Transcript of the above video:

Over this past weekend I had something of an epiphany. I was thinking about Tax and Immigration, and I had kind of an epiphany. I went ahead and wrote a bunch of notes to make this video. I'm just going to read the notes that I wrote to myself and then I am going to go ahead and get into my own analysis here. So again, this Epiphany comes about - for years I've been trying to figure out what the difference is between what is often referred to as an expat and what people call an immigrant.

For years, many people would say well that phrase it's racist; often times people from poorer countries or who have various backgrounds, or they are a certain ethnicity are often referred to as immigrants, but anytime Farang as we call them here in Thailand - basically westerners - come to other countries, they're called expats. And for a long time, I had a hard time kind of parsing out the differences. I've made videos in the past where I have said, look because I myself personally have gone through it, where I've gone from being an expat mentality guy to, no I live here in Thailand, I'm an Immigrant - I've done that before. but there is a deeper difference and in the context of this tax stuff, I think that that is where the rubber hits the road on the difference between an expat and an Immigrant.  Let me get into it here. 

So again, I wrote these notes to myself. "Having non-immigrant status implies you are not paying taxes here." So again, as we discussed in sort of the so-called "tax loophole" TM6 video, there is Bona fide Permanent Residence in Thailand; Thai PR, Permanent Residence. You have the right of abode in Thailand; you have sort of "belonger status" in a more sort of anglicized version of Immigration vernacular. You have a right to live in Thailand in Permanent Residence status. Short of that, you're not a bona fide resident, you're a non-immigrant, so it's not presumed that you live and work in Thailand. Let me keep going through my notes. "Was why the Tax Certificate System came into effect was because everyone was an Immigrant then because they gave them PR." So, what we are talking about here is again if you go back, one of the reasons the Tax Clearance System, the Certificate System that existed in the '70s and '80s, the reason it existed the way that it did was the model of expats at the time. Most Brits for example, British folks, operated out of Hong Kong. They had Holding Companies and things there; they would do their business and pay their tax in Hong Kong, and it resulted in all these disproportionate situations where local jurisdictions were not getting tax money and I'm not saying it was the British only. Everybody came out and sort of used this model. Again Hong Kong at the time - going back to the '70s and '80s - you basically would do all your business and banking out of Hong Kong, then you could sort of travel around the Southeast Asia area, and this was the reason for the creation the Tax Code as we know it. They were trying to pick up money off of people in much the same vein as the so-called "Zero Dollar tours" are now. People that were coming into Thailand, effectively earning income and not paying anything into Thailand. They were just remitting stuff back to Hong Kong and effectively pulling the sort of Zero Dollar move and the Thais got fed up with it, so they created the Tax Certificate System. As I discussed in other videos, that was later replaced by VAT. Now they are kind of trying to bring it back through this DTV and all of this OECD nonsense and then we have got a bunch of tax stamp-pimps coming out of the woodwork with regard to that as well, as I have discussed in other videos. 

But long story short and the thing to take away from this, the Epiphany I had is that the fundamental difference between an expat and an immigrant to my mind is the bona fide residence test. Do you have Permanent Residence; are you a Legal Permanent Resident? Because in that instance, whether you are in-country or not, if you're an Immigrant in Thailand, Permanent Resident, at that point tax status attaches much more deeply than does one of these non-immigrants. And as I have discussed in other videos, Thailand doesn't get to have it both ways in a sense. They don't get to issue all this non-immigrant status and basically say you have got to renew every year; you don't have PR; you don't have Bona fide residence; you don't have a right of abode, they can't have it both ways and then also say, "oh but you have got to pay taxes all the time."

My point being, if a non-immigrant is not in Thailand for example for the tax deadline for filing or never files taxes in a given year, in my opinion there's much less jurisdiction if you will, over that individual compared to somebody who has Lawful Permanent Residence - who has bona fide residency as we say in the more sort of IRS tax vernacular, and the point I am trying to make is this makes all the difference in the world. An expat to my mind is somebody on non-immigrant status here in Thailand who sort of lives here, makes this place their hub, but they are not dug in. They are not saying I'm going all the way and I'm willing to sort of shoulder my tax obligations associated with my Residency here. That's not what they're doing. They're in Non-Immigrant status, they are here for their time, and again I don't think you get to have it both ways. You don't get to say, oh you don't get Resident status, and then try to just pile on all this tax jurisdiction, all this tax liability; I don't think that's how it works. 

So the Epiphany that I had was wow yeah, actually there is a fundamental difference between expats and immigrants and that fundamental difference oftentimes comes down, well I think in my opinion, a big one of these differences, and I had a hard time finding differences between these two words before, but the big difference to my mind comes down to tax.