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

[Geir Rasch]

I do not understand the fear of paying tax to Thailand, or is Norway very special compared to other western countries? 

Yes, to avoid double tax you have to take action, but if you can’t do that you should not be living abroad.

when you pay tax in Thailand you get two documents that you send to the tax office in your home country. RO21: Income Tax Payment tells how much of your income have been taxed in Thailand. RO22: Certficate Of Residence prove that you are a resident of Thailand in tax matter. So about six months later you get back the deducted tax so there will be no double tax. Easy peasy! And best of all: The total tax are reduced considerable. 

[MeePeeMai]

9 minutes ago, Geir Rasch said:

I do not understand the fear of paying tax to Thailand

No fear, it's just that some of us made the decision to retire here in part because we were told that our pensions were not taxed here in Thailand.  Should they change their tune on this someday, it would certainly be a kick in the nuts (to say the least).

[ThomasThBKK]

5 hours 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. 

Yeah but what if they introduce it only for non-thais, then we would be screwed.

Thailand doesn't really have a problem with discrimination...

 

One example is Cryptocurrency taxation, from how i understand it it's not in the worldwide tax basket and specifically should be taxed in thailand no matter where you "cashed out", i guess wealthy thais don't have those so they don't care.

 

This is the answer from the revenue department regarding this specific case:

Quote

those who live in Thailand but trade digital assets abroad, … it’s the duty of taxpayers to declare such income, otherwise, they will face both civil and criminal penalties if the Revenue Department discovers the transactions.

 

[MeePeeMai]

1 hour ago, ThomasThBKK said:

One example is Cryptocurrency taxation, from how i understand it it's not in the worldwide tax basket and specifically should be taxed in thailand no matter where you "cashed out", i guess wealthy thais don't have those so they don't care.

Yea I heard it's a flat rate of 15% here ...is that correct?

 

Uncle Sam would want his 15% too (for long term capital gains taxes).  The Thai Exchanges won't even allow a US citizen to create an account so I'm not a big fan of the crypto rules here.

[MeePeeMai]

 

2 hours ago, ThomasThBKK said:

One example is Cryptocurrency taxation

Yikes!   I just looked it up and it looks scary.  Here is a copy and paste on what I found with a link to the original story below:

 

MODS, I hope you do not feel that this post is off topic since some of our retirement funds are invested in cryptocurrencies such as myself (Bitcoin IRA) and I currently use the 65k monthly route.  

 

#5. 15% W/H tax: Under the May 2018-amended Revenue Code, individuals who gain and receive benefits from putting money into digital assets are subject to a 15% withholding tax. The Finance Ministry will also issue ministerial regulations to impose a 15% withholding tax on capital gains and benefits from digital asset transactions for corporate entities,

This change in law does not have the character of a tax reduction. It does not allow to deem the withholding tax rate as final taxation. Therefore, to quote the BLARD, “juristic persons and individuals are required to include capital gains and benefits from digital asset transactions in computing income tax.”As a result, the upper limit for Bitcoin taxation remains at 35%, instead of 15%.

#6. 7% VAT: The May-2018 legislation dealt with 7% VAT on a digital asset transaction. The Revenue Department announced to waive this additional tax burden for retail investors who trade cryptocurrencies and digital tokens through digital exchanges. This VAT waiver is subject to cabinet approval.

The Finance Ministry will also issue ministerial regulations to impose a 15% withholding tax on capital gains and benefits from digital asset transactions for corporate entities. This is not (yet) part of a VAT waiver by the Revenue Department. Therefore, companies making digital-asset-related trades will be liable for a 7% VAT payment from the transaction value, on top of the 15% withholding tax, on top of the 20% CIT.

#7. ICO taxation: Specific rules apply to ICO Initial Coin Offerings. More details later.PUGNATORIUS: Tax planning opportunities on a national or cross-border level

Cryptocurrencies can utilize traditional capital gains strategies by

• offsetting gains with losses,
• the timing of dispositions to qualify for long-term treatment,
• the tax-effective harvesting of losses and gains.

 

https://pugnatorius.com/bitcoin-taxation/

[zoza]

On 7/15/2019 at 6:56 PM, Kopitiam said:

This is getting more and more ridiculous.  We just had a thread with OP stating that the banks will prevent you from withdrawing your 400k in your account.  Now this nonsense about taxing your monthly pension income.  Why stop at taxing monthly pension income?  What is the difference if I accumulate 12 months of pensions and put it in my bank account as 800K?  To be taxed too?  Why people are so paranoid?  Don't believe anything until it is gazetted as law/order.  Even after that, there are so many interpretations.

 

Why stress over something that is not in existence?

many are already being taxed, even though money going into my Thai account is already taxed in the UK, they are now taking tax out of any

interest earned...the fact that 20.000 baht of interest has to be earned

by law ? before any tax is due ,they have now decided to take money out before this figure is achieved, it seems that many foreigners do not fight

for their money back, so a few new mercs for some lucky people.

talk about land of scams. 

[LivinLOS]

3 hours ago, zoza said:

many are already being taxed, even though money going into my Thai account is already taxed in the UK, they are now taking tax out of any

interest earned...the fact that 20.000 baht of interest has to be earned

by law ? before any tax is due ,they have now decided to take money out before this figure is achieved, it seems that many foreigners do not fight

for their money back, so a few new mercs for some lucky people.

talk about land of scams. 

Sorry but thats normal.. Interest payments are domestic sourced.. Entirely the same as paying income tax while working in a country, to then claim the tax back if your under the tax threshold (as is the case with many farangs) or not resident for the duration required. 

Far from being unusual, this is exactly how it is in many other places. 

[LivinLOS]

6 hours ago, Geir Rasch said:

I do not understand the fear of paying tax to Thailand, or is Norway very special compared to other western countries? 

Yes, to avoid double tax you have to take action, but if you can’t do that you should not be living abroad.

when you pay tax in Thailand you get two documents that you send to the tax office in your home country. RO21: Income Tax Payment tells how much of your income have been taxed in Thailand. RO22: Certficate Of Residence prove that you are a resident of Thailand in tax matter. So about six months later you get back the deducted tax so there will be no double tax. Easy peasy! And best of all: The total tax are reduced considerable. 

agreed.. as someone who deals with multi territory and cross border workforces, this is very normal.. 

 

Peoples insistence on not understanding it, stems mostly from a desire to avoid it. 

[LivinLOS]

On 7/15/2019 at 12:56 PM, Kopitiam said:

This is getting more and more ridiculous.  We just had a thread with OP stating that the banks will prevent you from withdrawing your 400k in your account.  Now this nonsense about taxing your monthly pension income.  Why stop at taxing monthly pension income?  What is the difference if I accumulate 12 months of pensions and put it in my bank account as 800K?  To be taxed too?  Why people are so paranoid?  Don't believe anything until it is gazetted as law/order.  Even after that, there are so many interpretations.

 

Why stress over something that is not in existence?

The point is, it IS explicitly directed as a law already. 

 

It is a law that hasnt been enforced, much like TM30 reporting wasnt enforced. However those who sign on the dotted line that they bring in 65k of income, as part of thier visa extension, are signing declarations which make them liable under an existing, gazetted, law. 

 

There is no aw change required here, merely a change in enforcement which is possible at the whim of any sitting government. 

[LivinLOS]

8 hours ago, khunPer said:

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.

Not true where I come from.. Not true with any private pension.. Not true with any investment income.. Not true with any REITs etc.. Not true with any precious metals programs.. Not true with any Crypto investments.. Not true with (shall I continue) ?? 

 

Fact is, given its not true most of the time, why should Thailand continue to ignore it ?? Why not demand as it normal in the developed world, to do 2 tax returns, and demand that the non resident country refunds the taxation or that obligation is then reduced from the Thai one, still having to do a source country declaration and a resident country declaration !! Thats how it works in the developed world. 

 

Last year I did tax returns in 3 countries and by law should have done a nil return for Thailand also. 

[UKresonant]

44 minutes ago, LivinLOS said:

Sorry but thats normal.. Interest payments are domestic sourced.. Entirely the same as paying income tax while working in a country, to then claim the tax back if your under the tax threshold (as is the case with many farangs) or not resident for the duration required. 

Far from being unusual, this is exactly how it is in many other places. 

I think it is better deducted, and then there is no worry about being due anything. If it builds up to something useful it may be worth claiming, but its mainly small change, which they are welcome to as it is sourced here.

[IraqRon]

54 minutes ago, UKresonant said:

I think it is better deducted, and then there is no worry about being due anything. If it builds up to something useful it may be worth claiming, but its mainly small change, which they are welcome to as it is sourced here.

i remember the reprint on tv of a news article within the past few months explaining this tax. didn't bookmark it.  seems you can opt out of the witholding, but if you do that the bank will report that to the tax dept.  something mentioned about multiple account holders also. i am terrible with using the tv search tool, maybe someone can find article and post it.

[fletchsmile]

On 7/15/2019 at 6:29 PM, marcusarelus said:

Subject to the provisions of paragraph 2 of Article 21 (Government Service), pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State.

 

http://library.siam-legal.com/thai-law/u-s-thai-tax-treaty-pensions-and-social-security-payments-article-20/

2 problems with that:

 

1) Not everyone is a US citizen. It's an extract from the US-Thai tax treaty so given that the most foreigners in Thailand are not from the US it won't cover most people on here

 

2) You haven't included paragraph 2 of Article 21, which it is subject to: Note the conditional elements such as where the services a rendered and being a resident of that State who is a national of that state

 

 

Quote

 

However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is a resident of that State who:

1. is a national of that State; or
2. did not become a resident of that State solely for the purpose of rendering the services.

 

1.  

On a very general note, DTAs for other countries like the UK, often exempt pensions only from government related positions/employment. Most people's pensions in the UK aren't from government related positions/ employment. eg state pension not from being employed in a government position, individual private pensions, company private pensions etc are captured not exempt. The government employment aspect is just the MPs, politicians, bureaucrats looking after themselves as usual with, the result that the majority of normal people's pensions from the UK aren't exempt via the UK-Thai DTA

Edited July 18, 2019 by fletchsmile