when will thai tax authority begin taxing those using monthly "pension"?

[Farang99]

1 minute ago, Farang99 said:

Your pension should already have tax deducted in the country of origin which probably has a no double taxation agreement with Thailand.

I have been living here on UK pensions for 20 years and never had a tax demand as the pensions are taxed at source

[onera1961]

21 hours ago, userabcd said:

Well if taxes have not been paid in the home state on the pension income being deposited in Thailand each month and the tax payer is resident in Thailand then the taxes theoretically should be paid in Thailand on that income subject to threshold and allowances etc...

Most people on SS don't pay any US taxes on their SS incomes. SS was never taxed. US taxable income is Wage - SS contribution. So they would be liable for Thailand's tax? 

[khunPer]

22 hours ago, IraqRon said:

as reorted in the discusion with jomtien imm. chief, he says that pensions are taxable.

Income is not taxed by Thai immigration.

 

Depending from where you originate, your home country likely has a double-taxation agreement with Thailand. If you are taxed of your pension in your home country, you are not also taxable in Thailand, when having such an agreement. You should check that.

 

If not taxed abroad, foreign income is only taxable in Thailand, if taken into the country, the same year as it is earned; the following year it's considered as tax-free savings. You are allowed to have you savings transferred in regular monthly amounts to fulfill the financial demands for an extension of stay.

 

Having income taxed in Thailand might in some cases be cheaper, than paying tax in one's home country. Some countries may tax some of your income with Thai rates, when you are tax-resident in Thailand; for example dividend withholding taxation could be refunded to match Thai rate.

[jojothai]

2 hours ago, topt said:

It has been mentioned in many threads that the DTA between UK and Thailand does not include pensions unless "Government" (for which read civil service not State Pension) and possibly forces pensions.

I will even find you the DTA link if you really want it..........

There seem to be many people ignorant of this and the tax laws here.

i guess mostly because they don't know, or dont want to know what the law is. Ignorance is bliss.

Tax advice for Thailand is freely available on many legal websites and tells you consistently what the rules are.

i summarize some information below for those who want some more insight. I am not interested in further communication on this matter. People who say it is BS can believe what they want.

 

if you are tax resident for a tax year then any income earned from abroad in that tax year (including pension income) and brought into Thailand during that year is considered taxable.

However it is not taxable if you earn it overseas and bring it into thailand later in a different tax year.

This may benefit Thais just as well as expats. I am not sure but go make your own conclusions.

 

There should be allowance for any double taxation agreements.

But, the UK agreement does not cover pensions except as stated by topt above for civil service pensions.

 

If you are not tax resident in Thailand then you dont need to concern yourself with this.

 

As far as we know from many posts on TV, the Thai authorities do not follow up on such taxes.

It will be very difficult and complicated for them to assess income outside Thailand.

Also, most Foreigners don't have a tax ID here and would have to go out of their way to get one and its going to raise questions if you go and ask for one.

So its not something people should have to contend with until it becomes a real problem.

Which it does not appear to be at present.

 

However as some posts point out, it is possible that the monthly declarations for Pension income being sent to Thailand could become a target to do so. If it does start to happen then for pension income from one year, people should look to establish a process where they can remit it in the next tax year.

Some people may not be able to do so, if they live on the income month by month.

 

However the tax ID situation has already started to change, as overseas banks and institutions are now asking for your Common Reporting System (CRS) declarations and tax ID. You will normally be asked for your Thai tax ID if you have an address here, otherwise you have to give them the foreign country tax ID and declare that you are not tax resident in Thailand.

Thailand has agreed to join the CRS system, although i dont know the precise target date yet.

I just searched on line and cant see anything to confirm timing. For background some links as follows.

https://forum.thaivisa.com/topic/1089086-has-thailand-already-joined-the-crs-system/

https://www.hxlpartners.com/tax/taiwan-and-thailand-will-be-in-the-aeoi-crs-framework/

 

From what I see on TV, there is no indication that this issue will become a problem in the near future. Unless somebody can post to say otherwise.

However some people may want to find out the background and figure out how they may deal with it, if and when it becomes an issue. 

 

 

 

 

 

 

[rocketdave]

When her first, over 33 years ago we were charged 2,250 Baht (please forgive me for any error on the amount, it was a long time ago) income tax per year at the end of our one year of visa runs.

I had the receipts stapled in the back of an old Passport.

[Parsve]

I would say that it never will happen because money  from pension is already taxed and Thailand have regulations with several countries about tax for pension and salary for instance. I fully understand that some people are dissatisfied with their life in Thailand, but trying to make it seem worse than it realy is not making anything better.

[Searat7]

The government here should concentrate on collecting taxes from Thais, most of whom aren’t even registered in the tax system never mind paying taxes. 

[marcusarelus]

1 hour ago, NightSky said:

yes but claiming relief for double taxation takes a lot of time and energy to organize or money to hire several accountants in 2 countries.

You don't have to claim relief the Thai tax authority is familiar with the law and has never tried to collect double tax.  You can stop trying to scare people now.  

[NoshowJones]

22 hours ago, MeePeeMai said:

Should be safe from "double taxation" if your country has a tax treaty with Thailand (as the USA does) but who knows whether Thailand will honor that treaty or not.

 

22 hours ago, MeePeeMai said:

Should be safe from "double taxation" if your country has a tax treaty with Thailand (as the USA does) but who knows whether Thailand will honor that treaty or not.

The treaty will soon get honored if there is money in it for the top brass, otherwise forget it.

[marcusarelus]

Haven't you all had enough fun trying to scare people into leaving with bogus topics by now?  Don't you think it's time to close this one?

[soalbundy]

22 hours ago, LivinLOS said:

Said this as soon as people started depositing pensions directly each month.. The 800k savings route is safe but those reporting directly bringing pensions in are literally signing a tax liability. 

I mean, why would Thailand just ignore that free revenue ?? 

see post #3

[TPI]

22 hours ago, IraqRon said:

so, what is the definition of state in this ref.?

The state where the pension was earnt ie Oz pension earnt in Oz, UK in UK etc.

[Naam]

21 hours ago, Thaidream said:

22 hours ago, LivinLOS said:

Said this as soon as people started depositing pensions directly each month.. The 800k savings route is safe but those reporting directly bringing pensions in are literally signing a tax liability. 

I mean, why would Thailand just ignore that free revenue

The money is not earned in Thailand or originated in Thailand as any form of income.

 

The Immigration person is blowing smoke- they don't like the income method- too much work and using the *))K also  allows agents into the system.

whether earned or not or origininated in Thailand as income is irrelevant. relevant is

Quote

Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand.

https://www.rd.go.th/publish/6045.0.html

 

[Naam]

1 hour ago, Farang99 said:

1 hour ago, Farang99 said:

Your pension should already have tax deducted in the country of origin which probably has a no double taxation agreement with Thailand.

I have been living here on UK pensions for 20 years and never had a tax demand as the pensions are taxed at source

a number of Farangs use the THB 65k/month derived from other sources than pensions.

[shaurene]

A new tax started 1st May this year. We earn interest in the bank on our deposit account every 1 month. Roughly 2% or close. If we earn more than 20,000 baht in a year they used to take around 20% tax. Now I just found out that this new tax takes 15% of interest you earn every 1 month.

I had my bank book topped up the other day and noticed the 2 tax deductions 1 for May and the other for June.

But when I think about it my bank in New Zealand charge me 19.5% tax on my monthly interest I get from my term deposit accounts that pay me 3.5%.

[DPKANKAN]

23 hours ago, MeePeeMai said:

Should be safe from "double taxation" if your country has a tax treaty with Thailand (as the USA does) but who knows whether Thailand will honor that treaty or not.

Correct. I read that before. And I also understand, tax laws here are only on money earned or made here! Until that is changed!!

[ThomasThBKK]

25 minutes ago, Naam said:

a number of Farangs use the THB 65k/month derived from other sources than pensions.

 

17 minutes ago, DPKANKAN said:

Correct. I read that before. And I also understand, tax laws here are only on money earned or made here! Until that is changed!!

Then it's taxable if they move it into Thailand the same year as it's earned, it's that simple.

Dividends, Salary etc - earned in the same year as deposited into thailand = TAX LIABILITY. If not taxed at source that is almost always the case.

[Captain 776]

Don’t answer the phone until it rings

[Yme]

The pension payments might not be taxable, but they're already taxing the interest earned on the accounts it is deposited in even if the interest earned is below the tax threshold.

[whiteman]

the sky is falling run to the hills

[seancbk]

On 7/15/2019 at 6:37 PM, MeePeeMai said:

If Thailand starts taxing foreign pensions and requires expensive and useless medical insurance policies for extensions of stay then they will get their wish.  Most (if not all) non-o pensioners will leave for good.  

 

Is that a promise? 

[owl sees all]

4 hours ago, Guderian said:

If the TRD does become aggressive when CRS is implemented then I have Plan B already worked out, so I'm not too worried.

 

Good to have your Plan B at the ready. I hope all the farang will be ready.

 

3 hours ago, marcusarelus said:

It's sad that everyone who has been her for even a little bit has read discussions on this topic and many failed to post and say it's absurd.  Truth takes a back seat to Thai bashing again.  

 

I think it's wise to be aware of what's actually going on here. I don't see Thai bashing.

 

Not so much scared on the tax front, as concerned.

 

It's the 'shop the farang' stuff that really scares me. They did it in the UK, and now it's here.

[elliss]

On 7/15/2019 at 6:53 PM, userabcd said:

Well if taxes have not been paid in the home state on the pension income being deposited in Thailand each month and the tax payer is resident in Thailand then the taxes theoretically should be paid in Thailand on that income subject to threshold and allowances etc...

  Those aliens resident in Thailand

 should be liable for tax in thaiand , not in the uk..

 

[oznomad]

5 hours ago, khunPer said:

Income is not taxed by Thai immigration.

 

Depending from where you originate, your home country likely has a double-taxation agreement with Thailand. If you are taxed of your pension in your home country, you are not also taxable in Thailand, when having such an agreement. You should check that.

 

If not taxed abroad, foreign income is only taxable in Thailand, if taken into the country, the same year as it is earned; the following year it's considered as tax-free savings. You are allowed to have you savings transferred in regular monthly amounts to fulfill the financial demands for an extension of stay.

 

Having income taxed in Thailand might in some cases be cheaper, than paying tax in one's home country. Some countries may tax some of your income with Thai rates, when you are tax-resident in Thailand; for example dividend withholding taxation could be refunded to match Thai rate.

 

Nailed it - and saved me typing the story. 

[Felt 35]

On ‎7‎/‎15‎/‎2019 at 7:29 PM, owl sees all said:

I don't think you get it Kopitiam.

 

First they are trying to get us with the paperwork; the TM this and that. Then its the medical insurance. Then it's the visa regulations. Now it's tax the pensions and shop the farang. Finally when we are in hand-cuffs, and we ask sheepishly if we can have back our 800k, just Cheshire cat grins all round and lots of pointing in front of the cameras.

Its due to that they (Government) finally have found out that if they had a less corrupt and more straightforward westernised immigration policy/tax system they could make the same economic surplus from foreign residents from all walks of life,. i.e. foreign workers, pensioners etc. and their taxes as from mass tourism which anyway deteriorate the country more than it improve it. Problem is where to start to making a country stand out as legal after thousands of years with practice of " tea money,under the table and my friend you" system. The problem with taxing foreign pensioners which prove income by transferring 65k monthly is that their own tax regulations says no tax if its savings from previous years, and to change this they will "shot themselves in the foot", at least some, i.e. the "elite" which are mostly also in "elite age" and of course have most of their "real" assets abroad. Then again, foreign residents which transfer money in the same tax year already have to pay taxes if here more than 180 days annually.

[Geir Rasch]

For years I have been paying tax to Thailand for that part of my pension I transfere to Thailand. That amount of my pension will be deducted from my taxable pension in my home country. The result is that total tax are lower than if all pension was taxed in my home country. This because the tax rate is lower in Thailand than in my home country. I believe that is the case for most of us. No need to avoid tax in Thailand.

[Geir Rasch]

There are two ways to avoid double tax. 1. The credit mode: Your income will be fully taxed in your home country, but the total tax will be deducted with the tax payed in the foreign country. In my country (Norway) that goes for salary.

2. The other method is that your income will be deducted with the amount that is transfered and taxed in the foreign country. Then the tax is calculated of a lower income. Because tax are progressive, that result in a lower grade of tax. This methode is in my country used on pension.

In case 1 the total tax will be the same as if all where taxed in your home country. In case 2 the total tax will be lower if the foreign country has a lower tax rate than your country of origin.

 

Of course, if you tranfere your pension a year later than it was earned and taxed in your home country, that is considered transfering savings (already taxed) and shall not be axed again in the foreign country. If your country has a lower tax rate than Thailand, then you should only transfere savings. In other cases, you should transfere your pension the same year it is earned.

 

[rickudon]

Obviously a lot depends on which country your money comes from ...... in the case of the UK, all UK based pensions are taxed in the UK, whatever your residential status, so double taxation rules should mean no further tax in Thailand unless Thai tax rates are higher than the UK (unlikely). If you have outsourced your pension to a tax haven, you might be at risk ....

 

I fully understand that current arrangements make it difficult for Thailand to assess tax on money transferred into the country as it may be savings, but if going the income route and also showing the source of your money, that makes tax assessment possible. The universal application of withholding tax, even for trivial amounts, could be so that any one trying to reclaim it has to have a tax number - then they can calculate your overall liability - stops people using multiple accounts. It also now means you have a tax number in Thailand - maybe a step towards taxing pensions for the few, if not the many under double taxation rules. I think unlikely, but not impossible. 

All laws can be changed.

[MeePeeMai]

Indonesia used to leave foreign income and foreign pensions alone (as Thailand does now) for persons living there more than 183 days in a calendar year.  They are now taxing ALL income and pension money earned globally for those staying there more than 183 days a year. 

 

How is this related?  It seems that Thailand is looking at it's neighboring ASEAN countries and how they structure their retirement and resident alien requirements and are considering all their options (possibly including taxing them accordingly).  I have recently noticed a lot of other similarities while comparing various requirements for living in some SE Asian countries (such as the TM30 for example) but that is for another thread.

 

The USA has a tax treaty with Indonesia but Indonesia has very high tax rates for foreigners living and retiring there.  Here is a short summary or example of how their tax system works.

 

If staying there more than 1/2 of any calendar year and for all those who have a visa to live there, foreigners must now get a NPWP (nomor pokok wajib pajak) which is a TAX ID number (similar to a SS# or ITIN# in the USA) and this requires that you file (and pay) any and all taxes each year (until cancelled).  In order to register a vehicle (car/bike/truck) in your name now in Indonesia you must have a NPWP and it is also required to get an Indonesian driver's license (in most areas) now too.

 

EXAMPLE:  If I earned $36,000 USD last year (36,000 USD x 14,000 IDR per $ = 504,000,000 Indonesian Rupiah per year).  I would be in a 30% tax bracket if I lived in Indonesia (see chart below).  If I paid 20% tax on that money in the USA then I would have to pay the difference (10% or about 5,000,000 rupiah) to the Indonesian tax authorities.  If I paid no tax in the USA then I would be obligated to pay the entire 30% in Indonesia.  This would be in accordance with the tax treaty as no double taxation would occur in this example.  There are some small exemptions in Indonesia for you, your unemployed spouse and for your kids (but it does not add up to much).

 

How would they know how much I earned and could I cheat the system?  They require you (by law) to submit any and all complete and correct Federal and State tax forms which you filed for that year in your home country.  You didn't have to file?  You will be taxed at the appropriate rate then.  Wish to file fraudulent tax forms with them?  Risk lengthy prison terms as the IRS will share and compare data with them upon request and it has been and is being done (tax treaty).

 

Corruption is rampant in Indonesia (as it is here) and I have heard that if you get a "good" accountant or have a friend in the Tax Dept. you can lower or eliminate you tax obligations by sliding them a nice little brown envelope whenever required.  I would steer clear of this though as it can come back to bite you big time (as we all know).

 

I am in no way advocating for them to start taxing us here but it is a real possibility that it will happen at some point in the future.  I do not discount rumours of them moving the goalposts (such as the possibility of mandatory med. ins. for O-A initially and then implementing it later on for us on various extensions) as total rubbish.  I'd rather be prepared and think of it as a possibility (realistically) so as not to be totally crushed when and if it happens.

 

Simple tax table for 2018 (Indonesia only):

[ukrules]

If they start taxing me I'm out of here on the next flight.