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

[jayboy]

2 minutes ago, noobexpat said:

 

Stick to your day job, which clearly isn't tax. I will do the same - which is!

You're right it's not my day job.Can you refer me to the bit or bits where I have gone wrong.

[noobexpat]

50 minutes ago, jayboy said:

 

I believe the onus is on the individual to submit the P85 and argue the case for NT status with HMRC who would then advise the pension provider.

 

I gather it's not nearly as simple as it might appear and I know a few who have been unsuccessful in getting the NT status despite having a good case.

 

Be that as it may, those residents of Thailand with NT status will obviously not be able to benefit from the provisions of the UK/Thailand DTA (because they have been exempted from paying tax in the UK resulting in a conclusion they should pay in\come tax in Thailand).That presents a problem for them, unless they have the financial resources to fund themselves from pre-2024 investments/savings.

 

I've bolded the incorrect bits.

 

You also misunderstand the purpose of a DTA. 

[The Cyclist]

2 hours ago, noobexpat said:

Why would they be taxed in UK when you are non resident and the pension provider is using an NT tax code provided by hmrc?

 

Because some forms of income and pensions will always be taxed in the UK regardless of your resident / non resident status.

 

28 minutes ago, noobexpat said:

 

Stick to your day job, which clearly isn't tax. I will do the same - which is!

 

Clearly it is not. Or you would know that there are forms of income and pensions that will always be taxed in the UK, regardless of whether you complete a P85.

 

Would you like me to embarrass you by rattling some of them off ?

[The Cyclist]

33 minutes ago, jayboy said:

You're right it's not my day job

 

It's not his either, or he was utter crap at it.

[jayboy]

18 minutes ago, noobexpat said:

 

I've bolded the incorrect bits.

 

You also misunderstand the purpose of a DTA. 

 

Thanks.Isn't the purpose of a DTA to prevent the double taxation of income? Thus if a Brit has HMRC agreed NT status on his/her UK sourced pension income the provisions for tax exemption/tax credit in Thailand under the DTA are not relevant to him/her.Seems logical but perhaps I have missed something.

[roobaa01]

Gday

 

So if I'm to pay tax in Thailand then I should receive also the benefits as not to pay 15 % source tax on interest income or being allowed to participate in the 30 bath health care scheme ? 

One question being married to a Thai national what is the tax credit?

Wbr

Roobaa02

[Mike Lister]

38 minutes ago, roobaa01 said:

Gday

 

So if I'm to pay tax in Thailand then I should receive also the benefits as not to pay 15 % source tax on interest income or being allowed to participate in the 30 bath health care scheme ? 

One question being married to a Thai national what is the tax credit?

Wbr

Roobaa02

Everyone, Thais and foreigners, has 15% tax with held, it's not determined by whether you file a tax return or not.

 

If you pay social security in Thailand you become eligible to join the health insurance scheme, to do so you need a work permit and a job, it is not a function of paying tax or having a TIN.

 

[UKresonant]

Just now, stat said:

The DTA is only! relevant if

 

a. you already paid taxes in one country (for example dividends, rent from UK house etc, already taxed! pension)

b. you are tax resident in both countries.

c. you are an us national (very special case)

 

Yes, I'm looking at the subject, anticipating the difference from being 179 days or under in Thailand, or, as "b." tax resident in both countries, as most likely I shall always be over 92 days in the UK (there is still a couple of clauses I need to check again), so will not detach from UK tax  liability. 

 

It is just a tipping point that could become a disincentive to be in Thailand for the naturally desired amount of time.

 

It is still much less of a tipping point than if the wife were to go over 182 days in the UK, facing what I find to be a very arrogant taxation system when looking from the other direction. (weather condition considerations would cut in, before the tax consideration perhaps  ). 

 

 

[whiteman]

Just asking I get paid a tax-free pension in New Zealand from a defined benefit plan that I had for over 30 years with AXA. When I first started to pay into it the product said all pensions will in the end be paid to the member Tax free. So I am wondering did Axa pay the tax on the accumulating returns over the 30 years that it earned on my contributions? If so do I pay tax on any money I bring in from the proceeds of this pension?

[noobexpat]

1 hour ago, The Cyclist said:

 

Because some forms of income and pensions will always be taxed in the UK regardless of your resident / non resident status.

 

 

Clearly it is not. Or you would know that there are forms of income and pensions that will always be taxed in the UK, regardless of whether you complete a P85.

 

Would you like me to embarrass you by rattling some of them off ?

 

Beyond google - you have no idea.

State pension and various witholding taxes. Booooring!

 

 

[noobexpat]

2 hours ago, jayboy said:

 

Thanks.Isn't the purpose of a DTA to prevent the double taxation of income?

 

No, thats the intended outcome.

What is the principal purpose of a DTA? @The Cyclist will tell us.

 

(But only if he can find it on google 555)

 

[MistyBlue]

4 hours ago, noobexpat said:

Why would they be taxed in UK when you are non resident and the pension provider is using an NT tax code provided by hmrc?

 

I think a lot of expats never completed their P85. I couldn’t wait to fill mine in 555

Completing a P85 form does not automatically result in a NT tax code on a taxed at source pension arising in the UK.  The P85 form (or SA109 for self assessment) informs HMRC one is no longer UK resident, that doesn't have any bearing on tax at source pension income.

 

To get an NT tax code on a taxed at source pension, one would also need to complete the HMRC form "DT-Indvidual" and this form would also need to be endorsed by the tax authority of the country of residence to state you are paying taxes there instead (the Thai RD in this instance).   But as it's your day job, you'd know that, right?

[noobexpat]

1 minute ago, MistyBlue said:

Completing a P85 form does not automatically result in a NT tax code on a taxed at source pension arising in the UK.  The P85 form (or SA109 for self assessment) informs HMRC one is no longer UK resident, that doesn't have any bearing on tax at source pension income.

 

To get an NT tax code on a taxed at source pension, one would also need to complete the HMRC form "DT-Indvidual" and this form would also need to be endorsed by the tax authority of the country of residence to state you are paying taxes there instead (the Thai RD in this instance).   But as it's your day job, you'd know that, right?

 

Of course. One leads to the other is the point. I wrote one short sentence - you've written 2 big paragraphs! 

 

Good for you. 

 

 

[MistyBlue]

10 minutes ago, noobexpat said:

Of course. One leads to the other is the point. I wrote one short sentence - you've written 2 big paragraphs! 

 

Good for you. 

So, as you are paying your taxes to the Thai RD, rather than to the UK HMRC on your full pension income (which I think is what you are implying from your posts), would you be willing to share your experiences of completing Thai tax returns and your experience of the Thai RD initially endorsing the HMRC form confirming you pay tax in Thailand?  

[noobexpat]

57 minutes ago, MistyBlue said:

So, as you are paying your taxes to the Thai RD, rather than to the UK HMRC on your full pension income (which I think is what you are implying from your posts), would you be willing to share your experiences of completing Thai tax returns and your experience of the Thai RD initially endorsing the HMRC form confirming you pay tax in Thailand?  

 

Maybe i'm doing phased crystallisations of the PCLS.

 

 

[MistyBlue]

14 minutes ago, noobexpat said:

Maybe i'm doing phased crystallisations of the PCLS

 

How does phased crystallisations connect with your earlier claim on having an NT tax code through submitting a P85 (and later acknowledging DT-Indvidual) for being non-resident?

 

6 hours ago, noobexpat said:

Why would they be taxed in UK when you are non resident and the pension provider is using an NT tax code provided by hmrc?

 

I think a lot of expats never completed their P85. I couldn’t wait to fill mine in 555

 

[noobexpat]

2 minutes ago, MistyBlue said:

 

your earlier claim on having an NT tax code

 

 

 

Never said that. Go back and check.

[MistyBlue]

2 minutes ago, noobexpat said:

Never said that. Go back and check.

Fair enough, I thought you had implied you had an NT code based on being non UK resident.  My apologies.

 

I'm now at a loss of what your original point was because being non-resident doesn't result in an NT code unless one is paying taxes already in the other country.  You implied that scenario in your earlier post, even if it wasn't for you personally.

 

I've nothing more to add on this exchange... wish you well.

[JackGats]

From what I gather from many posts here, the UK might be as much of a problem as TH for expats unfortunate enough to have to answer to both the UK and TH while living in TH.

[Lorry]

20 hours ago, Mike Lister said:

Is there an English language version of this?

Several translations were given in this thread. 

I myself used Google translate and posted the result on p70 and 71, but there are better ones. 

The RD has not provided a translation. 

[Lorry]

11 hours ago, Sheryl said:

in order to be extra sure I can live solely on my SS I have switched to use of US card when buying air tickets to abroad and for my (internationally based) health insurance.  In both instances, though I do the transaction from Thailand the funds never enter Thailand at all, except/unless I use a Thai air carrier

Not sure this would help.

 

As for tickets out of Thailand: someone (Guavaman?) earlier posted the British rules for non-doms, who have to pay taxes only for money remitted into the UK. Tickets out of the UK are taxable,  no matter how and where they were paid for.

 

In the AmCham webinar it was said: it is a remittance whenever you get the service or goods (that you paid for) in Thailand. Method and location of payment doesn't matter at all. This makes a lot of sense. 

 

 

[jerrymahoney]

9 hours ago, JimGant said:

But, as you've already said -- if you do owe Thai taxes, it won't be much. Relax.

Article 20 Par. 3 :  Annuities derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State.

 

What Article 20 Par. 3 means(maybe) is that an annuity derived in Thailand by a tax resident in Thailand can only be taxed in Thailand

 

AND

 

An annuity derived in US by a tax resident in US -- and a US citizen is ALWAYS a tax resident of the US -- can only be taxed in US.

 

And at least for me the 'savings clause' issue is moot because I have no annuity derived in Thailand.

[OzzBlizz]

13 minutes ago, jerrymahoney said:

Article 20 Par. 3 :  Annuities derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State.

 

What Article 20 Par. 3 means(maybe) is that an annuity derived in Thailand by a tax resident in Thailand can only be taxed in Thailand

 

AND

 

An annuity derived in US by a tax resident in US -- and a US citizen is ALWAYS a tax resident of the US -- can only be taxed in US.

 

And at least for me the 'savings clause' issue is moot because I have no annuity derived in Thailand.

Makes sense, but maybe too much sense for the doomers & gloomers. 

[jacko45k]

21 hours ago, JimTripper said:

I may take a trip to the phillippines to see what's up. Hearing good things about Dumaguete.

I am more tied to this country... but many could start off draining their 800,000 baht retirement extension fund ahead of such a move!

[UKresonant]

44 minutes ago, whiteman said:

Just asking I get paid a tax-free pension in New Zealand from a defined benefit plan that I had for over 30 years with AXA. When I first started to pay into it the product said all pensions will in the end be paid to the member Tax free. So I am wondering did Axa pay the tax on the accumulating returns over the 30 years that it earned on my contributions? If so do I pay tax on any money I bring in from the proceeds of this pension?

Article 19
Pensions

• 1.Pensions (including government pensions) and annuities paid to a resident of a Contracting State shall be taxable only in that State.

https://www.legislation.govt.nz/regulation/public/1998/0424/latest/whole.html#DLM267900

 

Looks like quite good words to say only in NZ?  If your sure the scheme falls under that article.

[The Cyclist]

11 hours ago, noobexpat said:

 

Beyond google - you have no idea.

State pension and various witholding taxes. Booooring!

 

 

 

C'mon then Mr Tax Expert

 

Please enlighten all the British readers / posters how they can avoid UK Tax on their

 

Pensions

Rental income

UK based earnings

Interest on Savings.

 

You will manage at a stroke to solve an issue that I have spent the best part of 20 years tryng to solve, with the assistance and advice of various. Tax Experts and accountants.

 

You must be a really special person, special in the window licker sense of the word.

[tomkenet]

My plan is prior to 2024 deposit in a savings account back home money to last for 3-4 years in Thailand. 

Let's call this money X which can be remitted taxfree.

 

My other investments will after 2023 continue to generate income that is not taxed. Let's call this money Y. As far as i understand I will be developing a sort of tax debt on this money, generating tax when later remitted.

 

In 3-4 years, when X is depleted I will have a big incentive to move to another country where Y will be considered taxfree savings. I wonder how long I would have to stay away from Thailand for this taxdebt to go away. 

 

Another outcome is by that time Thailand has changed to Worldwide taxation (not remittance) , what would then happen to Y.

 

[beammeup]

My understanding is that as long as you are out of Thailand for 180 days Y is tax free if remitted.

[Seeall]

On 9/18/2023 at 9:57 AM, connda said:

Eventually someone is going to write, "Does that mean farang's pension income too."

Short answer would probably be "No," at least for those countries with bilateral tax agreements with Thailand.  If you're paying income tax in your home countries, then Thailand has no claim to tax the income twice.

We all know they do whatever they want, stating things here to reassure yourself does nothing....  your cash is wanted and any reason will do thanks..

[JimGant]

6 hours ago, jerrymahoney said:

and a US citizen is ALWAYS a tax resident of the US -- can only be taxed in US.

 

...... unless he's a tax resident of Thailand, and certain incomes defined in the DTA say Thailand can tax these. If you parse the language in the Code, it doesn't say all US citizens are tax residents of the US -- it says they'll be "treated" as if they're tax residents of the US, meaning, whether their residence is in Boston or Bangkok, their annual tax bill will be the same (with a few exceptions, like having an FEIC).

 

Anyway, yes, some of this language can be confusing. The term "derived" particularly. However, logic would dictate that para 3 is not addressing an American tax resident of Thailand's treatment of an annuity generated by a Thai insurance company. Instead, an immediate pay annuity from the US would logically be treated just like private pensions, IRAs, etc addressed in para 1, namely, Thailand has first taxation rights.