Proof of Tax Residency in Thailand (UK passport Holder)

[foreverlomsak]

I have been informed that if I can obtain proof of tax residency in Thailand, I will not have to pay tax in the UK on my pensions. Does anybody have any direct experience on this subject. The questions I have are

1 - how to obtain the proof of tax residency

2 - how to get HMRC and pension providers to accept this and

3 - has anybody actually succeeded

 

[CharlieH]

MOVED to Banking/Finance forum

[brobro2424]

If you are living full time in Thailand, you become uk-non-resident the moment you left UK. It is none of the UK's business where you are. Generally speaking if you don't live there and aren't using their government services, you should not be paying tax there.

 

Apply for an NT tax code via https://www.gov.uk/government/publications/income-tax-leaving-the-uk-getting-your-tax-right-p85

 

From what I've seen you will only successfully get a Thai tax code if you are actually going to start paying tax in Thailand. There is no need to do this. Thailand is not trying to tax foreigners on money coming from outside Thailand (in general).

 

I'm sure you will want more proof than just the above, but I'm trying to point you in the right direction. Its a grey area I've spent many hours looking into and have discussed with 5 or 6 international tax advisors, albeit not specifically pension-related. I'd be interested in replies to the contrary.

[AsiaCheese]

Thailand has at some point joined the Global Forum on Transparency and Exchange of Information for Tax Purposes and will carry out its first AEOI scheduled for 2023 (more here: https://home.kpmg/us/en/home/insights/2021/11/tnf-thailand-aeoi-actions-by-financial-institutions-expected-beginning-2022.html).

Although not "there yet", a Swiss bank already asked of me this year to send them my local Thai "tax ID" - seemingly in conjunction with the above. Trouble is: you won't get a tax ID in Thailand unless you're actually paying tax (as in: legally, with work permit). Many countries give people based there (expats) such a tax ID, simply for the purpose of correctness and compatibility, so that you can fill in forms... Thailand won't. A buddy of mine wanted to get witholding tax from a paid-out pension back, and a local lawyer here "fixed" it for him (sorry, I don't have details, but he sucessfully reclaimed the witholding tax, which according to all the Swiss forms NEEDED a tax ID).

[sometimewoodworker]

50 minutes ago, brobro2424 said:

If you are living full time in Thailand, you become uk-non-resident the moment you left UK. It is none of the UK's business where you are.

Incorrect information. It is a little more complex than that.

 

34 minutes ago, AsiaCheese said:

Trouble is: you won't get a tax ID in Thailand unless you're actually paying tax (as in: legally, with work permit).

Incorrect information, just go down to the local area tax office (you will need a Thai speaker) you can get a taxi ID. 
If you have a bank savings account you are already paying tax and can get it back.

 

3 hours ago, foreverlomsak said:

1 - how to obtain the proof of tax residency

Live in Thailand for more than 180/190 days and you are automatically tax resistant. But you can be tax resident in more than 1 country.

 

Also it is extremely likely that you must declare your U.K. pension income on your Thai tax return if you get HMRC to accept that you are non tax resident in the U.K. and that your state pension is exempt from U.K. tax.

 

3 hours ago, foreverlomsak said:

2 - how to get HMRC and pension providers to accept this and

How to get HMRC is quite easy https://www.gov.uk/tax-right-retire-abroad-return-to-uk

But your other pension providers have no compulsion to pay your pension like that so they will probably be treated as U.K. income for tax purposes.

 

I have seen no information that the U.K. state pension can be excluded from your U.K. income.

 

AFIK How or where the pension is paid is irrelevant as far a liability for U.K. tax is concerned

you need a U.K. taxation specialist to advise you

 

Edited July 25, 2022 by sometimewoodworker

[Guderian]

34 minutes ago, AsiaCheese said:

Trouble is: you won't get a tax ID in Thailand unless you're actually paying tax (as in: legally, with work permit).

Well that's not true. Like many people, I wanted to reclaim the 15% withholding tax paid on my bank account interest (where I keep the 800K Baht for the annual renewals) as it was below the tax-free allowance, and to do that you need to have a Thai tax ID. The Revenue Department was more than happy to issue me with one.

[topt]

47 minutes ago, brobro2424 said:

Generally speaking if you don't live there and aren't using their government services, you should not be paying tax there.

Absolute nonsense in general terms.

 

Not sure what pensions the OP will receive but I the information he has been given appears strange unless the amounts fall below the tax threshold.........

 

There is no DTA available for most pensions including the State Pension. The only pensions that qualify for the DTA are certain govt. (civil service/forces). All others (unless removed from the UK under a recognised scheme) are taxable in the UK.

 

 

[topt]

1 minute ago, topt said:

All others (unless removed from the UK under a recognised scheme) are taxable in the UK.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/710099/DT_Digest_April_2018.pdf

 

Thailand page 34 look at Note 4 on the right.

[sometimewoodworker]

The benefit of being nonresident for U.K. tax only really exist if you are earning income from outside the U.K. 

If your sole income is from U.K. pensions becoming non U.K. tax resident makes no difference as the pensions are still taxable in the U.K. as they are U.K. income.

 

If you want to try to evade paying tax (in my opinion an extremely poor choice in the long term) that is something I will not give any help with.

[JackGats]

1 hour ago, AsiaCheese said:

 Trouble is: you won't get a tax ID in Thailand unless you're actually paying tax (as in: legally, with work permit). Many countries give people based there (expats) such a tax ID, simply for the purpose of correctness and compatibility, so that you can fill in forms... Thailand won't. 

I assume you don't mean a Thai TIN (tax identification number). Because I got one no problem no questions asked in Thailand. I then sent the Thai TIN to my EU banks so that they at least had something to chew on.

 

I wanted my Thai broker to tie this TIN to the dividend withholding taxes I pay in Thailand but he wasn't interested. The real only use I've had so far for this Thai TIN was when filling in the W8BEN form with my EU bank. This is a form regarding withholding tax on US stocks whenever an EU country has a a double tax treaty with the US.

Edited July 25, 2022 by JackGats

[userabcd]

"1 - how to obtain the proof of tax residency

2 - how to get HMRC and pension providers to accept this and

3 - has anybody actually succeeded"

 

1 - Proof of tax residency is done with a tax residence certificate issue by certain RD regional offices in Thailand 

Certificate of Residence (Individual Taxpayer) | The Revenue Department (English Site) (rd.go.th)

 

It needs to be applied from the RD each tax year with certain documentation and taxes paid on the detailed income for which relief is being applied for.

 

Certificate of Residence
Supporting documents required (in case of an individual taxpayer) :

1.A copy of the filed income tax returns e.g. P.N.D. 90, P.N.D. 91.

2.A copy of tax receipt.

3.A copy of taxpayer's tax identification card.

4.A copy of taxpayer's passport (in order to total number of days the taxpayer resides in Thailand. In order to issue the certificate, the taxpayer must resides in Thailand more than 180 days).

5.Other relevant documents, if any.

6.An authorization letter in case of the taxpayer authorizes other person to act on behalf.

 

People tax resident in Thailand (working or receiving taxable income in Thailand) and have to prove their tax residence in Thailand to their home countries tax offices or to financial institutions are doing this.

Edited July 25, 2022 by userabcd

[Chongalulu]

47 minutes ago, sometimewoodworker said:

The benefit of being nonresident for U.K. tax only really exist if you are earning income from outside the U.K. 

If your sole income is from U.K. pensions becoming non U.K. tax resident makes no difference as the pensions are still taxable in the U.K. as they are U.K. income.

 

If you want to try to evade paying tax (in my opinion an extremely poor choice in the long term) that is something I will not give any help with.

This is exactly my understanding too. My rental income ,private and uk state pensions are uk generated income which I have to pay uk tax on despite living outside the country. My BA pilot friend living in France is able to avoid paying most of his uk tax only on the basis that his income is being generated outside the uk (while flying) but even then calculations are made based on his rosta for the time on each flight he’s in uk airspace when taking off /landing for which he’s liable for tax ! 

[GoRover]

I'm a bit confused though, where it says about the UK State Pension: 

 

https://www.gov.uk/tax-uk-income-live-abroad

 

When tax is not due or is already deducted

 

Non-residents do not usually pay UK tax on:

the State Pension

[topt]

7 minutes ago, GoRover said:

I'm a bit confused though, where it says about the UK State Pension: 

 

https://www.gov.uk/tax-uk-income-live-abroad

 

When tax is not due or is already deducted

 

Non-residents do not usually pay UK tax on:

the State Pension

Depends on your overall level of income after taking the Personal Allowance and any other things into account.

If your only income is the UK State Pension you may not be due to pay any tax but it will go towards your total income.

[GoRover]

9 minutes ago, topt said:

Depends on your overall level of income after taking the Personal Allowance and any other things into account.

If your only income is the UK State Pension you may not be due to pay any tax but it will go towards your total income.

It's possibly that then. They just don't make it clear.

[StevieAus]

3 hours ago, brobro2424 said:

If you are living full time in Thailand, you become uk-non-resident the moment you left UK. It is none of the UK's business where you are. Generally speaking if you don't live there and aren't using their government services, you should not be paying tax there.

 

Apply for an NT tax code via https://www.gov.uk/government/publications/income-tax-leaving-the-uk-getting-your-tax-right-p85

 

From what I've seen you will only successfully get a Thai tax code if you are actually going to start paying tax in Thailand. There is no need to do this. Thailand is not trying to tax foreigners on money coming from outside Thailand (in general).

 

I'm sure you will want more proof than just the above, but I'm trying to point you in the right direction. Its a grey area I've spent many hours looking into and have discussed with 5 or 6 international tax advisors, albeit not specifically pension-related. I'd be interested in replies to the contrary.

If you have a bank account with funds in Thailand presumably you will receive interest minuscule as it may be.

Obtaining a tax number is very easy allowing you then to claim it back.

Personally I don’t bother. know of others who do this.

[partington]

4 hours ago, brobro2424 said:

If you are living full time in Thailand, you become uk-non-resident the moment you left UK. It is none of the UK's business where you are. Generally speaking if you don't live there and aren't using their government services, you should not be paying tax there.

 

Apply for an NT tax code via https://www.gov.uk/government/publications/income-tax-leaving-the-uk-getting-your-tax-right-p85

 

From what I've seen you will only successfully get a Thai tax code if you are actually going to start paying tax in Thailand. There is no need to do this. Thailand is not trying to tax foreigners on money coming from outside Thailand (in general).

 

I'm sure you will want more proof than just the above, but I'm trying to point you in the right direction. Its a grey area I've spent many hours looking into and have discussed with 5 or 6 international tax advisors, albeit not specifically pension-related. I'd be interested in replies to the contrary.

Just to reiterate what has already been said: nearly everything in this post is completely incorrect and needs to be ignored.

 

1. You are NOT UK non-resident the moment you leave the UK - there is a residence test guide here which you can apply to find out. It never works out that you are non resident the day you leave. https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3

 

2. Even if you actually do eventually qualify as a UK non-resident, money that arises in the UK including UK state pension, rental income and so on IS completely taxable, and this has nothing to do with whether you "use services" or not!  You are still entitled to a personal tax allowance so if your UK arising income does not exceed this you won't actually owe tax, but if it did, you would!

 

3.  You can easily get a Thai tax number without paying tax in Thailand, I did myself and many others here have also reported this. Often banks abroad ask for a tax number . I myself got a Thai TIN for this purpose alone.

 

Nothing is "grey" about this at all.

Edited July 25, 2022 by partington

[Liverpool Lou]

2 hours ago, sometimewoodworker said:

If your sole income is from U.K. pensions becoming non U.K. tax resident makes no difference as the pensions are still taxable in the U.K. as they are U.K. income.

Only if the pension exceeds the Personal Allowance. UK state pensions are taxable but are paid without tax being deducted

[foreverlomsak]

1 hour ago, GoRover said:

Non-residents do not usually pay UK tax on:

the State Pension

The New State Pension is in the order of 9k+GBP maximum this is less than your tax free allowance 12k+GBP therefore state pension will not be taxed.

If they were to tax your state pension they would need to employ legions of new civil servants to administer it.

As I understand it the full tax calculation is as follows

State Pension + other UK pensions + other UK income = Total Income

Total Income - Personal allowance = Taxable amount (e.g. the amount you pay tax on).

 

[sometimewoodworker]

20 minutes ago, Liverpool Lou said:

Only if the pension exceeds the Personal Allowance. UK state pensions are taxable but are paid without tax being deducted

So you are agreeing with my statement!

 

all U.K. income is taxable. 

if you hold a U.K. passport (various others also get this) then the first £12,570 in the tax year 2022/23 is rated a zero.

 

Any amount paid from the U.K. (some specific exceptions exist) is taxable.

 

If you are non resident income from outside the U.K. is not taxable in the U.K. 

 

So if your sole income is from the U.K. you gain nothing as far as U.K. tax is concerned  by becoming non resident.

 

If you have income from outside the U.K. and you structure your income wisely it can be legally tax free. 
 

 

 

 

 

[sometimewoodworker]

33 minutes ago, foreverlomsak said:

Total Income - Personal allowance = Taxable amount (e.g. the amount you pay tax on).

Technically No. But practically yes.

all income is taxable but the first £12,570 in the current year is taxed at 0%

[LivinLOS]

5 hours ago, topt said:

Absolute nonsense in general terms.

 

Not sure what pensions the OP will receive but I the information he has been given appears strange unless the amounts fall below the tax threshold.........

 

There is no DTA available for most pensions including the State Pension. The only pensions that qualify for the DTA are certain govt. (civil service/forces). All others (unless removed from the UK under a recognised scheme) are taxable in the UK.

 

 

Incorrect. 

 

Almost all UK pensions are tax deferred and you should pay tax where you are resident at the time of receipt by law.

 

Thailand makes no effort to tax this, mostly because they are unable to determine what is (taxable) income and what is savings (non taxable) however the law very clearly includes pension income as taxable income.

 

What the UK HMRC will accept as proof of residency is another matter, a simple easy obtainable Thai tax number or a filed tax return. Curious on this myself.

 

At worst you could file one year and never again without being chased.

[foreverlomsak]

1 hour ago, sometimewoodworker said:

all income is taxable but the first £12,570 in the current year is taxed at 0%

and is classed as your personal allowance

[topt]

25 minutes ago, LivinLOS said:

Incorrect. 

 

Almost all UK pensions are tax deferred and you should pay tax where you are resident at the time of receipt by law.

If you read all the replies I think you will find that the majority disagree with you. I have already posted a link to the DTA digest so not sure where you get your erroneous justification from...........

[foreverlomsak]

1 minute ago, topt said:

If you read all the replies I think you will find that the majority disagree with you. I have already posted a link to the DTA digest so not sure where you get your erroneous justification from...........

Agree in 2005 the DTA was simple, basically income in the UK was taxed in the UK, income in Thailand was taxed in Thailand. Somewhere around 2014 the DTA changed and it gets more complex with the ability for double taxation to occur and limited tax relief on what is claimable for double payment.

[foreverlomsak]

45 minutes ago, LivinLOS said:

Almost all UK pensions are tax deferred and you should pay tax where you are resident at the time of receipt by law.

what law?

UK, US, Thai?

or something you think it should be?

[sometimewoodworker]

1 hour ago, LivinLOS said:

Incorrect. 

 

Almost all UK pensions are tax deferred and you should pay tax where you are resident at the time of receipt by law.

You are correct that your statement is totally incorrect and completely bogus.

 

Some pension are paid without tax being deducted at source. That is not tax deferred.

U.K. Tax liability attaches to almost all income that originates in the U.K. the state pension and many, or even most U.K. pensions fall into that category. If your income from U.K. pensions (and any other U.K. sources) exceeds the U.K. personal allowance you must pay tax to HMRC. 
 

Depending on where you live you may have a duty to declare and pay local tax on your U.K. (as well as other) income. The U.K. has a number of dual taxation agreements that allow off setting U.K. tax paid against local tax due. The U.K. Thailand DT treaty is very limited.

 

Thai tax law is rather different from U.K. tax law and you should draw no inferences between them.

 

you are clearly not a tax expert and would do a poor job playing one on TV. ???? 

[foreverlomsak]

4 minutes ago, sometimewoodworker said:

If your income from U.K. pensions (and any other U.K. sources) exceeds the U.K. personal allowance you must pay tax to HMRC. 

Let's see using mostly incorrect numbers all in GBP and Per Annum

Personal allowance = 12,750

State pension = 9,500 - no tax liability accrues

add Company Pension 1 = 1,500 Income now 11,000 - no tax liability accrues

add Company Pension 2 = 6,750 Income now 17,750 - tax liable on 5,000 @ 20% = 1,000

Who deducts tax through PAYE is an other issue, previously HRMC erroneously had me liable for tax before I claimed my state pension by bad allocation of tax codes, i.e. I was below the tax liability threshold.

[manolothai]

However in Thai the Tax Id is not mandatory, even most Thai people do not have one. 

In fact I request every year a tax residence ro22 certificate from Thai tax office that report my passport number instead of tax id and state that I am resident here. 

I also go every year at foreign affair office (dfa), in order to stamp it, then translate and stamp again at embassy of my origin country. 

I do this every year. 

 

International Bank compliance are aware of the fact that tax id in some country are not mandatory and usually there is a checkbox on the form the Bank provide that says something like "tax id is not required on my country of residence" or something like that. 

 

Sometimes they do not have this checkbox . That's happened to me sometimes. 

 

In that case I sent an Email with scan of tax residence from tax office (ro22), and stamp of foreign affair office (dfa) and my embassy, explaining on the email the fact that here tax ID is not mandatory and if they don't believe me they can check on internet or even with their legal department. 

 

After that, never had problems, I always passed every Banking application. 

Edited July 25, 2022 by manolothai

[thonglorjimmy]

14 hours ago, sometimewoodworker said:

if you hold a U.K. passport (various others also get this) then the first £12,570 in the tax year 2022/23 is rated a zero.

I think this may have been asked before, on my demise my wife is eligible for a widows pension of 50% of my Civil Service Pension, my State Pension will die with me.

I had assumed that even though she doesn't have a UK Passport, and it's unlikely that we'll ever return to the UK, she would still be entitled to the Personal Allowance to set against her widows pension, but I'm not sure and the HMRC will not give me a straight answer, but simply refer me to their website.
The tax saving by receiving the PA is around £2,500, so worth finding out.
Any ideas where I can get a definitive answer?
Thanks