Do I need to pay taxes in Thailand if I stay for 90 days, leave to Malaysia, and repeat this process annually?

@David *********

correct if your only remitting your social security or armed forces pensions, can't recall the private pension entry. Other remittence may be subject to tax depending on source and when realised.

Thank you

@Brandon ***********

good to know

@David *********

as I said, that's not how dual taxation treaties work. There is no treaty Thailand has with America that says Americans don't have to pay taxes.

For example if an American remits $100,000 they made from capital gains which is only taxed at about 10% at that amount, so about $10,000 in taxes, but the Thai tax rate is higher than 10%, the American can write off the $10,000 they paid but still has to pay taxes owed above that since the Thai tax rate is higher.

@John *********

the same principle is in effect today under the current Dutch-Thai DTA.

@Bart *************

I think you are misunderstanding. The DTAs do contain clauses which determine whether income is assessable income or not for the purposes of the treaty. If your income is not assessable (such as SS for US citizens) then you don't need to worry about it, nor do you need to include it on a Thai tax return. What we're discussing here is assessable income (such as the state pension for UK citizens) and how that gets treated. In this case if you your sole uk income is your state pension and you bring it all in to Thailand then you need to file a Thai tax return.

So the DTAs are a mixture of both exemptions for what is deemed non-assessable income and tax credits for tax already paid on assessable income.

@Bart *************

no I didn't go back and read very carefully what I said...🙄

And " top up tax" does occur... Australia for one does it when Aussies are taxed under two or more jurisdictions 👍

@Paul **********

I think you lost it a little. You say several times that a DTA doesn't apply but in your reply you refer several times to clauses in one (even stating those as reasons that a DTA wouldn't be in effect).

Also your point is wrong; taxes are, in general, not topped up. Read the applicable DTA between your country and Thailand and you'll find out.

@John *********

Top up tax is a colloquial term...🙄.. As it tops up the tax you have already paid so all you did was repeat everything I said.. 🤦

@Paul **********

I don't know where you're getting the definition of "top up tax" other than in your head. 2 use your examples

1. You have income in jurisdiction 1 and pay 10% on that. You remit the entirety of that income to Thailand where the rate for that amount is 12%. Then in your Thai tax return you document that income along with claiming the 10% credit. Result is your Thai tax is reduced from 12% to 2%. If there were no DTA it would remain at 12%.

2. Assuming your total UK income is £12,570 you would pay no tax in the UK so therefore would have no credit to claim, the DTA doesn't apply because you aren't being taxed in the UK. If you bring the entirety of that into Thailand Thai tax rates would apply along with Thai tax allowances. Your calculation is out because you take no account of these allowances. But it's not a top up tax, it's just Thai tax.

@John *********

you completely misunderstood. It's opposite: tax treaties, in general, exempt INCOME from double taxation. Not tax itself. If that were the case then your reasoning that you'd end up paying the higher of the two taxes is right. But your entire premise is wrong, it doesn't work with tax credit already paid; the avoidance of double taxation principle applies to the income that is taxed. You don't pay the higher of the two, you pay where the DTA determines that the income is taxable, and you pay nothing in the other country (for that part of your income).

Your principle may apply to some income components but certainly not the major ones such as income from labor or pension.

@John *********

but you haven't addressed the exact point I raised...🙄

Example Let's say in jurisdiction 1 you pay 10% on your income..

You remit to Thailand and under a DTA you claim the 10% tax credit as you can..

on the same amount of money in Thailand the applicable rate would have been 12%

The Thai tax man could ask for the 2% difference in rates ie this is called top up tax

This is not double taxation so DTA doesn't apply

Another example.. In the UK the first £12,570 (THB 525,000) of income is tax free..

If remitted to Thailand, only the first THB 150k is tax free, therefore THB 375k would be assessable under Thai tax at around 10%

Again DTA doesn't apply and a top up tax

@Paul **********

so whatever you want to call it the concept is clearly defined in every DTA that Thailand has signed to date via the concept of tax credits. There's no such thing as top up tax, rather if you are a Thai tax resident and you bring assessable income into Thailand then you have a Thai tax liability. You can the use any tax already paid on that income in the DTA partner country to offset some or all of that Thai tax liability.

@John *********

the difference between two tax rates when one falls under two tax jurisdictions where one claims a tax credit in one jurisdiction against tax paid in the other

@Paul **********

what is top up tax?

@John *********

we are not talking about tax credit per DTAs

You mentioned top up tax.. Which is what I commented on and the fact it hadn't been commented on yet by the Thai tax man

@Paul **********

the concept of tax credits for tax already paid in the other country features in every single DTA Thailand has entered into

@Jared *********

Another idiot who spends weeks here and knows everything

@Alex ******

I've lived here for years, never paid taxes and still won't be. Everyone's situation is different

@Kool ******

I'm sure she loves you handsome man 💆‍♂️

@Alex ******

believe what you want, and the statement you pay taxes has no relevance. I pay taxes too. In fact my wife is a licenced accountant.

@Kool ******

I live here also and pay taxes

You are both wrong 😒 just keep giving wrong advice, it doesn't affect myself

@Brandon ***********

although you're completely right, I think that even if you don't cut off one day yourself, sticking to 179 days, it even happens for you with the disadvantageous rounding of stay duration that immigrations applies. Because all calendar days count in full for that, also arrival and departure, you don't actually get to stay 90 full days, but you'll get stuck at 89. In this case that could be convenient.

Example. Arrive May 2nd. Your 90th day is then July 30th. But if you then take the passport and count where you were each of the days, you find a Malaysian stamp on July 30th, and you'd count that day as outside Thailand. On a duration basis, the period from May 2 until July 30 is 89 counts days.