Exemptions under the new tax laws?

[Presnock]

1 hour ago, sometimewoodworker said:

There seems to be a rather confused interpretation of what a DTA actually means.

It doesn’t mean that if you are taxed in one country that you are exempt from tax in another.

What it does mean is that the tax payed in one country is off set against the tax liability in the second country.

Some countries have negotiated that certain types of income are exempt from taxation in Thailand. 

One example, The U. K. has negotiated a tax free allowance for capital gains.

 

So if your Thai tax liability is greater than the tax you paid in your other country you must pay the difference.

If your Thai tax liability is smaller than the tax you paid in your other country you pay nothing.

 

Calculations for tax are always done using the rules applicable in that country so any tax reduction strategies are only valid in the country that is assessing your liability 

THE US DTA with Thailand is clear on US SS and USgovt pensions- articles 20 and 21 of the DTA.  These monies as far as I know are taxed only by the US govt if at all.  I am not sure about the level on SS funds if any so I am not definite there.  

[Presnock]

48 minutes ago, kingstonkid said:

 

I am surprised that one of the many accounting firms in Thailand have not jumped up and advertised or provided info.

 

I thinkthere are still a lot of things that need to be covered and decided yet.

some of the translated Thai tax law are done by these tax agents/agencies.  Since DTA's may be different by country , the agents/agencies are probably waiting for the Thai govt to make the final restrictions.  At least one of the ex-pat news casts about the program indicated that not all Thai officials agreed with the program and that the committee working on the program were meeting regularlly.

[Sheryl]

5 hours ago, TheAppletons said:

 

  I'm relatively certain this applies only to the "built-in" exemption for people holding the "wealthy pensioner" Long Term Resident (LTR) visa.  

 

  

  

OP is confusing 2 very different things.

 

(1) Thailand provides a taxation exemption for overseas income for people with the LTR visa, which requires an income on at least $80,000 a year.

 

(2) Some (not all!) DTAs specify that some types of pensions and equivalent can only be taxed in one's country of nationality.  Fore example, the US DTA clearly states that government (not private) pensions and US Social Security are taxable only in the US. The UK DTA states that government pensions are taxable only in the UK but this does nto apply to State pensions e.g. the Old Age pension.  Every DTA is unique so people must read their own specific DTA on this matter.

 

It is not at all clear to me that there is any format for filing a Thai tax return showing income that, under the terms of a DTA, is non-assessable in Thailand.  To my (limited) understanding you simply do not declare such income.  Of course, if doing that be very sure that the income you do not declare (which might mean not filing at all) is indeed clearly exempt.

 

There is a way to claim a tax credit  for taxes paid to your home country on a Thai tax return  but that is a different matter than income being non-assessable in Thailand under a DTA.

 

 

[Mike Lister]

5 hours ago, Presnock said:

social security in the US maxes out at less than 40K per year but article 20 of the DTA says that SS can only be taxed by the US.  I do blv other countries mention their pensions too but I haven't bothered to read any of those, only seen notes from ex-pats from other countries.

Indeed it does ay that US Ssc can only be taxed by the USA, my reference was to wealthy pensioners being tax free under Thai RD or DYA rules.

[Mike Lister]

2 hours ago, Presnock said:

if you are a wealthy pensioner, globally rich, at least 40k pension and willing to invest in Thai bonds or whatever, then obtain a long term visa and they indicate tax free in Thailand, there are other benefits too...just search "Thai immigration LTR" .  As for USA pensioners, the DTA says that US govt pensions can be taxed only in the paying country unless the pensioner is also a Thai native and resident in Thailand. (this is according to article 21 of the DTA...just search DTA between USA and Thailand.  

I know very well that there are special visa's that offer tax perks but those perks are not part of the Thai Revenue Code, they especially negotiated concessions agreed by government. In order to get those perks, you have to BUY a LTR so this is something that is for only a few people, not the majority or average foreigner in Thailand. 

 

And once again, yes, I know very well that US SSc cannot be taxed in Thailand under DTA rules. Those things however have nothing to do with what you wrote when you said wealthy pensioners in the DTA earning over 80k and being tax free, a point you tried to pick me up on when I agreed with the earlier poster.

 

 

[Mike Lister]

2 hours ago, treetops said:

Forum rules require no such thing.  Here's a link to prove it. ;)

 

https://aseannow.com/terms/

 

You need to read the full set of rules, not the cut down version for those with short attention spans, just click where it says, "read more":

 

Rule 18

 

"However in factual areas such as but not limited to news, current affairs and health topics, social media cannot be used unless it is from a credible news media source or a government agency, and must include a link to the original source".

 

https://aseannow.com/forum_rules/

[treetops]

2 minutes ago, Mike Lister said:

You need to read the full set of rules, not the cut down version for those with short attention spans, just click where it says, "read more":

I'm sure you realised my comment was tongue in cheek, but in response the bit you quoted refers to not using social media sources without a link.

 

Rule 5 may have been better given the post content:

 

5. You will not use ASEAN NOW to post any material which is knowingly or can be reasonably construed as false, inaccurate, invasive of a person's privacy, or otherwise in violation of any law. Topics or posts deemed to be scaremongering, deliberately misleading or which deliberately distort information will be removed. In factual areas such as news forums and current affairs topics member content that is claimed or portrayed as a fact should be supported by a link to a relevant reputable source.

 

I submit that this comes under the "In factual areas such as news forums and current affairs topics" banner (my emphasis)?

[TallGuyJohninBKK]

2 hours ago, treetops said:

Forum rules require no such thing.  Here's a link to prove it. ;)

 

https://aseannow.com/terms/

 

 

As I see you now realize above, you need to read and understand the full set of rules... not just the front-page quick summary. The full version includes the following under section #5:

 

"5. You will not use ASEAN NOW to post any material which is knowingly or can be reasonably construed as false, inaccurate, invasive of a person's privacy, or otherwise in violation of any law....

 

"In factual areas such as news forums and current affairs topics member content that is claimed or portrayed as a fact should be supported by a link to a relevant reputable source."

 

https://aseannow.com/forum_rules/

 

@Mike Lister 's request above was in keeping with the forum's rules.

 

 

[Sigma6]

3 hours ago, Presnock said:

if you ar a wealthy pensioner, globally rich, at least 40k pension and willing to invest in Thai bonds or whatever, then obtain a long term visa and they indicate tax free in Thailand, there are other benefits too...just search "Thai immigration LTR" .  As for USA pensioners, the DTA says that US govt pensions can be taxed only in the paying country unless the pensioner is also a Thai native and resident in Thailand. (this is according to article 21 of the DTA...just search DTA between USA and Thailand.  

 

OK good, so finally you concede that the reference to 'wealthy pensioner', '80k pension', '40k with investments' is a reference to the LTR visa scheme, and nothing to do with any DTA/thai tax documents that have been translated by 'legal folk'.

 

[TallGuyJohninBKK]

I believe the correct interpretation of the issue being discussed above is that people with wealth can get a blanket Thai tax exemption by qualifying for and being on the Thai LTR visa.

 

On the other hand, wealthy expats who are NOT on  the LTR visa DO NOT qualify for the blanket Thai tax exemption even with those same levels of wealth.

 

 

[sandyf]

1 hour ago, Sheryl said:

but this does nto apply to State pensions e.g. the Old Age pension.

Not the same thing. The Old Age Pension was a non contributory scheme introduced in 1909 under the Old Age Pensions Act. It was replaced by a contributory State Pension in 1948 under the National Insurance Act.

In 2016 the State Pension was discontinued and replaced by the New State Pension, the former currently being £156.20/wk and the latter £203.85/wk.

Under the State Pension it was possible for a  percentage of NI to be used towards a private pension and there are many today receiving private pensions that have been partially funded by the state.

Nothing is ever as clear cut as it may look.

[Sheryl]

17 minutes ago, sandyf said:

Not the same thing. The Old Age Pension was a non contributory scheme introduced in 1909 under the Old Age Pensions Act. It was replaced by a contributory State Pension in 1948 under the National Insurance Act.

In 2016 the State Pension was discontinued and replaced by the New State Pension, the former currently being £156.20/wk and the latter £203.85/wk.

Under the State Pension it was possible for a  percentage of NI to be used towards a private pension and there are many today receiving private pensions that have been partially funded by the state.

Nothing is ever as clear cut as it may look.

However to my reading of the UK DTA, both State Pensions and private pensions can be taxed in the country of residence (i.e. Thailand).

 

It is only government pensions  that are clearly exempt from taxation in Thailand. Which I'm told means things like armed forces pension.

 

 

[CartagenaWarlock]

8 hours ago, Mike Lister said:

Untrue. It depends on the visa the person holds and the source of that 80k pension, if social security in the USA for example, yes,

Social security can't have 80K USD per year. 2024 maximum social security is $4,873/month. 

[Mike Lister]

5 minutes ago, CartagenaWarlock said:

Social security can't have 80K USD per year. 2024 maximum social security is $4,873/month. 

....as I recently am led to understand. Which makes that posters claim of 80k. even less likely to be correct

[CartagenaWarlock]

1 hour ago, Mike Lister said:

And once again, yes, I know very well that US SSc cannot be taxed in Thailand under DTA rules. Those things however have nothing to do with what you wrote when you said wealthy pensioners in the DTA earning over 80k and being tax free, a point you tried to pick me up on when I agreed with the earlier poster.

I don't believe social security is free from taxes by foreign governments when the US can tax social security.  It's been a long-held IRS policy to deduct any foreign government taxes from your US tax obligations, and I have done so (non-SS incomes) in three countries. 

https://www.ssa.gov/international/AlienTax_reference_2.html#:~:text=Taxation of U.S. Social Security,Washington%2C D.C.%2C for information.

[Mike Lister]

5 minutes ago, CartagenaWarlock said:

I don't believe social security is free from taxes by foreign governments when the US can tax social security.  It's been a long-held IRS policy to deduct any foreign governments taxes from your US tax obligations, and I have done so in three countries. 

https://www.ssa.gov/international/AlienTax_reference_2.html#:~:text=Taxation of U.S. Social Security,Washington%2C D.C.%2C for information.

I think the DTA between the US and Thailand specifically forbids Thailand from taxing Social Security payments, only the US can do that, that is what the DTA says. Poster @JimGant will be happy to recite chapter and verse on this and provide you with the links.

[Srikcir]

5 hours ago, Presnock said:

they indicate tax free in Thailand,

According to BOI at Chumchuri square18th Floor 254 Phaya Thai Rd, Pathum Wan, Bangkok 10330 (Sam Yan MRT Station) that obtained a Royal Proclamation to tax exempt three of the four options (one being wealthy pensioner) qualifying for the LTR visa. 

[Mike Lister]

1 minute ago, Srikcir said:

According to BOI at Chumchuri square18th Floor 254 Phaya Thai Rd, Pathum Wan, Bangkok 10330 (Sam Yan MRT Station) that obtained a Royal Proclamation to tax exempt three of the four options (one being wealthy pensioner) qualifying for the LTR visa. 

So tax exempt by Royal Proclamation and not part of the Revenue Code and not part of a DTA......as expected.

[khunPer]

On 1/5/2024 at 4:28 AM, Presnock said:

I have read a lot of Thai (translated) by some legal folks too, that according to the new tax laws, there can be exemptions on certain pensions (in one it says special pensions) and even in other google available translations.  There is even an exemption for "wealthy retiree's pension" and the wealthy retiree is defined as one receiving a pension of over 80K USD per year.  Also, there are provisions that state that the DTA has priority if the pension is taxed prior by the paying country.  By reading one's country's DTA with Thailand (also can easily be googled) one should be able to understand if their pension or other funds are exempt or not.  All should be available on google in different languages even.  Hopefully we will receive "official" notification of exactly what we can expect to do this year though nothing needs to be paid until we reside over 180 daysin Thailand this year, but it would be nice to be able to make any necessary plans prior to then.

Valid DTAs are still valid; many covers retirement pension taxation.

[Sheryl]

1 hour ago, CartagenaWarlock said:

I don't believe social security is free from taxes by foreign governments when the US can tax social security.  It's been a long-held IRS policy to deduct any foreign government taxes from your US tax obligations, and I have done so (non-SS incomes) in three countries. 

https://www.ssa.gov/international/AlienTax_reference_2.html#:~:text=Taxation of U.S. Social Security,Washington%2C D.C.%2C for information.

The US- Thai Taxation treaty very explicitly states that SS is taxable only in the US. Full stop.

 

"ARTICLE 20
Pensions and Social Security Payments
1. Subject to the provisions of paragraph 2 of Article 21 (Government Service), pensions and othersimilar remuneration paid to a resident of a Contracting State in consideration of past employment shallbe taxable only in that State.
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."

 

(emphasis mine)

 

(paragraph 2 pf Article 21 refers to the case where a person is a citizen of the country.)

 

Taxable only in the US means Thailand cannot tax it, period. Even if - as happens to many people whose sole income is SS -- no taxes were due in the US.

 

 

[stat]

9 hours ago, retarius said:

Can Thailand withdraw from the DTAs? Would it pay the Thai government to do this? I always ask myself what are the possibilities?

Theoretically yes they could but would never do it as they would lose out a lot of business investments from the US. DTAs are usually decades old and are only changed in minuscule details. For example DTA between Thailand and Germany is from 1968.

[TallGuyJohninBKK]

1 hour ago, Mike Lister said:

So tax exempt by Royal Proclamation and not part of the Revenue Code and not part of a DTA......as expected.

 

Yes, the LTR visa got its tax exempt status by royal decree long before the Revenue Department came along this past fall with their new "tax the expats" scheme.

 

[Presnock]

18 hours ago, Mike Lister said:

I know very well that there are special visa's that offer tax perks but those perks are not part of the Thai Revenue Code, they especially negotiated concessions agreed by government. In order to get those perks, you have to BUY a LTR so this is something that is for only a few people, not the majority or average foreigner in Thailand. 

 

And once again, yes, I know very well that US SSc cannot be taxed in Thailand under DTA rules. Those things however have nothing to do with what you wrote when you said wealthy pensioners in the DTA earning over 80k and being tax free, a point you tried to pick me up on when I agreed with the earlier poster.

 

 

Yeah, I apologize, in my zeal to find exemptions, I skipped right over the LTR that includes several types of "wealthy" pensioners.  I hope that everyone understands that we (inclusive) sometimes jump to false beliefs as we read too many different sides to this activity.  I note that the

translations of the Thai tax laws are done mostly by agents/agencies that cater to doing taxes for foreigners and unless they are talking to a specific foreigner from a particular country with or without a DTA, they don't include all the details.  AS mentioned by me and others, please read your own DTA to see what might or might not be included in exemptions.  Even then, TIT  and we don't yet know what the final program will look like.  

[Presnock]

15 hours ago, Mike Lister said:

I think the DTA between the US and Thailand specifically forbids Thailand from taxing Social Security payments, only the US can do that, that is what the DTA says. Poster @JimGant will be happy to recite chapter and verse on this and provide you with the links.

Mike is correct...US SS is taxable only by the US govt article 210 of the DTA with Thailand and US GOVT pensions taxable only by the US govt unless the receipient is also a receiver of such pension but is also a Thai citizen.  this under article 21 of the DTA with Thailand.

[Presnock]

Just now, Presnock said:

Mike is correct...US SS is taxable only by the US govt article 210 of the DTA with Thailand and US GOVT pensions taxable only by the US govt unless the receipient is also a receiver of such pension but is also a Thai citizen.  this under article 21 of the DTA with Thailand.

 

Just now, Presnock said:

Mike is correct...US SS is taxable only by the US govt article 210 of the DTA with Thailand and US GOVT pensions taxable only by the US govt unless the receipient is also a receiver of such pension but is also a Thai citizen.  this under article 21 of the DTA with Thailand.

That shourld readl article 20 of the DTA for US SS.

[Datsun 1200]

"Money goes to where it is treated best". If Siam suddenly started to tax all transfers as income, the money will move to Cambodia, Phillipines, Vietnam, Vanuatu etc etc

Rich expats are the "premium visitors" and also spend the most. They will not kill their "cash cows" 

and they will make sure they don't lose them and their $$. Like the chances of Cannabis being made illegal again,

I think the chances are zero. 

[Srikcir]

19 hours ago, Mike Lister said:

So tax exempt by Royal Proclamation and not part of the Revenue Code and not part of a DTA......as expected.

In a kingdom as good as law.

[TroubleandGrumpy]

On 1/6/2024 at 9:42 AM, Presnock said:

Since they are a sovereign government, they could withdraw or re-negotiate, just as the US could.

Thailand aint gonna withdraw from a DTA - BUT the issue is if the Thai RD will accept the claim made by an Expat that their money remitted into Thailand is not taxable under a DTA. It is not a 'get out of jail free' card you can wave - it is an agreement to reduce/prevent double taxation. Tehcnically every individual (company or person) has to CLAIM under a DTA that they are exempt or have allowances or credits. BUT it is still up to the Thai RD whether they agree or not.  And - here is the single largest and real issue all Expats will have with this - 'good luck' if they dont agree with your DTA claim.

 

However there is a 'solution' the Thai RD provides clarification statements that specifically advise that Expats with money they remit into Thailand from souces A-Z and is of types 1-50 are not taxable income when remitted into Thailand.  That would mean (hopefully) that if an Expat's money of from A-Z and/or is in the form of 1-50 then they do not have to lodge an income tax return. 

 

[TroubleandGrumpy]

On 1/6/2024 at 1:55 PM, Sheryl said:

OP is confusing 2 very different things.

 

(1) Thailand provides a taxation exemption for overseas income for people with the LTR visa, which requires an income on at least $80,000 a year.

 

I hear what you are saying Sheryl - I assume that means that the Thai RD has confirmed to the BOI that their LTR Visa holders are still exempt from income taxes under this rule change.

 

If that is true, that means that Thailand has allowed some Visa holders (LTR) to pay them a certain amount of money, and that excludes them from being subjected to income taxes. IMO that means Thailand is in breach of the OECD rules and regulations that have been established to stop people (and companies) avoid income taxes in the country they are living/operating in. 

 

It also means to me, that if Thailand does impose income tax obligations on all non-LTR Visa Expats, that they are saying to us all - You 'not rich' Falang - You pay tax'.  WTF? 

[TroubleandGrumpy]

On 1/7/2024 at 8:59 AM, Presnock said:

Mike is correct...US SS is taxable only by the US govt article 210 of the DTA with Thailand and US GOVT pensions taxable only by the US govt unless the receipient is also a receiver of such pension but is also a Thai citizen.  this under article 21 of the DTA with Thailand.

Please remember though - the big issue on this matter, is will the Thai RD require US Expats to lodge a tax return and prove that the money they remitted into Thailand is from a Pension - or will they issue advice that confirms the DTA exempotion and state that such an Expat does not have to lodge a tax return and 'prove' that.