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Answered3 years ago

Is income tax exemption in Thailand possible for expats paying taxes in Germany?

Marvin *********
asked Jan 15, 2024
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Hi, i spend about half of the year in Thailand.

I do not work in Thailand but have business in Germany and also pay income tax in Germany.

I wondering whether income tax exemption is possible in Thailand if i pay taxes in Germany and spend longer than 180 days in Thailand?
Answer summary
The post discusses the income tax obligations of an individual spending significant time in Thailand while paying income taxes in Germany. Key points include the existence of a double taxation agreement between Germany and Thailand, implications of spending more than 180 days in Thailand, and new regulations regarding the taxation of foreign-income remittances after January 1, 2024. Various commenters offer insights on possible tax credits, the treatment of dividends, and strategies to remain compliant with Thai tax laws while avoiding double taxation.
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Ally ************
Ally ************
Marvin Gunther My understanding is that the assessment for tax in Thailand will be based upon income you receive in Thailand.. not income earned in Thailand.. and they will consider any deposit to your Thai bank account from overseas as 'income' irrespective of the fact you could be transferring money to Thailand from savings that you accumulated prior to the introduction of the new foreigner tax regime.. ie. from savings held prior to 1 Jan 2024.. so whether you are flipping a current month paycheck (or pension) just received into your overseas bank account to your Thai Bank account.. or whether you are moving funds you may have had on deposit overseas for the last 10-years.. once it hits your Thai Bank account the Thai tax authorities will deem it as income in the current tax year.. however if your home country has a double taxation agreement with Thailand.. and the tax assessment in Thailand is lower than the tax you have already been charged in your home country (on a current year basis).. then you will have nothing to worry about.. you simply produce proof of the home country tax charge to avoid any further taxation in Thailand.. on the other hand people who are in receipt of regular remittances to their Thai bank from overseas.. and with no tax charge in the current tax year in their home country.. could see the aggregate of all said remittances assessed for tax in Thailand.. that said the new tax regime is still being rolled out and may be subject to change once the authorities here begin to grasp the complexities of the system they are trying to introduce.. i believe their intention was to try and 'catch' people of working age who are employed by overseas companies and receive their income into overseas bank accounts.. these people may live in Thailand for more than 6 months of the year and could potentially avoid paying tax on their income in their home country as a result.. but also escape paying tax in Thailand since they were not previously on the tax radar here.. but it is likely to also catch retirees who live here comfortably on fairly modest pensions.. and the introduction of such a tax liability could severely disrupt their retirement plans.. with a reduction in disposable income directly also affecting the Thai family/s they may support.. so i remain hopeful that the foreigner tax legislation will be reviewed and amended before anyone has to actually submit a tax return.. and that is still some way off since this is the first year of operation.. and the first return will be based upon income received up to 31 Dec 2024.. though for those with Thai spouses.. it might be a good idea to remit incoming funds into their bank account initially.. since that would avoid scrutiny.. at least until things become clearer anyway.. just a thought ;)
Graham *******
Graham *******
Ally, the damage has been done, the new rules are a disaster and many are seeing it. It says "come to Thailand and worry about your taxes" or "do not come ever"!
Marvin *********
Marvin *********
OP
@Graham ******
so true. But... in the short time i live hear i have learned that this kind of big news with u-turn are not unusual here. I hope this time it is the same but not different. 😉
Graham *******
Graham *******
@Ally ***********
that smells of blatant tax avoidance.
Ally ************
Ally ************
@Graham ******
I don't see how sharing your savings with your wife can be considered a crime?
Graham *******
Graham *******
@Ally ***********
gifting money.
Neil ********
Neil ********
If the business continues to earn revenue then you continue to pay tax. If you earn income for less than 6 months then your German taxes will correct themselves
Brown ********
Brown ********
Yes. If you pay tax on your income in Germany you won't in Thailand.
Marvin *********
Marvin *********
OP
@Brown *******
without using the DTA because the foreign taxed income is for thai revenue department only nontaxable savings?
Graham *******
Graham *******
Read the DTA very very carfully
Marvin *********
Marvin *********
OP
@Graham ******
it is also possible that Thailand do not want tax for taxed income in a dta state. They target non tax payers with this new rule. They need a definition of what are savings and what is taxable income. One criteria could be to declare taxed income of dta states to savings.
Graham *******
Graham *******
@Marvin ********
you would activate the dta to reduce you tax in thailand, if u do not want to do this then just pay them the tax which is due in Thailand
Marvin *********
Marvin *********
OP
@Graham ******
i do not want to activate the DTA. Question is do the Thai RD activate the DTA or is it ok for them when you pay abroad income tax.
Brown ********
Brown ********
@Marvin ********
you in a country that doesn't have dta with Thailand?
Brown ********
Brown ********
@Marvin ********
ok then you shouldn't have a issue I'd think
Marvin *********
Marvin *********
OP
@Brown *******
no germany has DTA.
Alain ***********
Alain ***********
Interested as im in exactly the same situation except its Belgium and not Germany.

Also double taxation avoidance treaty. But I'm not sure if it cover capital gains on stock
Daniel *********
Daniel *********
@Alain **********
If you check your government's website you might be able to view a PDF of the treaty signed between Belgium and Thailand. I was able to download a PDF of the agreement between Ireland and Thailand which detailed everything that is covered and answered the questions I had.
Marvin *********
Marvin *********
OP
@Alain **********
DTA in general cover it. But question is whether the DTA is applied at all because the abroad income taxed dividends are nontaxable savings.
Graham *******
Graham *******
i am going to a seminar tomorrow, i have an advanced summary of what will be said in pdf format. DM me and i will send to u.
Kristian ************
Kristian ************
If you take dividends as a passive owner, you should be able to claim German tax paid as a credit against Thai income tax payable for the amount you remit to Thailand.

If you draw a salary or participate in the management or operations of the German company while staying in Thailand, you need to evaluate whether the company has a permanent establishment in Thailand which would create a tax obligation for your company in Thailand as well.
Marvin *********
Marvin *********
OP
Kristian Tuomikumpu in relation to the dividends (if not remitted but taxed in germany) question is when this dividends become non taxable private saving.
Kristian ************
Kristian ************
@Marvin ********
Check out these newsletters
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Especially this one:

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/NL244E-Taxation-of-Foreign-Dividends-under-Thai-Law-Nov23.pdf
Marvin *********
Marvin *********
OP
Kristian Tuomikumpu yes but maybe if they taxed they can be transformed abroad to savings and then be remitted tax free to Thailand. 😉 They talk about income not about savings. The target is non taxpayers so it sounds logic that if you pay foreign tax on income it is transformed to private savings.
Kristian ************
Kristian ************
If the German tax rate is higher, it may be likely that you won't need to pay any Thai tax whenever you remit your money. That would make sense. But I think we need to wait for guidelines and clarifications.
Kristian ************
Kristian ************
@Marvin ********
If you keep your German dividends in Germany without ever remitting them, no problem. They are not taxable in Thailand. However, from 2024 onwards, your new offshore earnings do not become "savings" anymore, even if you wait to remit.
Marvin *********
Marvin *********
OP
Kristian Tuomikumpu Thanks for information. This aplies to dividends that are remitted to thailand. But if the dividend is taxed in another country and is remitted from a savings account it could be non taxable saving. Savings are non taxable after the new and old rule. The solution could be to transform the dividend to already foreign taxed savings. The new rule target non taxpayers so i hope this would be possible...
Kristian ************
Kristian ************
@Marvin ********
Dividends (or any other money) from 2023 and before are now your savings that are not assessable income for Thai income tax purposes. From 1.1.2024 onwards, foreign-source dividends you earn while a Thailand tax resident will not become tax-free savings but will be taxed if and when remitted to Thailand.

I believe tax credits will only be available during the year you receive the income, so to be able to deduct German tax you paid in 2024, you might have to remit the money in 2024. But this entire credit system for individuals has not been announced yet.
Heather *******
Heather *******
I suggest you look on YouTube. There is a great deal of info given on this by Thai Lawyers who are better placed to answer your questions
Etincelle **********
Etincelle **********
@Heather ******
Any links you can suggest? Thx.
Heather *******
Heather *******
@Etincelle *********
just put into the YouTube search engine Tax Thailand 2024 and it will bring up tons of up to date info but to give you a starter
Marvin *********
Marvin *********
OP
@Heather ******
thanks but if you read the thread you will see that we are already a little further.. 😉
Javier ********
Javier ********
You only pay taxes on the money you remit to Thailand earned after 2024.

Therefore you can remit your previous earnings tax free.
Galenus ******
Galenus ******
@Javier *******
no, you're taxed for 2023 within the first 3 months of 2024
Javier ********
Javier ********
For 2023 previous rules apply no tax on money remitted next year after earnings, for 2024 new rules apply in which all remitted money earned after 2024 is taxed.
Marvin *********
Marvin *********
OP
@Javier *******
if is taxable income. Money earned in and taxed in germany could be private saving that is non taxable in Thailand no matter when remitted.
Javier ********
Javier ********
If you become a tax resident in Thailand you will pay the difference here.

If Germany taxes 20% but Thailand 40% you will need to pay the remaining amount until the 40%.

Nevertheless, tax agreements usually say you can only be a tax resident in one country of the signers.
Marvin *********
Marvin *********
OP
@Javier *******
maybe but question is it is income or savings if it is taxed already abroad.
Graham *******
Graham *******
if u spend longer than 180 days in Thailand u must file a tax return for the work u do in Thailand u will get a tax credit u can offset against any tax in Germany as a result of your work in Thailand. Will be costly to be compliant.
Marvin *********
Marvin *********
OP
@Graham ******
Yes but i do not work in Thailand. Question is the german income that is taxed in germany for thai authorities only private saving that is not taxable in Thailand...
Graham *******
Graham *******
if u are in Thailand 180 days u must declare here what u have earned in Germany but can offset german tax against thai tax. You will need a receipt for the taxes paid, i guess in thai so u will have to get this translated. you must file before 31st march i believe. These are new rules so no one really knows the details. i can see this being a total mess. Your saving are taxable also
Graham *******
Graham *******
@Marvin ********
we are all still trying to understand the new laws, i think if not remitted to TH then not taxable.
Marvin *********
Marvin *********
OP
@Graham ******
yes for income. But is in germany taxed and not remited income also taxable income in Thailand or non taxable private saving?
Marty *********
Marty *********
No one knows but Germany has a tax treaty with Thailand to avoid double taxation
Marvin *********
Marvin *********
OP
@Marty ********
Yes but i do not work in Thailand.
Marty *********
Marty *********
@Marvin ********
So you pay German taxes on income earned in Germany. You won’t be taxed on that money if you bring it into Thailand. The unknown is whether expats will have to file a tax return even if it doesn’t result in any taxes. Also unknown is if the tax rate you paid in Germany is lower than the tax rate in Thailand. Would you have to pay the difference?

No one knew last month and I’ve heard nothing yet this month. I expect more information will emerge in the next 3-4 months
Marty *********
Marty *********
@Marvin ********
Of course. Much better than consulting Facebook. As an American I know how this type of taxation works for me. I’m not expecting these Thai changes to affect me but I will wait and see.
Marvin *********
Marvin *********
OP
@Marty ********
yes but with this new announcements they target worlwide non taxpayers. I have to consult a lawyer or accountant to clarify my case.

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