Taxation of Ex-Pats pensions etc.

[Mike Lister]

It now seems that the combination of allowances, deductions and the zero rated tax free band, for the average over 65 year old expat pensioner, is z minimum of 500k per year, almost the same level as the UK Personal allowance!

 

60k - Personal Care Allowance

(up to) 100k - Pension Income Allowance

190k - over 65 years old allowance

(first) 150k - zero rated for tax

 

That's good news for us but it does seem very high, given average earnings here. That's around THB 46k a month, it's doable for many pensioners.

Edited December 4, 2023 by Mike Lister

[Geir Rasch]

On 12/3/2023 at 3:13 AM, Mike Lister said:

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.

I have 100k deduction on pension, 60k personal deduction, 190k age-deduction plus deduction for wife and health insurance. I do not pay in to any pension plan in Thailand or overseas. I have no morgage in Thailand which would give deduction on payd interest up to 100k.

[Mike Lister]

2 minutes ago, Geir Rasch said:

I have 100k deduction on pension, 60k personal deduction, 190k age-deduction plus deduction for wife and health insurance. I do not pay in to any pension plan in Thailand or overseas. I have no morgage in Thailand which would give deduction on payd interest up to 100k.

Thanks, I actually got there courtesy of a helpful post from somebody else earlier but thanks for your reply anyway.

[Guavaman]

Fellow expat tax residents in Thailand,

One source of confusion in our communications regarding Thai income tax issues is the lack of consistent use of technical terms in English. The Revenue Department webpage https://www.rd.go.th/english/38306.html states the following:

 

Advisory Notice

Please note that the English version is for translation purposes only. For official use, please refer to the Thai language.

 

The absence of “official” translations of Thai language tax-related documents results in variations in terms used by sources of information accessible online, including articles in English language newspapers. On the other hand, use of terms on web-based articles by international law and tax consultant firms are usually quite consistent, with minor variations.

 

The diverse collection of participants in this forum from different countries and including non-native English speakers naturally gives rise to many different idiosyncratic uses of important legal and taxation terms, resulting in confusion. If we could all get clear on the use terms these terms in English, it would facilitate clarity in our continued discussions going forward.

 

For example, Exemptions, Deductions of Expenses, and Allowances are not synonyms – they are not inter-changeable; rather, each term has a specific meaning and a different root word in Thai.

 

These are the terms used in the PND 91 tax filing form in English from the downloadable forms on the RD webpage:  https://www.rd.go.th/english/63902.html Personal Income Tax Return for taxpayer with only income from employment under Section 40 (1) of the Revenue Code Only (Tax Year 2022).

 

 

 

 

It is hoped that this example may help to visualize the structure of the tax filing form for those who report “only income from employment” category using the PND 91 form.

 

Taxpayers who report other categories of income must use the other form PND 90 “for taxpayer with income not only from employment” to include income from other categories as well, such as interest, dividends, rental income, etc.

 

If one accepts payment of 15% withholding tax on interest on Thai bank accounts, one can use the PND 91 form; otherwise, one must use the PND 90 form to claim refund of the 15% withholding tax on interest.

 

Exemptions, deductions of expenses, allowances: not same = different.

Good luck in your Thai tax adventures

[Ben Zioner]

14 minutes ago, Guavaman said:

Fellow expat tax residents in Thailand,

One source of confusion in our communications regarding Thai income tax issues is the lack of consistent use of technical terms in English. The Revenue Department webpage https://www.rd.go.th/english/38306.html states

Thanks  so much. IMHO this is the best post so far on this sad Tax issue.

 

But since my potential exposure would be around 750k I don't think I can proceed without a Thai speaking agent. It would be great if people could recommend here professionals they worked with recently. 

 

One other thing I'd love to know is wether I could use the services of a Bangkok based agency, while residing up country.

[MartinL]

57 minutes ago, Guavaman said:

Fellow expat tax residents in Thailand,

One source of confusion in our communications regarding Thai income tax issues is the lack of consistent use of technical terms in English. The Revenue Department webpage https://www.rd.go.th/english/38306.html states the following:

 

Advisory Notice

Please note that the English version is for translation purposes only. For official use, please refer to the Thai language.

 

The absence of “official” translations of Thai language tax-related documents results in variations in terms used by sources of information accessible online, including articles in English language newspapers. On the other hand, use of terms on web-based articles by international law and tax consultant firms are usually quite consistent, with minor variations.

 

The diverse collection of participants in this forum from different countries and including non-native English speakers naturally gives rise to many different idiosyncratic uses of important legal and taxation terms, resulting in confusion. If we could all get clear on the use terms these terms in English, it would facilitate clarity in our continued discussions going forward.

 

For example, Exemptions, Deductions of Expenses, and Allowances are not synonyms – they are not inter-changeable; rather, each term has a specific meaning and a different root word in Thai.

 

These are the terms used in the PND 91 tax filing form in English from the downloadable forms on the RD webpage:  https://www.rd.go.th/english/63902.html Personal Income Tax Return for taxpayer with only income from employment under Section 40 (1) of the Revenue Code Only (Tax Year 2022).

 

 

 

 

It is hoped that this example may help to visualize the structure of the tax filing form for those who report “only income from employment” category using the PND 91 form.

 

Taxpayers who report other categories of income must use the other form PND 90 “for taxpayer with income not only from employment” to include income from other categories as well, such as interest, dividends, rental income, etc.

 

If one accepts payment of 15% withholding tax on interest on Thai bank accounts, one can use the PND 91 form; otherwise, one must use the PND 90 form to claim refund of the 15% withholding tax on interest.

 

Exemptions, deductions of expenses, allowances: not same = different.

Good luck in your Thai tax adventures

 

Excellent post and almost exactly the process I'd arrived at, with exception of health insurance, using different figures.

 

Just a note; Section A(5) should be 210,000 rather than 21,000. 

Edited December 6, 2023 by MartinL

[Mike Lister]

1 hour ago, Guavaman said:

Fellow expat tax residents in Thailand,

One source of confusion in our communications regarding Thai income tax issues is the lack of consistent use of technical terms in English. The Revenue Department webpage https://www.rd.go.th/english/38306.html states the following:

 

Advisory Notice

Please note that the English version is for translation purposes only. For official use, please refer to the Thai language.

 

The absence of “official” translations of Thai language tax-related documents results in variations in terms used by sources of information accessible online, including articles in English language newspapers. On the other hand, use of terms on web-based articles by international law and tax consultant firms are usually quite consistent, with minor variations.

 

The diverse collection of participants in this forum from different countries and including non-native English speakers naturally gives rise to many different idiosyncratic uses of important legal and taxation terms, resulting in confusion. If we could all get clear on the use terms these terms in English, it would facilitate clarity in our continued discussions going forward.

 

For example, Exemptions, Deductions of Expenses, and Allowances are not synonyms – they are not inter-changeable; rather, each term has a specific meaning and a different root word in Thai.

 

These are the terms used in the PND 91 tax filing form in English from the downloadable forms on the RD webpage:  https://www.rd.go.th/english/63902.html Personal Income Tax Return for taxpayer with only income from employment under Section 40 (1) of the Revenue Code Only (Tax Year 2022).

 

 

 

 

It is hoped that this example may help to visualize the structure of the tax filing form for those who report “only income from employment” category using the PND 91 form.

 

Taxpayers who report other categories of income must use the other form PND 90 “for taxpayer with income not only from employment” to include income from other categories as well, such as interest, dividends, rental income, etc.

 

If one accepts payment of 15% withholding tax on interest on Thai bank accounts, one can use the PND 91 form; otherwise, one must use the PND 90 form to claim refund of the 15% withholding tax on interest.

 

Exemptions, deductions of expenses, allowances: not same = different.

Good luck in your Thai tax adventures

Well done, Probably the single most useful and practical posts on this subject, since all the various threads began.

Edited December 6, 2023 by Mike Lister

[Mike Teavee]

2 hours ago, Ben Zioner said:

Thanks  so much. IMHO this is the best post so far on this sad Tax issue.

 

But since my potential exposure would be around 750k I don't think I can proceed without a Thai speaking agent. It would be great if people could recommend here professionals they worked with recently. 

 

One other thing I'd love to know is wether I could use the services of a Bangkok based agency, while residing up country.

I haven't personally used them but these were the guys who were recommended to me by people who have so I kept a note of their details... https://asiaaccounts.com/

 

They're based in Bangkok (Ekkamai area) but I don't see why you couldn't use them without visiting Bangkok as returns are filed online so the only paperwork you would need to sign would be with them & I'd be surprised if you couldn't do it digitally.

 

When I have to sign anything with my Accountant in the UK it's either Docusign or if it's an HMRC form, a PDF that I edit to "Sign" it. 

 

 

 

 

[samtam]

4 hours ago, Guavaman said:

Fellow expat tax residents in Thailand,

One source of confusion in our communications regarding Thai income tax issues is the lack of consistent use of technical terms in English. The Revenue Department webpage https://www.rd.go.th/english/38306.html states the following:

 

Advisory Notice

Please note that the English version is for translation purposes only. For official use, please refer to the Thai language.

 

The absence of “official” translations of Thai language tax-related documents results in variations in terms used by sources of information accessible online, including articles in English language newspapers. On the other hand, use of terms on web-based articles by international law and tax consultant firms are usually quite consistent, with minor variations.

 

The diverse collection of participants in this forum from different countries and including non-native English speakers naturally gives rise to many different idiosyncratic uses of important legal and taxation terms, resulting in confusion. If we could all get clear on the use terms these terms in English, it would facilitate clarity in our continued discussions going forward.

 

For example, Exemptions, Deductions of Expenses, and Allowances are not synonyms – they are not inter-changeable; rather, each term has a specific meaning and a different root word in Thai.

 

These are the terms used in the PND 91 tax filing form in English from the downloadable forms on the RD webpage:  https://www.rd.go.th/english/63902.html Personal Income Tax Return for taxpayer with only income from employment under Section 40 (1) of the Revenue Code Only (Tax Year 2022).

 

 

 

 

It is hoped that this example may help to visualize the structure of the tax filing form for those who report “only income from employment” category using the PND 91 form.

 

Taxpayers who report other categories of income must use the other form PND 90 “for taxpayer with income not only from employment” to include income from other categories as well, such as interest, dividends, rental income, etc.

 

If one accepts payment of 15% withholding tax on interest on Thai bank accounts, one can use the PND 91 form; otherwise, one must use the PND 90 form to claim refund of the 15% withholding tax on interest.

 

Exemptions, deductions of expenses, allowances: not same = different.

Good luck in your Thai tax adventures

Thank you! From your link

https://www.rd.go.th/english/63902.html Personal Income Tax Return for taxpayer with only income from employment under Section 40 (1) of the Revenue Code Only (Tax Year 2022).

 

which PDF file is the return you have chosen as your sample page, as there only appears to be a PIT for joint filing (no 10 in the RD list)?

 

[Ben Zioner]

1 hour ago, Mike Teavee said:

I haven't personally used them but these were the guys who were recommended to me by people who have so I kept a note of their details... https://asiaaccounts.com/

 

They're based in Bangkok (Ekkamai area) but I don't see why you couldn't use them without visiting Bangkok as returns are filed online so the only paperwork you would need to sign would be with them & I'd be surprised if you couldn't do it digitally.

 

When I have to sign anything with my Accountant in the UK it's either Docusign or if it's an HMRC form, a PDF that I edit to "Sign" it. 

 

 

 

 

I  am not a business, my income, about 4 million, is entirely derived from pensions, will they look after me?

[Mike Teavee]

1 hour ago, Ben Zioner said:

I  am not a business, my income, about 4 million, is entirely derived from pensions, will they look after me?

I'm sorry you'd have to ask them as they do look after my mate's tax needs BUT he also has a business here so it could be a "Packaged" deal. 

[Sqoop]

It seems simplistic to say that a tax treaty means no tax. For instance if UK tax were 30% and local tax 35 % then there might be tax to pay. Also if pensions are tax except in the UK but deemed to be income here ? Need to wait and see. 

[federicoP]

6 hours ago, Ben Zioner said:

I don't think I can proceed without a Thai speaking agent.

 

If you have only a pension, do not worry, it is not so difficult.
It is ten years that I am paying here (Chalong, Phuket)  the tax on my pension.

My thai is zero and my english is not so fluent, but I go to the local Revenue office bringing my passport and all the data, and they (kindly) help me.

When paying the tax here, I also ask for the documents R.O. 21 (Certification, in english, of the amount for which I paid here) and R.O.22 (Certification that I am, for that year, fiscal resident in Thailand).
These documents may be useful in relation to the treat against double taxation between my native country and Thailand The tax on the pension is lower here in Thailand and I pay only here the tax on it, as allowed by the DTA.

If my native country asks something about the payment for my pension I can show them these documents.

[Guavaman]

5 hours ago, samtam said:

which PDF file is the return you have chosen as your sample page, as there only appears to be a PIT for joint filing (no 10 in the RD list)?

3.	Personal Income Tax Return for taxpayer with only income from employment under Section 40 (1) of the Revenue Code Only (Tax Year 2022)

 

As someone pointed out above, line 5 should be 210,000 rather than 21000; the form does not do any calculations for you.

[herfiehandbag]

On 11/25/2023 at 3:11 PM, Mike Lister said:

It depends on whether your home country has a double taxation agreement with Thailand and the sources and amounts of your income. UK Government (Civil Service) pensions are exempt, State Pension is not, company and private pensions are not. The Thai tax system has fairly generous allowances and deductions plus a large zero rated band which means you can import around 10k Pound per year, without being subjected to Thai tax (which is tiered at 5%, 10% 15% 20% bands)

Of all the posts in this and related threads, finally one which gives some useful answers!

[CartagenaWarlock]

On 11/25/2023 at 2:04 AM, LittleBear57 said:

I missed this article somehow. However it seems very clear it will not affect people from countries with a double taxation agreement. Thank you for posting.

So people from countries with double taxation agreements can bring unlimited funds without paying any taxes? I am skeptical about that. 

[JimGant]

2 hours ago, federicoP said:

When paying the tax here, I also ask for the documents R.O. 21 (Certification, in english, of the amount for which I paid here) and R.O.22 (Certification that I am, for that year, fiscal resident in Thailand).
These documents may be useful in relation to the treat against double taxation between my native country and Thailand The tax on the pension is lower here in Thailand and I pay only here the tax on it, as allowed by the DTA.

If my native country asks something about the payment for my pension I can show them these documents.

 

Sounds like the Norwegian example. The Norwegian - Thai DTA has Thailand as the primary tax authority for Norwegian tax residents of Thailand, to include Norwegian govt pensions. All's that's required is for Norwegians to produce a Thai tax return, showing that all their Norwegian income was taxed by the Thais. As such, Norway will exclude such income from their taxes, which, in most cases, would be higher than that of the Thais. But, unlike with other DTAs, there is no provision for a tax credit, with the difference being paid into the Norwegian coffer.  Instead, it's just: You pay taxes in Thailand, you don't pay taxes in Norway. Nice.

 

I guess Norwegians (and others with similar DTAs) aren't losing too much sleep over these new tax regulations.

[samtam]

4 hours ago, Guavaman said:

3.	Personal Income Tax Return for taxpayer with only income from employment under Section 40 (1) of the Revenue Code Only (Tax Year 2022)

 

As someone pointed out above, line 5 should be 210,000 rather than 21000; the form does not do any calculations for you.

 Thank you.

[federicoP]

13 hours ago, JimGant said:

I guess Norwegians (and others with similar DTAs) aren't losing too much sleep over these new tax regulations.

 

Yes, also the DTA between Italy and Thailand states that the tax on the pensions (generally) can be paid in Thailand, and here the taxes are lower than in Italy.

 

For other incomes it is more complicated, it varies from case to case.

[Ben Zioner]

21 hours ago, federicoP said:

f you have only a pension, do not worry, it is not so difficult.
It is ten years that I am paying here (Chalong, Phuket)  the tax on my pension.

My thai is zero and my english is not so fluent, but I go to the local Revenue office bringing my passport and all the data, and they (kindly) help me.

If I did that they'd send me a bill for THB 750000. I am ok with 350000 so I have a lot of homework to do.

Edited December 7, 2023 by Ben Zioner

[Robin]

So much specultion.  Until the definitive law is passed  (on jan2 2024?)  we do ot know hiw this will pan out, so I think poinles to spennd t much energy working out ways of avoiding something that might not hppen.

As a precaution, I hve transferred wht spare cash I have saved in oerseas bank, o my Thailbank account.  No questions asked aout this transfer, which with my wife's income should keep me going for the next year.  i can use my UK credit card fro any travel outside Thailans,  By then we should know waht is actually going to happen, and what will, or will not be taxable income, and wiich Tha  Agents will be offering work-arounds.

My personal opinion FWIW is that this will prove too difficult to enforce, so will be forgotten or drastically modified.

I I understand it correctly, it will put an end to Thais workign overseas, and end Thaialnd as a Retirement destination

I have never met a Thai who pays any tax, so is thia going to change?  How much does Sreetha and his cronies pay in personal incme tax.

[homeseeker]

Be appreciative if a knowledgeable person can assist me.

I am long time stayer in Thailand (retirement visa 800 k bank method) with pension etc income. 

Pension and Income etc. subject to double taxation agreement.

 

Currently arranging my affairs to ensure I can avoid (not evade) reaching the threshold if it is the case that I may be liable to personal income tax from 1 January 2024.

 

How much income for the year 2024 can I bring into Thailand as shown on my bank statement so I cannot be said to be liable to pay tax?

(and I assume no necessity to file a tax return).

 

Thanks very much for any input.

 

Edited December 26, 2023 by homeseeker

[Mike Lister]

2 minutes ago, homeseeker said:

Be appreciative if a knowledgeable person can assist me.

I am long time stayer in Thailand (retirement visa 800 k bank method) with pension etc income. 

Pension and Income etc. subject to double taxation agreement.

 

Currently arranging my affairs to ensure I can avoid (not evade) reaching the threshold if it is the case that I may be liable to personal income tax from 1 January 2024.

 

How much income for the year 2024 can I bring into Thailand as shown on my bank statement so I cannot be said to be liable to pay tax?

(and I assume no necessity to file a tax return).

 

Thanks very much for any input.

 

60,000 per year before you must file a tax return.

 

How old are you, which country does your income come from. what type of income is it?

[OJAS]

On 12/4/2023 at 8:11 AM, Mike Lister said:

That's good news for us but it does seem very high, given average earnings here.

 

But presumably most working Thais would, in practice, only be entitled to the initial 150k tax-free allowance?

 

And upon what basis is entitlement to the Personal Care Allowance assessed, please?

[Mike Lister]

1 minute ago, OJAS said:

 

But presumably most working Thais would, in practice, only be entitled to the initial 150k tax-free allowance?

 

And upon what basis is entitlement to the Personal Care Allowance assessed, please?

The RD rules don't distinguish between people of different nationality and assign each different allowances and deductions. All tax payers are eligible for the same deductions and allowances. So if a Thai person is over aged 65 and is working, they will be entitled to the over 65 allowance of 190k and also a 50% deduction on income earned, and, a 50% deduction on pension received.

 

Personal Care Allowance is a personal deduction, everyone is entitled t it, it is the same concept as the UK personal Allowance.

[RubbaJohnny]

On 12/6/2023 at 2:01 PM, Sqoop said:

It seems simplistic to say that a tax treaty means no tax. For instance if UK tax were 30% and local tax 35 % then there might be tax to pay. Also if pensions are tax except in the UK but deemed to be income here ? Need to wait and see. 

I do not wish to be awkward but all uk penssions are  income in uk whether private, state or combo. My mother was a senior tax consultant in Uk so I know the guidlines.

Of course if a person has only the meagre state pension around 200 pounds a week, or less for those without full contribution record, they are under thethreshold in UK, plus the added "benefit" that it will decline as not uprated for Thai residents..

My private pensions are not in sterling and I may have to pay but with allowances of almost 500k  may be cheaper to jusy bite the bullet or once dust settles employ a local accountant.Up to you.I may well leave fund offhore and ue for vacation air ticket etc o that money never ever brought in.

IMHO this has been poorly thought out.

Unless every credit card ATM is taxed, bitcoin gold , cash on arrival checked  it may come down to usual revesal when RD have hindeds of frustrated farangs and tourists , same Immigration when we all need them to add days on those who hve multiple passports. Irish plus UK plus kiwi passports  etc

If they tax ATM hit tourism, if they dont it will be a wy to avod I jut take 20k a week from my Autralian bank

 

Again regrads DT treaty there may be arbitrgae and will have to claim back .

With thousands of expats hundreds of tax systems currencies I can see tehonly ones to benfit will be the accountants copy shops.

 

I cannot imagine anyone but immigration will be acceptable proof here of how many days for RD.

Not sure I will be in LOS for 18- days befor 2568 but forewarned is fore armed.

I think it will deter new retirees , old ones wiyh homes families pets will just spend less.

Digital nomads and others yung and flexible enough may not quit but just arrange to be in no more than the permitted number of days.

 

 

[OJAS]

40 minutes ago, Mike Lister said:

Personal Care Allowance is a personal deduction, everyone is entitled t it, it is the same concept as the UK personal Allowance.

 

So, when the 60k in question is added to the initial 150k tax-free provision, this presumably means that everyone is, in practice, entitled to a personal allowance of 210k?

 

[Mike Lister]

2 minutes ago, OJAS said:

 

So, when the 60k in question is added to the initial 150k tax-free provision, this presumably means that everyone is, in practice, entitled to a personal allowance of 210k?

 

I get +190k, +100K, +60, +150k, 500 k in total for being over 65 on a pension.

[OJAS]

1 hour ago, Mike Lister said:

I get +190k, +100K, +60, +150k, 500 k in total for being over 65 on a pension.

 

Incidentally, whilst most of us Brits in receipt of the State Pension will probably not have to pay any tax here in Thailand on our perpetually-frozen pensions, this may not be the case for anyone in receipt of the New State Pension who might be contemplating a move to Thailand after next April and their weekly pension rate has increased to £221.20 (before being then frozen in perpetuity):

 

https://www.gov.uk/government/publications/proposed-benefit-and-pension-rates-2024-to-2025/proposed-benefit-and-pension-rates-2024-to-2025#state-pension

 

This amounts to £11,502.40 per annum which, in turn, converts to a shade above 500,000 THB on the basis of yesterday's Bank of Thailand GBP/THB exchange rate of 43.5078 (which, I gather, is the one upon which the RD would require conversions from GBP to THB to be calculated):

 

https://www.bot.or.th/en/home.html

 

[Mike Teavee]

2 hours ago, Mike Lister said:

I get +190k, +100K, +60, +150k, 500 k in total for being over 65 on a pension.

I understand the 190K (> 65), 60K(personal allowance for everybody) & 150k (taxed at 0%) but can I ask what the 100K allowance is for? 
 

I get 60K +25K (Health Insurance) +150K = 235K 

 

 

Edited December 26, 2023 by Mike Teavee