Must Read A SIMPLE GUIDE TO PERSONAL INCOME TAX IN THAILAND

[Lacessit]

5 minutes ago, Mike Lister said:

The answer to the first question is that you are correct, no tax is paid.

 

The answer to the second part depends on the source of that money. If it comes from savings earned before 1 January 2024, no tax is due. If it comes from income earned after that date, potentially tax is due.

How will the Thai RD determine what is savings, and what is income?

 

I get paid a pension, it goes into an Australian bank. I also have funds on term deposit with the same bank, and elsewhere.

If I draw on the term deposits, and leave the pension to accumulate, how will the RD know the difference?

[Mike Lister]

9 minutes ago, Presnock said:

Mike I for one have been saying from the very beginning when we first read about this new interpretation of an old law - with so many DTA's with different countries, each ex-pat wherever they are from should read in their language of understanding, the details on pensions, and any other banking requirements for double taxation or whatever.  Must be that too many ex-pats can't read nor just too lazy to try and figure out what might be coming as until we see the final requirements, we all are guessing only

Very much agreed!

[Mike Lister]

9 minutes ago, Lacessit said:

How will the Thai RD determine what is savings, and what is income?

 

I get paid a pension, it goes into an Australian bank. I also have funds on term deposit with the same bank, and elsewhere.

If I draw on the term deposits, and leave the pension to accumulate, how will the RD know the difference?

The Thai RD wont determine anything, YOU will tell the Thai RD what is what. Have you really read the document, this is your responsibility to tell the RD what your tax return contains, income or savings. And if they should ask you to prove what you say, you may need to do that using statements etc. from the various accounts, using 1 January 2024 as your baseline. TBH I'm slightly aghast you asked me that question in that way. The RD isn't going to figure out anything, you have to explain everything in your tax return and tell them it's true.

[Presnock]

1 hour ago, sirineou said:

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

If I understand this correctly  not only SSI pensions but all pensions.  

Am I correct in this? 

read your question - article 21 (govt service) is not all pensions, is govt pensions only as the title states.  Private company pensions may or may not be exempt under this article anyway.

[sirineou]

25 minutes ago, Presnock said:

read your question - article 21 (govt service) is not all pensions, is govt pensions only as the title states.  Private company pensions may or may not be exempt under this article anyway.

 

It is the may or may not part that I am concerned about and asking.

Why is the "Govt Serviced in parenthesis?  why dont it say Government services pension then , if it is only goverment pensions? 

[aussienam]

19 hours ago, TigerandDog said:

that's the confusion with the wording of S18. Does "State" mean the State/Country" where payment is made from OR where payment is received. That's what I'm waiting to hear about. I'm scheduled to receive a phone call from an aussie tax agent on Jan 23 with regards to S18

From my interpretation you will be taxed in the state you are a resident of. For tax purposes, Thailand deem you a resident of Thailand as over 180 days staying in Thailand in a calendar year.  

If you haven't been taxed in source country above your determined Thai tax bracket, then it appears you will be subject to being taxed for your pension.  There are some possible deductions that reduce tax liability for certain individuals. 

[Mike Lister]

Posted 9 minutes ago

  15 minutes ago, EVENKEEL said:

This a forum of mostly older people and from what little I read you seem to be instigating fear in many for something that probably won't effect anyone.

 

Are you bound by some contract to keep posting, i think not. So please stop playing the savior of mankind.

Mike Lister Replied:

 

I will be delighted to do so, all anyone had to do was ask. Goodbye.

 

Sorry everyone but you're on your own from hereon, straws and camels and all that.

 

 

 

[aussienam]

43 minutes ago, Lacessit said:

How will the Thai RD determine what is savings, and what is income?

 

I get paid a pension, it goes into an Australian bank. I also have funds on term deposit with the same bank, and elsewhere.

If I draw on the term deposits, and leave the pension to accumulate, how will the RD know the difference?

Thailand adopted Common Reporting Standards in September 2023, joining the several other countries already registered. Meaning exchange of all transaction data. So bank to bank transfers, bank to money exchange to bank transfers, etc.  It appears Thailand revenue department will technically be able to now audit your transaction records from source country/ies for remittances sent to Thailand and your home country will be obligated to provide data. The trail will indicate the sources of each transaction.  

[TheAppletons]

22 minutes ago, sirineou said:

 

It is the may or may not part that I am concerned about and asking.

Why is the "Govt Serviced in parenthesis?  why dont it say Government services pension then , if it is only goverment pensions? 

 

  It says (Government Service) in parentheses because it is referring to the preceding words which are "paragraph 2 of Article 21."

 

  In the US/Thailand DTA, the title of article 21 is "Government Service." 

 

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

[BE88]

1 hour ago, generealty said:

 

 

What about bringing in money to purchase car or house, is that going to be taxed at above rates, meaning you will need pay 35% on purchase of a house ? and tax on credit card use ?

 

Yes this is the big question, it would seem that you would have to prove that you owned these funds before January 1, 2024 and therefore there is always a risk of significant taxation. It is clear that it would be better to inform the competent tax office before making the capital transfer and to request their written confirmation.

 

[BillyBloggs]

4 hours ago, Mike Lister said:

It depends which country the income is from, the type of income and the contents of any DTA between the two countries.

 

One example: a British retiree living in Thailand receives the UK state pension directly in Thailand. That income is not exempt under the terms of the DTA hence it must be regarded as assessible income. The amount is over the RD minimum threshold for filing a tax return (120,000) which require the person to file a tax assessment and report their assessible income. When they fill out the form they find that the total of their deductions, exemptions and allowances is greater than the amount received, hence, there is no tax to pay.

 

Not everyone agrees with the above interpretation and it has been the subject of much debate, But the rules as they exist to day are very clear and the above conforms with them. Some suggest that the above is a pointless exercise but there again, most of us from Western countries have been forced to do similar when we filed our returns there, even though no tax was due. It is possible that the new RD Tax Form is made available, it may shed some light on what the RD will require but thus far they have not said and the specialist firms also are unclear. 

Thanks yeah its sort of similar to Australia in a way, but you do get the choice to opt out if you dont think you will have no tax to pay in the future, I will have a small amount of tax to pay there this year I will make sure.

[BillyBloggs]

57 minutes ago, Mike Lister said:

Posted 9 minutes ago

  15 minutes ago, EVENKEEL said:

This a forum of mostly older people and from what little I read you seem to be instigating fear in many for something that probably won't effect anyone.

 

Are you bound by some contract to keep posting, i think not. So please stop playing the savior of mankind.

Mike Lister Replied:

 

I will be delighted to do so, all anyone had to do was ask. Goodbye.

 

Sorry everyone but you're on your own from hereon, straws and camels and all that.

 

 

 

Dont let one melon who hopefully gets caught up with his 65k brought in each month, stop you from posting, tax in any country is a minefield with many interpretations and only with gathering information can you hope to get an insight, I wont have to pay tax here but I will need to do a return and will anyone with retirement or married extensions using monthly inputs it seems at this stage from a lot of countries, I know I worked in tax in Oz and the way I saw things was different others in my office on some things. 

[JimGant]

3 hours ago, sirineou said:

Subject to the provisions of paragraph 2 of Article 21 (Government Service), pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State "

If I understand this correctly  not only SSI pensions but all pensions.  

Am I correct in this? 

 

No.  It's all spelled out in the Technical Explanation:

https://www.irs.gov/pub/irs-trty/thaitech.pdf

Quote

The treatment of social security benefits is dealt with in paragraph 2. This paragraph
provides that, notwithstanding the provision of paragraph 1 under which private pensions are taxable exclusively in the State of residence of the beneficial owner, payments made by one of the Contracting States as a social security benefit or similar public pension to a resident of the other Contracting State or to a citizen of the United States will be taxable only in the Contracting State making the payment.

 

Quote

Paragraph 1 provides that private pensions and other similar remuneration [for example, IRAs] paid in consideration of past employment are generally taxable only in the residence State of the recipient.

 

Article 21 is where you'll find that government pensions are taxable only by the country paying these pensions. And the TE says state and local pensions are included, not just Federal.

[Olmate]

2 minutes ago, BillyBloggs said:

Dont let one melon who hopefully gets caught up with his 65k brought in each month, stop you from posting, tax in any country is a minefield with many interpretations and only with gathering information can you hope to get an insight, I wont have to pay tax here but I will need to do a return and will anyone with retirement or married extensions using monthly inputs it seems at this stage from a lot of countries, I know I worked in tax in Oz and the way I saw things was different others in my office on some things. 

Why would you hope some'melon'gets caught up ex Oz tax man? 

[CapraIbex]

4 hours ago, Mike Lister said:

you will see the clause regarding the Oz pension has been removed and at the end of the document, on the to do list

I found a pertaining conversation here:

 

[Sheist]

RE:  "a retiree aged 65 years of age, married and living here full  time, supporting a Thai wife who has no income and doesn’t file tax return, is allowed the following:

 

a. Personal Allowance for self - 60,000

b. Personal Allowance for wife - 60,000

c. Over age 65 years exemption - 190,000

d. 50% of pension income received, up to 100k - 100,000

e. In addition, the first 150,000 of assessable income is zero rated and free of tax"

 

-----

 

So if a USA national sends 209,965 baht wire transfer, this precludes the need to get a TIN and file any PIT?  Assume rate 35b per USD.

 

The assumption being, 150k no tax, 60k personal exemption = 210k baht

Under 65, unmarried, no children, no pension, no insurance etc.  Assuming these facts, is 210k the correct total deduction before tax consideration, or am I missing another available deduction?  My research says it is 210k.

 

Also curious about the "gift" avenue.  If the gift amount is to an unrelated local person, let's say under 100k baht for the year, is this still considered income that must be included to the 209,965b?

 

 

 

[TroubleandGrumpy]

2 hours ago, Mike Lister said:

 

As said at the outset and again this morning, responsibility for researching the DTA's of individual countries is the responsibility of individuals from those countries, there are far too many for us to research. I also said that I don't believe we will include country specific information in the document, above and beyond what's already there, again, there are too many. The only reason the Oz information got included was because the subject came up in another thread and several people were convinced of the answer. Now that answer is in doubt and the subject is being researched, it's more likely that the answer will be posted here but not included in the document.

I am on it guys -looks like I have found the source of the claim that the Aust Age POension is considered assessable income in Thailand.  Either way, I am contacting the ATO for definitive advice and I am also contacting a couple of local accountants. As soon as I get a response from anyone I will post it to Mike. The Guide will be updated by Mike only if the advice is definitive. As it stands right now, it is not definitive if the Aust Age Pension is taxable in Thailand. 

 

If any Aussie receiving the Age Pension has previously lodged a tax return with the Thai RD and  therefore has a definitive answer, please post the information and any realted document/s (with any identifiers deleted). 

[TroubleandGrumpy]

2 hours ago, Mike Lister said:

Posted 9 minutes ago

  15 minutes ago, EVENKEEL said:

This a forum of mostly older people and from what little I read you seem to be instigating fear in many for something that probably won't effect anyone.

 

Are you bound by some contract to keep posting, i think not. So please stop playing the savior of mankind.

Mike Lister Replied:

 

I will be delighted to do so, all anyone had to do was ask. Goodbye.

 

Sorry everyone but you're on your own from hereon, straws and camels and all that.

 

 

Sorry to hear that Mike - but I do understand.

 

This is an example of why most Expats avoid other Expats - far too many of them are just pharked up people with totally ridiculous expectations and demands.

 

Mike and I have 'debated' several points - but he is just trying to help by putting together a complete 'summary' of where things are at as far as he knows it.  By all means agree or disagree (politely) - but only an absolute idiot would abuse someone who is just trying to help others. Ignore him if you want - that is what the block member option is for - what an ahole @EVENKEEL is - BLOCKED.  

 

[MartinL]

2 hours ago, Mike Lister said:

Posted 9 minutes ago

  15 minutes ago, EVENKEEL said:

This a forum of mostly older people and from what little I read you seem to be instigating fear in many for something that probably won't effect anyone.

 

Are you bound by some contract to keep posting, i think not. So please stop playing the savior of mankind.

Mike Lister Replied:

 

I will be delighted to do so, all anyone had to do was ask. Goodbye.

 

Sorry everyone but you're on your own from hereon, straws and camels and all that.

 

 

2 hours ago, Mike Lister said:

 

 

I gave one of the controversial (for some) 'Sad' emojis to this post. 

 

If you're really bailing out of this, Mile, I'm so sorry to see you go. Your contribution has been invaluable and doesn't deserve the negativity being thrown your way. It's great that someone took the time to collate information into a useful form rather than 200++ pages of contributions of variable quality or no quality at all. Will one of your critics step up now?

[TigerandDog]

2 hours ago, aussienam said:

From my interpretation you will be taxed in the state you are a resident of. For tax purposes, Thailand deem you a resident of Thailand as over 180 days staying in Thailand in a calendar year.  

If you haven't been taxed in source country above your determined Thai tax bracket, then it appears you will be subject to being taxed for your pension.  There are some possible deductions that reduce tax liability for certain individuals. 

my interpretation is the same as yours, however I will wait til I have had the conversation with the aussie tax expert re the Thai/Oz tax treaty.

[sirineou]

2 hours ago, JimGant said:

5 hours ago, sirineou said:

Subject to the provisions of paragraph 2 of Article 21 (Government Service), pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State "

If I understand this correctly  not only SSI pensions but all pensions.  

Am I correct in this? 

 

No.  It's all spelled out in the Technical Explanation:

https://www.irs.gov/pub/irs-trty/thaitech.pdf

Thank you so much, this certainly clarifies things. 

"Paragraph 1 provides that private pensions and other similar remuneration paid in consideration of past employment are generally taxable only in the residence State of the recipient. It is understood that the rules of this paragraph apply even if the payee of the pension is not the person who performed the past employment. For example, a pension paid to a surviving spouse who is a resident of Thailand would be exempt from tax by the United States on the same basis as if the right to the pension had been earned directly by the surviving spouse "

it also provides additional  information concerning my wife who after my passing (a long time from now I hope ) ,will  continue getting 80% of my private pension.  But it might be a little tricky where she is taxed as she is dual citizen (US/Thai). 

    But regrades, I appreciate you taking the time to provide me with that link , it sure takes a load off of my mind. . 

[Bazle]

4 hours ago, WhiteHatPhil said:

Furthermore, I repeatedly read that the UK DTA does not cover pensions - state or private. Of course it does. But just because it doesn't use the word "pension" in Article 16, people have made the incorrect leap.

 

It clearly states "...salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment".  And that is EXACTLY what a pension is - income, remuneration in respect of an employment. That is why my monthly pension slip is called a "pay slip". That is why i still have a Tax Code  - because I am being taxed by HMRC on my income.

 

Have a read of the OECD Commentary re Articles 15 and 18 of its Model Convention and you will conclude otherwise.

https://www.oecd.org/berlin/publikationen/43324465.pdf

[Presnock]

29 minutes ago, sirineou said:

Thank you so much, this certainly clarifies things. 

"Paragraph 1 provides that private pensions and other similar remuneration paid in consideration of past employment are generally taxable only in the residence State of the recipient. It is understood that the rules of this paragraph apply even if the payee of the pension is not the person who performed the past employment. For example, a pension paid to a surviving spouse who is a resident of Thailand would be exempt from tax by the United States on the same basis as if the right to the pension had been earned directly by the surviving spouse "

it also provides additional  information concerning my wife who after my passing (a long time from now I hope ) ,will  continue getting 80% of my private pension.  But it might be a little tricky where she is taxed as she is dual citizen (US/Thai). 

    But regrades, I appreciate you taking the time to provide me with that link , it sure takes a load off of my mind. . 

If your wife is dual citizenshipor is a Thai native and you depart withher getting80% of your US pension, Thai can tax her legally as article 21 states clearly that there is no exemption if the recipient is also a Thai native citizen so she would be taxed in Thailand legally.  She could file a form 4 I think for the IRS to cease taxing her in the US and then avoid a double tax as she is responsible for Thai taxes as a resident citizen.  Read the DTA articles 20 and 21 about exemption of US paid ss and govt pensions.

[john donson]

why oh why are Americans exempt from paying tax on pensions and other nations not

 

is this because of some high end up person also had US citizenship ?

 

 

my personal question... I will have 200.000 thb of interest from thai savings account, because I am a dumb farang that knows nothing about investment...  so I have to report a tax return ???    the bank already takes 15% of that... so I am not out of the clear ...

 

I see my personal hell at Samut Prakarn immigration only grow if they start to ask for a tax return or no extension on top of all the other misery these cause as it is the most miserable deplorable immigration I ever went... 

[EVENKEEL]

1 hour ago, TroubleandGrumpy said:

 

Sorry to hear that Mike - but I do understand.

 

This is an example of why most Expats avoid other Expats - far too many of them are just pharked up people with totally ridiculous expectations and demands.

 

Mike and I have 'debated' several points - but he is just trying to help by putting together a complete 'summary' of where things are at as far as he knows it.  By all means agree or disagree (politely) - but only an absolute idiot would abuse someone who is just trying to help others. Ignore him if you want - that is what the block member option is for - what an ahole @EVENKEEL is - BLOCKED.  

 

Kisses back at you, the hysterics is insane on here. You guys are already lining up at an imaginary que to pay an imaginary tax. The last official word was nothing is really finalized.

[CapraIbex]

44 minutes ago, EVENKEEL said:

You guys are already lining up at an imaginary que to pay an imaginary tax.

It's generally better to be informed and prepared.
 
"People residing in Thailand for more than 180 days per tax year are supposed to file a tax return and declare their assessable income. Just because the Thai tax authorities didn't press the issue does not mean that retirees are exempt."

[Sheist]

52 minutes ago, Mike Lister said:

Had to just come back quickly when I saw this, it was like, wow, there really are people out there who walk amongst us who use this kind of thinking and call it logic! It leaves me speechless.

You can lead a horse to water, but you can't make him "think."  

[CharlieH]

This topic is now CLOSED to discussion

 

The OP was meant as a general guide and a basis to work from and will probably be amended as more information becomes available, however from a discussion aspect its reached the end.