Taxation of Ex-Pats pensions etc.

[Mike Lister]

31 minutes ago, Geir Rasch said:

Pension! 100k deduction on pension.

My apologies if this seems pedantic or laborious but it still doesn't make sense. That deduction is under the heading of expense deductions, that means contributions on payments into a pension, not pension income that is received. Getting a deductions for 100% of pension payments MADE into an approved fund makes a lot of ence but only if they are made in Thailand, not made overseas.

[tlcwaterfall]

Need some help please. Currently bringing in 600k per year and will turn 65 July 2024.

 

When working out my tax as of age 65 do I claim 190k deduction for being over 65 and 60k personal deduction?

 

Can some knowledgeable person/s please let me know how much tax I will pay and the formula to work it out?

 

I am getting a headache trying to work it out myself.

[Mike Lister]

7 minutes ago, tlcwaterfall said:

Need some help please. Currently bringing in 600k per year and will turn 65 July 2024.

 

When working out my tax as of age 65 do I claim 190k deduction for being over 65 and 60k personal deduction?

 

Can some knowledgeable person/s please let me know how much tax I will pay and the formula to work it out?

 

I am getting a headache trying to work it out myself.

That is correct, 190k plus 60k and don't

forget the first 150k of the remainder is zero rated.

[Yumthai]

4 hours ago, Mike Lister said:

Is that not for expenses related to that income? What expenses are connected with expat overseas pensions other than contributions to a pension scheme? Thai Social Security contributions are deductible for example, because they are an expense from which the ultimate pension is derived but that deduction is from a salary or wage in Thailand, not a wage paid overseas. 

 

Have to say I've never heard anyone raise that before and I've been filing taxes here for several years and have had this chat about allowable deductions with RD several times in different ways. I'm pretty sure that it would have been mentioned previously, had it been allowable. If you can add further to this, I'll certainly listen.

 

Check 2022 Personal Income Tax Return  form page 2 "No. 1 Assessable Income Under Section 40 (1) (2)"  along with the Guide to Personal Income Tax Return 2022 page 7

 

 

 

You declare the pension you received (remitted into Thailand) the same way as a salary.

Then you can enter allowable deductible expenses equal to 50% of the amount stated in item 4 (Balance).

 

Edited December 1, 2023 by Yumthai

[proton]

6 minutes ago, Mike Lister said:

That is correct, 190k plus 60k and don't

forget the first 150k of the remainder is zero rated.

 

So you can transfer 400k a year without paying any tax at all? that would do me

[Mike Lister]

3 minutes ago, proton said:

 

So you can transfer 400k a year without paying any tax at all? that would do me

You still have file a return of your income is over 60k per year (I think)

[Mike Lister]

8 minutes ago, Yumthai said:

 

Check 2022 Personal Income Tax Return  form page 2 "No. 1 Assessable Income Under Section 40 (1) (2)"  along with the Guide to Personal Income Tax Return 2022 page 7

 

 

 

You declare the pension you received (remitted into Thailand) the same way as a salary.

Then you can enter allowable deductible expenses equal to 50% of the amount stated in item 4 (Balance).

 

That continues to make mo sense to me that a foreigner with an overseas pension is allowed to deduct any expenses be they actual or a standard deduction. But if so, does that standard deduction replace the 190k and 60k? If it does, it might make more sense.

[Yumthai]

3 minutes ago, Mike Lister said:

That continues to make mo sense to me that a foreigner with an overseas pension is allowed to deduct any expenses be they actual or a standard deduction. But if so, does that standard deduction replace the 190k and 60k? If it does, it might make more sense.

 

190K and 60K allowances are for different purposes and should add up.

 

What makes sense or not to you is not relevant here, this is Thailand.

 

If you want a definitive answer, just hop to your Revenue Department branch and ask if you can deduct expense on your declared foreign pensions as described in the tax return form adding up all other allowances. I don't see why you could not do it as it's not written otherwise.

 

[Mike Lister]

2 minutes ago, Yumthai said:

 

190K and 60K allowances are for different purposes and should add up.

 

What makes sense or not to you is not relevant here, this is Thailand.

 

If you want a definitive answer, just hop to your Revenue Department branch and ask if you can deduct expense on your declared foreign pensions as described in the tax return form adding up all other allowances. I don't see why you could not do it as it's not written otherwise.

 

It's just that I've filed taxes here for the past three years and never in any of my discussions with the Rd, has this possibility ever been mentioned and our local Rd is extremely helpful. Perhaps more importantly, it's never once been mentioned by anyone else in any of the hundreds of posts on the subject of Thai tax and deductions. So, I continue to believe this deduction does not exist for me or other retirees.

[JTXR]

“I've had a lot of worries in my life, most of which never happened.”

- Mark Twain

[DrJack54]

So 5 pages.

Let's pray that a mod transfers to "General chat" or "Pub forum" 

It's so not related to this forum and full of unsubstantiated rubbish.

[Mike Lister]

3 minutes ago, DrJack54 said:

So 5 pages.

Let's pray that a mod transfers to "General chat" or "Pub forum" 

It's so not related to this forum and full of unsubstantiated rubbish.

Sadly, I'm bound to agree.

[DrJack54]

2 minutes ago, Mike Lister said:

Sadly, I'm bound to agree.

TBH when I saw you quoted me I did not expect your reply.

 

Think post above mine from Mark Twain ..sums it up.

 

So many threads and predictions prior to any changes.

 

Bit unrelated but I have an aside saying....

  Never impose a law that is difficult/Impossible to enforce.

Anyway I don't concern myself with "what ifs"

[Mike Lister]

1 minute ago, DrJack54 said:

TBH when I saw you quoted me I did not expect your reply.

 

Think post above mine from Mark Twain ..sums it up.

 

So many threads and predictions prior to any changes.

 

Bit unrelated but I have an aside saying....

  Never impose a law that is difficult/Impossible to enforce.

Anyway I don't concern myself with "what ifs"

I understand the nervous/fear by older expats because of concerns that a tax take could derail their finances during retirement here. I also understand the curiosity by younger people, many of whom are not tax savvy in the West, let alone in Thailand. There's a third group that are in the middle, many of whom are afraid the new law will short circuit their long "holidays" here, many of whom are pretending to be somewhere else and who could get found out. Everyone's got a different concern about this, hence the nervousness and second guessing. Personally, I'm in the clear in all of this so I don't have any concerns but I would like to see as many people as possible understand what the basics are and to bring an end to the paranoia and deliberate misinformation which is seriously unhelpful.

[Ben Zioner]

10 hours ago, DrJack54 said:

So 5 pages.

Let's pray that a mod transfers to "General chat" or "Pub forum" 

It's so not related to this forum and full of unsubstantiated rubbish.

 

[Ben Zioner]

On 11/25/2023 at 11:04 AM, Moonlover said:

Whenever I see yet another thread being raised on this topic, I immediatly refer back to the original article on this matter, which stated quite clearly:

 

'Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand'.              (with apologies to the mods for the use of big fonts!)

 

That's my mantra, and I'm sticking to it.

Very helpful for the vast majority who  are not taxed in their country of origin... And even for  the Brits it concerns only their measly government pension they pretend one could live off.

[Moonlover]

53 minutes ago, Ben Zioner said:

On 11/25/2023 at 11:04 AM, Moonlover said:

Whenever I see yet another thread being raised on this topic, I immediatly refer back to the original article on this matter, which stated quite clearly:

 

'Also exempt will be those who have been taxed in a foreign country that has a standing Double Tax Agreement with Thailand'.       

 

53 minutes ago, Ben Zioner said:

Very helpful for the vast majority who  are not taxed in their country of origin... And even for  the Brits it concerns only their measly government pension they pretend one could live off.

We all have different issues to contend with, but it doesn't make the above statement any less true. Us Brits pay income tax on our pensions, including the state pension. (I paid 1,144 GBP last year) so we should not be affected at all by this new ruling.

 

Edited December 2, 2023 by Moonlover

[Ben Zioner]

1 hour ago, Moonlover said:

 

We all have different issues to contend with, but it doesn't make the above statement any less true. Us Brits pay income tax on our pensions, including the state pension. (I paid 1,144 GBP last year) so we should not be affected at all by this new ruling.

 

Let me know if this forum is for Brits only, I might have  overlooked this reality.

[Moonlover]

3 hours ago, Moonlover said:

4 hours ago, Ben Zioner said:

Very helpful for the vast majority who  are not taxed in their country of origin... And even for  the Brits it concerns only their measly government pension they pretend one could live off.

 

1 hour ago, Ben Zioner said:

Let me know if this forum is for Brits only, I might have  overlooked this reality.

May I remind you that you brought up the issue of Brits pensions, (with your very ill-informed comment) not me.

 

Edited December 2, 2023 by Moonlover

[Geir Rasch]

On 12/1/2023 at 1:45 PM, Mike Lister said:

My apologies if this seems pedantic or laborious but it still doesn't make sense. That deduction is under the heading of expense deductions, that means contributions on payments into a pension, not pension income that is received. Getting a deductions for 100% of pension payments MADE into an approved fund makes a lot of ence but only if they are made in Thailand, not made overseas.

It is not pedantic, it is wrong. For about 10 years I have got that deduction on my pension being taxed in Thailand.

[Mike Lister]

4 hours ago, Geir Rasch said:

It is not pedantic, it is wrong. For about 10 years I have got that deduction on my pension being taxed in Thailand.

That's great, I'm pleased to hear that. Can you detail please what your deductions are overall?

 

You claim the one that's being discussed here, 100k for pension expenses,

190K for over age 65 years?

60K Personal allowance?

 

It will also help if you can confirm that you're not making payments into any pension plan in Thailand or overseas, in order to obtain that first deduction or that there is not something else that's non standard, in your case.

 

It's not necessary to detail any other incidental allowances/deductions such as health insurance or spouse etc but if you can clarify those three, that will help clarify things and wrap this up. Thanks.

Edited December 2, 2023 by Mike Lister

[Guavaman]

2 hours ago, Mike Lister said:

It is not pedantic, it is wrong. For about 10 years I have got that deduction on my pension being taxed in Thailand.

It is a standard deduction. 

The Revenue Code on the RD website has not been updated on this in English; however, a translation of the amended Act of 2017 appears in the Revenue Department Annual Report 2560 (2017) on page 73

https://www.rd.go.th/fileadmin/download/annual_report/annual_report60.pdf

1. Tax measures to increase the competitiveness of the country.

1.1. Restructuring personal income tax.

(1) Increased standard deductions.

1. Any person, who has the assessable income under Section 40 (1) and (2) of the Revenue Code such as salary, wage, or commission, shall be allowed to use a standard deduction as expense of 50 percent of the income but shall not exceed 100,000 Baht according to Section 42 Bis of the Revenue Code amended by Section 3 of the Act amending the Revenue Code (No. 44) B.E. 2560.

Note: The original deduction was 40 percent of income but shall not exceed 60,000 Baht.

 

Section 40 Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer.

(1) Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment.

 

 

                                                                                                                                                                 

Thailand: Individual - Deductions

Last reviewed - 12 July 2023

Employment expenses

A standard deduction of 50%, with a limit of THB 100,000, is permitted in respect of income from employment.

 

Here is an example from the Defence Finance Department of a General receiving a pension and taking the standard deduction..

 

Google Translate:

Defence Finance Department

Example of calculation of withholding tax, type 3, age 65 years

General. A receives a monthly pension of 74,320 baht, amounting to 12 month 891,840.00.

 Exemption age 65 years                                                                                                               190,000.00

Deduct expenses 50%, not more than 100,000 baht                                                          100,000.00

Balance                                601,840.00

Allowances

1. People with income                                                                     60,000.00

2. Husband or wife who has an income                                   60,000.00

3. Educational child 1 person                                                       30,000.00

4. Biya Prakanatcheewit (not exceeding 100,000 baht)   100,000.00

5. Fund units in stock mutual funds (not exceeding

15% of income, not exceeding 500,000 baht)                       133,776.00

6. Interest on loans for hire purchase or construction of residential buildings.

Not more than 100,000 baht                                                       100,000.00                                                                                                                                                                                   483,776.00

                                                 Balance Net Income                                                        118,064.00

7. Donation 10% net income (not exceeding 100,000 baht)                                            11,806.40

Net income for tax calculation                                                                                                   106,257.60

Income tax structure Ordinary people start tax year 2017

 

All of the retired Thai civil servants and military are eligible for the standard deduction on their pension incomes.

[Mike Lister]

1 hour ago, Guavaman said:

It is a standard deduction. 

The Revenue Code on the RD website has not been updated on this in English; however, a translation of the amended Act of 2017 appears in the Revenue Department Annual Report 2560 (2017) on page 73

https://www.rd.go.th/fileadmin/download/annual_report/annual_report60.pdf

 

1 hour ago, Guavaman said:

 

All of the retired Thai civil servants and military are eligible for the standard deduction on their pension incomes.

Thank you for posting that, it helped make things more clear, until your last line above. The first part of what you posted suggested that anyone who receives a pension is allowed to deduct 50% for expenses, up to 100k. But the last line and the example, refers to military and civil servants. Is the deduction restricted to those groups or is it generally available?

 

 

[proton]

All still very confusing 

[scorecard]

On 11/27/2023 at 8:54 AM, Old Croc said:

Why would you assume Thai tax rates are stated in US dollars?

Agree, I believe your referring to a table/chart issued by a Thai gov't agency, which would quite naturally be in Baht. 

 

Reality is the foreigners possibly affected in some way come from numerous countries, not just from the USA. I repeat; I believe your referring to a table/chart issued by a Thai gov't agency, which would quite naturally be in Baht. 

[Guavaman]

9 hours ago, Mike Lister said:

Is the deduction restricted to those groups or is it generally available?

Sorry, it was only meant to indicate that retired Thais take the standard deduction on their pensions.

[Mike Lister]

2 minutes ago, Guavaman said:

Sorry, it was only meant to indicate that retired Thais take the standard deduction on their pensions.

Yes, but does the standard deduction replace all other deductions? 

 

 

[Guavaman]

9 hours ago, Mike Lister said:

Yes, but does the standard deduction replace all other deductions? 

The Thai tax system does not have a single “standard deduction”. Rather, each of 8 categories of assessable income has a standard deduction of expenses as a % of that type of assessable income, within a specified limit.

 

The taxpayer can choose whether to claim the standard % or to claim actual and proven expenses for some categories and sub-categories, as shown by asterisks below.

 

 

Exemptions and allowances are detailed on this webpage.

https://sherrings.com/personal-tax-deductions-allowances-thailand.html

 

[Mike Lister]

2 hours ago, Guavaman said:

The Thai tax system does not have a single “standard deduction”. Rather, each of 8 categories of assessable income has a standard deduction of expenses as a % of that type of assessable income, within a specified limit.

 

The taxpayer can choose whether to claim the standard % or to claim actual and proven expenses for some categories and sub-categories, as shown by asterisks below.

 

 

Exemptions and allowances are detailed on this webpage.

https://sherrings.com/personal-tax-deductions-allowances-thailand.html

 

Thanks for bearing with me, I think I'm finally on board with this.

[Ben Zioner]

23 hours ago, proton said:

All still very confusing 

It is, and isnt, in that is is clear that we need Thai speaking agents.  Mazaars are recruiting massively. A useful input here would be recommendations for such agents.