Taxation of Retirement Income Brought Into Thailand

[BangkokBaksida]

I am planning to retire in Thailand as soon as I am able to enter the country.  I intend to have a certain amount of money transferred into the country every month to cover my living expenses.  Will that money be taxable by the Thai authorities?  If so, at what rate?  And even if it might be taxable by law (which is my question), how does it work in practice?  Will immigration ask me any questions about this money during my annual visa renewals?  Or are they satisfied to know that I am able to support myself?

 

Thanks. 

[MarkT63]

Hi BangkokBaksida.

 

There may be no tax liability at all.

“The imposition of tax on income derived outside Thailand will apply only to income derived and brought into Thailand in the same year in which such income is

earned”.

Not an expert so suggest you get that confirmed. 

 

 

[ubonjoe]

I not aware of anybody being taxed for their income transferred into the country.

Immigration certainly is not involved in taxation.

Will you be using the 800k baht in a Thai bank for 2 months or proof of 65k baht income.

[BangkokBaksida]

I would be using the 800k in a Thai bank option, Ubonjoe.

[tonray]

Many countries have reciprocal tax treaties with Thailand, meaning if you pay tax on income in your home country you do not pay tax on same income in Thailand, avoiding double taxation. Check if your country has said agreement.

[ubonjoe]

27 minutes ago, BangkokBaksida said:

I would be using the 800k in a Thai bank option, Ubonjoe.

No problem to do that. They will not tax it other than for the interest earned.

 

[BangkokBaksida]

17 minutes ago, ubonjoe said:

No problem to do that. They will not tax it other than for the interest earned.

 

I thought I remembered reading some time ago that they make a distinction between money that was earned in the current year and money that was earned in a previous year and if you transfer money that was earned in a previous year it is not taxable, or something like that.  But if I understand you correctly, they don't even care about that - and the money will in any case not be taxable?

 

Thanks very much for sharing your time and knowledge.

[kokesaat]

At least with the US, the money you make/earn in the US is not taxable in Thailand......some sort of tax treaty with Thailand and the US (and, I believe, most if not all, other countries).

If you put money in a Thai bank, the interest you earn on that money is taxable.....although it's generally nothing to get worried about as interest rates are near zero.

I second the opinion that if you're coming here to live a quiet, retirement life, the best way to go is to park 800,000Baht in a Thai bank and leave it alone.  That will make your annual extensions so much easier.

[cnx1204]

As a couple of people pointed out, the tax treaty between the U.S. and Thailand says that income that is earned in one country and is taxable in that country is NOT taxable in the other country.   The treaty is available on line if you google it.

[ubonjoe]

11 minutes ago, BangkokBaksida said:

I thought I remembered reading some time ago that they make a distinction between money that was earned in the current year and money that was earned in a previous year and if you transfer money that was earned in a previous year it is not taxable, or something like that.  But if I understand you correctly, they don't even care about that - and the money will in any case not be taxable?

The tax deducted for interest earned is different that normal income. It can even be reported and refunded if you do not earn enough in a calendar year to pay taxes on it.

Income earned in a previous year is not taxable.

[notrub]

I opened a foreign currency account (euros) with BKK.  No interest paid but it meant a one time only transfer charge.  The immigration recognize this as money in a Thai bank.  I can take it out in euros if I need to, unlike THB in a local account.  Fairly easy to transfer as THB into my local account. 

[lopburi3]

8 minutes ago, kokesaat said:

I second the opinion that if you're coming here to live a quiet, retirement life, the best way to go is to park 800,000Baht in a Thai bank and leave it alone.  That will make your annual extensions so much easier.

How does it make it so much easier?  You still need bank letter of account ownership and showing balance for each month remains at 400k or above under current requirements (and some are being asked to return to prove this after 3 months) - using income you need bank letter and proof of 65k deposits each month (a passbook/yearly bank statement if US or letter from Embassy if they issue for most) - basically the same paperwork. 

 

So for those married the 800k is tied up in there name only and likely not available for months after death to spouse.   Can not be used for medical emergency (or at most half).  

[OJAS]

51 minutes ago, tonray said:

Many countries have reciprocal tax treaties with Thailand, meaning if you pay tax on income in your home country you do not pay tax on same income in Thailand, avoiding double taxation. Check if your country has said agreement.

The following link provides details of the countries with which Thailand has negotiated double taxation agreements:-

 

https://www.rd.go.th/english/766.html

 

[EricTh]

1 hour ago, BangkokBaksida said:

I would be using the 800k in a Thai bank option, Ubonjoe.

No, it's not taxable. I have been transferring money for many years now.

 

The immigration doesn't ask anything about the money (in the case of 800k option), they just want to know that the minimum amount is reached for x months.

Edited September 28, 2021 by EricTh

[DrPhibes]

30 minutes ago, OJAS said:

The following link provides details of the countries with which Thailand has negotiated double taxation agreements:-

 

https://www.rd.go.th/english/766.html

 

You have to be careful with that as some of them might say if you pay tax in Thailand, you get it as a deduction on your personal return in your home country.  Personally, I keep a couple of bank accounts where I move money from the year I earn it to another account where I season it to the next calendar year and only pull money from the seasoned account to bring to Thailand.

Edited September 28, 2021 by DrPhibes
Content

[OJAS]

4 hours ago, DrPhibes said:

You have to be careful with that as some of them might say if you pay tax in Thailand, you get it as a deduction on your personal return in your home country.

A particular difficulty in this regard is that the tax year dates in Thailand may not necessarily be the same as those in your home country. For example, the Thai tax year, I gather, runs from 1st January to 31st December, whereas in my home country (UK) it runs from 6th April to the following 5th April.

 

[JackGats]

Some expats play by the book and have a dedicated bank account in their home country where they leave money to "cool down" for one year before they transfer it to Thailand. In that way the letter of the Thai law ("not earned during the same year") is fully complied with.

 

Most people don't give a damn. Money is fungible anyway. "Savings" are almost by definition money not earned the same year and a savings account (not a current account) is what you get in Thailand anyway.

[alanrchase]

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.thaiembassy.com/faq/do-retirees-pay-income-tax&ved=2ahUKEwjvwfXu8aLzAhWf3jgGHT_QB-AQFnoECAQQBQ&usg=AOvVaw3RjU6Kt4nXl936x3kY0UAl

[BangkokBaksida]

19 minutes ago, alanrchase said:

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.thaiembassy.com/faq/do-retirees-pay-income-tax&ved=2ahUKEwjvwfXu8aLzAhWf3jgGHT_QB-AQFnoECAQQBQ&usg=AOvVaw3RjU6Kt4nXl936x3kY0UAl

Thanks very much.  That's very clear.

[Peterw42]

The whole "transfer savings not income" is really just to help with the explanation/understanding, Its not something you actually have to put into practice. A dollar is a dollar, they don't have an attached history as to when that dollar was earned, when it was banked etc.

Thailand cant see inside your home country bank account. 

Technically, any money in your home bank account is savings 5 minutes after its deposited.

[statman78]

I am living in Thailand on a retirement extension.  I transfer a minimum of 65k baht every month.  At extension time I have no issues.  I get a 1 year bank statement for my account and a copy of my bank book.  I highlight the monthly transfers.  Immigration in Chiang Rai has never asked about how I earned the money or if taxes have been paid.  The only tax I pay is on the small amount of interest I earn on my Thai account.  

[Card]

14 hours ago, BangkokBaksida said:

I thought I remembered reading some time ago that they make a distinction between money that was earned in the current year and money that was earned in a previous year and if you transfer money that was earned in a previous year it is not taxable, or something like that.  But if I understand you correctly, they don't even care about that - and the money will in any case not be taxable?

 

Thanks very much for sharing your time and knowledge.

My understanding is that they tax income but not savings brought into the country. To avoid this have 2 accounts in a UK bank. One is for savings (capital) and one is for income (pension, interest auto transferred from your other account when it is earned). Then just transfer money to Thailand from your capital account if u have enough).

[ubonjoe]

A post done in capital letter has been removed.

Forum rule. https://aseannow.com/terms/

"1. Please do not post in all capital letters, bold, unusual fonts, sizes, colors or use unusually large emoticons. It can be difficult to read."

[lopburi3]

7 hours ago, JackGats said:

In that way the letter of the Thai law ("not earned during the same year") is fully complied with.

AFAIK that is not Thai law - it is current policy only which could change under current laws - if you can provide a real law source would be most appreciated.  

[lopburi3]

1 hour ago, alanrchase said:

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.thaiembassy.com/faq/do-retirees-pay-income-tax&ved=2ahUKEwjvwfXu8aLzAhWf3jgGHT_QB-AQFnoECAQQBQ&usg=AOvVaw3RjU6Kt4nXl936x3kY0UAl

Not an official source for information.

Quote

Copyright © 2020 ThaiEmbassy.com. This is NOT the official website of the Thai Embassy. 

 

[OJAS]

46 minutes ago, BangkokBaksida said:

Thanks very much.  That's very clear.

But please note that @alanrchase's link specifically relates to a question specifically posed in the Swiss context, the answer to which is, in fact, dependent on the provisions of the double taxation agreement between Thailand and Switzerland. So it may not necessarily be applicable to non-Swiss retirees. It would also appear to contradict the following official RD link:-

 

https://www.rd.go.th/english/6045.html

 

1.Taxable Person

 

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. A non-resident is, however, subject to tax only on income from sources in Thailand.

[Geir Rasch]

According to Thai tax law pension brought in to Thailand are subject to tax in Thailand if it is brought in the same year it is earned.

Thailand has tax-agreement with several countries. I’m Norwegian and the agreement between Thailand and Norway is that pension being taxed in Thailand will be withdrawn from pension to be taxed in Norway. Since tax level in Thailand is lower than in Norway, norwegian paying tax to Thailand save a lot of money by doing that.

Not all pay tax and I asked the regional revenue office why they don’t coordinate with immigration to make all expat pay tax. The answer was that since revenue department accept thai pensionare not paying tax of their pension, they cannot force expat to do that. So in practice it is up to you.

If the tax agreement between Thailand and your home country is the same as the one with Norway, you should pay tax to Thailand if the tax level in your home country is higher than what it is in Thailand.

[ubonjoe]

6 minutes ago, Geir Rasch said:

According to Thai tax law pension brought in to Thailand are subject to tax in Thailand if it is brought in the same year it is earned.

Can you quote in the tax laws that say that and post a link to it.

Number 2 here does not mention pension income. It only mentions earned income. https://www.rd.go.th/english/6045.html

 

 

 

[topt]

58 minutes ago, ubonjoe said:

Can you quote in the tax laws that say that and post a link to it.

Number 2 here does not mention pension income. It only mentions earned income. https://www.rd.go.th/english/6045.html

 

 

 

I would have thought it came under item 3 - 

Quote

1. income from goodwill, copyright, franchise, other rights, annuity or income in the nature of yearly payments derived from a will or any other juristic Act or judgment of the Court;

In the UK many pension payments are classed as "annuities" for example. Arguably pension income is derived from past earned income........

@khunPer regularly comments on DTAs and the opportunity to reduce home taxation for selected countries.

[ubonjoe]

30 minutes ago, topt said:

I would have thought it came under item 3 -

You have to include all of that line.

 

"annuity or income in the nature of yearly payments derived from a will or any other juristic Act or judgment of the Court"

 

A pension is not any of them.