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

[Misab]

My country has a written agreement with Thai Authorities, that taxation of pension happens in the country there pay the pension.

[DPKANKAN]

13 hours ago, ThomasThBKK said:

 

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.

Not if tax has already been paid on it in the base country as there is a reciprical arrangement between that country and Thailand.

[Jip99]

9 minutes ago, DPKANKAN said:

Not if tax has already been paid on it in the base country as there is a reciprocal arrangement between that country and Thailand.

 

 

Wrong.

 

ThomasThBKK is spot on where UK income is concerned.

Edited July 17, 2019 by Jip99

[LivinLOS]

On 7/15/2019 at 12:42 PM, 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.

If the person is tax resident here >183 days, then any double tax agreement would enable the resident to claim tax back from the country they are not resident in. 

Now some pensions (state workers) will have different tax obligations to private pensions, the entire area is messy, but its entirely possible for Thailand to demand it and then let the taxpayer work hard to claim it back elsewhere. 

[LivinLOS]

On 7/15/2019 at 12:46 PM, asiaexpat said:

Immigration officials are poor sources of Revenue Department and Foreign Ministry information. Those concerned about their tax liabilities should investigate their home country/Thailand agreements on taxation. Most pensions are taxed by the home country.

Thats a very wide claim.. and ignores all private pensions.. Or ignores the fact that many pension systems are simply under the tax free allowances.. 

 

While many government pensions are taxed by a home country, once the person de-registers there (and possibly then gives up rights to pension inflation increases, healthcare, etc) then the pension is often paid tax free. 

When it comes to pensions, there are so many source countries, with mixtures of tax paid, tax deferred, and private pensions. Its almost impossible to hit a one size fits all answer. 

[LivinLOS]

On 7/15/2019 at 1:39 PM, Thaidream said:

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.

Pensions come in a wide variety.. From government worker pensions, state pensions, tax deferred pensions, and full private investment programs. Many of these are tax liable at the time of payment (when it is assumed in the west you are no longer earning, so very often under or at least lower in tax bands). It is not possible to answer every one of these use cases. 

If you are resident in Thailand at the time of payment, there is a potential tax liability if you bring the pension into Thailand in the year the pension is paid to you. Which is exactly what everyone who lines up to do the monthly pension retirement extension is doing. 

My primary business is owning a cross border labour supply company. What I do day in day out is manage dual taxation contributions. In a past business I owned I operated SIPP pensions funds on behalf of depositors into non fiat asset classes. 

[LivinLOS]

14 hours ago, Naam said:

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

And when people say pension, they mean many things. 

 

Tax deferred savings are a common 'pension' route in the western world.. Investment programs are classed as 'pensions'.. Then you have private and state pensions which have all kinds of variables. 

Its even possible to split these down into the very asset classes within which the pension is invested. I used to operate a bullion retail and storage company and that had a pension offering. If someone purchased bullion bars, these incurred a tax liability at redemption, if someone used the same money to purchase gold sovereigns, legal tender, there was no liability. See how complex this discussion can suddenly become ?? 

 

The word pension covers a huge range of financial assets and agreements. If your signing a piece of paper to the Thai government saying 1) I live here > 180 days a year and 2) I am bringing this 'pension income' into Thailand in the year I 'earn' it over 65k a month. That is a liability. 

Maybe they will not come for it, maybe they will continue to allow farangs to not pay taxes that the statute says they can claim, I just wouldnt bet on it myself. The risk is there. 

[LivinLOS]

7 hours ago, rickudon said:

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). 

Sorry but thats wildly factually incorrect. 

Secondly, even for those (state) pensions which are taxed at source, due to the expectation of a UK residency, you highly likely to be able to reclaim that tax after an annual tax return, based on the payment of Thai tax where you are now resident. 

Of course to do so you lose the inflation adjustments from the date you leave the UK and lose access to UK healthcare (I think for the first 2 years after you return). Its not a zero sum game. 

 

 

[LivinLOS]

On 7/15/2019 at 1:08 PM, owl sees all said:

Don't tell 'em. How would they know?

Because the farang happily marches into immigration with the 'proof' then signs off on that 'proof'.. 

 

What more do they need.. 65k per month income declared. 

[Naam]

4 minutes ago, LivinLOS said:

Maybe they will not come for it, maybe they will continue to allow farangs to not pay taxes that the statute says they can claim, I just wouldnt bet on it myself. The risk is there. 

the risk is there without any doubt. however, the big profiteers how the tax situation is handled are not Farangs but the Thai big shots. that should minimise the danger of a change.  

[Naam]

14 hours 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!!

little do you know

 

read and weep:

 

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

 

[LivinLOS]

On 7/15/2019 at 1:05 PM, Sheryl said:

Scare mongering

 

Thailand has tax treaties with most of the countries retirees are from which would preclude this

 

Immigration staff are not tax experts and have nothing to say about what income is and is nto taxed

Legally thats not correct. 

A double taxation agreement merely allows someone the ability to claim back taxes, in the country they are not resident, after the submission of tax returns in both countries and proof of paying double. It is not some get out clause that stops them asking for it. I have contractors working for me who have to pay 2 lots of taxes, until year end when one lot gets refunded. If someone is full time resident in Thailand it would be up to them to get it refunded from the state where they are not resident, however that often comes with penalties (or in the case of Americans hard to achieve due to worldwide taxation). 

Secondly, the issue of what makes a pension is very complex, some are taxed at source, some are taxed at payment but are under western tax thresholds but not under Thai ones. 

In the case of the UK, where I come from, pensions, even state pensions, are taxable. Government workers I understand are not. So for the vast majority of Brits, pension income brought into Thailand in the year it is paid is a taxable source of income for Thai residents due to the Thai government. Savings, brought in annually from prior years income, are not taxable. 

I am not saying the sky is falling and this is now happening, I am only saying it is entirely possible for this to happen, and those signing income declarations are signing onto thier own liability. 

[LivinLOS]

15 minutes ago, Naam said:

the risk is there without any doubt. however, the big profiteers how the tax situation is handled are not Farangs but the Thai big shots. that should minimise the danger of a change.  

Are they though.. Wealthy Thais can just stack the money into Hong Kong / Singapore / or any panama papers deposit system and hold it for a year.. No liability for them. 

Thai big shots are not living hand to mouth, desperate for the 65k a month paid to them the month they spend it. Its the bufferless retirees who can get hit, anyone with >800k to park is safe. 

[Jip99]

20 minutes ago, LivinLOS said:

Because the farang happily marches into immigration with the 'proof' then signs off on that 'proof'.. 

 

What more do they need.. 65k per month income declared. 

 

 

I agree with that entirely............................. however, it is worth adding the caveat regarding 'income earned in the current tax year'; pensions paid direct to Thai bank accounts cannot escape that definition - in my case, my income goes into a UK bank account from where I transfer via Transferwise to Thailand. Far less identifiable and gives me the opportunity to say that I am transferring previous years' income.

[LivinLOS]

7 minutes ago, Jip99 said:

 

 

I agree with that entirely............................. however, it is worth adding the caveat regarding 'income earned in the current tax year'; pensions paid direct to Thai bank accounts cannot escape that definition - in my case, my income goes into a UK bank account from where I transfer via Transferwise to Thailand. Far less identifiable and gives me the opportunity to say that I am transferring previous years' income.

However the fact remains that even with your claim, your still going the 'income declaration' route over the 'savings' route. 

Its funny, because years back I brought up the issues of pension taxation and back then 99% of replies howled this wasnt due, that it was crazy to even consider that risk.. Then again when the stat dec letters stopped I started a thread again with a slight shift in responses, many now pointing out the thai tax code explicitly includes pensions income... Now while theres still a lot of posters who are in denial, the percentage of replies who are finally starting to legally get it, is getting there.. 

 

'Double taxation' is not a magic bullet, it means you have to pay taxes somewhere. 
'Pensions' come in many formats however there are many (dare I say most) that are often tax liable.
If you are resident in Thailand over 180 days in a year you are tax resident.
If you bring money into Thailand in the year it is paid, and sign evidence of that, it is a potential source of Thai taxation liability. 

The above are facts. That doesnt mean everyones suddenly getting a tax bill.. But bookmark these threads for the day it comes. 

Edited July 17, 2019 by LivinLOS

[hansnl]

On 7/15/2019 at 6:42 PM, 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 Thai tax authorities tend to honour tax treaties.

It is mostly the tax grabbers in the home country that will try to meddle in affairs.

[Jip99]

2 minutes ago, LivinLOS said:

However the fact remains that even with your claim, your still going the 'income declaration' route over the 'savings' route. 

Its funny, because years back I brought up the issues of pension taxation and back then 99% of replies howled this wasnt due, that it was crazy to even consider that risk.. Then again when the stat dec letters stopped I started a thread again with a slight shift in responses, many now pointing out the thai tax code explicitly includes pensions income... Now while theres still a lot of posters who are in denial, the percentage of replies who are finally starting to legally get it, is getting there.. 

 

'Double taxation' is not a magic bullet, it means you have to pay taxes somewhere. 
'Pensions' come in many formats however there are many (dare I say most) that are often tax liable.
If you are resident in Thailand over 180 days in a year you are tax resident.
If you bring money into Thailand in the year it is paid, and sign evidence of that, it is a potential source of Thai taxation liability. 

The above are facts. That doesnt mean everyones suddenly getting a tax bill.. But bookmark these threads for the day it comes. 

 

 

Not quite true.

 

I am going the "transfer 65,000 Baht from overseas" route. That 65k transfer each month is only a fraction of my 'income' - which never comes to the attention of immigration et al.

 

You are right to highlight the potential risk IF the income is clearly identifiable as being generated in the current financial year.

[LivinLOS]

1 minute ago, Jip99 said:

Not quite true.

 

I am going the "transfer 65,000 Baht from overseas" route. That 65k transfer each month is only a fraction of my 'income' - which never comes to the attention of immigration et al

Is that what it says in Thai script ?? Is that what declarations are interpreted as.. 

I FULLY get your distinction, its a clear and accurate one.. But is it an enforceable one ?? 

Do you maintain an account which receives no co-mingled funds each year ?? Do you only draw down from that source account and never any other ?? Whole can of worms around that. Personally I will do the lump sum deposit for peace of mind. 

[Jip99]

1 hour ago, LivinLOS said:

Is that what it says in Thai script ?? Is that what declarations are interpreted as.. 

I FULLY get your distinction, its a clear and accurate one.. But is it an enforceable one ?? 

Do you maintain an account which receives no co-mingled funds each year ?? Do you only draw down from that source account and never any other ?? Whole can of worms around that. Personally I will do the lump sum deposit for peace of mind. 

 

 

Yes to your final question.

 

My next extension will switch from income to funds in the bank - more to do with potential issues identifying Transferwise deposits than re income tax risk.

[owl sees all]

2 hours ago, LivinLOS said:

Because the farang happily marches into immigration with the 'proof' then signs off on that 'proof'.. 

 

What more do they need.. 65k per month income declared. 

Absolutely!

 

I'm more concerned with money transferred to accounts from within Thailand*. When they demand to know where this money originates from, it might be time to consider one's future.

 

*TransferWise, Azimo, CurrencyFair.

Edited July 17, 2019 by owl sees all

[UKresonant]

1 hour ago, LivinLOS said:

Do you maintain an account which receives no co-mingled funds each year ?? Do you only draw down from that source account and never any other ?? Whole can of worms around that. Personally I will do the lump sum deposit for peace of mind.

It's quite difficult to achieve that amount sterile separation.

I've not been resident here yet, but the account that I have shown to the Thai Embassy to demonstrate UK income stream. Mainly consists of one pension that most likely be under treaty, one that is absolutely under treaty, and the remainder of the cash stream can be shown as previous year 2018 vintage (or earlier) non income savings draw down . No income is sent from that account, direct to Thailand, to avoid any doubt.

The pension that is a very dark shade of grey, in respect to DTT, rather than black and white, I've now started transferring to Thailand monthly, a year after it was paid, but the method of sending Monthly, for now means it must pass through a legacy cluttered account (payments) whilst being sent! (Legit proof of regular source at least)

Originally I was going to have two groups for alternating calendar years, making transfers on rate opportunity, but the design seems to have to changed with the wind, the goal posts have spinnakers tied to them, especially with the exchange rate factor.

Paranoid even before I begin or what!????

But to try to anticipate and cover all the combinations

UK stream >1500gbp  (last guidance before they stopped the non-O ME at London) indexed.

O-A 1500/month + 3000gbp (or about  110000 baht ) deposit, to make  800kTHB, (but insurance tag on will make it incompatible for me anyway)

Average of 40.1 kTHB monthly sent to the Thai Bank, (Marriage extension), but less than 9months p.a. in Thailand

Will I need to show 5000 GBP in a bank or Banks for a METV (would they accept half in a Thai Bank and Half in a UK bank????).

Or most likely repeated non-O SEs, with no financials.

Who knows the Lottery numbers, for 12 Months time????

Edited July 17, 2019 by UKresonant

[Sheryl]

3 hours ago, LivinLOS said:

Legally thats not correct. 

A double taxation agreement merely allows someone the ability to claim back taxes, in the country they are not resident, after the submission of tax returns in both countries and proof of paying double. It is not some get out clause that stops them asking for it. I have contractors working for me who have to pay 2 lots of taxes, until year end when one lot gets refunded. If someone is full time resident in Thailand it would be up to them to get it refunded from the state where they are not resident, however that often comes with penalties (or in the case of Americans hard to achieve due to worldwide taxation). 

 

 

Actually the tax treaty between the US and Thailand specifically precludes Thailand from taxing Social Security payments, full stop.

 

In the US at least one can opt not to have tax withheld during the year and just pay/settle at the end. So if one is going to have to pay tax in Thailand one would forego withholding during the year and then on annual income tax statement claim the tax credit for any taxed paid in Thailand. No need to pay both and then seek refund. I don't know how this compares to other countries.

 

Also to my understanding, funds brought into Thailand are taxable only if brought in the same year as earned.

[IraqRon]

1 hour ago, Sheryl said:

 

Actually the tax treaty between the US and Thailand specifically precludes Thailand from taxing Social Security payments, full stop.

 

In the US at least one can opt not to have tax withheld during the year and just pay/settle at the end. So if one is going to have to pay tax in Thailand one would forego withholding during the year and then on annual income tax statement claim the tax credit for any taxed paid in Thailand. No need to pay both and then seek refund. I don't know how this compares to other countries.

 

Also to my understanding, funds brought into Thailand are taxable only if brought in the same year as earned.

thanks for the ssa info sheryl, thats (ssa pay.) what i have.  maybe that is why, when setting up the direct dep. acct. with bkk to process ssa the bkk branch nyc, that only ssa pay would be accepted by nyc to my dd account here.  per bkk person in hq.  hope thai abides by the treaty.

[LivinLOS]

3 hours ago, Sheryl said:

 

Actually the tax treaty between the US and Thailand specifically precludes Thailand from taxing Social Security payments, full stop.

 

In the US at least one can opt not to have tax withheld during the year and just pay/settle at the end. So if one is going to have to pay tax in Thailand one would forego withholding during the year and then on annual income tax statement claim the tax credit for any taxed paid in Thailand. No need to pay both and then seek refund. I don't know how this compares to other countries.

 

Also to my understanding, funds brought into Thailand are taxable only if brought in the same year as earned.

Yes it is only in the year earned / paid. That is exclusively what is being discussed.. 

Narrowing declared 'pensions' in the expat income proof sense, to only social security, when many are using investment income, stock dividends, etc etc is exactly the problem.. 'some pensions' are taxed at source from 'some countries' however thats 1) not most and 2) Not Thailands fault. A DTA agreement would allow you to either claim it back from the country of non residence or reduce it from a tax liability here at whichever is the higher rate but still means it is now being paid. 

 

None of which changes that a lot of retirees currently pay no tax, and this change would ensure they pay it somewhere. 

Edited July 17, 2019 by LivinLOS

[MeePeeMai]

3 hours ago, Sheryl said:

Also to my understanding, funds brought into Thailand are taxable only if brought in the same year as earned.

To simplify the taxation process, they will probably just do away with (or clarify) this particular "error" in their tax code.

[LivinLOS]

2 hours ago, MeePeeMai said:

To simplify the taxation process, they will probably just do away with (or clarify) this particular "error" in their tax code.

Doubt it.. Its what Thai mega rich use to offshore billions and not have income tax even due on it. All legal and above board. 

The Ultra wealthy Thai set is far more concerned over thier own legal loopholes than chasing us pesky farangs, other much easier low hanging fruit ways of dealing with it. 

[MeePeeMai]

7 minutes ago, LivinLOS said:

Doubt it.. Its what Thai mega rich use to offshore billions and not have income tax even due on it. All legal and above board. 

The Ultra wealthy Thai set is far more concerned over thier own legal loopholes than chasing us pesky farangs, other much easier low hanging fruit ways of dealing with it. 

Of course it would only apply to the "aliens on a long stay visa or extension."

[billd766]

On 7/15/2019 at 6:42 PM, 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.

So does the UK.

[elliss]

1 hour ago, LivinLOS said:

Doubt it.. Its what Thai mega rich use to offshore billions and not have income tax even due on it. All legal and above board. 

The Ultra wealthy Thai set is far more concerned over thier own legal loopholes than chasing us pesky farangs, other much easier low hanging fruit ways of dealing with it. 

 

 Farlangs ,  are low hanging fruit , easy pickings.

  Be sure to have your P45. for your next visit to immigration. welcome to LOS..

 

 

Edited July 17, 2019 by elliss
spelling

[khunPer]

9 hours ago, Sheryl said:

I don't know how this compares to other countries.

Countries with double taxation agreement with Thailand will normally tax retirement pensions if it's paid by a government, or there have been tax-deductions during the pay-in period for private savings.