issue of being a 'elite visa holder' and money you bring in charged between 25-35% (lets be realistic you won't bring in less than those tax brackets).

Dividend, interest, capital gain other than property are not cited as assessable income.

If all types of assessable income were taxable, why would they be so specific then?

One thing to take from that, is the tax amount in the UK as an example against the %, compared to Thailand.

In Thailand at around 5,000$ you start paying taxes.... at 100-120,000$ you are at 35%...

You will have a credit carried forth... so you still end up paying high taxes.

The new rule will only affect money that is remitted into Thailand.

In other words, they just removed the clause that allowed to delay transferring money into Thailand in order for it to be tax-free, but income that is not remitted into Thailand will remain untaxed.

Thailand: New interpretation of foreign-sourced income brought into Thailand by Thai tax residents

Foreign-sourced income brought into Thailand from 1 January 2024 onwards will be subject to Thai individual income tax

kpmg.com

One thing to consider for cryptobros.. they consider crypto wherever it is, to be in Thailand if you are in Thailand, and resident (tax) in Thailand...

How can you remit tax free salary to Thailand? they will tax all income and you cannot work while being in Thailand, you can take dividends. Are you sure?

This is the conundrum i have, also a friend.

He was a engineer, operated world wide but under the tax requirement for tax, PR in HK... his entire income world wide was tax free over the decades he worked.

If he brings it in (savings) he will have to pay Income tax.

---

Likewise I work usually 5-10 yrs and get dividends not taking a salary... I usually do that whilst in Middle East or like.

Bringing those savings in now would be a taxable income.

Whats in common?

No recorded tax structure back in those days, as no reporting requirement.

 

[Mercury]

... money you bring in charged between 25-35% (lets be realistic you won't bring in less than those tax brackets).

Not everybody needs to spend US$10K a month in Thailand (23% average tax rate remitted with new rules) for a good quality of life.

A retiree needs to show THB800K (US$22K, 6% average tax rate remitted with new rules) for 5 months to renew his yearly retirement extension of stay.

 

[wellington]

Ref Elite:

Last year, the Thai government estimated that each Elite holder spent an average of US$28,320 per person on personal consumption, Mr Ansari said. Participation in the Elite Card programme has climbed sharply over the past three years. In 2022, net membership grew by 5,582, the largest one-year increase ever.

That naturally doesn't include big ticket purchases (Condo's/Villas) or rent of them, Cars, etc.

Average expat in Thailand spends 150,000 THB a month for comfortable living, that's into the 20-25% tax bracket.

Ref Dividends, have they relabeled those as 'income' also?

 

[Mercury]

Average expat in Thailand spends 150,000 THB a month for comfortable living, that's into the 20-25% tax bracket.

Wrong.
THB150K /month = THB1,800,000 /year ($US50K)
Average tax rate with minimum deductions THB160K (Expenses THB100K + Self Allowance THB60K) = 15.3%

 

[wellington]

Wrong.
THB150K /month = THB1,800,000 /year ($US50K)

Factor in medical and big ticket items on top.

As for Deductions they are unique to each tax payer, I am going on pre-deductions.

Taxable income (Baht)	Tax rate %
1-150,000	Exempt
150,001-300,000	5%
300,001-500,000	10%
500,001-750,000	15%
750,001-1,000,000	20%
1,000,001-2,000,000	25%
2,000,001-5,000,000	30%
5,000,001 and over	35%

Now factor in Retirement/Marriage Monkeys and their 800k + 400k brought into service their visa renewal + living costs of 150k THB month.

+ Medical expenses, Insurances (my kids insurance costs 100k THB a year alone) + car + home (Maintenance/Rent/Purchase).

Etc.

 

[JackAlabama]

Ref Elite:

Last year, the Thai government estimated that each Elite holder spent an average of US$28,320 per person on personal consumption, Mr Ansari said. Participation in the Elite Card programme has climbed sharply over the past three years. In 2022, net membership grew by 5,582, the largest one-year increase ever.

That naturally doesn't include big ticket purchases (Condo's/Villas) or rent of them, Cars, etc.

Average expat in Thailand spends 150,000 THB a month for comfortable living, that's into the 20-25% tax bracket.

View attachment 5422
Ref Dividends, have they relabeled those as 'income' also?

Thailand: New interpretation of foreign-sourced income brought into Thailand by Thai tax residents

Foreign-sourced income brought into Thailand from 1 January 2024 onwards will be subject to Thai individual income tax

kpmg.com

*
The Thai Revenue Department on 15 September 2023 issued guidance—Departmental Instruction No. Por 161/2566 (DI No. 161/2566)—to assist tax officers in determining the individual (personal) income tax implications for foreign-sourced income brought into Thailand by Thai tax residents.
DI No. 161/2566 provides a new interpretation of Section 41 Paragraph 2 of the Thai Revenue Code—the assessable income under Section 40 of the Revenue Code derived by a resident of Thailand in the previous tax year (from employment, a business carried on overseas, or property situated overseas) that is brought into Thailand is to be subject to individual income tax in the tax year that the said assessable income is brought into Thailand. This rule will apply to assessable income that would be brought into Thailand from 1 January 2024 onwards.
A resident of Thailand is defined as an individual who stays in Thailand for a period or periods aggregating 180 days or more in any tax year.
Any rules, regulations, instructions, rulings, or practices that contradict DI. No. 161/2566 will be repealed.
If the assessable income is subject to tax in the source country, the tax paid in the source country can be credited against the personal income tax liabilities in Thailand per rules prescribed in the applicable double tax treaties.
*

KPMG does not think so... regarding dividends.

 

[Mercury]

Factor in medical and big ticket items on top.

As for Deductions they are unique to each tax payer, I am going on pre-deductions.

Taxable income (Baht)	Tax rate %
1-150,000	Exempt
150,001-300,000	5%
300,001-500,000	10%
500,001-750,000	15%
750,001-1,000,000	20%
1,000,001-2,000,000	25%
2,000,001-5,000,000	30%
5,000,001 and over	35%

Now factor in Retirement/Marriage Monkeys and their 800k + 400k brought into service their visa renewal + living costs of 150k THB month.

+ Medical expenses, Insurances (my kids insurance costs 100k THB a year alone) + car + home (Maintenance/Rent/Purchase).

Etc.

We're talking about tax on declared income.
You can use this convenient below calculator: for 1.8M THB declared you will pay 275K THB so 15.3%.
You could pay even less say you deduct your spouse/dependants/insurance allowances.

Tax Calculator - UOB Asset Management

www.uobam.co.th

 

[fshore]

A retiree needs to show THB800K (US$22K, 6% average tax rate remitted with new rules) for 5 months to renew his yearly retirement extension of stay.

But you only have to do this once. And it could be done the year before you become tax resident if you plan it (and are able to open a bank account).

 

[Mercury]

But you only have to do this once. And it could be done the year before you become tax resident if you plan it (and are able to open a bank account).

You need to live from something so if you don't wanna touch this money you'll need to bring more (and be taxed) for your living expenses.

Alternative is cash, up to $US20K in/out of Thailand without declaring it (plenty of options for cash in neighbouring countries).

Bringing cash into and out of Thailand - สถานเอกอัครราชทูต ณ สิงคโปร์

singapore.thaiembassy.org

Crypto for cash in HK: USDT => USD 0.99 (max120K HKD)

Quote — Crypto HK

www.cryptocurrencyhongkong.com

 

[tickertrader]

We're talking about tax on declared income.
You can use this convenient below calculator: for 1.8M THB declared you will pay 275K THB so 15.3%.
You could pay even less say you deduct your spouse/dependants/insurance allowances.

Tax Calculator - UOB Asset Management

www.uobam.co.th

Yes, I don't think personal income tax is a big problem. It's aggregated, and not that bad. The problem is that will the tax department add pressure on offshore coporate income part, given CRS (information exchange), given new rules (attitude to target this)

 

[theblast3r]

Yes, I don't think personal income tax is a big problem. It's aggregated, and not that bad. The problem is that will the tax department add pressure on offshore coporate income part, given CRS (information exchange), given new rules (attitude to target this)

Do you think it also affects FATCA? Or is it worse with CRS?

 

[tickertrader]

Do you think it also affects FATCA? Or is it worse with CRS?

I don't think it will affect FATCA

 

[JackieTsan]

Hello,
Anyone is really aware of the new instruction in Thailand? Its not clear; are they going to completely tax the worldwide income? Or only the income that is getting into the country?
In any case and in my opinion this will create a nightmare to the country. Real estate market will die. Who is going to buy condo having to pay 25% + tax in the incoming amount?
And which wealthy resident will stay if the wordwide income will be taxed? I don't want to extend more, but I really believe that this situation will bring money with several illegal ways etc..
From my aspect, I am not into these things at all. So, I'm waiting to see what they will finally announce. If they will tax the worldwide income at all, or only each and every income that will be getting into Thailand any time.
I am talking about the tax residents of thailand without any DTA from other country etc.
Anyone knows?
thank you

 

[zzzzzz]

Hello,
Anyone is really aware of the new instruction in Thailand? Its not clear; are they going to completely tax the worldwide income? Or only the income that is getting into the country?
In any case and in my opinion this will create a nightmare to the country. Real estate market will die. Who is going to buy condo having to pay 25% + tax in the incoming amount?
And which wealthy resident will stay if the wordwide income will be taxed? I don't want to extend more, but I really believe that this situation will bring money with several illegal ways etc..
From my aspect, I am not into these things at all. So, I'm waiting to see what they will finally announce. If they will tax the worldwide income at all, or only each and every income that will be getting into Thailand any time.
I am talking about the tax residents of thailand without any DTA from other country etc.
Anyone knows?
thank you

Remittance only, but since you have to live somehow, you will also have to file and pay taxes if you want to be tax resident in TH. Bringing cash or using someone elses card is tax evasion, I guess.
One solution is to buy condo in a year when you spend less than 180 days in TH.

 

[JackieTsan]

Hey zzzz thank you! i am paying taxes for the income i have inside. But my big income is in 0% regions. and I don't need to get it in at all. I live with the income i have here. I don't need to get it in. The concern is if they will tax the worldwide income if will stay outside. I don't mind to get it in, i mind to keep it outside without paying any tax. In the future i might move somewhere else, who knows. Remittance means when you move it inside Thailand, correct?

 

[zzzzzz]

Hey zzzz thank you! i am paying taxes for the income i have inside. But my big income is in 0% regions. and I don't need to get it in at all. I live with the income i have here. I don't need to get it in. The concern is if they will tax the worldwide income if will stay outside. I don't mind to get it in, i mind to keep it outside without paying any tax. In the future i might move somewhere else, who knows. Remittance means when you move it inside Thailand, correct?

Remittance = bringing money (cash/atm/card/wire/crypto) in TH.

 

[JackieTsan]

thank you! i heared that the latest update is a full taxation in the worldwide income. so it's not true? (even if you don't bring inside any time).

 

[zzzzzz]

Worldwide taxation proposal was on Monday, but they changed it on Tuesday to remittance. I have no idea if they changed anything since then.