What Olaf Says About Foreign Currency Transfers & Taxes

When Transferring Money into Phuket – Document It Correctly

If you are investing in Phuket real estate, it is vital that you keep accurate, detailed records of all transfers, starting with the transfer of money into Thailand for the purchase. There are specific requirements you must understand before making your first payment. Your receiving bank in Phuket must prepare the correct documentation to confirm the transfer. The precise documents required will depend on purpose of the transfer and the amount you are sending.

If you are a foreigner, and you have purchased a freehold condominium unit in your own name, to register your ownership you will need the relevant documents for the transfer of each tranche of money related to the purchase. Once you have completed the transfer, have the necessary supporting documents from your bank, and have registered the property, please keep all the documents in a safe place.

If you have a safe at home, or a safety deposit bank at a bank, use these. The Foreign Exchange Transaction forms and title deed should be considered as important as any other valuables you possess. When it comes time to sell your Phuket condominium (or villa), these forms will be necessary in order to transfer your money out of Thailand and back to your home country.

All transfers of funds into Thailand must be documented!

Your Taxes: Pay Them!

For some reason, people in Phuket need a constant reminder of this universal requirement. They honestly don’t believe that accurately assessing their taxes is really that serious, and if you try to convince them they are wrong, they simply will not listen. Not only is the rental income earned subject to income tax, but if you live “rent free” in a company-owned property, the income not being collected is also taxable. Failure to pay your taxes could be grounds for your property (or in the event it is owned through a company, the company’s property) to be seized by the authorities and sold.

One tax which we have not yet mentioned is also one which people all-too frequently attempt to cheat on: the tax on the sale price of the real estate. This tax must be paid to the authorities at the time of purchase, but countless people attempt to reduce their “tax burden” by under-declaring the purchase price of the property.

Apart from the fact that it is a criminal act (tax fraud), it is also not smart from a commercial perspective. It does not matter if the property is owned by an individual or a company, when it comes time to resell the property, your tax liability will almost certainly be greater than what you think you “saved” by illicitly under-declaring the purchase price.

On top of that, you put yourself (and potentially your property) on the radar of the tax authorities for under-declaring your taxes for as long as you owned the property.