Thai gov. to tax (remitted) income from abroad for tax residents starting 2024 - Part I

[Dogmatix]

5 hours ago, TroubleandGrumpy said:

Everything that is written in the Thai RD Tax Code is written specifically for salary earners and recipients of income in Thailand, who are tax residents.  It has been and still is my belief that unless a person has to pay income taxes, then they do not have to lodge a tax return in Thailand.  The vast majority of Thai citrizens do not lodge tax returns - a google search indicates that only 6-9 million people lodge a tax return out of a population of over 50 million over the age of 18.  Unlike other countries, the Thai RD does not want everyone to lodge a tax return.

 

The application of everytghing in the Thai RD Revenue Code is not automatic, as some people think - otherwise every single person leaving Thailand would be fined 1000 Baht for not getting a tax clearance.  When it comes to application of the Code, it is not automatic that it will be against all money received/earned overseas by Expats and remitted into Thailand. DTAs have a big impact on those forms of income, as does the application of the Thai RD Tax Code in each and every single situation (and as directed by the Thai Govt). So does the application of the tax laws in Thailand against Expats (which have not been tested in a Court - yet).  No part of this 'new rule' ramifications have been 'tested' in a legal manner (Court), and the Thai RD often loses Court challenges. Depending on how they implement this new rule change, they are going to get a lot of new 'challenges' by Thai citizens for changing a system used for 30 years, with 3 months notice.

 

I am not keen to lodge a tax return in Thailand - ever.  I do not believe Thailand has the legal or moral right to force retired or married Expats to do so - unless they are using their Visas to avoid taxes overseas, or are earning money in Thailand.  That viewpoint is based upon how Thailand legally treats retired/married Expats.  Legally and technically, all Expats staying in Thailand long term are doing so as a tourist - we are not here as an immigrant - the 90 day reporting and annual renewals is due to the Visa being an extended tourist Visa - that is why we have the same 'legal rights' as a tourist. Thailand does not and cannot legally tax tourists, unless they are earning income while they are in Thailand.  There are Visas that actually give legal rights (such as the LTR), but the standard Visa that most Expats used when entering Thailand, is an extended tourist Visa - we are all tourists (visitors).  But I am not going to take that legal 'argument' further and get it tested in the Thai RD Tribunal or Court - only because that would be extremely expensive.

 

I will also point out that there is SFA arrangements in place at the Thai RD for the lodgement of a tax return in Thailand under which the terms and conditions of a DTA can be utlised. Both the written and online versions of the Thai RD tax lodgement do not cater for that situation.  Therefore, should any Expats wish to lodge a tax return and claim that certain money is not taxable under a DTA with their country, it will be an expensive exercise if we use a tax expert - and it could be very expensive if it goes to a Tribunal.  Plus I am certain that the Thai RD does not have the time and resources available to manage that anyway, should every Expat who receives over 120K Baht from a Pension lodge a tax return claiming they owe no taxes (or a very small amount) due to their interpretation of a DTA. Who the hell at the Thai RD is going to be able to deal with exemptions claimed under the DTAs that Thailand has with over 60 different countries. 

 

Unless I am working/earning income in Thailand (legally available only with a work permit), then I see no legal reason for a retired or married Expat to pay income taxes.  My calculations are that they get zero from myself anyway, but it is the principle of the matter.  When a Thai Court has ruled that Expats can be legally charged a much higher rate in a State hospital, because they are not Thai citizens and have more money, that clearly states we dont have the same legal rights as a Thai citizen. And there are so many other situations (like dual pricing, courts, etc.) where it is very clear what our/my legal status is in Thailand. Implicit in that is that we dont have to pay income taxes 

 

Thailand will find out soon enough that if they start applying income taxes against many Expats (especially their Pensions) then they will not stay living here in Thailand full-time.  Obviously some Expats have no choice and cannot easily move out, but many Expats can and will either just visit Thailand (<180 days), or they will take up other options.  It is no coincidence that the Taxation Minister in Malaysia, who introduced this same new rule in 2022, has stated that they have no intention of taxing the money of retired/married Expats that they bring into the country. As she said that is wrong because that is all 'new money' being broguht into the country, and it would be a massive disincentive for Expats to bring money into Malaysia if it is going to be taxed.  The implementation of this new tax rule is about removing the loophole that allowed citizens and companies to invest their money (earned in their country) overseas and to then bring that money back and not pay taxes on the earnings made on that investment overseas. The associated 'global taxation' system that is now being employed in many countries, is about stopping people living in one country for long periods, just so that they can avoid income taxation in another (and money laundering).

 

 

I think the situation is that the RD requires any tax resident with over 120k in income to file a tax return but it is rather pointless because the tax threshold starts at 150k plus a 60k basic allowance. So it is not enforced. I am not sure what law or regulation requires this but it is to be found on the RD's website without cited any legislation to support it. Thus I don't know, if there is any penalty for not filing a tax return for those who have income over 120k but not enough to pay tax. I don't think so and this regulation seems not to be enforced. AFAIK there are only penalties for not filing tax returns and paying tax on income over the threshold and allowances.

 

Re DTAs I have heard from professional tax advisors that claiming tax credits from corporate income tax under DTAs can be a complex and costly business. The RC doesn't ever specify that DTAs are applicable to PIT but there is a ruling to that effect.  So perhaps it is unsurprising that there is no space on the PND 90/91 forms, as this is unsupported by any section of the RC which is always referred on the forms. 

 

You say the reinterpretation is intended to tax corporate and personal income derived from funds that originated in Thailand. This is not an issue in the case of corporate income tax because companies already have to pay tax on income arising overseas whether it is remitted to Thailand or not. However, most Thai companies do not have income overseas in their own names.  They have income in overseas subsidiaries that is taxable in their country of domicile, while dividends remitted to the Thai parent are taxable in Thailand but subject to DTAs as they usually taxed in the country of origin. There are other cases like Thai companies earning capital gains from investments in businesses overseas that they sell for a profit.  This has always been taxable. Also where tax companies own property overseas.

[topt]

1 minute ago, JimGant said:

 

Ok. So then does Thailand have exclusive taxation rights -- thus the UK can't tax these private and State pensions? Or does Thailand have primary taxation rights, but the UK can also tax, but has to give a credit for Thai taxes? Or in reverse -- the UK has primary taxation rights? Without any clarity in the DTA, we're in a double taxation quandary. Dunno. Hope it all sorts out for the Brits. But, since Yorktown, I won't lose too much sleep.

Playing devil's advocate could they in fact be taxed twice....

The UK digest of DTa's states that State and personal pensions are excluded in relation to the agreement with Thailand and there is in fact no relief......

https://assets.publishing.service.gov.uk/media/5b05425fed915d1317445ed2/DT_Digest_April_2018.pdf

 

Thailand page 34.

(I have only quoted you as it was easier but understand it is a non issue for you )

[JimGant]

40 minutes ago, Dogmatix said:

Thus I don't know, if there is any penalty for not filing a tax return for those who have income over 120k but not enough to pay tax. I don't think so and this regulation seems not to be enforced. AFAIK there are only penalties for not filing tax returns and paying tax on income over the threshold and allowances.

 

No penalties for not filing if no tax owed. Only if filing late, and taxes are owed. Then, it's a fine equivalent to taxes owed, or twice taxes owed (I forgot what drives the difference).

[Guavaman]

7 hours ago, EVENKEEL said:

http://thailawforum.com/articles/taxleeds.html

 

Pensions, Social Security Payments, Annuities, Alimony and Child Support

Article 20 covers four types of payments which share the trait that they are typically paid or received by individuals as “personal” items. Pensions, social security payments, annuities, alimony and child support payments paid to the resident of a contracting state shall be taxable only in the state where they arise.⁽³⁹⁾

ISSUE: Online source of tax information contradicts US-Thailand DTA and US Department of the Treasury Technical Explanation  https://home.treasury.gov/system/files/131/Treaty-Thailand-TE-11-26-1996.pdf

 

This quoted statement from an online legal source is misleading – it is only partially correct; that is:

-  Government pensions, social security benefits, alimony & child support benefits are taxable only in the state where they arise. (US) – Paragraphs 2, 4 & 5 of Article 20, and Paragraph 2 of Article 21 (Government Service)

 

- Private pensions and annuities are taxable only in the residence State of the recipient (Thailand for tax residents) – Paragraphs 1 & 3 of Article 20

 

The lesson here is that one cannot simply accept a single source of tax information from non-Revenue Department sources.

 

ARTICLE 20

Pensions and Social Security Payments

1. 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.

 

TECHNICAL EXPLANATION:

Paragraph 1

Paragraph 1 provides that private pensions and other similar remuneration paid in consideration of past employment are generally taxable only in the residence State of the recipient.

 

2. Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned State.

 

TECHNICAL EXPLANATION:

Paragraph 2

The treatment of social security benefits is dealt with in paragraph 2.  This paragraph provides that, notwithstanding the provision of paragraph 1 under which private pensions are taxable exclusively in the State of residence of the beneficial owner, payments made by one of the Contracting States as a social security benefit or similar public pension to a resident of the other Contracting State or to a citizen of the United States will be taxable only in the Contracting State making the payment.

 

3. Annuities derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State.

 

TECHNICAL EXPLANATION:

Paragraph 3

Under paragraph 3, annuities that are derived and beneficially owned by a resident of a Contracting State are taxable only in that State.

 

4. Alimony paid to a resident of a Contracting State shall be taxable only in that State.

5. Periodic payments, not dealt with in paragraph 4, for the support of a child made pursuant to a written separation agreement or a decree of divorce, separate maintenance, or compulsory support, paid by a resident of a Contracting State to a resident of the other Contracting State, shall be taxable only in the first-mentioned State.

 

TECHNICAL EXPLANATION:

Paragraphs 4 and 5

Paragraphs 4 and 5 deal with alimony and child support payments.  Both alimony, under paragraph 4, and child support payments, under paragraph 5, are defined as periodic payments made pursuant to a written separation agreement or a decree of divorce, separate maintenance, or compulsory support.  Paragraph 4, however, deals only with payments of that type that are taxable to the payee.  Under that paragraph, alimony paid by a resident of a Contracting State to a resident of the other Contracting State is taxable under the Convention only in the State of residence of the recipient.  Paragraph 5 deals with those periodic payments that are for the support of a child and that are not covered by paragraph 4 (i.e., those payments that are not taxable to the payee).  These types of payments by a resident of a Contracting State to a resident of the other Contracting State are taxable only in the first-mentioned Contracting State.

 

ARTICLE 21

Government Service

2. a) Any pension paid by, or out of funds created by, a Contracting State or political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

 

TECHNICAL EXPLANATION:

Paragraph 2

Paragraph 2 deals with the taxation of a pension paid by, or out of funds created by, one of the States or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority.  Pensions paid to retired civilian and military employees of a Government of either State are intended to be covered under paragraph 2.

[Mike Lister]

I've removed a post that was highly disrespectful of another posters efforts to help clarify the tax issues. If you are unable or unwilling to express yourself in a civil manner and respect fellow posters, do not post here again. No further warnings will be issued.

[Mike Lister]

52 minutes ago, Guavaman said:

ISSUE: Online source of tax information contradicts US-Thailand DTA and US Department of the Treasury Technical Explanation  https://home.treasury.gov/system/files/131/Treaty-Thailand-TE-11-26-1996.pdf

 

This quoted statement from an online legal source is misleading – it is only partially correct; that is:

-  Government pensions, social security benefits, alimony & child support benefits are taxable only in the state where they arise. (US) – Paragraphs 2, 4 & 5 of Article 20, and Paragraph 2 of Article 21 (Government Service)

 

- Private pensions and annuities are taxable only in the residence State of the recipient (Thailand for tax residents) – Paragraphs 1 & 3 of Article 20

 

The lesson here is that one cannot simply accept a single source of tax information from non-Revenue Department sources.

 

ARTICLE 20

Pensions and Social Security Payments

1. 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.

 

TECHNICAL EXPLANATION:

Paragraph 1

Paragraph 1 provides that private pensions and other similar remuneration paid in consideration of past employment are generally taxable only in the residence State of the recipient.

 

2. Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned State.

 

TECHNICAL EXPLANATION:

Paragraph 2

The treatment of social security benefits is dealt with in paragraph 2.  This paragraph provides that, notwithstanding the provision of paragraph 1 under which private pensions are taxable exclusively in the State of residence of the beneficial owner, payments made by one of the Contracting States as a social security benefit or similar public pension to a resident of the other Contracting State or to a citizen of the United States will be taxable only in the Contracting State making the payment.

 

3. Annuities derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State.

 

TECHNICAL EXPLANATION:

Paragraph 3

Under paragraph 3, annuities that are derived and beneficially owned by a resident of a Contracting State are taxable only in that State.

 

4. Alimony paid to a resident of a Contracting State shall be taxable only in that State.

5. Periodic payments, not dealt with in paragraph 4, for the support of a child made pursuant to a written separation agreement or a decree of divorce, separate maintenance, or compulsory support, paid by a resident of a Contracting State to a resident of the other Contracting State, shall be taxable only in the first-mentioned State.

 

TECHNICAL EXPLANATION:

Paragraphs 4 and 5

Paragraphs 4 and 5 deal with alimony and child support payments.  Both alimony, under paragraph 4, and child support payments, under paragraph 5, are defined as periodic payments made pursuant to a written separation agreement or a decree of divorce, separate maintenance, or compulsory support.  Paragraph 4, however, deals only with payments of that type that are taxable to the payee.  Under that paragraph, alimony paid by a resident of a Contracting State to a resident of the other Contracting State is taxable under the Convention only in the State of residence of the recipient.  Paragraph 5 deals with those periodic payments that are for the support of a child and that are not covered by paragraph 4 (i.e., those payments that are not taxable to the payee).  These types of payments by a resident of a Contracting State to a resident of the other Contracting State are taxable only in the first-mentioned Contracting State.

 

ARTICLE 21

Government Service

2. a) Any pension paid by, or out of funds created by, a Contracting State or political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

 

TECHNICAL EXPLANATION:

Paragraph 2

Paragraph 2 deals with the taxation of a pension paid by, or out of funds created by, one of the States or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority.  Pensions paid to retired civilian and military employees of a Government of either State are intended to be covered under paragraph 2.

The answer would seem to be that we should not use third party information sources and to restrict ourselves to Thai Revenue Department issued documentation, from hereon out. That said, I think that particular post was a one off.

[Mike Lister]

2 hours ago, The Cyclist said:

 

Yes, I know what the UK - Thai DTA says, that is why I posted

 

 

Point 1, Government Pensions. Taxed only in UK

 

Point 2, any other type of pension that is already taxed in the UK. Not taxable in Thailand to prevent Double Taxation

 

Point 3, any additional pensions that are not taxed in the UK, are open to be being taxed in Thailand, should Thailand wish to tax them.

 

Not sure how many people are existing solely on a meagre frozen state pensions or other type of pension that falls  below the UK tax threshold, but I cannot imagine that the numbers would be very high.

 

Which might be another reason why 3 RD Offices have basically said, UK Pensions, no need to file anything. Not worth the time and effort to chase frozen state Pensions for a meagre, if any return.

 

Unless others have a different view, I'd like to extract some of the words from your post, tweak them and insert them into the document as guidance for other UK readers: 

 

1 - UK Government Pensions. (Civil Service, Armed Forces etc)

     Taxed only in UK, (in accordance with the DTA)

 

2 - Any other type of pension that is already taxed in the UK.

      Not taxed in Thailand to prevent Double Taxation, or subject to tax credit reclaim.

 

3 - Any pensions that are not taxed in the UK. 

      Are capable of being taxed in Thailand, should Thailand wish to tax them.

 

Thoughts? Anyone?

 

 

[ukrules]

3 hours ago, The Cyclist said:

Point 1, Government Pensions. Taxed only in UK

 

You know I heard that the term "Government Pensions" is not clearly defined in the treaty.

 

Some say it's only pensions paid to people who worked for the government, others say it's both pensions paid to government workers and the 'state pension' - who's right on this?

 

[Mike Lister]

7 minutes ago, ukrules said:

 

You know I heard that the term "Government Pensions" is not clearly defined in the treaty.

 

Some say it's only pensions paid to people who worked for the government, others say it's both pensions paid to government workers and the 'state pension' - who's right on this?

 

It does not include the UK State Pension, that has been proven several times.

[ukrules]

18 minutes ago, Mike Lister said:

It does not include the UK State Pension, that has been proven several times.

 

Ok, good to know.

[topt]

1 hour ago, Mike Lister said:

2 - Any other type of pension that is already taxed in the UK.

      Not taxed in Thailand to prevent Double Taxation, or subject to tax credit reclaim.

Isn't this just an assumption at the moment - or is it because a couple of outlying RD offices have said so?

 

Although as you have said nothing has really changed other than the current year/following year, are we likely to see a definitive RD ruling on how they will interpret DTAs particularly as in this case the pensions you are referring to are specifically excluded. I know there was the statement originally that appeared in the press which one poster keeps mentioning but is that being taken as gospel.......?

 

I have not looked into it but how easy is it to potentially claim a credit from HMRC against Thai tax? 

[topt]

1 hour ago, ukrules said:

 

Ok, good to know.

If you want to prove to yourself just look at the link that I provided higher up the page. Stated very clearly in there.

[UKresonant]

Just now, JimGant said:

If not, kick back, have a beer, and don't worry about filing a Thai tax return.

That is the choice under consideration, to have the Beer in the UK or Thailand 😋

[UKresonant]

Just now, ukrules said:

 

You know I heard that the term "Government Pensions" is not clearly defined in the treaty.

 

Some say it's only pensions paid to people who worked for the government, others say it's both pensions paid to government workers and the 'state pension' - who's right on this?

 

Government could be National or Local authority...

https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343040

 

Part C.1: UK State Pension or Incapacity Benefit...

"If there is no ‘other income’ article, you cannot claim exemption under the treaty from UK Income Tax on your State Pension".

https://assets.publishing.service.gov.uk/media/637e192f8fa8f56eabf75e5b/Double_Taxation_Treaty_Relief_Form_DT-Individual.pdf

Part 😄 Application for relief at source from UK Income Tax (Thailand = No)

(Relief at source may be available in cases where HMRC is able to exercise its discretion to issue a notice...????)

Where we cannot agree to allow relief at source or cannot arrange it, you can claim repayment of part or all of the UK tax taken off, as appropriate. (Big Maybe, could be double tax for months, until sorted, if possible)

 

P34 note (R/H Column)

4. Treaty does not include an article dealing with DT-Company Non-Government pensions. Also, no relief for State Pension or ‘trivial commutation lump sum’.

https://assets.publishing.service.gov.uk/media/5b05425fed915d1317445ed2/DT_Digest_April_2018.pdf

 

 

 

 

 

 

[UKresonant]

Just now, Mike Lister said:

We could do with some examples to show the effect of the tax, both taxed in the UK versus taxed in Thailand (for those pensions that are transportable). Any volunteers, a cpa sort of person would be good. :))

not quite what you asked for, may be of some use? (consider as a draft) 

 

[Mike Lister]

4 hours ago, topt said:

Isn't this just an assumption at the moment - or is it because a couple of outlying RD offices have said so?

 

Although as you have said nothing has really changed other than the current year/following year, are we likely to see a definitive RD ruling on how they will interpret DTAs particularly as in this case the pensions you are referring to are specifically excluded. I know there was the statement originally that appeared in the press which one poster keeps mentioning but is that being taken as gospel.......?

 

I have not looked into it but how easy is it to potentially claim a credit from HMRC against Thai tax? 

Yes, it's still mostly unproven theory at this point, but I think it helps to put a stake in the ground that we can test against going forward, otherwise we're constantly theorising. There's no damage done at this stage, because we're some way off from the first filing date. If anyone disagrees with that approach, they should say so.

[Mike Lister]

50 minutes ago, UKresonant said:

not quite what you asked for, may be of some use? (consider as a draft) 

 

Thanks, I'll need to study this, it looks complicated at first glance but let  me take a look later, it's too much for 2:30am. But thanks for the effort though.

[Mike Lister]

9 hours ago, topt said:

Isn't this just an assumption at the moment - or is it because a couple of outlying RD offices have said so?

 

Although as you have said nothing has really changed other than the current year/following year, are we likely to see a definitive RD ruling on how they will interpret DTAs particularly as in this case the pensions you are referring to are specifically excluded. I know there was the statement originally that appeared in the press which one poster keeps mentioning but is that being taken as gospel.......?

 

I have not looked into it but how easy is it to potentially claim a credit from HMRC against Thai tax? 

 

2 - Any other type of pension that is already taxed in the UK.

      Not taxed in Thailand to prevent Double Taxation, or subject to tax credit reclaim.

 

A second look at this:

 

Now that I've thought this through a few times, I think this is almost certainly how things will turn out, is my guess. That UK pension arises in the UK so tax there is inescapable, unless the pension is moved, (which will be very much the exception). The Thai RD can either accept that tax was paid in the UK, which seems most probable, or, elect to tax it again. But since the rate of Thai tax would be lower, 5% or 10% versus 20%, DTA relief is possible, presumably,  but in the form of  tax credit, again presumably?

 

I will be happy to go with this as a straw man with a high degree of confidence. EDIT TO ADD: the obvious caveat being, conditional upon what the RD finally speaks on this subject.

 

One potentially open issue is that the UK State Pension falls into this category. Since it is currently below the level of the Personal Allowance and some resident expats don't need to file a UK tax return, how do they demonstrate that UK tax was paid on the pension or do they not even need to? (That pension will have been subject to the UK tax process and taxed in the 0% tax band). I'm going to guess this is a non-issue?

 

[Mike Teavee]

16 minutes ago, Mike Lister said:

That pension will have been subject to the UK tax process but not taxed

I’d word this part differently…

“That pension will have been subject to the UK tax process & taxed at the 0% rate). 
 

[Mike Lister]

12 minutes ago, Mike Teavee said:

I’d word this part differently…

“That pension will have been subject to the UK tax process & taxed at the 0% rate). 
 

Done, thanks, well spotted!

[UKresonant]

Just now, Mike Lister said:

One potentially open issue is that the UK State Pension falls into this category. Since it is currently below the level of the Personal Allowance and some resident expats don't need to file a UK tax return, how do they demonstrate that UK tax was paid on the pension or do they not even need to? (That pension will have been subject to the UK tax process and taxed in the 0% tax band). I'm going to guess this is a non-issue?

If the state pension exceeds the (£12570 frozen till 2028?)Personal allowance, because of the high inflation indexation in the past couple of years, the tax code is adjusted on other pensions to pay the tax ( actually if savings interest exceeds the allowance slightly the adjust the coding as well ). If no other pension(s), they will ask for it probably.

I can say that Occupational Government pension (DB), Occupational (DB), Private (DC), Private (Occupational DC SIPP) pensions that I know of are all automatically taxed via UK PAYE deduction. Tax return only needed if you actually need to pay tax on some other event.

 

State Pension issues an annual Pension letter advising the amount for the next April To April payment period (No P60)

DB pensions issue Annual pay advice (unless a change in amount or tax adjustment) and P60 End of year Tax Cert. (Gov can down load monthly Payslip via PDF).

DC monthly pay advice Paper or PDF on different providers, and P60 end of tax year Certs

 P60 is 6th April to 5th April.

 

[Mike Lister]

26 minutes ago, UKresonant said:

If the state pension exceeds the (£12570 frozen till 2028?)Personal allowance, because of the high inflation indexation in the past couple of years, the tax code is adjusted on other pensions to pay the tax ( actually if savings interest exceeds the allowance slightly the adjust the coding as well ). If no other pension(s), they will ask for it probably.

I can say that Occupational Government pension (DB), Occupational (DB), Private (DC), Private (Occupational DC SIPP) pensions that I know of are all automatically taxed via UK PAYE deduction. Tax return only needed if you actually need to pay tax on some other event.

 

State Pension issues an annual Pension letter advising the amount for the next April To April payment period (No P60)

DB pensions issue Annual pay advice (unless a change in amount or tax adjustment) and P60 End of year Tax Cert. (Gov can down load monthly Payslip via PDF).

DC monthly pay advice Paper or PDF on different providers, and P60 end of tax year Certs

 P60 is 6th April to 5th April.

 

A very thorough and complete reply, thank you for taking the time and making the effort.

[Yumthai]

Is this thread related to only UK residents in Thailand? Sometimes I'm wondering.

[Mike Lister]

4 minutes ago, Yumthai said:

Is this thread related to only UK residents in Thailand? Sometimes I'm wondering.

No it is not and I apologise that it has been so UK centric recently. Perhaps this is because there has been so little input from other nationalities and/or that UK expats are one of the largest groups here.

 

The tax process and its rules are generic, up to the point of the DTA which is country specific. The generic parts of the process are fairly well understood and documented in the Simple Guide. I think where we are currently is attempting to second guess and understand the RD position in respect of the tax changes so it's useful to use an example of UK pensions as a straw man for that because once understood, the model should be easily transferable to other nationalities and DTA's.

 

If anyone has country specific questions or issues, please raise them.

[TroubleandGrumpy]

18 hours ago, stat said:

Thailand can of course tax your worldwide income, if you are a tax resident as the majority of countries do worldwide. The only thing that could stop them would be a DTA but even in most DTAs it is stipulated that the country of (primary) residence aka TH has the right to tax them. I am afraid your legal status (dual pricing, right to vote, free healthcare etc) in TH does not change a thing about the right of taxation. If they will enforce this RD directive in real life is of course a different topic and no one yet knows.

I hear you about the 'moral rights' issue - that is not a legal matter.  But you overlook or are not aware of one factor - the part in all DTAs about primary residence. Most Expats do not have 'residence' in Thailand - sure they are 'tax residents' but they do not have 'residence'.  I did not quote the DTA, or provide many many others, because the post would have been even longer than it was already - but check this out:-

 

2.         A person is not a resident of a Contracting State for the purposes of this Agreement if the person is liable to tax in that State in respect only of income from a source in that State.
 

3.         Where by reason of the preceding provisions, an individual is a resident of both Contracting States, the status of the person shall be determined in accordance with the following rules, applied in the order in which they are set out: 
            (a)        the person shall be deemed to be a resident solely of the Contracting
                         State in which a permanent home is available to the person;
             (b)        if a permanent home is available to the person in both Contracting States,
                         or in neither of them, the person shall be deemed to be a resident solely
                         of the Contracting State in which the person has an habitual abode;
             (c)        if the person has an habitual abode in both Contracting States, or in neither
                         of them, the person shall be deemed to be a resident solely of the Contracting
                         State with which the person's personal and economic relations are the closer.

 

I do not have a 'permanent home' in Thailand - I do have one in Australia.  I have a lot more personal (family and friends) relations in Australia than in Thailand. My economic relations are 90% with Australia - that is where all my money and wills and any legal rights I have are held - I pay tax in Australia - and I am a Citizen of Australia. I do not earn any income in Thailand anmd neither does my wife - working in Thailand would be a big factor in my economic relations.  I will always be closer to Australia personally and economically.

 

One of the reasons becoming a 'resident' in Thailand (a legal resident) is not appealing to me, is because that would change me from a long term tourist into a resident, and I would therefore become subject to a lot more Thai legal and financial obligations (it is both a give and take matter). The fact that I would have to pay a large amount of money to apply and then wait many years - and I will probably not get approved (age) - also came into my decision of course.  My wife on the other hand easily became an Aust Resident (small fee and online application - no interviews etc. - it was basically automatic. I am not and probably never will be a resident of Thailand and under the DTA I will pay no income taxes to Thailand - unless I earn income in Thailand.  

[TroubleandGrumpy]

16 hours ago, Dogmatix said:

 

I think the situation is that the RD requires any tax resident with over 120k in income to file a tax return but it is rather pointless because the tax threshold starts at 150k plus a 60k basic allowance. So it is not enforced. I am not sure what law or regulation requires this but it is to be found on the RD's website without cited any legislation to support it. Thus I don't know, if there is any penalty for not filing a tax return for those who have income over 120k but not enough to pay tax. I don't think so and this regulation seems not to be enforced. AFAIK there are only penalties for not filing tax returns and paying tax on income over the threshold and allowances.

 

Re DTAs I have heard from professional tax advisors that claiming tax credits from corporate income tax under DTAs can be a complex and costly business. The RC doesn't ever specify that DTAs are applicable to PIT but there is a ruling to that effect.  So perhaps it is unsurprising that there is no space on the PND 90/91 forms, as this is unsupported by any section of the RC which is always referred on the forms. 

 

You say the reinterpretation is intended to tax corporate and personal income derived from funds that originated in Thailand. This is not an issue in the case of corporate income tax because companies already have to pay tax on income arising overseas whether it is remitted to Thailand or not. However, most Thai companies do not have income overseas in their own names.  They have income in overseas subsidiaries that is taxable in their country of domicile, while dividends remitted to the Thai parent are taxable in Thailand but subject to DTAs as they usually taxed in the country of origin. There are other cases like Thai companies earning capital gains from investments in businesses overseas that they sell for a profit.  This has always been taxable. Also where tax companies own property overseas.

All good points mate - I will give my opinion one by one - but nothing is certain and no one knows it all.

 

Lodging Tax Returns - there is no penalty for not lodging a tax return when you have not taxes to pay. I read it somewhere in the Code that the penalties are onbly applicable when a person does not pay income taxes that were due.  Technically, they could force everyone to lodge a return, but their current 'method of operation' is not to require a tax return to be completed when income taxes are not liable to be paid.

 

DTAs are very expensive and costly to complete - I have been told that by two tax consultants/lawyers. Both those companies stated that they do those for companies a lot, and that the only persons they have ever lodged a tax return for were extremely wealthy Thais - nil Expats. 

 

Companies Incorporated in Thailand.  Yes - companies legally based in Thailand have to pay income taxes on all monies earned globally - unless under DTAs the other Country can lay claim to income earned in their own country (USA is particularly strong on this). That same thing and associuated rules do not apply (as such) to non-juristic private persons. 

 

 

[The Cyclist]

1 hour ago, TroubleandGrumpy said:

Most Expats do not have 'residence' in Thailand - sure they are 'tax residents' but they do not have 'residence'. 

 

A very valid and interesting point.

 

I might own a residence in Thailand, but I am allowed to stay here in 12 month blocks. Whoch technically, could be revoked at any time.

[The Cyclist]

15 hours ago, ukrules said:

 

You know I heard that the term "Government Pensions" is not clearly defined in the treaty.

 

Some say it's only pensions paid to people who worked for the government, others say it's both pensions paid to government workers and the 'state pension' - who's right on this?

 

 

There is a long list published on the UK Gov website, and a link has been posted on here previously, of different types of pensions and they are all annoted either Government or Non Government.

 

I'm not at State Pension age, so not something I have put any effort into, but the general consesus is that it is not classed as a Government Pension.

 

Perhaps the person who posted it originally can repost it.

[redwood1]

1 hour ago, TroubleandGrumpy said:

I hear you about the 'moral rights' issue - that is not a legal matter.  But you overlook or are not aware of one factor - the part in all DTAs about primary residence. Most Expats do not have 'residence' in Thailand - sure they are 'tax residents' but they do not have 'residence'.  I did not quote the DTA, or provide many many others, because the post would have been even longer than it was already - but check this out:-

 

2.         A person is not a resident of a Contracting State for the purposes of this Agreement if the person is liable to tax in that State in respect only of income from a source in that State.
 

3.         Where by reason of the preceding provisions, an individual is a resident of both Contracting States, the status of the person shall be determined in accordance with the following rules, applied in the order in which they are set out: 
            (a)        the person shall be deemed to be a resident solely of the Contracting
                         State in which a permanent home is available to the person;
             (b)        if a permanent home is available to the person in both Contracting States,
                         or in neither of them, the person shall be deemed to be a resident solely
                         of the Contracting State in which the person has an habitual abode;
             (c)        if the person has an habitual abode in both Contracting States, or in neither
                         of them, the person shall be deemed to be a resident solely of the Contracting
                         State with which the person's personal and economic relations are the closer.

 

I do not have a 'permanent home' in Thailand - I do have one in Australia.  I have a lot more personal (family and friends) relations in Australia than in Thailand. My economic relations are 90% with Australia - that is where all my money and wills and any legal rights I have are held - I pay tax in Australia - and I am a Citizen of Australia. I do not earn any income in Thailand anmd neither does my wife - working in Thailand would be a big factor in my economic relations.  I will always be closer to Australia personally and economically.

 

One of the reasons becoming a 'resident' in Thailand (a legal resident) is not appealing to me, is because that would change me from a long term tourist into a resident, and I would therefore become subject to a lot more Thai legal and financial obligations (it is both a give and take matter). The fact that I would have to pay a large amount of money to apply and then wait many years - and I will probably not get approved (age) - also came into my decision of course.  My wife on the other hand easily became an Aust Resident (small fee and online application - no interviews etc. - it was basically automatic. I am not and probably never will be a resident of Thailand and under the DTA I will pay no income taxes to Thailand - unless I earn income in Thailand.  

 

Exactly......Folks what do these Non-O visas say?

 

They say you can not immigrate to Thailand....

 

So you have absolutely no benefits, and you are in no way a legal entity in Thailand... 

 

The list of what a non  immigrate can not do in Thailand is very long and the list of what a non  immigrate can do is very short with loads of restrictions like in working or owning a house or condo.....

 

So even if you never invested 1 baht or worked 1 day in Thailand in your life someone thinks you should be paying tax on any money you made before you came to Thailand?

 

 

 

 

 

 

 

 

[Mike Lister]

Good luck to you guys, arguing your point in a Thai court.......I'm not hopeful you stand a cat in hecks chance but you never know. :))