oldcpu

AseanNow user "Guavaman" recently (possibly on 29-January-2025) called the Thai Revenue Department on their help line, and asked the RD a number of questions about taxation that has been puzzling foreign expats in Thailand , and been the topic of debate on this forum.  One of the questions he asked was this:
----

Quote

 

 Q1: If I remit U.S. Social Security benefit income, is it exempt from taxation?

A1: Remittance of U.S. Social Security benefit income is exempt from taxation.

 

----
ok, that is US income, not Canadian, and this thread is for Canadian income relevant to the Canada-Thai DTA.

In reply to their post, I did note that their discussion with the Thai RD help line was possibly relevant in areas where they did not specifically discuss such.  

What am I thinking of?  Well when discussing USA Social Security the Thai RD noted USA Social Security was not taxable in Thailand and a Thai Tax form not to be submitted it for that.   I believe that the Thai-USA DTA notes such is exclusively (or only taxed) in the USA which per Royal Decree-18 means such income is exempt Thailand tax.

I note other DTAs have somewhat similar wording. And if other incomes in Thai DTAs are also exclusively (or only taxed) in the source country, and not Thailand, and also exempt Thailand tax (pre Royal Decree-18) than I think one could extrapolate that  a  Thai tax form is not to be submitted for those.

Canadian pensions (and similar remunerations) are to be exclusively taxed in Canada.  So if such Canadian pensions is one's only income remitted to Thailand (and one has no local income), one could extrapolate from that a conclusion that an expatriate in Thailand in receipt of a Canadian pensions (or similar remuneration from Canada) as their only income, need not file a Thailand tax return.

Here is the post I am referencing:

Again I am no tax expert, nor a tax advisor. Everyone should research such themselves, but I find this encouraging given the wording of the Canada-Thailand DTA.

21 hours ago, oldcpu said:

 

I am puzzling over the German-Thai DTA in regards to pensions. 

 

I have assumed my small German pension is nominally assessable income, based on an official letter from the German Tax office.  After looking at the German-Thai DTA, I am wondering, was i wrong in my assumption?

 

.....

 

if I made a mistake, if any are familiar with the Thai-German DTA, please point out my mistake?

 

Note - this is far too small (and too mute an observation at this time) to bother contacting any tax advisors.

I stumbled across a Youtube video (in German language) here.  Now this is an English language forum ... and also my German language skills are not adequate to understand the spoken German (I used subtitles and Google translate to observe the video):'

https://www.youtube.com/watch?v=3B0sZ4xq8UA

However according to that video (best i can understand), German pensions are taxed in Thailand (in general) for residents of Thailand in receipt of such Germany sourced pensions.

It is mostly a mute point for me (as my German pension amount is below the Thai taxation threshold), and i don't remit that pension to Thailand , and I have an LTR visa.  But it will dictate my financial planning for the future, in case in year 2033 (if i am still alive) I decide not to stay with an LTR visa.

1 hour ago, Pib said:

@oldcpu

    While I was of the same mindset as your observation until  a few weeks ago, I'm now of the mindset just as stated by Expat Tax that it only applies to remitted funds from the previous tax year with the previous tax year meaning 2023 or before since the tax year we are all talking about "right now" is tax year 2024. 

 

 

It would be good at some point in time to get a Thai RD ruling on this specific example.

This doesn't affect me as I have most my funds outside of Thailand (much more than a year's pension income outside of Thailand) so its easy for me to make the case (and prove such remitted income to Thailand) is income  from a prior year (more precisely from savings going back over a decade or more).  And in part por.161/162 makes this a bit of a mute point for myself as well.

Still - clarity would be nice.  Not everyone is as fortunate as myself.

I was scrolling through one of the (many) Thailand tax threads, and it pointed to a link on Expat Tax Thailand web page which lead me to a very good Expat Thailand FAQ (question and answer page).  The page was very good, but unfortunately I believe their interpretations on some LTR visa aspects are out of date given more recent clarifications. 

I posted my observations on that AseanNow tax page.

Note i am no tax expert. This is not tax advice. i recommend if the above affects one's financial strategy/actions, that one should take the time to confirm themselves, possibly by phoning the Thai tax help line (try to get a knowledgeable Thai speaker to translate for one).

Deleted.. duplicate 

18 minutes ago, TheAppletons said:

 

  That said, the major disconnect (based solely upon what's written in your post) appears to be article 18-2, where it states "... pensions and other payments for past employment as well as annuities paid out of funds created by a Contracting State (Germany) ... shall be exempt from Tax in the other Contracting State (Thailand)."

 

  Earlier in the post you mentioned you have a small German "state pension"....is that an old age pension that is available to everyone, by chance?  If so, perhaps article 18-2 is to be taken literally in that pensions and other payments for past employment is germane.  In other words, if your state pension isn't directly connected to employment then article 18-2 doesn't apply.

My state pension is for working in Germany (as an employee of a company supporting a European intra-government organization (not German but European) ...  and yes, that pension is available to everyone IF they work and they (and their employer) contribute to the German pension system while working. 

A mute point:  In fact, i did not have enough time working for the company in Germany (as later I became a civil servant of the European intra-government organization and hence no longer in the German system - even thou living in Germany) ... however my previous time working in Canada and my time working for that European intra-government organization in Germany qualified me for a German pension, IF (and only if) I paid the German pension system a lump sum of money (in essence pay them a few months of pension contributions to bring me up to the qualification point for the German pension).  So I immediately did that, and immediately then started receiving a German pension. The pension is small, as it was/is calculated on my only contributing financially to the German pension system for 5-years.

18 minutes ago, TheAppletons said:

 

  If that's the case, then it appears the DTA and the letter you received would be in agreement.  If not, then pursue another avenue, I suppose.  Good luck.

The DTA stuff is interesting ... but the (legal) language it is written in can be confusing.

On 1/28/2025 at 4:07 PM, oldcpu said:

As for my incomes ... my large combined Canadian pension incomes can only be taxed in Canada.

 

....

That just leaves a small German pension (which IS assessable and hence taxable in Thailand) that falls under the submission threshold of money needed to file a Thai tax return. ie its too small.

 

I am puzzling over the German-Thai DTA in regards to pensions. 

I have assumed my small German pension is nominally assessable income, based on an official letter from the German Tax office.  After looking at the German-Thai DTA, I am wondering, was i wrong in my assumption?

Details:

Over 4 years ago, I received a letter from the German Tax Office, that as a resident of Thailand, the DTA between Thailand and Germany applies, and that the right to tax my German pension (which is a state pension (ie not a civil-service nor a military) is assigned exclusively to the United Kingdom of Thailand. That was 100% clear.

From that I assumed (where assuming can be 'dangerous') that the German pension was assessable income for Thailand and taxable.  (I note at present my German pension is too small to meet the Thai taxation threshold, but that is not the point of this post).

So out of curiousity as to how the German Tax Office concluded (what they advised me in that letter), I decided to dig through the Germany-Thailand DTA to find that reference. 

Upon re-reading the German-Thai DTA I note:

Quote

Article-17:  Remuneration paid by, or out of funds created by a Contracting state (Germany) ... to any individual in respect of employment, shall be exempt from tax in the other Contracting State (Thailand) ....

If those remunerations are pensions, then that does not seem consistent with the German Tax Office letter. But maybe the remunerations are not pensions in that article.

So I then went on to read article-18:

Quote

Article-18 (1) Pensions and other payments for past employment as well as annuities derived by a resident of a Contracting State (Thailand) may be taxed in the other contracting State (Germany) only if such payments are deducted as expenses .....

That 18(1) does appear consistent with the German Tax office letter. ie Pensions may (only) be taxable in Germany in circumstances that don't affect me.

I then continued reading article-18 and read:
 

Quote

Article-18 (2) ... pensions and other payments for past employment as well as annuities paid out of funds created by a Contracting State (Germany) ... shall be exempt from Tax in the other Contracting State (Thailand).

Again - the DTA states not taxable in Thailand. That does not appear consistent with the German taxation office letter.  What am I reading wrong here?

Can it be such pensions are not taxable in either country?  That would be (an almost unbelievable) first. Typically at least one country does the taxation.  Escaping the taxman is not supposed to happen.  Is it?

Ok - Yes, a present time, for me its a bit of a mute point, as I am on an LTR -WP visa and my German pension is very small, but in 8 more years my LTR visa expires, ... I may have more assessable income then, and if financial restructuring by me is potentially desireable to reduce my tax exposure, I like to plan ahead.

Am I misreading this Thai-German DTA?

if I made a mistake, if any are familiar with the Thai-German DTA, please point out my mistake?

Note - this is far too small (and too mute an observation at this time) to bother contacting any tax advisors.

1 hour ago, Guavaman said:

Department of the Treasury Technical Explanation of the Convention between the United States and Thailand which was signed on November 26, 1996.

 https://www.irs.gov/pub/irs-trty/thaitech.pdf

 Article 20 (Pensions and Social Security Payments)

Article 20 deals with the taxation of private (i.e., non-government) pensions, annuities, social security, and similar benefits.

 Paragraph 1

Paragraph 1 provides that private pensions and other similar remuneration paid in consideration of past employment are generally taxable only in the residence State of the recipient.

The phrase “pensions and other similar remuneration” is intended to encompass payments made by private retirement plans and arrangements in consideration of past employment.  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), non-discriminatory section 457 plans, section 403(a) qualified annuity plans, and section 403(b) plans.

https://www.irs.gov/retirement-plans/plan-sponsor/types-of-retirement-plans

Types of Retirement Plans

Individual Retirement Arrangements (IRAs)
Roth IRAs
401(k) Plans
SIMPLE 401(k) Plans
403(b) Plans
SIMPLE IRA Plans (Savings Incentive Match Plans for Employees)
SEP Plans (Simplified Employee Pension)
SARSEP Plans (Salary Reduction Simplified Employee Pension)
Payroll Deduction IRAs
Profit-Sharing Plans
Defined Benefit Plans
Money Purchase Plans
Employee Stock Ownership Plans (ESOPs)
Governmental Plans
457 Plans
Multiple Employer Plans

I'm no tax expert, but there doesn't appear to me to be much wriggle room there.

13 minutes ago, NoDisplayName said:

Are the officials and employees always right?

 

Last July needed a bank withholding letter for 2023 tax return.  Local branch (lady at the service desk) gave me one statement, told me the bank only provides the statement for fixed accounts.

 

Went in today to get the withholding letter for 2024.  This time was directed to the regular customer line.  Clerk took my five passbooks, made out five withholding statements without question.

 

 

 There is only one answer for that (which you know):

"This is Thailand".

lol.

9 minutes ago, Jingthing said:

TRD doesn't care about the U.S. tax rules.

Both Roth and Traditional withdrawals are classed as accessable PENSION income if remitted.

 

Have you checked the DTA wording? 

The Canadian-Thai DTA, when talking about pensions, says "pensions and other similar remunerations".  Those words "other similar remunerations" is a pretty big encompassing category.  Does the USA-Thai  have that sort of wording as a big net for catching various pension type incomes?

45 minutes ago, JimGant said:

Guavaman had an exchange with TRD, with the same question:

 

Expatthai tax vs TRD ('tho it wasn't at the highest level of TRD).

Guavaman did note a number of times the RD official on the Tax help line (?) could not answer his question, so they went off line for a while to consult with someone else.

With respect to Expatthai tax ...  I will place more faith in the answer of an RD official who takes the time to check than I do with Expatthai tax.

23 minutes ago, Guavaman said:

She entered the exact amount of your tax liability on item 12 into item 13, even though her calculation of your "withholding tax" exceeded the tax liability by almost tenfold. So she merely hacked the system by entering only the exact amount needed to cancel-out your apparent tax liability. Problem solved for her and for you, even though it might be difficult to explain to AN English-speaking expats, AN users, and such perfectionists

You are right - that would drive me nuts ...  if not withhold tax - it shouldn't be in 'withholding tax' area.  lol !!

I confess thou - I have not read the guide - maybe the guide states to do that.

How would that stand up to a future audit?   If it were me, and the amount substantial (which it is not in the noted case) I would probably lose sleep over it.

This is going to be an interesting year in Thailand to observe (and to a limited extent participate in) as all these tax topics play out.

1 minute ago, The Cyclist said:

 

I have just booked my Interuptor for a lunch date tomorrow, followed by a visit to my local TD Office to ask the question ( Again )

 

* The last time I asked, I was told yes, and given a pencilled in PND 91, to use as a template.

 

Lets see what I am given tomorrow.

Good luck.

I hope this goes well for you.

2 hours ago, Guavaman said:

I just spent an hour in a dialogue with a representative of the TRD on their hotline 1161 in Thai language.  Several times the TRD representative clarified my question and said: "Please hold while I check the information for your answer."  I have summarized our dialogue below.

 

Q1: If I remit U.S. Social Security benefit income, is it exempt from taxation?

A1: Remittance of U.S. Social Security benefit income is exempt from taxation.

 

Q2: Do I need to declare remittances of U.S. Social Security benefit income and file a tax return?

A2: There is no need to declare U.S. Social Security benefit income and no need to file a tax return for that income.

 

 

I thought your post about your discussion with the Thai RD help line relevant possibly in areas where you did not specifically discuss such. 

When discussing USA Social Security the Thai RD noted it was not taxable in Thailand and a Thai Tax form not to be submitted it for that.

I believe that the Thai-USA DTA notes such is exclusively (or only taxed) in the USA which per Royal Decree-18 means such income is exempt Thailand tax.

If other incomes in Thai DTAs are also exclusively (or only taxed) in the source country, and not Thailand, and also exempt Thailand tax (pre Royal Decree-18) than I think one could extrapolate that  a  Thai tax form is not to be submitted for those.

Typically (but not always) this applies to foreign civil servant/military pensions, and to all Canadian pensions (and remunerations), where if one extrapolates, those being tax exempt (per their DTAs and Royal Decree-18) are not to have a Thai tax form submitted to them.

Further Royal Decree-743 notes LTR-WP, LTR-WGC, and LTR-WFTP visa holders remitted income to Thailand is tax exempt. And again, here re: the LTR visa, the RD help line official stated no Thai tax return required for those exempt remitted incomes to Thailand.

If a Thailand tax return form needs not to be submitted for those exempt incomes (such as US Social Security and LTR selected visa holders), I think it supports a view that such DTA/LTR exempt incomes are not to be considered assessable income for the tax calculation and not considered assessable for the purpose of determining if a Tax return is needed to be submitted.

i concede others do NOT share my view - and I appreciate them if politely sharing their different view - but still - I include this as another point in support of my view that exempt income per a DTA (and LTR in selected categories) should not be considered assessable income for purposes of filing a Thai income tax return.

Of course this is my speculation - and speculation is just that -the same as everyone elses's speculation.

There are many threads on taxation running in parallel on AseanNow.  On one of the threads, user Guavaman reported that they phoned the Thai Revenue Department help line and asked them a number of questions one being:

Quote

 

Q: If I have an LTR Wealthy Pensioner visa, do I need to file a tax return?

 

The answer was:

 

A: If you have an LTR Wealthy Pensioner visa, there is no need to file a tax return.

 

That's good news IMHO!

     EDIT:  I assume this applies to LTR-WP, LTR-WGC and LTR-WFTP visa holders.

It did thou send me off thinking of a hypothetical scenario.  

I obtained my LTR visa in 2023.  Lets say in 2033 I elected to switch to a Type-O non-immigrant visa (that is not my plan - I am just speculating).

Is money accrued in the past when on an a LTR visa, but left outside of Thailand (in savings) ,  considered by the RD as  income if one has switched to a Type-O visa?

I speculate worst case it might be, so i am going to do a book keeping such that I can prove my German pension (which is not protected by the Thai-German  DTA) was brought into Thailand when I was on the LTR-WP.  And show that any savings I have outside of Thailand is from my pension incomes that the Thai DTA exempts from Thai taxation ... ie Canadian pensions (or similar Canadian remunerations for example.  

That way I ensure I don't get stuck with paying tax on German pension accrued after 1-Jan-2024 (por-161/162 relevant date) when I bring such into Thailand , as I can show i already brought the money into Thailand.

This is all hypothetical, but it may impact my book keeping ,and maybe impact some bank transfers to Thailand.

27 minutes ago, ukrules said:

 

Interesting, but it would show up in an audit and they say that if you submit money made in a year when you are resident in a later year even if you were non resident then it's taxable - PWC put out a bulletin about this a month or two ago.

 

Yes - and I also suspect thou if one could show they had the money BEFORE -1-Jan-2024 then there is no issue (per por-161/12).

Further i suspect after -Jan-2024, if they can show how much their savings grew in years when they were not a Thai resident, and then add that (post 1-Jan-2024 non-resident savings accumulation) to their record of pre-1-Jan-2024 savings, there would be no issue.  I think it becoming more and more clear that having financial records handy, in case of an audit, could be essential.

...and Royal Decrees (DTA / LTR visa) possibly complicate the answer further with additional categories/exemptions.

13 minutes ago, Yumthai said:

 

https://www.rd.go.th/english/37749.html#section48

 

Section 48 (3)

 

(3) The taxpayer may elect to pay tax at the rate of 15.0 per cent of the following income under Section 40 (4) (a) and (g) instead of calculating the amount of tax as under (1) and (2): ...

 

My understanding is that you have the choice to select the 15% WHT on interest as a final tax thus not to be declared.

 

More information:

https://sherrings.com/interest-income-personal-tax-thailand.html

 

Thanks ... THAT was the tax code section I was looking for and could not find.  If i may quote just a bit more:

Quote

 

Section 48 (3)

 

(3) The taxpayer may elect to pay tax at the rate of 15.0 per cent of the following income under Section 40 (4) (a) and (g) instead of calculating the amount of tax as under (1) and (2):

(a) Interest on a bond, interest on a deposit with a bank in Thailand

 

I don't fully understand what is meant by " instead of calculating the amount of tax as under (1) and (2) " but it could mean not being assessable income as part of the determination for filing a tax return (in addition to not being included in a tax return). 

But honestly -  I don't know.  I suspect thou it may mean given the bank account interest was already taxed (withholding tax) at a max of 15% flat tax, it not need be considered in any future tax calculations. 

Of course this would be a Thailand approach.

No way Canada would go for such - as Canada wants to use every last cent of one's global income to assess one's taxation bracket.  ...

But Canada is Canada - and This IS Thailand.

15 minutes ago, anrcaccount said:

 

The idea that people 'relied' on the year after remittance rule is not real, because it never needed to be tested, therefore it was never relied on.

Speak for your experience.  I can only speak for mine.  I know many expats (a couple dozen in Thailand)  who noted that was what they did.  They deliberately waited 1 tax year before remitting.

15 minutes ago, anrcaccount said:

 

There's no sign or evidence that the internal directives of 161/2 have caused any change in enforcement and operation, i.e. they are not 'chasing after foreigners'. 

I agree.  Although we have seen RD officials and legal experts from the RD, participate in Tax Advisor youtube bloggs (where the RD officials were never fully asked the correct questions).

Is that a change?  Well - I don't recall seeing such videos before 161/162.

15 minutes ago, anrcaccount said:

 

IMO, the vast majority of foreigners will not file any Thai tax return this year, despite a large % of them being technically required to, and there'll be no consequences for those who didn't file.

I agree.

15 minutes ago, anrcaccount said:

 

Just like last year, and the 10 years before that, when a large % of them ( remitting same year income) were technically required to, didn't, and there were no consequences.

 

I don't have a prediction here.  We will just have to watch how this plays out.

I suspect those MOST concerned are those who remit large amounts of money to Thailand where such is NOT covered by a Royal Decree (DTAs/LTR) .  At least in my chats with fellow expats, that was my observation.

Most had not decided yet if they would file an income tax return.

16 minutes ago, Neeranam said:

The RD didn't know they existed a they never asked for a Thai TIN. They still don't know they exist. 

And I would be happy to see it stay that way.

But (... of course there is always a 'but' ) , ...  but I would be surprised if the Thai financial institutions (banks) are not sending most annual foreigner bank account summaries to the Thai RD ( where this is already now a OECD CRS requirement so likely Thai RD copied on such) . I suspect even before OECD/CRS the Thai banks were sending info to the Thai RD.  Was it looked at thou by the RD? Possibly not.

Anyway,  the RD  knows the foreigners exist - but will they follow up on such ?  Likely not follow up IMHO, unless something  catches their attention.  What could catch their attention?  Bank accounts with large amounts of money perhaps.  Also , large transfers of money to Thailand also need to be reported (I suspect) to the Thai RD.

So the RD needs to decide in the past, based on the money involved, if they follow up.  I speculate 99% of the time they never bothered.  But there is always that 1%.

Again , speculation is the operative word for both you and me.

21 minutes ago, Neeranam said:

Quote

Every foreign account in Thailand is subject to CRS reporting

 

I don't think so. 

I have not verified your research, but I do know that any government registered account in Thailand is NOT reported to CRS. (This typically corresponds to any Thai equivalent of a USA 401k or a Canadian RRSP/RRIF).   Can a foreigner have money in such Thai government registered accounts?  i have not checked such, but i suspect foreigners can for some of them.  But again, I have not checked such.

10 minutes ago, Guavaman said:

I just spent an hour in a dialogue with a representative of the TRD on their hotline 1161 in Thai language.  Several times the TRD representative clarified my question and said: "Please hold while I check the information for your answer."  I have summarized our dialogue below.

 

Thankyou!

i wish some of the video blogger Income tax advisor companies had been as direct in asking those questions. 

Such questions were not in the parts of their videos that they posted on youtube.

And the paranoid/skeptic part of me asks, why not?  Were the 'tax advisor companies' just trying to keep this obscure, so to drum up business for themselves?

But I need to say to myself over and over " do not be a skeptic ...do not be a skeptic ... do no be ... "

12 minutes ago, Neeranam said:

 

Now this is an issue that puzzles me. 

Did you wait a year before remitting your pension in previous years?

Yes

12 minutes ago, Neeranam said:

 

I've had countless retired foreigners asking me if they should get a tax ID and I ask them if they were only remitting monies earned in the previous year, none of them were.

Those foreigners remitting in the year of income earnings were subject to paying Thailand tax if their remitted income to Thailand was assessable over a certain threshold

However I speculate that the Thai RD knowing the loop hole (that was closed by por-161), and the RD not knowing everthing about those persons (especially since in pre-CRS days they had no access to the sum of foreigners bank accounts with other OECD countries) the RD may have decided it not worth their while to chase after such people.  Plus such foreigners who remitted their income to Thailand, may have been covered by Royal-Decree-18 and the relevant Double Tax Agreement (DTA) potentially making such income exempt for the purpose of an income tax calculation.  

Knowing all of that, was it worth the time of the RD to chase after foreigners?  However 161.162 closed the loophole.

To repeat - in short, before por-161/162,  the Thai RD may have thought it not worth their while. The Thai RD may reconsider such now.

12 minutes ago, Neeranam said:

 

How many people here were waiting a year before remitting their pensions due to the loophole? I suspect few, yet all of a sudden it is the main topic on internet forums! 

Pretty much every expat that I know (albeit they are not forum participants)  and i know more than a few, were relying on that loophole.

12 minutes ago, Neeranam said:

 

The ONLY thing that has changed is scrapping that waiting a year before remitting, so if you weren't doing it before, don't start doing it as obviously you don't understand what's the new order is all about. It's going after huge companies that were saving millions of baht in tax by using this loophole. 

Except now - one no longer has a legal leg to stand on, if the RD goes after one.