Tax on funds brought into Thailand from O/S....any clarity yet?

[Kenny202]

Hi all, I am guessing this topic has been done to death. I scroll through the news on Asean now everyday and seems to be two very polar opposite schools of thought re it will effect the average expat or it definitely wont.

 

My situation is that I have superannuation (mandatory superannuation investment fund) in Australia. I draw on this once or twice a year for living expense. the money in my super account was paid in monthly during my working life so I assume this money has already been taxed? The money sits in the super account and continues to attract interest which for me at retirement age I believe is tax fee in Australia. We aren't talking about millions of dollars by the way. I will also be on the Australian pension in the years to come. It is my money, I earned it and was with held during my working days. I have no other income in Thailand or Australia nor do I file a tax return in either country. I live in Thailand permanently. Are the new rules if they come to fruition likely to effect me...or are we going to have to get some damn certificate from my bank to give our Thai bank or something every time we bring money in to prove it is non taxable? Not like the Thai government to blab out some ill thought out dreamed up scheme without thinking it through or sharing the details (I doubt they even know themselves yet)

 

I understand the change of law is predominantly to plug a loop hole where people (Thais?) can earn money / invest in other countries and simply leave it there for more than a year and the money is non taxable / non declarable when the funds are returned to Thailand after the 1 year.   

[scubascuba3]

Stop panicking, wait and see but they won't be taxing transfers, possible taxing income but with DTR no further tax to pay

[freeworld]

10 hours ago, Kenny202 said:

Hi all, I am guessing this topic has been done to death. I scroll through the news on Asean now everyday and seems to be two very polar opposite schools of thought re it will effect the average expat or it definitely wont.

 

My situation is that I have superannuation (mandatory superannuation investment fund) in Australia. I draw on this once or twice a year for living expense. the money in my super account was paid in monthly during my working life so I assume this money has already been taxed? The money sits in the super account and continues to attract interest which for me at retirement age I believe is tax fee in Australia. We aren't talking about millions of dollars by the way. I will also be on the Australian pension in the years to come. It is my money, I earned it and was with held during my working days. I have no other income in Thailand or Australia nor do I file a tax return in either country. I live in Thailand permanently. Are the new rules if they come to fruition likely to effect me...or are we going to have to get some damn certificate from my bank to give our Thai bank or something every time we bring money in to prove it is non taxable? Not like the Thai government to blab out some ill thought out dreamed up scheme without thinking it through or sharing the details (I doubt they even know themselves yet)

 

I understand the change of law is predominantly to plug a loop hole where people (Thais?) can earn money / invest in other countries and simply leave it there for more than a year and the money is non taxable / non declarable when the funds are returned to Thailand after the 1 year.   

Suggest you read and comply with the existing revenue codes of each country where you are tax resident and the DTA.

Edited October 15, 2023 by freeworld

[CRUNCHER]

4 hours ago, scubascuba3 said:

Stop panicking, wait and see but they won't be taxing transfers, possible taxing income but with DTR no further tax to pay

Good advice.

[retarius]

No there is no clarity. Nor will there ever be. The English translated law will be full of the usual mistakes, mis-spellings, and contradictions. Best policy (mine) is to become non resident for tax purposes until the situation clarifies. If you have other homes in different countries use them for a couple of years to make sure you spend less than 180 days here. By then the confusion may have cleared enough for you to make a sensible decision. This recommendation was from my US/Thai accountant, a specialty firm in Bangkok. 

[hotandsticky]

4 hours ago, scubascuba3 said:

Stop panicking, wait and see but they won't be taxing transfers, possible taxing income but with DTR no further tax to pay

 

"Taxable income"..... but, as you say, DTAs take care of that.

 

Rather like the UK state pension being taxable income - no one pays tax on their pension because the annual tax allowance covers it.

 

Too many people (who are unaffected) are considering actions that are totally unnecessary.

 

 

[scubascuba3]

51 minutes ago, hotandsticky said:

Rather like the UK state pension being taxable income - no one pays tax on their pension because the annual tax allowance covers it.

Tax is payable if other income brings you over the allowance, such as another pension

[TimeMachine]

In a way the VAT the government collects can be likened to a mafia group getting protection money from a small shop. Pay up or you'll be in trouble. Mafia burn down your house shop and government throw you in prison if you don't pay.  Having said that hard truth I don't think any savings even super will be taxed any time soon. 

Edited October 15, 2023 by TimeMachine

[DrJack54]

1 hour ago, hotandsticky said:

Too many people (who are unaffected) are considering actions that are totally unnecessary.

Completely agree.

Hadn't seen that video.

Watch that guys blogs often.

 

[Mike Lister]

22 minutes ago, TimeMachine said:

In a way the VAT the government collects can be likened to a mafia group getting protection money from a small shop. Pay up or you'll be in trouble. Mafia burn down your house shop and government throw you in prison if you don't pay.  Having said that hard truth I don't think any savings even super will be taxed any time soon. 

More nonsense! VAT is a pass through tax, customers pay it and the seller passes it on to the RD after deducting VA related expenses. There's nothing even remotely mafia like about that, if you don't pass the VAT on to government then sure you could go to prison because it's not the sellers to keep and you deserve to go to jail!

[4MyEgo]

12 hours ago, Kenny202 said:

I draw on this once or twice a year for living expense. the money in my super account was paid in monthly during my working life so I assume this money has already been taxed?

Yes, you pay an input tax when paying into a super fund, about 15% if memory serves me.

 

12 hours ago, Kenny202 said:

The money sits in the super account and continues to attract interest which for me at retirement age I believe is tax fee in Australia.

Once you turn 60 years of age you can take your super out, tax free, you can also take out up to a set amount, if memory serves me was or is up to $195k without paying tax, once you hit preservation age, about 57-58 years of age depending on what year you were born, then the balance can be taken out at age 60 with no tax payable.

 

You mention it attracts interest, if you are a non resident, a withholding tax of 10% is payable on any interest earned in Australia.

 

12 hours ago, Kenny202 said:

I will also be on the Australian pension in the years to come. It is my money, I earned it and was with held during my working days. I have no other income in Thailand or Australia nor do I file a tax return in either country.

Just be careful as your super (asset) can have a Deeming Rate applied to it when you apply for the age pension, there is a threshold if you are non home owner, which is about $543,500. The Deeming Rate is 0.25% on the 1st $60,400 and then 2.25% thereafter, however you might be able to offset this as they allow you up to $204 per fortnight as an income free area.

12 hours ago, Kenny202 said:

I live in Thailand permanently.

If you don't do a tax return as stated, you are a non resident for tax purposes, so won't pay any tax, that said, the age pension is taxable income, however no one seems to pay tax on it (rightfully so), and I believe the government turns a blind eye to this because it suits them to have pensioners living abroad as it's cheaper for them, as they don't have to pay for rental assistance, Medicare, Energy Allowance and the Supplement, plus the Concession card for meds and travel, that said, as long as you know, if they come knocking, you will be up for 32c off the bat, no threshold, plus the Deeming Rate on your super, compliments Services Australia.

 

The above said, don't want to be wishing to burst anyone's bubble, but it's good to know, if it ever raises it's ugly head, you were prewarned.

 

If you can set you super up as an income stream, it might be better for you, however you would need to speak to someone in that area of expertise and ask how that would affect your age pension, if it would at all ?

 

As far as Thailand and taxes, wouldn't worry about it, if anyone ever asks, you tell them it's your pension from your super, or something like that.

[proton]

If you do get affected nothing to stop you bringing in the allowed $20k in cash on your travels, that would do me for 2 years.

[Kenny202]

10 minutes ago, 4MyEgo said:

Yes, you pay an input tax when paying into a super fund, about 15% if memory serves me.

 

Once you turn 60 years of age you can take your super out, tax free, you can also take out up to a set amount, if memory serves me was or is up to $195k without paying tax, once you hit preservation age, about 57-58 years of age depending on what year you were born, then the balance can be taken out at age 60 with no tax payable.

 

You mention it attracts interest, if you are a non resident, a withholding tax of 10% is payable on any interest earned in Australia.

 

Just be careful as your super (asset) can have a Deeming Rate applied to it when you apply for the age pension, there is a threshold if you are non home owner, which is about $543,500. The Deeming Rate is 0.25% on the 1st $60,400 and then 2.25% thereafter, however you might be able to offset this as they allow you up to $204 per fortnight as an income free area.

If you don't do a tax return as stated, you are a non resident for tax purposes, so won't pay any tax, that said, the age pension is taxable income, however no one seems to pay tax on it (rightfully so), and I believe the government turns a blind eye to this because it suits them to have pensioners living abroad as it's cheaper for them, as they don't have to pay for rental assistance, Medicare, Energy Allowance and the Supplement, plus the Concession card for meds and travel, that said, as long as you know, if they come knocking, you will be up for 32c off the bat, no threshold, plus the Deeming Rate on your super, compliments Services Australia.

 

The above said, don't want to be wishing to burst anyone's bubble, but it's good to know, if it ever raises it's ugly head, you were prewarned.

 

If you can set you super up as an income stream, it might be better for you, however you would need to speak to someone in that area of expertise and ask how that would affect your age pension, if it would at all ?

 

As far as Thailand and taxes, wouldn't worry about it, if anyone ever asks, you tell them it's your pension from your super, or something like that.

I was under the impression if I leave my super in the original fund, and draw bits and pieces of it, the remaining balance can sit in the fund accruing tav free interest. I was under the impression if I drew it all out and invested somewhere else it would then be taxable. Is that right?

[Kenny202]

What are DTAs and DTRs?

[Mike Lister]

3 minutes ago, Kenny202 said:

What are DTAs and DTRs?

Double Tax Agreements and Double Tax Relief.

[biervoormij]

10 minutes ago, proton said:

If you do get affected nothing to stop you bringing in the allowed $20k in cash on your travels, that would do me for 2 years.

I think the trip to go get the $20K would cost me a lot more than the tax but sounds like a good plan if you go home every 2 years anyway.

 

Not sure if I will be affected but to be on the safe side I transferred some money to Thailand so I have enough to live on. Hopefully there will be some clarity on this change prior to needing to do another transfer.

[brianthainess]

45 minutes ago, 4MyEgo said:

Once you turn 60 years of age you can take your super out, tax free,

I was able to take mine out aged 50.

[TimeMachine]

1 hour ago, Mike Lister said:

More nonsense! VAT is a pass through tax, customers pay it and the seller passes it on to the RD after deducting VA related expenses. There's nothing even remotely mafia like about that, if you don't pass the VAT on to government then sure you could go to prison because it's not the sellers to keep and you deserve to go to jail!

You explained it perfectly as it is. But you still don't see how it's mafia action so I'll leave it as an agree to disagree one with my eyebrows funnelled inwards. If the government gave back to community and used the VAT to help people, that would help your argument.

[hotandsticky]

2 hours ago, scubascuba3 said:

Tax is payable if other income brings you over the allowance, such as another pension

Correct. As I said 'taxable income' with no tax payable if that is your only income - in fact tax is never paid on the state pension it is paid through the tax code on other income.

[scubascuba3]

5 minutes ago, hotandsticky said:

Correct. As I said 'taxable income' with no tax payable if that is your only income - in fact tax is never paid on the state pension it is paid through the tax code on other income.

Nah tax code is irrelevant for some income, like bank interest, dividends, rent, maybe pensions too. Tax code is used more often when tax is deducted before receipt like a salary

[hotandsticky]

1 minute ago, scubascuba3 said:

Nah tax code is irrelevant for some income, like bank interest, dividends, rent, maybe pensions too. Tax code is used more often when tax is deducted before receipt like a salary

My tax code (like most people)  is applied to my occupational pension. Obviously, gross payments received for the state pension. Self assessment takes care of the dividends.

[jaideedave]

3 hours ago, retarius said:

No there is no clarity. Nor will there ever be. The English translated law will be full of the usual mistakes, mis-spellings, and contradictions. Best policy (mine) is to become non resident for tax purposes until the situation clarifies. If you have other homes in different countries use them for a couple of years to make sure you spend less than 180 days here. By then the confusion may have cleared enough for you to make a sensible decision. This recommendation was from my US/Thai accountant, a specialty firm in Bangkok. 

I highly doubt the bar stool warmers will be facing the dilemma of having to chose which villa to have to relocate to. The average retiree like myself are probably settled in here and a move to another country will cause a huge disruption.

Its way too early to speculate what the outcome will be.What baffles me is why some govt rep doesn't clear this up.Are the local RD offices geared up to deal with a whole new batch of foreigners asking questions about whether or not their particular income/pension is taxable? I think the answer is no. 

[Mike Lister]

2 hours ago, TimeMachine said:

You explained it perfectly as it is. But you still don't see how it's mafia action so I'll leave it as an agree to disagree one with my eyebrows funnelled inwards. If the government gave back to community and used the VAT to help people, that would help your argument.

I don't have an argument to make, other than nobody goes to jail and houses  don't get burned down regarding none payment of VAT which bizarrely you seem to think happens. As far as helping the people is concerned, riddle me this:

 

VAT is the biggest single source of tax income, followed by Customs and corporate tax, less than 4% of the population pays tax, only 11% file a tax return.......and you want government to give collected VAT back to help the people. My question is, if they did that, who is going to pay for health care, hospitals, schools, universities, social security, roads and infrastructure, and......you get the idea?

[TimeMachine]

8 minutes ago, Mike Lister said:

I don't have an argument to make, other than nobody goes to jail and houses  don't get burned down regarding none payment of VAT which bizarrely you seem to think happens. As far as helping the people is concerned, riddle me this:

 

VAT is the biggest single source of tax income, followed by Customs and corporate tax, less than 4% of the population pays tax, only 11% file a tax return.......and you want government to give collected VAT back to help the people. My question is, if they did that, who is going to pay for health care, hospitals, schools, universities, social security, roads and infrastructure, and......you get the idea?

Do the math. The money is there. 

[topt]

8 hours ago, hotandsticky said:

"Taxable income"..... but, as you say, DTAs take care of that.

 

Rather like the UK state pension being taxable income - no one pays tax on their pension because the annual tax allowance covers it.

 

13 hours ago, scubascuba3 said:

but with DTR no further tax to pay

You both seem to be ignoring the fact that the UK/Thai DTA specifically excludes pensions other than govt/civil service.......

So in theory, under the agreement, you could be taxed twice........

Not saying that will happen but no point in wearing blinkers.

 

Anybody from the UK with offshore (non-taxed) income could be hit with a sizeable tax amount depending on transfer amount........(sizeable being relative to zero currently).

[hotandsticky]

7 minutes ago, topt said:

 

You both seem to be ignoring the fact that the UK/Thai DTA specifically excludes pensions other than govt/civil service.......

So in theory, under the agreement, you could be taxed twice........

Not saying that will happen but no point in wearing blinkers.

 

Anybody from the UK with offshore (non-taxed) income could be hit with a sizeable tax amount depending on transfer amount........(sizeable being relative to zero currently).

Thanks.......but I remain unconcerned.

 

I have more than sufficient taxed income to play with.

 

 

Failing that I have a friendly ex wife who will make monthly loan repayments to me.

 

Failing that......................I will be here for less than six months.

[KannikaP]

9 hours ago, retarius said:

No there is no clarity. Nor will there ever be. The English translated law will be full of the usual mistakes, mis-spellings, and contradictions. Best policy (mine) is to become non resident for tax purposes until the situation clarifies. If you have other homes in different countries use them for a couple of years to make sure you spend less than 180 days here. By then the confusion may have cleared enough for you to make a sensible decision. This recommendation was from my US/Thai accountant, a specialty firm in Bangkok. 

And if you do not have other homes, if you have committed yourself to retirement in Thailand with your home & family here?

[topt]

3 minutes ago, KannikaP said:

And if you do not have other homes, if you have committed yourself to retirement in Thailand with your home & family here?

Well you could do what you said you did - bend over and offer it all to the Thai taxman........

Which was fine for you as if the amount you mentioned is correct it was negligible. 

 

Or as we should all be doing which is wait for hopefully some clarification in our favour but have other options planned which is what @retarius outlined. Everyone will be different.

[Liverpool Lou]

21 hours ago, Kenny202 said:

I am guessing this topic has been done to death.

It has and, no matter how many times it is  regurgitated, no one here knows the specifics apart from what has already been published, murkily, everywhere...if there was any clarification, everyone would know about it but, hey, let's have another 15-page thread of the same old pointless bickering to which there are no clearly specific answers.

Edited October 15, 2023 by Liverpool Lou