Is Retirement Income subject to Income Tax

[James Roderick]

s most  retirees will  know, the Thai immigration authority  requires a person to have a monthly income of 65 ,000 Baht ( or a lump sum amount ) to qualify  for a retirement visa. If a person declares they have such an income in either  pension , interest or other  income producing means ( and that retirement income is earned and brought into the country in the same  year  ) would those earnings  be subject to income tax  in Thailand, under current tax law ??

[Jingthing]

NO.

It is an important question though.

I've been looking at other nations as retirement destinations and many of them DO tax on worldwide income and some of them even tax on global assets!

Another big advantage for Thailand. 

Edited July 9, 2018 by Jingthing

[KhaoYai]

I'm not 100% but I think the true answer is, not if its either been taxed or is not taxable in the source country.

[Jingthing]

4 minutes ago, KhaoYai said:

I'm not 100% but I think the true answer is, not if its either been taxed or is not taxable in the source country.

That's irrelevant.

I've read this forum for over a decade and not one report of even one expat being taxed on the FOREIGN SOURCED retirement income.

Typically, retired expats don't ever even file a Thai thai form in the first place! Retired expats are not allowed to work here and maintain their legal retirement status here. 

So even if there were some truth to what you're saying that there are cases where it would be subject to tax, the Thai authorities are NOT pursuing that. Just don't file in Thailand. 

End of. 

Why complicate an issue that is simple? 

I have no problem with complicating issues where there is a rationality complicating them.

The OP asked if he needs to be worried about Thai taxation on his foreign imported money used to qualify for retirement extensions here.

He does not even need to file here, much less worry about tax on it!

Edited July 9, 2018 by Jingthing

[KhaoYai]

I did say true answer - that may not be what actually happens. I don't think Thailand is much different to the UK where if your income, pension or otherwise, is over the tax threshold, its taxable.  As Thailand and the UK have a dual taxation agreement, if its been taxed in the UK, its not taxable again in Thailand.

Edited July 9, 2018 by KhaoYai

[allane]

Most countries likely to have foreign retirees coming here seem to have a tax treaty with Thailand. These normally provide that income is not taxed in both countries.

[Jingthing]

1 minute ago, KhaoYai said:

I did say true answer - that may not be what actually happens.

Fair enough.

I'm saying there are things to worry about here, but not that.

 

[Jingthing]

1 minute ago, allane said:

Most countries likely to have foreign retirees coming here seem to have a tax treaty with Thailand. These normally provide that income is not taxed in both countries.

Thailand doesn't go after these monies regardless. 

[dotpoom]

Don't mind me.....butI can't help thinking that some people Need to have something to worry about.

[arithai12]

A subject discussed in many threads already, but anyway:

 

-if your pension is taxed at the origin, normally you won't need to pay taxes again in Thailand (check tax treaty between your country and Thailand)

 

-if your pension is not taxed at the origin, but rather you have declared that you are subject to Thai taxation, then:

a) if you transfer the money in the same year in which you earn it, then you are subject to pay tax in Thailand

b) otherwise, tax free in Thailand

 

Some countries of origin will require not just your word for it, but some proof such as e.g. a Thai Tax number, whether you use it or not.

 

Now, in case a) above, it is your choice and initiative to go and declare your pension income and pay tax on it. Thai authorities normally would not inquire of their own. Note that income tax in Thailand is minimal compared to, e.g., european countries.

 

 

[NanLaew]

16 hours ago, Jingthing said:

... Typically, retired expats don't ever even file a Thai thai form in the first place! Retired expats are not allowed to work here and maintain their legal retirement status here. 

So even if there were some truth to what you're saying that there are cases where it would be subject to tax, the Thai authorities are NOT pursuing that. Just don't file in Thailand. 

End of. 

Why complicate an issue that is simple? 

...

That's correct. However,  a growing number of non-working and retired expats have been forced to get a Thai tax ID because the banks in their home domicile and elsewhere outside Thailand are legally bound to comply with FATCA.

 

I know that getting a Thai tax ID isn't too difficult and also know it doesn't mean that you are obligated to pay or even file a Thai tax return. It is a rather unwelcome intrusion into one's personal affairs if one just wants a quiet life. Maybe there are a few 'retirees' involved in nefarious or illegal businesses here and in their homelands who have a serious desire to stay below the radar but they generally have enough of a wedge to fend off the seriously tax inquisitive. The average retired taxi driver from Gosport with a relatively small pot to p!ss in has to jump through ALL the hoops or risk being unable to keep his savings and pension in his foreign bank when they close the account.

 

22 minutes ago, arithai12 said:

...

-if your pension is taxed at the origin, normally you won't need to pay taxes again in Thailand (check tax treaty between your country and Thailand)

 

-if your pension is not taxed at the origin, but rather you have declared that you are subject to Thai taxation, then:

a) if you transfer the money in the same year in which you earn it, then you are subject to pay tax in Thailand

b) otherwise, tax free in Thailand

 

Some countries of origin will require not just your word for it, but some proof such as e.g. a Thai Tax number, whether you use it or not.

...

Succinct, factual and correct.

[OJAS]

48 minutes ago, arithai12 said:

-if your pension is taxed at the origin, normally you won't need to pay taxes again in Thailand (check tax treaty between your country and Thailand)

Details of the double taxation agreements which Thailand has entered into with various countries are on the RD website:-

 

http://www.rd.go.th/publish/766.0.html

Edited July 10, 2018 by OJAS

[crazykopite]

I pay U.K. tax on my pensions Thailand does as far as I know have some sort of agreement with the U.K. in 12 years I have never been asked or had a tax demand from the Thai government and when I show my yearly pension letter that I get from the Embassy it is gross income and not net income

[topt]

17 hours ago, Jingthing said:

NO.

Strictly according to the letter of the law I think you are wrong.

However I do not disagree with what you said below - 

17 hours ago, Jingthing said:

That's irrelevant.

I've read this forum for over a decade and not one report of even one expat being taxed on the FOREIGN SOURCED retirement income.

Typically, retired expats don't ever even file a Thai thai form in the first place! Retired expats are not allowed to work here and maintain their legal retirement status here. 

So even if there were some truth to what you're saying that there are cases where it would be subject to tax, the Thai authorities are NOT pursuing that. Just don't file in Thailand. 

End of. 

Why complicate an issue that is simple? 

I have no problem with complicating issues where there is a rationality complicating them.

The OP asked if he needs to be worried about Thai taxation on his foreign imported money used to qualify for retirement extensions here.

He does not even need to file here, much less worry about tax on it!

I think @arithai12 in post #10 pretty much nailed it. 

 

There was a long discussion here if anybody is interested - and for UK citizens the only pensions falling under the DTA are civil service pensions - not the state pension.

 

[Derek B]

5 hours ago, NanLaew said:

That's correct. However,  a growing number of non-working and retired expats have been forced to get a Thai tax ID because the banks in their home domicile and elsewhere outside Thailand are legally bound to comply with FATCA.

 

I know that getting a Thai tax ID isn't too difficult and also know it doesn't mean that you are obligated to pay or even file a Thai tax return. It is a rather unwelcome intrusion into one's personal affairs if one just wants a quiet life. Maybe there are a few 'retirees' involved in nefarious or illegal businesses here and in their homelands who have a serious desire to stay below the radar but they generally have enough of a wedge to fend off the seriously tax inquisitive. The average retired taxi driver from Gosport with a relatively small pot to p!ss in has to jump through ALL the hoops or risk being unable to keep his savings and pension in his foreign bank when they close the account.

 

Succinct, factual and correct.

My UK banks are always asking where I am Tax resident. I now think it best to declare that to be Thailand. What is the best way to get a Thai Tax ID number?

[khunPer]

On 7/9/2018 at 11:54 AM, James Roderick said:

...would those earnings  be subject to income tax  in Thailand, under current tax law ??

If you, and your retirement pension income, originates from a country having a "double tax agreement" with Thailand, and the income is taxed in that country, it's not taxable in Thailand; that's the situation for most staying on extension based on retirement.

 

Money earned abroad, is only taxable in Thailand, if brought into the country the same year as earned abroad, if taken into the nation the following year it's tax-free savings – this is the understanding of the Thai text – to my knowledge most alien folks with foreign income, other than retirement pension, live of savings...?

[rickudon]

Even with a double taxation agreement, it is theoretically possible to be taxed in Thailand on your retirement income if your tax liability in Thailand was higher than your home country. This could affect those expats who have offshored their pensions too avoid tax in their home country. But the practicalities of this are that if you remit the pension money payments yourself to Thailand, the Thai authorities have no way of knowing if you have paid tax on your pension money in another country, or if it is actually savings (12 month rule could apply). Unless foreign banks are going to provide full disclosure of all your transactions to the Thai authorities (highly unlikely), how could they possibly assess your tax liability? It would be pure guess work. And Thais do not like problems .....

 

The only income they could possibly assess would be pension payments paid direct from the foreign pension fund into a Thai bank account. Not done in practice, but possible .....

[musicscene]

10 hours ago, Derek B said:

My UK banks are always asking where I am Tax resident. I now think it best to declare that to be Thailand. What is the best way to get a Thai Tax ID number?

I am in the same situation. How can I get a Thai Tax ID number?

[bandito]

Thailand does not tax retirement income.

Be it Thai or foreign.  ?

 

[ubonjoe]

5 hours ago, musicscene said:

I am in the same situation. How can I get a Thai Tax ID number?

You a apply at the local tax office for where you living. Click on the region where you live to find the location here. http://www.rd.go.th/publish/38156.0.html

Required documents can be found here. http://www.rd.go.th/publish/21987.0.html

[James Roderick]

3 hours ago, bandito said:

Thailand does not tax retirement income.

Be it Thai or foreign.  ?

 

HI Bandito

 

That's  great news - how can I confirm that is the case ??  

[OJAS]

22 hours ago, topt said:

- and for UK citizens the only pensions falling under the DTA are civil service pensions -

Article 19, I think, also covers military & local government pensions:-

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/507424/uk-thailand-dtc180281_-_in_force.pdf

[mikebell]

My UK state pension is first frozen (ten years now and counting) then taxed.  I resent this unfair treatment.  Two Norwegian friends tell me they have elected to pay tax on their income (I think from pensions) in Thailand as there is a considerable saving.  Is there a way of circumventing the British tax system?

[OJAS]

25 minutes ago, mikebell said:

My UK state pension is first frozen (ten years now and counting) then taxed.  I resent this unfair treatment.  Two Norwegian friends tell me they have elected to pay tax on their income (I think from pensions) in Thailand as there is a considerable saving.  Is there a way of circumventing the British tax system?

If your income is derived in the UK, then there is no way of circumventing the British system completely, unfortunately.?

 

As alluded to above, Article 19 of the UK/Thailand double taxation agreement means that it is only possible to pay tax on public sector (civil service, military, local government) occupational pensions to HMRC.

 

Likewise, as a result of Article 7, rental income on any property which you might own in the UK is only taxable there.

 

In the case of private sector occupational pensions and the State Pension, it is, in theory, possible to be taxed in Thailand. However, the jolly old taxman in HMRC would, I gather, still be entitled to go after you tax-wise for the difference between the UK (20%) and Thailand (7%??) standard rates.

 

Edited July 11, 2018 by OJAS

[topt]

7 hours ago, OJAS said:

Article 19, I think, also covers military & local government pensions:-

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/507424/uk-thailand-dtc180281_-_in_force.pdf

Thanks I was being lazy 

[topt]

11 hours ago, bandito said:

Thailand does not tax retirement income.

Be it Thai or foreign.  ?

 

Can you show us the link to that specific reference in the Thai Revenue regs?  Or is this your conclusion because they do not currently do it....... 

If they did not then there would be no need of any mention in the UK DTA?

Edited July 11, 2018 by topt
typo

[OJAS]

15 hours ago, bandito said:

Thailand does not tax retirement income.

Be it Thai or foreign.  ?

 

That may well be the case in practice at the present time. But it would IMHO be unwise to rule out altogether the possibility of this happening at some point in the future, particularly after local tax identification numbers - which, as has been reported extensively on here recently, a number of banks back in our home countries are currently pressing us to obtain - start finding their way to the RD. But, of course, we would then only be liable to being taxed in Thailand within the constraints of the relevant double taxation agreement between Thailand and our home countries.

Edited July 11, 2018 by OJAS

[earlinclaifornia]

Thanks for asking and thanks for the responders.

[mikebell]

On 7/11/2018 at 9:35 AM, OJAS said:

If your income is derived in the UK, then there is no way of circumventing the British system completely, unfortunately.?

 

As alluded to above, Article 19 of the UK/Thailand double taxation agreement means that it is only possible to pay tax on public sector (civil service, military, local government) occupational pensions to HMRC.

 

Likewise, as a result of Article 7, rental income on any property which you might own in the UK is only taxable there.

 

In the case of private sector occupational pensions and the State Pension, it is, in theory, possible to be taxed in Thailand. However, the jolly old taxman in HMRC would, I gather, still be entitled to go after you tax-wise for the difference between the UK (20%) and Thailand (7%??) standard rates.

 

Unwelcome but thorough answer; thank you.

[bandito]

On ‎7‎/‎11‎/‎2018 at 5:06 PM, topt said:

Can you show us the link to that specific reference in the Thai Revenue regs?  Or is this your conclusion because they do not currently do it....... 

If they did not then there would be no need of any mention in the UK DTA?

 

It's in the Thai tax law.

You have to Google to find it.

I have a Thai accountant aqaintance who went to the Thai tax office for me, years ago, as my government told me I had to pay tax over my pension in Thailand.

I got some forms to fill out to be signed by the Thai tax office.

They had a good laugh about it and told her that I was considered a tourist AND retired and was not eligible for paying tax to Thailand.

That was the end of it and these forms ended up in the trash.

These double tax exemptions are for people working here and not for retirees.

Living 40+ years here and never had to pay tax here.

Edited July 19, 2018 by bandito
clarification