Transcript of the above video: 

As the title of this video suggests, we are discussing the LTR Visa. And this is actually a video; I thought I had kind of fleshed this out in prior videos sometime back. I did a video about the review process pertaining to the LTR itself, which by the way we have yet to actually see one of these go through the review process because nobody has aged out their LTR enough; it hasn't been around long enough. We are likely to see this I expect next calendar year; sometime in 2026 I imagine. 

But basically the premise of this video is, is the LTR something of a "tax trap"? Now what am I talking about here? Well candidly, a very effective way of for lack of a better term, trapping a person, an individual, into tax liability would be to explain that, hey, in the instance of the LTR, "hey you are not taxable on any money earned outside of Thailand." Okay, fair enough. But then not really get into the notion of tax residency itself which okay, 180 days spent in Thailand makes you a tax resident. Couple that with the issue of inbound fund remittance into Thailand and the whole issue of attributable earnings becomes somewhat opaque. We deal with this, or I should say the accountants here at the firm deal with this quite frequently in matters pertaining to Corporate VAT, especially where we have foreign directors that work regionally, and oftentimes VAT will not necessarily apply to certain work even though it is a Thai Company because the Director for example, will be doing the work outside of Thailand. So the work is not attributable to Thailand. So for example, we had a client some time ago, who spent like 2 months in Malaysia doing work. It billed through the Thai Company; yes, it is subject to Thai Corporate Income Tax, yes that person's salary they draw off the company is subject to personal income tax but as far as VAT went, under the circumstances and again everything is different, don't take this as a one-size-fits-all piece of advice or piece of analysis, I am just giving it to you as I have been told by the accounting folks here at the firm, basically VAT was not attributed to that because it was not an activity occurring in Thailand and therefore VAT was not relevant.

So look at that in the inverse with regard to the LTR. Again part of the selling point on that was, "oh you are not liable for taxes on anything earned/accrued outside of Thailand. But now let's look at the totality of the circumstances - I almost said "totalitarian" there. I have been using that word a lot lately - but the totality of the circumstances surrounding someone who might be in Thailand on an LTR Visa and again we are merely surmising here because we have not actually seen one of these things reviewed. But as I have discussed in prior videos, they talked when this thing was created that there would be the equivalent of an audit looking backwards on the five years someone has already spent in Thailand, utilizing the LTR Visa when a request for the renewal of the further five years is put in. So we know that there is going to be some sort of review associated with the LTR. We don't know what it looks like yet because nobody has yet gotten to the five-year mark because it hasn't been five years that this Visa has existed. 

That said, let's look at it inverted from the notion of attributed VAT. Okay, you are in Thailand for 180 days in a given calendar year and there have been inbound remittances to you the person, within that calendar year. Again, it's going to depend on the given circumstances in the case, but I can see a number of different fact patterns playing out where a reviewer, an auditor for lack of a better term, looks at that situation and says, "hey you had inbound remittances of 50,000 US Dollars (somewhere in the neighbourhood of 1.5 million baht), you were in Thailand for 180 days or more", or let's say you were in Thailand a full calendar year, let's say you were here the entire 365 days out of the year and that money came in, how can that be, I think you have a hard sell saying that that's exempt. Again, it is an odd question and not one I think people really want to be put under - at least the scrutiny of - when they are dealing with maintaining their visa status. 

So this is not a video to create consternation. It's a video, if anything, it's a free warning. I have been right about a lot of stuff that I take him a lot of guff for on YouTube okay, across the board. And it hasn't done me a lot of good but whatever. I just feel like sometimes there's just what is right is right, and in this circumstance frankly, I don't really want to see a whole backlash a year from now or a little longer probably, from folks who are on the LTR and finding out that they are being scrutinized and they are being told, "hey, we are assuming that you made all this money. It's now put on you to rebut our presumption that you are liable for taxes on this". And again, until we see an actual review, it is hard to speculate, but I am just putting it out there that I have looked at this thing backwards, frontwards, sideways. The work authorization thing is spurious to me, the legal reasoning behind it, I get into that in more death in another video made contemporaneously with this one as we recently we were assisting some folks dealing with the LTR, actually one individual, dealing with trying to get an LTR. And in that set of circumstances, I finally fleshed out, not me but sort of tangentially through the work that colleagues of mine in the firm were doing, I was able to sort of flesh out and ascertain, okay now I can parse out what they are talking about with this "work authorization". As discussed in there, it looks a lot more like DTV, call it “work exemption” rather than “work authorization” might be the better word. 

That said, back to the main tax issue here. Similar to that, we have been looking at this backwards, frontwards and sideways for a number of years as we have been assisting folks in getting these kind of visas and I really think there is a strong possibility to people are going to get into their review for getting a new one of these, and there is going to be substantial scrutiny attached to their past activities, especially their past remittances of funds inbound to Thailand taken into account with their physical presence in Thailand which might attached tax residency, and especially in the situations where somebody spent over 300 days out of the year, let's put it that way, where it's very difficult to say, "well this was earned abroad". How? I can see and I sort of have put myself in the mind of these kind of bureaucrats that are in the Revenue Department and things in the past, and I see how they think; how are they going to look at that? I don't know that it is going to look very favourable to the person holding the LTR. 

So the point of this video is to act as a sort of warning based on what I have seen with respect to this thing, and my sort of overall analysis of the possible unforeseen consequences resulting in a person's initial 5-period in Thailand when they are going through the review to get their second 5 years, how that may play out. Again it remains to be seen. We will certainly be keeping you updated on this channel as the situation evolves.