mudcat

Interesting discussion of the treatment of private pensions including ROTH distributions in the Technical 2006 Model (note that the sections are different from the 1996 Thai-U.S. conventions which has this as Article 20. https://home.treasury.gov/system/files/131/Treaty-US-Model-TE-2006.pdf ARTICLE 17 (PENSIONS, SOCIAL SECURITY, ANNUITIES, ALIMONY, AND CHILD SUPPORT) This Article deals with the taxation of private (i.e., non-government service) pensions and annuities, social security benefits, alimony and child support payments. Paragraph 1 Paragraph 1 provides that distributions from pensions and other similar remuneration beneficially owned by a resident of a Contracting State in consideration of past employment are taxable only in the State of residence of the beneficiary. The term "pensions and other similar remuneration" includes both periodic and single sum payments. The phrase pensions and other similar remuneration is intended to encompass payments made by qualified private retirement plans. In the United States, the plans encompassed by Paragraph 1 include: qualified plans under section 401(a), individual retirement plans (including individual retirement plans that are part of a simplified employee pension plan that satisfies section 408(k), individual retirement accounts and section 408(p) accounts), section 403(a) qualified annuity plans, and section 403(b) plans. Distributions from section 457 plans may also fall under Paragraph 1 if they are not paid with respect to government services covered by Article 19. In the other Contracting State, the term pension applies to: [ ]. The competent authorities may agree that distributions from other plans that generally meet similar criteria to those applicable to the listed plans also qualify for the benefits of Paragraph 1. Pensions in respect of government services covered by Article 19 are not covered by this paragraph. They are covered either by paragraph 2 of this Article, if they are in the form of social security benefits, or by paragraph 2 of Article 19 (Government Service). Thus, Article 19 generally covers section 457, 401(a), 403(b) plans established for government employees, and the Thrift Savings Plan (section 7701(j)). However, the State of residence, under subparagraph (b), must exempt from tax any amount of such pensions or other similar remuneration that would be exempt from tax in the Contracting State in which the pension fund is established if the recipient were a resident of that State. Thus, for example, a distribution from a U.S. "Roth IRA" to a resident of the other Contracting State would be exempt from tax in the other Contracting State to the same extent the distribution would be exempt from tax in the United States if it were distributed to a U.S. resident. The same is true with respect to distributions from a traditional IRA to the extent that the distribution represents a return of non-deductible contributions. Similarly, if the distribution were not subject to tax when it was “rolled over” into another U.S. IRA (but not, for example, to a pension fund in the other Contracting State), then the distribution would be exempt from tax in the other Contracting State.

I was speaking proactively as to filing with my wife next year - my name will be on the return

Well, that is what the BoI maintains, but the language in Section 5 is not as clear as I would want to rely on exclusively.

Someone who has a strong position, but whose wife is easily bullied by Thai officialdom.

I am going to file jointly with my wife - which should show I believe I am in compliance and that return has been accepted .I am on a long term resident visa - my obligation to Immigration is limited to annual reporting (if I do not leave the Kingdom) and a re-qualification at five-years.

Not necessary - wanted to have my wife start with a better understanding of filing when the banks start to withhold interest. Also wanted to confirm that the largish ($60K) transfer were correctly documented and I was applying the Thai-U.S. DTA and my LTR exemptions correctly.

All my U.S. income is exempt from taxes as both my Social Security benefit and local government district pension are taxable only in the source country (in the U.S. Section 20.2 and Section 21.2a) both of which are excluded from Article 1's savings clause under 1.3a and 1.3b. I have been retired for more than 10-years and we live comfortably on my non-assessible U.S. income. My direct deposited Social Security benefit, which as it's source is taxable only in the U.S. is not taxable in Thailand when remitted and its exemption flows from the source and is not determined by its remittance mode or destination, in our case our living expenses here. My local government pension is likewise taxable only in the U.S. and its exemption flows from its source and is not determined by its remittance mode or destination when I make ATM withdrawals, credit card purchases here or there, or any other use or mode. We move all of our pre-2024 cash savings here last year and confirmed that these two transfer were not assessible - we did keep meticulous records of the source and paths to our respective Thai bank accounts (one in Baht, one in Dollars.) We have simplified our U.S. investment accounts into two accounts that I have no need to touch until either I leave or die (when they are non-assessable either under the Inheritance Tax Act or the Revenue Code. One of the reasons we went to the TRD provincial office was to have my wife understand the steps she will need to take to reclaim any withheld interest in subsequent years (none was withheld in 2024, so no need to file this year). I believe that the TRD has left their staff with a misleading document that appears to instruct their agents to use the Credit method to determine taxes due (see p.6 of the power point). The correct instruction for U.S. persons (and probably others) is to describe both the exemption and credit methods as shown below. Possibly the font size was too small, or there were too many words on a single page.

The training and ability of front-line Thai Revenue Department employees is abysmal. The initial person we interacted with took the leap between determination of whether our income is assessible and beginning to fish for our U.S. income and pulling out her calculator. I blame the above power point presentation that simplifies an enormously complex area of tax law together with the apparent inability to read either the Thai or English version of the applicable treaty. After an unpleasant back and forth with her including providing our English/Thai extracts of the Thai-U.S. tax convention she continued to maintain that somehow we owed taxes on our income and remittances. We demanded to see her supervisor whom we had interacted with before when we were considering moving pre-2024 savings who, after consulting with one of their staff attorneys recognized that my U.S. Social Security and local U.S. government pension were in fact as described in Sections 20 and 21 of the aforementioned treaty and not subject to Thai taxes, and were further more carved out for the standard savings clause in Section 1 paragraph 3a and 3b. I attach the relevant sections from the Thai-U.S. treaty. Once we were all on the same pages, smiles all around except for her minion who kept her head down as we left.

I have my SSA benefit direct deposited into my Bangkok Bank account (plain vanilla with a debit card and iBanking). This deposit is transferred from SSA's correspondent bank in Thailand to your account in Thai Baht using the local banking service BahtNet. If you plan on using your benefit to qualify for a retirement extension there may be steps you need to take to have your local immigration office accept it as a foreign transfer. As far as convenience goes it it good to know the deposit will show up on the third of every month. The form is SSA-1199-OP-107. Fill out the top section and go to your branch with your bank book and passport. and have it signed and stamped. I emailed mine but the may require mailed hard copy.

I was referring to the year of my death when our executors will be around to help but the corpus of my estate will pay for a professional to file her f1040 as my widow, and certainly if she needs to file f8938. The other variable is at what portion of my Social Security gets taxed - currently at 85% - if I should die earlier in the year it would be either exempt or at 50%, so I imagine there will be over-withholding if I make it past one more Songkran.

Sorry, did not realize your wife was not a citizen. For us the SSA survivor benefit should be around $2,000 per month so not too worried about her bank interest.

We have chosen to go the other way as once my wife inherits into a U.S. account she will be subject to taxes on her remittances - but if she inherits directly to Thailand remittances are not subject to inheritance or income taxes. I have instructed our executors to note on the wires. Tax Exempt under Inheritance Tax Act Section 3.2 and Thai Revenue Code Section 42.10. Section 3 This Act shall not apply to: (1) an inheritance from a deceased person who dies prior to the date on which this Act comes into force; (2) an inheritance received from a deceased person by the spouse of the deceased person. Section 42 The assessable income of the following categories shall be exempt for the purpose of income tax calculation: (10) Income derived from an inheritance.11 11R.C.A.A. (No. 40) B.E. 2558

I am not sure about the penalty, but the IRS does have what they call a streamlined procedure which they describe the criteria and some of the steps here: https://www.irs.gov/individuals/international-taxpayers/us-taxpayers-residing-outside-the-united-states Went through the process - five years of missed FinCEN 114s for my wife and three years of amended 1040 for us. No penalties but it did cost a little bit of late payments and interest and a LOT of research through our financial records. In the end I was glad I no longer had it hanging over us going forward. The good faith 'non-willful' reason was that I (the tax filer in the family) did not realize that my wife's remarriage accounts needed to be reported. Some tax preparation firm offer to do the filing, but you are still on the hook for the research and coming up with a believable reason you failed to file.

I have no intention of ever being so foolish to bring hundreds of thousand dollars here to put into a Thai bank - but my wife will once I pass, so I have pre-filled out the forms including the GIIN # and addresses for her banks. Fortunately the form is not dated as to tax year so the forms can be pre-filled out. Simply by waiting to the next tax year she can dodge that bullet, but waiting 11-months may be beyond her. The form is kind of confusing each page 1 requires a total amount of assets and interest, but it does not appear allow you to append the account specific information on page 2 to be rolled into a single - I recommend that she go with a tax professional at least for the first year.

This is an issue for myself whose income is is entirely non-assessible (U.S. Social Security, U.S. government agency pension, and LTR). This means that my minuscule Thai bank account interest withholding is the only thing that any of my deductions can offset. Even though I will file jointly with my wife, I don't think that this will benefit her or us, but it will demonstrate that I at least tried.