Must Read A SIMPLE GUIDE TO PERSONAL INCOME TAX IN THAILAND

[Mike Lister]

28 minutes ago, TroubleandGrumpy said:

Technicality BUT it should read - "taxable income over 120K". Having income over 120K does not mean you have to lodge a tax return.  120K income is not 120K taxable income - if you have exemptions, allowances, offsets, and other deductions. 

That para has been changed in the latest rev, I am away at the hospital currently but will point you to it, when I get home. Alternatively, you could look yourself! Also you need to read the new para about assessable vs taxable income, the process and how they are defined.

Edited January 9 by Mike Lister

[jesimps]

23 minutes ago, BigStar said:

 

Yes, but I like living in Thailand. It's given me a lot over the years. Who's being taxed to death?

Anyone being taxed in their home country who is then taxed by the Thai Authorities would be "taxed to death" so to speak.

[Mike Lister]

2 minutes ago, jesimps said:

Anyone being taxed in their home country who is then taxed by the Thai Authorities would be "taxed to death" so to speak.

Over exaggerating. The purpose of a DTA is to avoid double taxation.

[TroubleandGrumpy]

3 hours ago, aussienam said:

This is potentially the beginning of the end for many decent elderly expats living here unfortunately.  

So many uncertainties as well, making me personally hold off on any large purchase decisions and my long term stay plans here are now unknown. 

**********************

I am sure there's plenty of other examples that need clarification. 

 

As it stands, I will not be purchasing any property, vehicles or any other big-ticket items.  2024 I will spend frugally and now reassessing whether Thailand is worth living as a retiree looking for an affordable, low-income friendly destination. Plenty of ladies will miss out on sponsor money, plenty of street level businesses relying on expat communities will probably be collateral damage from less spending.  All up, a conservative year for those wanting to avoid potential hefty tax bills. 

The Hi-So farangs could also see 30-35% tax on their living costs. 

Mate - I feel exactly the same way and could add another 6-10 examples to your list.  Likewise I am only bringing into Thailand the Age Pension payments in 2024 - I brought forward additional funds in December already. 

 

If I have to pay income taxes on that Pension then we are out of here. Hopefully the cliams made in this post that I can get 500K deduction in taxable income will pan out.  And hopefully going forward Thailand will sort this all out compltely, and they will never force me in the future to prove that the 5 million baht I brought into Thailand that year is not taxable income - but if I am required to do that, then I must be totally confident that my 'proof' will be fully accepted, or it aint gonna happen - which m,eans we are out of hear.

 

Some think I am being 'negative' - you should hear my Thai wife talk about what she thinks of me having to pay income taxes to the people running Thailand - especially given all the sheite they put me (us) through to stay here and the costs they charge me (us) for everything they provide me  (especially medical services).

[Rhys]

Thanks Mike very helpful.

 

[Guavaman]

1 hour ago, TroubleandGrumpy said:

Technicality BUT it should read - "taxable income over 120K".

It should read: "assessable income over 120k".

 

https://www.mazars.co.th/content/download/1176493/59841085/version//file/Personal-income-tax-return-PND-91-A-closer-look-November-2023.pdf

 

Who must file Form PND 91?

A person must file a PND 91 if they have income as set out in Section 40(1) of the Revenue Code and meet one of the following conditions:

 

1. Single Person

Assessable income exceeding 120,000 baht in the tax year.

2. Married Person

Assessable income, combined with that of your spouse, exceeding 220,000 baht in the tax year.

[TroubleandGrumpy]

10 hours ago, Mike Lister said:

Somebody hinted earlier at the impact of several thousand farangs trying to get their taxes filed at the RD office. The tax filing system is online and for several years, tax filers have been transitioned from paper to online. The system was only available in Thai, the last time I looked last year, I suspect it wont be long before an English language version is available. 

Several thousand?? I saw a figure of 200-300 thousand Expats in Thailand that will now be expected to lodge returns?  If it ainbt in English and available - unlike the 90 day reporting is frequently - then what happens? We have to get our documents translated/certified to Thai and lodge it manually?? This thing has more and more 'hairs' on it. 

[TroubleandGrumpy]

Just now, Guavaman said:

It should read: "assessable income over 120k".

 

https://www.mazars.co.th/content/download/1176493/59841085/version//file/Personal-income-tax-return-PND-91-A-closer-look-November-2023.pdf

 

Who must file Form PND 91?

A person must file a PND 91 if they have income as set out in Section 40(1) of the Revenue Code and meet one of the following conditions:

 

1. Single Person

Assessable income exceeding 120,000 baht in the tax year.

2. Married Person

Assessable income, combined with that of your spouse, exceeding 220,000 baht in the tax year.

ooops - my bad - Assessable Income is the correct term (and what I meant). 

[Mike Lister]

17 minutes ago, TroubleandGrumpy said:

Mate - I feel exactly the same way and could add another 6-10 examples to your list.  Likewise I am only bringing into Thailand the Age Pension payments in 2024 - I brought forward additional funds in December already. 

 

If I have to pay income taxes on that Pension then we are out of here. Hopefully the cliams made in this post that I can get 500K deduction in taxable income will pan out.  And hopefully going forward Thailand will sort this all out compltely, and they will never force me in the future to prove that the 5 million baht I brought into Thailand that year is not taxable income - but if I am required to do that, then I must be totally confident that my 'proof' will be fully accepted, or it aint gonna happen - which m,eans we are out of hear.

 

Some think I am being 'negative' - you should hear my Thai wife talk about what she thinks of me having to pay income taxes to the people running Thailand - especially given all the sheite they put me (us) through to stay here and the costs they charge me (us) for everything they provide me  (especially medical services).

Please don't populate this thread with the same stuff as the last one, this thread is attempting to build a tax guide, not listen to lengthy whining about how much people hate everything related.

[TroubleandGrumpy]

43 minutes ago, Mike Lister said:

That para has been changed in the latest rev, I am away at the hospital currently but will point you to it, when I get home. Alternatively, you could look yourself! Also you need to read the new para about assessable vs taxable income, the process and how they are defined.

All good Mike - another person has sorted me out and corrected me on that point. 

 

Take care - hope all is well at hospital.

Edited January 9 by TroubleandGrumpy

[Mike Lister]

6 minutes ago, TroubleandGrumpy said:

Several thousand?? I saw a figure of 200-300 thousand Expats in Thailand that will now be expected to lodge returns?  If it ainbt in English and available - unlike the 90 day reporting is frequently - then what happens? We have to get our documents translated/certified to Thai and lodge it manually?? This thing has more and more 'hairs' on it. 

Contribute positively to the construction of the document or post elsewhere please

[parallelman]

1 hour ago, FritsSikkink said:

No, Mike Lister said the same as me, it works like that in Western countries too.

That you don't agree has no value for the law.

'No'. Ha, . You obviously didn't read Mike Lister's reply to my comment which included '...Thailand doesn't operate those notification systems, especially not for foreigners.'

That I don't agree with YOU has nothing to do with the law, which is correct. Don't try to make it look like I said that I don't agree with the law. I think you are just trolling.

[TroubleandGrumpy]

4 minutes ago, Mike Lister said:

Please don't populate this thread with the same stuff as the last one, this thread is attempting to build a tax guide, not listen to lengthy whining about how much people hate everything related.

 Fair enough Mike - this thread is answering more of my issues than all the others together. Not great and not all good - but there is much more information to work through.

[Lacessit]

1 hour ago, GreasyFingers said:

That is interesting. I do not receive the old age pension but a NSW State Super pension that in their word is a "capped defined benefit income stream (CDBIS)" that did not need to be reported to the ATO. Recent changes suggest that it may need to be reported to the ATO but my tax accountant never did. Very interesting times.

 

Keep up the good work.

 

 

9 hours ago, Mike Lister said:

Australian old age pension is assessible income in Thailand.

 

The Australian pension is assessible income in Australia. If one is putting in a tax return there, it is included. Of course, with tax thresholds and offsets, no tax is ever paid if that is the sole income stream.

So how can the Australian OAP be assessible in both Thailand and Australia, with a DTA in existence? It sounds like a paperwork nightmare.

I can see some solutions to my individual dilemma. One is to marry my long-term Thai GF. The other is to shuttle between Australia and Thailand on the 180 day schedule.

When laws become stupid or oppressive, people always find a way to work around them. IMO this change will be no exception.

Hopefully, the Thai authorities will see this is driving away future retirees, and sanity will prevail with respect to pensions. I won't hold my breath though.

 

[Olmate]

1 hour ago, Mike Lister said:

I wrote the document, I included that statement because another poster confirmed it to us in one of the many tax threads and the consensus was that it was true. If you wish to disagree, please provide a link to support your claim.

Bold statement based on another poster, incorrect of course. AOP is already taxed and a treaty is in place! 

Edited January 9 by Olmate

[TroubleandGrumpy]

1 hour ago, Mike Lister said:

I wrote the document, I included that statement because another poster confirmed it to us in one of the many tax threads and the consensus was that it was true. If you wish to disagree, please provide a link to support your claim.

 

Under the Thai/Australia DTA it states:

ARTICLE 18
PENSIONS AND ANNUITIES

1.         Subject to the provisions of Article 19, pensions and annuities paid to a resident of one of the Contracting States shall be taxable only in that State.

australia : article 16-20 | The Revenue Department (English Site) (rd.go.th)

 

IMO that means that only the State that pays a pension or annuity can tax that payment.  In Australia the Age Pension is taxable income for the purpoises of calculating a person's total taxable income - however there is no taxes applied to the Age Pension payment, even though it is above the tax free threshold.

 

When you get the chance could you please provide more details about exactly who and what was provided to you to make the statement that the Australia Age Pension is taxable income in Thailand.  I will chase that up and try to get some clarity about the matter.

 

May I also suggest that going forward you/Charlie provide a link to the latest updated statement, for when things are changed/updated.  Not a post that ends up with hundreds of replies, nor an update within a thread that gets lost within all those replies.  Is there a facility to provide that on AseanNow?  

[GreasyFingers]

12 minutes ago, TroubleandGrumpy said:

 

Under the Thai/Australia DTA it states:

ARTICLE 18
PENSIONS AND ANNUITIES

1.         Subject to the provisions of Article 19, pensions and annuities paid to a resident of one of the Contracting States shall be taxable only in that State.

australia : article 16-20 | The Revenue Department (English Site) (rd.go.th)

 

IMO that means that only the State that pays a pension or annuity can tax that payment.  In Australia the Age Pension is taxable income for the purpoises of calculating a person's total taxable income - however there is no taxes applied to the Age Pension payment, even though it is above the tax free threshold.

 

When you get the chance could you please provide more details about exactly who and what was provided to you to make the statement that the Australia Age Pension is taxable income in Thailand.  I will chase that up and try to get some clarity about the matter.

 

May I also suggest that going forward you/Charlie provide a link to the latest updated statement, for when things are changed/updated.  Not a post that ends up with hundreds of replies, nor an update within a thread that gets lost within all those replies.  Is there a facility to provide that on AseanNow?  

That is also my reading of Article 18 but what troubles me is that "pensions...paid to a resident...taxable only in that state" while we are (tax) residents of Thailand. It could be interpreted in different ways.

[Mike Lister]

33 minutes ago, TroubleandGrumpy said:

 

Under the Thai/Australia DTA it states:

ARTICLE 18
PENSIONS AND ANNUITIES

1.         Subject to the provisions of Article 19, pensions and annuities paid to a resident of one of the Contracting States shall be taxable only in that State.

australia : article 16-20 | The Revenue Department (English Site) (rd.go.th)

 

IMO that means that only the State that pays a pension or annuity can tax that payment.  In Australia the Age Pension is taxable income for the purpoises of calculating a person's total taxable income - however there is no taxes applied to the Age Pension payment, even though it is above the tax free threshold.

 

When you get the chance could you please provide more details about exactly who and what was provided to you to make the statement that the Australia Age Pension is taxable income in Thailand.  I will chase that up and try to get some clarity about the matter.

 

May I also suggest that going forward you/Charlie provide a link to the latest updated statement, for when things are changed/updated.  Not a post that ends up with hundreds of replies, nor an update within a thread that gets lost within all those replies.  Is there a facility to provide that on AseanNow?  

No, I hold the master copy and monitor the various threads for the points being discussed as well as answering questions and correcting points I know to be wrong, as well as suffering abuse from trolls and idiots. I make changes to the master, as and when there appears to be a clear consensus but since I'm putting in 12 hours day on this, I do make mistakes. If you will research your country's position as it relates to tax on pensions on Thailand, that will help a lot.

[Adumbration]

On 1/8/2024 at 4:47 PM, nickmondo said:

you DO NOT need to submit a tax return unless the Thai Gov tell you to apply for a tax number.

Do NOTHING.

Yep.  This is the only sensible post I have read in this entire thread.  I will not be doing anything...until I am told to.  And the only time that could happen is when I apply for my visa extension.  No other interaction with government officials year in year out.  

 

I will also cease transferring any money here and live off the money I already have in Thai banks.  When that is gone I will also spend my 800k that I have had deposited for decades and use and agent.

 

I also want to transfer money I have in thailand into crypto.

Edited January 9 by Adumbration

[TroubleandGrumpy]

28 minutes ago, GreasyFingers said:

That is also my reading of Article 18 but what troubles me is that "pensions...paid to a resident...taxable only in that state" while we are (tax) residents of Thailand. It could be interpreted in different ways.

Yes indeed - it could be read either way.  In the Details section of the DTA it also states:-

australia : article 1-5 | The Revenue Department (English Site) (rd.go.th)

 

ARTICLE 4
RESIDENCE

1.         For the purposes of this Agreement,  a person is a resident of one of the Contracting States:
             (a)        in the case of Australia, if the person is a resident of Australia for
                         the purposes of Australian tax; and
             (b)        in the case of Thailand, if the person is a resident of Thailand for
                         the purposes of Thai tax. 

Given that I am a tax resident in Australia and lodge a tax return every year, then I am both, and therefore only Australia can tax any pensions or annuity IMO.   Howevber, there are lots of addiitonal definitions and situations listed in the DTA and who knows what ones will apply to any individual. 

 

Mate this thing is extremely complex - I know the Aust Tax Rules and they are fairly clear - plus you can use the ATO provided references and definitions and examples.  The Thai RD site is very basic and often wrong - as an example it lists the tax rates that were applicable in 2013-2014 - I can only imagine how many other errors and ommissions there are. But I can say that there is no 'advice' section whereby clear and definitive advice in detailed circumstances is provided in English that I could find. 

[Kerryd]

For Canadian residents/expats/etc.
Thailand and Canada do have a Tax Treaty. The full text can be found here: https://www.canada.ca/en/department-finance/programs/tax-policy/tax-treaties/country/thailand-convention-1984.html

Note: under Definitions - "b) the terms "a Contracting State" and "the other Contracting State" mean, as the context requires, Canada or Thailand;"
Article 4 defines what is considered a "resident" (for tax purposes) and that opens a can of worms.

Especially as Canada may consider you "non-resident for tax purposes" and then still tax you ! (Hence the "snowbird" or, as it's properly known, the Schedule XIII tax on pensions for people deemed "non-resident".) So if I'm "non-resident" in Canada, then why am I being taxed at all ?
And does my rented home in Thailand count as my "permanent" home ? If not and I don't have a "permanent" home in Canada, then by this treaty I would be deemed a resident of Canada by nationality (for tax purposes at least).

If you have a home in both countries, you'd be deemed resident in whichever country your personal and economic relations are closest. So if you have a Thai wife and are living in Isaan, guess what ?

As most of you are probably concerned primarily about pension income: (The stuff in bold, black parenthesis is mine. I tried to clarify it a bit. Not sure if it's better or worse !}
"Article 18
Pensions
1. Pensions and other similar remuneration, whether they consist of periodic or non-periodic payments, for past employment, arising in a Contracting State {Canada} and paid to a resident or the other Contracting State {Thailand} shall be taxable only in the first-mentioned State {I presume that means Canada in this case}.

2. For the purpose of paragraph 1 such remuneration for past employment shall be deemed to arise in a Contracting State if the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying such income, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment, and such income is borne by such permanent establishment, then such income shall be deemed to arise in the Contracting State in which the permanent establishment is situated."

Para 1 stipulates that pensions from Canada are only taxable in Canada and appears to apply to Gov't (Public Sector), Military, CCP and OAS (and provincial pension plans).

I hate jargonese but Para 2 seems to indicate that if you have pension income from the "other" country (i.e. Thailand) then it would be taxable in Thailand.

Article 22 deals with dual taxation. Para 2 states:
"2. In the case of Thailand, double taxation shall be avoided as follows:

The amount of tax payable in Canada, under the laws of Canada and in accordance with the provisions of this Convention, whether directly or by deduction, by a resident {deemed resident for tax purposes} of Thailand in respect of income from sources within Canada, which has been subjected to tax in Canada, shall be allowed as a credit against Thai tax payable in respect of such income, but in an amount not exceeding that proportion of Thai tax which such income bears to the entire income chargeable to Thai tax. For the purpose of determining such entire income, a loss incurred in any country shall not be taken into account."

 

More jargonese designed to keep lawyers in business. At least they use Canada and Thailand instead of "contracting states".

Basically says (if I have it right) that if you are taxed in Thailand on income from Canada that is already taxed, then you can claim the Canadian tax as a credit on your Thai taxes.
But only up to the amount that Thailand would have taxed you. So if Thailand decides you owe 100,000 baht in taxes and you've paid 150,000 baht (equivalent) in Canadian taxes on that income already, then you can claim up to 100,000 baht as a credit on your Thai taxes.

Conversely (the other way around) - if you only paid (for example) 50,000 baht (equivalent) on your Canadian taxes and your Thai tax bill is 75,000 baht, you'd be on the hook for the extra 25,000 baht. A situation like that can arise when people deliberately ask for their (Canadian) tax "at source" to be reduced for some reason. (It happens. People sometimes ask for a lower tax rate in expectation of having extra deductions at the end of the year and wanting more cash in their paycheques throughout the year instead of a larger refund on their tax returns.)

This treaty is pretty much the same idea as the treaty we (Canada) have with the USA. If you work in the States and get hit with (for example) $50,000 (Cdn equivalent) in US taxes, when you do your Canadian taxes, you may only owe the equivalent of $35,000 (Cdn) and you'd only be able to claim that much as a credit, not the whole $50,000. They won't give you a refund for the difference. (But in many cases, you can carry unclaimed balances forward and use them in later years up to a certain point.)

Note (last one) - I am not a lawyer or accountant so I definitely am not an expert on these matters. Do NOT take my interpretations of the regulations as cold, hard fact regardless of how they look or sound. I myself would seek expert advice on the matter if the need arises and not rely on my "keyboard expertise".

 

Edited January 9 by Kerryd

[TroubleandGrumpy]

27 minutes ago, Mike Lister said:

No, I hold the master copy and monitor the various threads for the points being discussed as well as answering questions and correcting points I know to be wrong, as well as suffering abuse from trolls and idiots. I make changes to the master, as and when there appears to be a clear consensus but since I'm putting in 12 hours day on this, I do make mistakes. If you will research your country's position as it relates to tax on pensions on Thailand, that will help a lot.

Shall do Mike - I will contact the ATO and request an online 'taxation ruling' about all the relevent taxation issues raised here about paying taxes in Thailand - especially the Age Pension. As soon as they reply I will let you know their answer/s.

By the way, your work and efforts are very much appreciated. We dont always agree - but there is no doubting the effort involved and it is great that you are taking this thankless unpaid task on.  

[Phulublub]

5 hours ago, Mike Lister said:

Perhaps I can ask you to let me know, when you find out, in case I miss it?

The link from mistyblue gives a definitive answer for UK pensions that could have been a grey area.  UK Armed Forces are specifically included as Government Pension for the DTA.  https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343040

 

PH

[Mike Lister]

A few points, now that I'm back home again.

 

1) Thanks to those of you who found your respective DTA's.

 

2) I don't think I'm going to list all the countries in the document that have DTA's that will and will not have pensions taxed in Thailand, there are two many countries, too many different type of pension and too many variables.....the task is too big for the purpose of this document.

 

3) A LOT of people have PM'd me in the past two days, thank you for your kind words and suggestions. A common theme is the need to focus on the job of constructing the document and not get side tracked with lengthy posts about what a particular DTA says or about how individuals feel about things....I agree, it will be helpful if we can keep things brief and to the point.

 

4) There are issues we can't bottom out right now. Rather than go round in a 200+ page loop discussing them and asking the same questions repeatedly, I'll create a section at the end of the next version of the document listing the items that are still unclear and need more work in the future. If we can't decide the answer on something, we put it on the list and come back to it at the end.

 

5) A lot of people are really pleased to have the information we've given them, a lot of people are less worried now they know more. We need to increase the number of those people, I think that's the objective.

Edited January 9 by Mike Lister

[Mike Lister]

2 minutes ago, Phulublub said:

The link from mistyblue gives a definitive answer for UK pensions that could have been a grey area.  UK Armed Forces are specifically included as Government Pension for the DTA.  https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343040

 

PH

Thank you, I'm grateful, I'll update that one.

[Mike Lister]

The new form of words for the pensions currently is:

 

1. UK State pension on the other hand is not covered by a DTA so it is assessable income in Thailand whilst UK Government or Civil Service, Armed Forces and some NHS pensions are not! Australian old age pension is being researched currently.

[Mike Lister]

2 hours ago, Lacessit said:

 

 

Australian old age pension is assessible income in Thailand.

 

The Australian pension is assessible income in Australia. If one is putting in a tax return there, it is included. Of course, with tax thresholds and offsets, no tax is ever paid if that is the sole income stream.

So how can the Australian OAP be assessible in both Thailand and Australia, with a DTA in existence? It sounds like a paperwork nightmare.

I can see some solutions to my individual dilemma. One is to marry my long-term Thai GF. The other is to shuttle between Australia and Thailand on the 180 day schedule.

When laws become stupid or oppressive, people always find a way to work around them. IMO this change will be no exception.

Hopefully, the Thai authorities will see this is driving away future retirees, and sanity will prevail with respect to pensions. I won't hold my breath though.

 

Several country's pensions are in the same boat. The UK State Pension is CAPABLE of being taxed although the maximum amount payable currently is within the Personal Allowance so it is not yet taxed. Plus the Thailand/UK DTA does not prevent Thailand from taxing that pension. So yes, a pension can easily be taxable in both countries but the existence of a DTA prevents double taxation. But does not mean that it wont be taxed at a higher or additional rate by Thailand than it was back in the home country. 

[Mike Lister]

4 hours ago, digital said:

If you have a pension thats invested into a fund, and not taken any withdrawals yet. And at a future date you choose not to buy an annuity that provides you with an income but instead withdraw all/part of the fund as cash, then in this case the value of the fund at 31 Dec 23 is the capital and would not be taxed in Thailand? Only the gain from 1 Jan 24 to the time its withdrawn should be taxable.

 

Does this sound right, only what you withdraw above the valuation on 31 Dec 23 would be a gain, but if you bought an annuity the monthly payment would be income and therefore taxable?

 

(I have read the guide several times)

Yes, I agree with that, the total amount at 31 December is the baseline, thereafter, any additions to it are profit and taxable.

[persimmon]

14 hours ago, Mike Lister said:

The rules do not tax foreigners in Thailand on their worldwide income, nor are there plans to do so.

Is it only money sent to Thailand that is taxable then ?

[Mike Lister]

4 minutes ago, persimmon said:

Is it only money sent to Thailand that is taxable then ?

Yes