Thailand new change - world wide income at Thai tax levels to be taxed

[wellington]

As they own real estate in the 0% income tax jurisdiction, and they it lease out and receive rent from that in the same bank account they shared with the embassy, their plan is to pay taxes in thailand in 2025 by declaring the rent they receive and gets paid on that account

Income they earn overseas is irrelevant, Thailand is territorial tax based, the new change is only based on income earned overseas and remitted... 0 tax on that rent (hence they are already trying to change the law as wealth rarely comes in to Thailand for the wealthy here which the act was done to entrap in the Thai system but as they live of domestic income they don’t need to remit their foreign income thus it’s not charged as income in Thailand )

Key to understand here is “principles” and “territorial tax” - oh and realized wealth (i.e your wealth on paper could rise x 10 but unless it’s realized it’s not taxable - but you can borrow against for near-free)

 

[wellington]

are huge chances they will eventually be hunted by thai authorities and sent to the most horrfying jail west of Chao Phraya

No, that's not what happens, at worst case if there is a feeling of tax evasion (under-reporting) they just flag the passport (if foreigner) and freeze the accounts, until a payment plan is enacted (likely paid in full immediately if a foreigner) if Thai paid over a number of years (from experience observed from watching the boat maintenance guy go through this recently).

 

[wellington]

I am personally thinking of grassing themout to that tax authorities

You would be committing defamation which is a criminal act in Thailand, you'd have to prove it with actual evidence not 'hear-say' as a claim - be very careful with this law...., as for the tax agencies, they would confirm if the guy owes no tax within Thailand and if he did he'd just get asked to pay it, if he doesn't then nothing to worry about, but they'd also under court order provide your details, and you'd be arrested, as defamation is a criminal act and costs 50,000-100,000 THB to have someone in a bull-and-chain... - in 15+ yrs one thing i've learned in Thailand - look the other way.

 

[wellington]

Basically as there's a lot of confusion, i will lay out a scenario.

You have bob the builder, bob the builder owns a overseas company, few assets, and earns income in crypto/stocks overseas.

Bob the builder net-worth in liquid terms is 1m in the bank $ in Jan 2024, in asset terms its (real-estate, stocks, bonds, crypto, companies) an additional 9m $ pre-2024 it was roughly 5.4m$ in liquid and investment assets, it's risen to 10m$ in total now.

Bob the builder utilises the residual income from his real-estate to finance his costs within Thailand, he remits this, he declares it and he pays tax on it as remitted income - he doesn’t need to due to the principle rule - but he’s confused.

Bob met Jon and Jon laughed that he was paying income tax on remitting his residential rent to Thailand, and informed him to learn about the principle rule.

Bob the Builder then sells one of his homes overseas for 3 x the amount and pockets his funds into his bank account overseas, there's 0 income in Thailand, as he hasn't remitted that income, and intends to speculate on SUI in the crypto markets, as it will likely 10x from here.

Bob the builder has also made a profit on his stonks of roughly 60% he liquidates those to that bank account, there is 0% tax within Thailand on those stonks, he has also made 1000% on some shitcoins like IAGON and deposits that via a Crypto exchange into his bank account, all in all he's made about (realized) 1m$ so far this year.

Bob didn't take a salary intending to take a dividends later (recommended approach), but if he took a salary for his overseas income (residual salary) in to his overseas account that's tax free if he wanted to, from his companies.

He didn't remit that, he deposited into his account overseas and it's tax free in Thailand.

Later on he wants to remit his 1m tax free, so he sits there and calculates his 'principles' before 2024, and has a principle pre-2024 investment of 5.4m $ (pre-2024), so he can remit 5.4m$ tax free into Thailand without having to glide around for 7 months in a year to harvest additional principle allowance.

It's really that simple.

^ basically sums up my approach as i had a sit down with the revenue department and legal to determine the intricacies and their impact, having a known net-worth of XX-XXXm$ (paper) + recorded in court, so in my case i was informed I could harvest against that as that was pre-2024.

Anything i earn now overseas is tax exempt if structured (dividends) or income from markets/assets and non-remitted, but would also be offset by 'principle-rule' if remitted.

Tell him to get his records straight and signed off and he will be fine.

FYI if someone is making money (serious) i am always interested to see if it can be replicated, rather than get annoyed by, its a brilliant way to have something to do (new) and also get rewarded for finding a crack in the system.

 

[wellington]

Pinging the people most plugged in with all Thai things

Hoping this isn't the "Martini Guy", i see Jordan is here, if so he makes about 15m$ a year and about 50-150m$ every 4 yrs.

Bright guy, and resident in Dubai but currently in BKK (was in Phuket the other day)

 

[JJReddick]

Basically as there's a lot of confusion, i will lay out a scenario.

You have bob the builder, bob the builder owns a overseas company, few assets, and earns income in crypto/stocks overseas.

Bob the builder net-worth in liquid terms is 1m in the bank $ in Jan 2024, in asset terms its (real-estate, stocks, bonds, crypto, companies) an additional 9m $ pre-2024 it was roughly 5.4m$ in liquid and investment assets, it's risen to 10m$ in total now.

Bob the builder utilises the residual income from his real-estate to finance his costs within Thailand, he remits this, he declares it and he pays tax on it as remitted income - he doesn’t need to due to the principle rule - but he’s confused.

Bob the Builder then sells one of his homes overseas for 3 x the amount and pockets his funds into his bank account overseas, there's 0 income in Thailand, as he hasn't remitted that income, and intends to speculate on SUI in the crypto markets, as it will likely 10x from here.

Bob the builder has also made a profit on his stonks of roughly 60% he liquidates those to that bank account, there is 0% tax within Thailand on those stonks, he has also made 1000% on some shitcoins like IAGON and deposits that via a Crypto exchange into his bank account, all in all he's made about 1m$ so far this year.

Bob didn't take a salary intending to take a dividends later (recommended approach), but if he took a salary for his overseas income (residual salary) in to his overseas account that's tax free if he wanted to, from his companies.

He didn't remit that, he deposited into his account overseas and it's tax free in Thailand.

Later on he wants to remit his 1m tax free, so he sits there and calculates his 'principles' before 2024, and has a principle pre-2024 investment of 5.4m $ (pre-2024), so he can remit 5.4m$ tax free into Thailand without having to glide around for 7 months in a year to harvest additional principle allowance.

It's really that simple.

^ basically sums up my approach as i had a sit down with the revenue department and legal to determine the intricacies and their impact, having a known net-worth of XX-XXXm$ (paper) + recorded in court, so in my case i was informed I could harvest against that as that was pre-2024.

Anything i earn now overseas is tax exempt if structured (dividends) or income from markets/assets and non-remitted, but would also be offset by 'principle-rule' if remitted.

Tell him to get his records straight and signed off and he will be fine.

FYI if someone is making money (serious) i am always interested to see if it can be replicated, rather than get annoyed by, its a brilliant way to have something to do (new) and also get rewarded for finding a crack in the system.

Thats brilliant thanks. I think the main difference with the case I was referring to is that there is no company nor dividends involved. But all the rest remains.

 

[JJReddick]

That's not how it works.

If they trade on a external account overseas its outside of Thailand(s) jurisdiction.

Only if Thailand introduces world-wide taxation would that change.

Oh I see. So basically the only issue would arise if one was trading on dexes via their hot wallets

 

[JJReddick]

Hoping this isn't the "Martini Guy", i see Jordan is here, if so he makes about 15m$ a year and about 50-150m$ every 4 yrs.

Bright guy, and resident in Dubai but currently in BKK (was in Phuket the other day)

Deffo not anyone you or anyone else on here might know. It's all very hypotethical

 

[wellington]

Thats brilliant thanks. I think the main difference with the case I was referring to is that there is no company nor dividends involved. But all the rest remains.

As a individual, just because he enacts a trade from Thailand doesn't bring it onshore, basically if he's using overseas accounts, and overseas exchanges/brokers, that activity occurs overseas (Thailand = Territorial), the only area he'd have possible tax is if he remits it (as income - after realizing) into Thailand via a Int wire, BUT then if he has accounting he can argue 'principles rule' i.e the amount he invested pre-2024 (or value) is same or equivalent or higher than what he remitted.

 

[wellington]

dexes via their hot wallets

The DEX's would be overseas....

It's still provided by a overseas entity... (dex's are decentralised only front end but their network infrastructure is provided by a company somewhere which is inherently offshore -> outside of Thailand(s) territorial tax system.

 

[wellington]

I prev posted diagrams on here but can't find (also ones from Revenue Department)

But here (basic overview) -> as a person without a entity, trading shitcoins completely overseas and depositing into a overseas account realised profits, tax exempt unless remitted.

Then if remitted, he can argue the principle rule (if he has a principle prior to 2024) that is higher than the amount sent over.

Note that completely resets if he spends 180+ days outside of Thailand, a example.

He does trade shitcoins makes 10m$ overseas, leaves Thailand the following tax year for 180+ days then returns to thailand he can remit that 10m$ tax free into thailand as it's now 'new principle' value, even though he made those profits whilst sitting in a bar getting head from a LB, but as it was done on overseas exchanges (decentralised/centralised) and deposited to overseas accounts (or left in stablecoins) its not under the territorial tax of Thailand.

 

[JJReddick]

I prev posted diagrams on here but can't find (also ones from Revenue Department)

But here (basic overview) -> as a person without a entity, trading shitcoins completely overseas and depositing into a overseas account realised profits, tax exempt unless remitted.

Then if remitted, he can argue the principle rule (if he has a principle prior to 2024) that is higher than the amount sent over.

Note that completely resets if he spends 180+ days outside of Thailand, a example.

He does trade shitcoins makes 10m$ overseas, leaves Thailand the following tax year for 180+ days then returns to thailand he can remit that 10m$ tax free into thailand as it's now 'new principle' value, even though he made those profits whilst sitting in a bar getting head from a LB, but as it was done on overseas exchanges (decentralised/centralised) and deposited to overseas accounts (or left in stablecoins) its not under the territorial tax of Thailand.

View attachment 8177

gotcha, that makes sense

 

[JJReddick]

The DEX's would be overseas....

It's still provided by a overseas entity... (dex's are decentralised only front end but their network infrastructure is provided by a company somewhere which is inherently offshore -> outside of Thailand(s) territorial tax system.

this is the only part that doesnt make sense to me and I know for a fact in other jurisdictions has created issues. If one owns a hot wallet on their laptop, then they are holding the coins regardless of what platform/protocol they are using to trade those coins. This is because they are self custodians of those coins and are "physically" holding them, as opposed to trading and leaving them in a cex (not your keys not your coins) or in a cold wallet elsewhere in the world.

I wonder if thai tax auth would go this far in the investigation (I mean that is what I was asking in a way) but I know a EU tax authority did and ruled against the same theory you support.

I would say defi LPing or staking revenue would go under this scrutiny as well, but havnt read/thought much about it so far.

I think this is the only part of the whole crypto traders dont get taxed theory that might get under scrutiny in the future were Thai tax authorities to get serious about crypto profits made by expats, which is not the case yet, if thats my understanding.

 

[wellington]

I wonder if thai tax auth would go this far in the investigation (I mean that is what I was asking in a way) but I know a EU tax authority did and ruled against the same theory you support.

How could you prove the transactions were done by the user within Thailand and that they owned or actioned those transactions in that hot wallet?

FYI Thai's utilising Crypto overseas via exchanges overseas is tax free (its remittance as Income they are taxed on) whereas domestic there's some tax advantages to doing on-shore (some taxes removed).

 

[wellington]

I think this is the only part of the whole crypto traders dont get taxed theory that might get under scrutiny in the future were Thai tax authorities to get serious about crypto profits made by expats, which is not the case yet, if thats my understanding.

Highly unlikely, they are only worried about Thais predominantly and Thai's have to go through ring-fenced on/off-ramps (hard for them to do int wires from CEX's overseas also...

Can do P2P but that data is collated domestic side easily enough and easily enough surveilled and tracked/taxed.

As it is any account that does the following

- 250,000 THB transaction +
- 200 transactions in a year on an account

Get automatically reported to AMOL / Revenue Department.

 

[wellington]

wallet on their laptop, then they are holding the coins regardless of what platform/protocol they are using to trade those coins

Just an FYI that's a construct.

You never hold coins onshore/offshore as they are on-chain 'everywhere' but 'nowhere' all the time, you never take physical ownership.

You do however have physical ownership of keys to access the wallet.

Now just because you own physical logins for your brokerage account in the UK whilst being in Thailand doesn't bring the activity onshore as a territorial tax country it doesn't tax offshore brokerage activity, just because you have login details for your brokerage account in London.

Likewise holding keys to your wallet/account isn't itself bringing the crypto onshore, its just holding keys.

Interacting with said funds inside said wallet though whilst being accessed in your front room, is actioned elsewhere i.e Germany for 1inch, US for Uniswap, and that in itself is just accessing the interface the transaction(s) itself are enacted elsewhere, say Uganda where it's being validated.

Now other countries have taken different routes like you've highlighted, but they are NOT territorial countries (tax wise), hence Thailand started murmuring about becoming WorldWide tax based.
----
Now even if they do change to 'WorldWide' tax based, you establish a quick paper common-law-trust and bang, The trust overseas in London carries out the trades the Trust in London is the benefiter etc. (then you go down that rabbit hole).

Thailand isn't like the EU, UK, US etc... its laws are different and theres many ways to circumnavigate them legally.

You should note one of the biggest crypto personel lives in Thailand (one of the Tether/Bitfinex backers etc) dual Thai-British Christopher Harborne basically one of the people behind the Eurodollar Network upgrade (which is a 400 Trillion $ global system) refinancing at 75 trillion $ a year.

Thailand having him puts them in a powerful position, but he could leave, as the US never had an access point to the Eurodollar market except SDNY and its connections banks (corresponding banks) overseas (surveillance) and its informal as well as formal, most of this will come on-chain via the use of USDT/Tether, Thailand doesn't want to scare someone like that off, as it puts them in a geopolitical position.

The few euros a expat makes annually is really not worth the trouble, when they'd be in the position to observe 75 trillion via surveillance and provide diplomatic prowess to themselves as having that vantage (and pliable pressure).

 

[JJReddick]

How could you prove the transactions were done by the user within Thailand and that they owned or actioned those transactions in that hot wallet?

FYI Thai's utilising Crypto overseas via exchanges overseas is tax free (its remittance as Income they are taxed on) whereas domestic there's some tax advantages to doing on-shore (some taxes removed).

well it will be up to the trader to prove that someone else was in control of their hot wallet and did the trades from somewhere else in the world (this is assuming trading dates match the trader's entry/exit log at the border, meaning border log confirms the trader was in thailand when the trades happened)

I personally know someone - from a completely different jurisdiction - who got investigated by their domestic tax auth and had to prove that he kept their hard wallet elsewhere in the world and was not subject to a sort of territorial wealth tax that the jurisdiction demanded.

A bit of a different ball game but also similar in a way

 

[wellington]

well it will be up to the trader to prove that someone else was in control of their hot wallet and did the trades from somewhere else in the world (this is assuming trading dates match the trader's entry/exit log at the border, meaning border log confirms the trader was in thailand when the trades happened)

I personally know someone - from a completely different jurisdiction - who got investigated by their domestic tax auth and had to prove that he kept their hard wallet elsewhere in the world and was not subject to a sort of territorial wealth tax that the jurisdiction demanded.

A bit of a different ball game but also similar in a way

No, you can't just make claims that the wallet belongs to someone (trust me i've been through multiple criminal court cases here as a plaintiff in the years i've been here) it's all about 'reasonable suspicion/doubt', i.e the revenue department can't point at a wallet and declare it to be yours they can say you've received funds from it consistently but that doesn't make it yours.

Don't compare Thailand to other countries unless they are 'territorial'.

'Territorial'
'Principle Value'

Those two words are the difference between liability and no liability (tax wise) and the meanderings down from them.

 

[JackAlabama]

So I met this really horrible individual recently. They are incredibly borious and their ego is the size of Patagonia.

They currently reside in a 0% income tax jurisdiction but they want to become a tax resident in thailand in 2025 by spending > 180days on DTV visa, which was obtained by showing a side bank account with over 500k bhat +muay thai curse booked. In their DTV application apparently they didnt discolse anything else about their financial situation. That person also told me they have enough savings in the same bank account they shared to the thai embassy that can easily last them those 5 years and more, so no remittance per se (besides atm withdrawals).

However that same person is a greedy mf and wants to make more money through trading. They trade on several crypto platforms + wallets + ibkr + seed investments and are generally able to make 7figs net profits each year, or so they claim. But their ego is so big they might be making this up. Let's assume they dont.

Moreover they have some capital stashed in ibkr and in money markets via EU broker (they are EU citizens) that is yielding some interest every year, the former (ibkr) is distributed, the latter (eu broker) is accumulated.

Now this greedy mf will have to pay thai taxes on cap gains when they become tax resident in 2025 as they will be effectively trading from within the country and they are not interested in going throght the loops of setting a company in the Caribbeans and trade through that. However the same person, being a disgusting greedy mf, thinks they can get away with not paying any taxes, as they believe the risk of thai tax authority opening a filing on them is < 0.01% given that ibkr doesnt do crs and eu broker accumulates interest payments rather than distributing them. They think Thai tax authority will never check their crypto accounts, and as far as it goes for crypto platforms and banks/ibkr, this person main address will remain in the 0% income tax jurisdiction.

As they own real estate in the 0% income tax jurisdiction, and they it lease out and receive rent from that in the same bank account they shared with the embassy, their plan is to pay taxes in thailand in 2025 by declaring the rent they receive and gets paid on that account, while remaining silent about all the rest outlined above. And this is only if thailand moves to ww from territorial taxation. Otherwise they won't decalare anything.

Do you think this absolutely vile way of thinking has some legs or will this disgusting piece of human trash will be hanging on a very thin thread and there are huge chances they will eventually be hunted by thai authorities and sent to the most horrfying jail west of Chao Phraya? I am personally thinking of grassing themout to that tax authorities myself if they eventually pull this out, but evaluating pros and cons for my karma, and also I dont want to waste thai tax authority precious time if they eventually dont do that.

Pinging the people most plugged in with all Thai things
@wellington @JackAlabama

agree what @wellington wrote.
it is (and likely for some more time to be) remittance based. So if they live a cheap lifestyle and just use up savings, it will work that way (but so would other remittance-based systems).

 

[JackAlabama]

this is the only part that doesnt make sense to me and I know for a fact in other jurisdictions has created issues. If one owns a hot wallet on their laptop, then they are holding the coins regardless of what platform/protocol they are using to trade those coins. This is because they are self custodians of those coins and are "physically" holding them, as opposed to trading and leaving them in a cex (not your keys not your coins) or in a cold wallet elsewhere in the world.

you cant/dont hold the coins. You cant really use/touch them without the chain (i.e. very different from gold coins which exist independently of the chain). The coins are like an offshore bank and the keys are your login data (to your offshore bank) which you use to move them.