New US Laws Increase Need For Accounting Service In Thailand
- By Gregory Smyth
- Published 12/16/2011
- Regulatory Compliance
- Unrated
The long arm of America's Internal Revenue Service (IRS) has reached further onto foreign soil, due to the strengthening of US tax laws last year.
For American expats these new laws will increase scrutiny over their foreign earnings, which are subject to US tax. Consulting
Thailand law experts has uncovered concerns the new laws could increase tax scrutiny and auditing services. Thailand's US expat community has feared the changes could also lead to the withdrawal of local banking services.
The Foreign Account Tax Compliance Act and Hiring Incentives to Restore Employment (HIRE) Act was passed as part of a legislative package aimed at addressing tax evasion by US citizens living overseas, including Thailand. The laws require foreign banks to report any assets held by US clients to the IRS. Analysts have predicted these standards may force foreign banks to withdraw services to US expats.
While the legislation was aimed at wealthy Americans using offshore bank accounts to evade tax auditing services, Thailand's US expat community can expect to face more scrutiny over their income and financial assets than ever before.
Financial experts also fear the HIRE Act could send US capital offshore and prompt foreign institutions to avoid transactions using the US dollar.
The strengthening of US tax laws for citizens living abroad intensify existing obligations under Thai law. Consulting an experienced legal or accounting service in Thailand is the best course for expats unsure of their dual tax responsibilities.
Under Thai law ex
pats working under a Thailand work permit (including those starting a business in Thailand) are required to pay Thai taxes.
Tax exemption treaties offer tax relief from Section 70 and Section 76 of Thailand law's Revenue Code. These treaties may apply to foreigners with a business investment in Thailand - a tax consulting firm in Thailand will be able to offer advice on protection treaties.
American expats will also need to declare any earnings with their home country.
US citizens living in Thailand are also required to lodge a tax return with the IRS, even if their earnings fall below the Foreign Earned Income Exclusion (US$91,500 in 2010). Modest incomes under this exclusion limit will avoid paying US taxes, but a return must still be filed.
As tempting as it might be, failing to file a US tax return can create additional costs, stress and even criminal prosecution down the track.
US expats living in Thailand have until June 15 following the calendar year end to file a US tax return. While it is standard practice under Thai business law to file using the calendar year, this is not an option with a US return.
Thai law firm BSA law is an international law firm in Thailand. It has warned that another reporting requirement, the Report of Foreign Bank and Financial Accounts (FBAR) must be submitted to the US Department of Treasury.
The new reporting and tax requirements create a complex legal framework for professional accounting services in Thailand.
Increased scrutiny over foreign earnings by US citizens living abroad means there really is no avoiding tax - consulting a Thailand accounting specialist will keep the IRS off your case!
For American expats these new laws will increase scrutiny over their foreign earnings, which are subject to US tax. Consulting
Thailand law experts has uncovered concerns the new laws could increase tax scrutiny and auditing services. Thailand's US expat community has feared the changes could also lead to the withdrawal of local banking services.
The Foreign Account Tax Compliance Act and Hiring Incentives to Restore Employment (HIRE) Act was passed as part of a legislative package aimed at addressing tax evasion by US citizens living overseas, including Thailand. The laws require foreign banks to report any assets held by US clients to the IRS. Analysts have predicted these standards may force foreign banks to withdraw services to US expats.
While the legislation was aimed at wealthy Americans using offshore bank accounts to evade tax auditing services, Thailand's US expat community can expect to face more scrutiny over their income and financial assets than ever before.
Financial experts also fear the HIRE Act could send US capital offshore and prompt foreign institutions to avoid transactions using the US dollar.
The strengthening of US tax laws for citizens living abroad intensify existing obligations under Thai law. Consulting an experienced legal or accounting service in Thailand is the best course for expats unsure of their dual tax responsibilities.
Under Thai law ex
Tax exemption treaties offer tax relief from Section 70 and Section 76 of Thailand law's Revenue Code. These treaties may apply to foreigners with a business investment in Thailand - a tax consulting firm in Thailand will be able to offer advice on protection treaties.
American expats will also need to declare any earnings with their home country.
US citizens living in Thailand are also required to lodge a tax return with the IRS, even if their earnings fall below the Foreign Earned Income Exclusion (US$91,500 in 2010). Modest incomes under this exclusion limit will avoid paying US taxes, but a return must still be filed.
As tempting as it might be, failing to file a US tax return can create additional costs, stress and even criminal prosecution down the track.
US expats living in Thailand have until June 15 following the calendar year end to file a US tax return. While it is standard practice under Thai business law to file using the calendar year, this is not an option with a US return.
Thai law firm BSA law is an international law firm in Thailand. It has warned that another reporting requirement, the Report of Foreign Bank and Financial Accounts (FBAR) must be submitted to the US Department of Treasury.
The new reporting and tax requirements create a complex legal framework for professional accounting services in Thailand.
Increased scrutiny over foreign earnings by US citizens living abroad means there really is no avoiding tax - consulting a Thailand accounting specialist will keep the IRS off your case!
Gregory Smyth
BSA Law has focused on providing reliable thai Law consulting and services to the business community in Thailand for nearly 30 years.Click to find out more about Law firm in Thailand.
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