Australian OAP Taxation Issues.

[Will27]

As previously advised, I've created this new thread for issues involving being taxed in Thailand and or Australia, both resident and non-resident rates.

Pretty much anything to do with what rates you can or could be taxed at.

 

The Australian Aged Pension thread can be used for a host of other queries and issues.

 

If posters apart from KH, don't agree with this, you can let me know and I'll ask for it to be closed or you can just keep using the other thread that KH has pretty much ruined.

[Jai Dee]

An off-topic troll post attempting to derail this topic has been removed as it contravenes our Community Standards.

[4MyEgo]

I thought I'd start this topic off, and thank Will27 for starting it as a new topic, as the Age Pension topic which was run for over a decade was highjacked, making it virtually impossible for anyone to sift through it, as most of the comments, including mine were off topic of late, while arguing with a particular member about Age Pension tax and the Double Taxation Agreement, DTA, Australia has had with Thailand since 1989/90 and it's interpretations, in particular Articles 18 & 19 where it discusses taxes on Age Pensions (Article 18 & Government Pensions under Article 19). 

 

Hopefully the same won't happen here, and I will ask anyone who is contributing to it, if stating what they believe to be facts in their opinions, then to back them up with a link, so that we can agree or disagree with what the facts are and whether those links are credible or not, again, links provided sorts thing out very quickly for the majority of members.

 

Now to get into it.

 

From my understanding/interpretation, if you like, Age Pensions paid to Australia expats living in Thailand since 1989/90 under the DTA have been blanketed from paying any tax in Australia as the DTA states that Thailand (the state) where the expat/resident resides shall pay tax, pretty straight forward for the majority of members to understand, i.e. Article 18 which is what the Age Pensions falls under, end of story on that.

 

Now with what's new.

 

Issued on 15th September 2023, Revenue Order 161/2023 mandates that from 1st January 2024, any and all foreign income, from all sources (whether from employment, business, pension, or from overseas assets) will be taxable in Thailand when it's brought into Thailand regardless of when it was brought into Thailand.

 

As you can see above, the word pension is clearly visible, however this new code, albeit it is new to most of us, the DTA has been around since 1989/90, so what's changed and are they after the Age Pensioner, well in my opinion, NO.

 

Why do I say that, because they wouldn't require a new code for that as they have the DTA which allows them to tax Age Pensioners since when the agreement came into play, i.e. 1989/1990.

 

I won't go into how would they even enforce this as it moves away from the topic, suffice to say these are my views, i.e. they aren't after the Age Pensioners who have been contributing to the Thai economy on what amounts they get, i.e. around 50,000 baht a month for a single Age Pensioner.

 

I take it that they are after the bigger fish and to that, I will leave it there until I here some Age Pensioner here on AN or elsewhere complaining that he received a letter from the Thai Revenue Department to cough up on his Age Pension.

 

Now with regard to tax on Age Pensions in Australia, from what I understand, residents of Australia have a tax free threshold of around $32k after having been approved for Seniors and Pensioners Tax Offset, SAPTO, expats can also apply for it, i.e. you don't have to be a resident of Australia to get the offset. So I can say Age Pensions are not assessible income in Australia for residents of Australia, unless they surpass the threshold, and one doesn't have to be Einstein to know that assessible income, isn't assessible until it becomes assessible, i.e. you must go over the threshold for it to be assessible income, and remember, thresholds are there to reduce your assessible income, to a lessor amount of tax that you would normally pay, or no tax in the case of an Age Pensioner, i.e. if he doesn't have any additional income which would push you over the threshold, so it's either assessible, or it's not, simple really.

 

https://www.austlii.edu.au/au/other/dfat/treaties/1989/36.html

 

https://atotaxrates.info/tax-offset/senior-australians-tax-offset/

 

 

 

[Mike Lister]

An extremely long post that attempted to hi-jack the thread, again, was removed.

 

If you post again, consider the contents and length very carefully.

 

 

[KhunHeineken]

7 hours ago, 4MyEgo said:

Issued on 15th September 2023, Revenue Order 161/2023 mandates that from 1st January 2024, any and all foreign income, from all sources (whether from employment, business, pension, or from overseas assets) will be taxable in Thailand when it's brought into Thailand regardless of when it was brought into Thailand.

 

As you can see above, the word pension is clearly visible, however this new code, albeit it is new to most of us, the DTA has been around since 1989/90, so what's changed and are they after the Age Pensioner, well in my opinion, NO.

 

Why do I say that, because they wouldn't require a new code for that as they have the DTA which allows them to tax Age Pensioners since when the agreement came into play, i.e. 1989/1990.

The tax is on the money, not the person.  That's everyone from a pensioner, to Elon Musk. 

 

There are no thresholds to the tax.  Eg.  everything over 1 million baht a year, or over 100k baht a month.  It's on all remitted funds from anyone, who could be from anywhere. 

 

The Germany DTA is interesting because it's actually the DTA that sets out the 15% tax, not the non resident tax brackets. 

 

The brand new DTA with Iceland is interesting because whilst Article 17 and Article 18 are similar to what is is in the Thailand DTA, it says this on the Treasury page. 

 

"The source (paying) country may also tax any pensions paid under the social security legislation or other public schemes organised for social welfare purposes of that country."

 

Make of this what you will. 

 

 

7 hours ago, 4MyEgo said:

Now with regard to tax on Age Pensions in Australia, from what I understand, residents of Australia have a tax free threshold of around $32k after having been approved for Seniors and Pensioners Tax Offset, SAPTO, expats can also apply for it, i.e. you don't have to be a resident of Australia to get the offset. So I can say Age Pensions are not assessible income in Australia for residents of Australia, unless they surpass the threshold, and one doesn't have to be Einstein to know that assessible income, isn't assessible until it becomes assessible, i.e. you must go over the threshold for it to be assessible income, and remember, thresholds are there to reduce your assessible income, to a lessor amount of tax that you would normally pay, or no tax in the case of an Age Pensioner, i.e. if he doesn't have any additional income which would push you over the threshold, so it's either assessible, or it's not, simple really.

Where did you get $32,00AUD from?

 

Here's the Australian resident tax brackets.

 

Here's the link where they came from.

 

https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents

 

The pension is taxable, or as you say, "assessable."

 

We know the pension is deemed an income.  We know the pension is taxable.  We know that living in Thailand we are non residents of Australia for tax purposes.  We know the first tier of non resident tax is from $0 to $120,000 and is 32.5% tax. 

 

A new DTA with Thailand might be similar to the DTA with Germany and offer pensioners some tax relief from the 32.5% non resident tax.  

 

The Germany DTA clearly shows there's no free passes for non resident pensioners. 

 

Australia is currently updating all of its DTA's with contracting countries. 

 

Here's the link.

 

https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/income-you-must-declare/government-payments-and-allowances

 

Taxable pensions, payments and allowances

You must include taxable Australian Government pensions, payments and allowances in your tax return.

Taxable government payments, pensions and allowances include:

• age pension

 

 

In relation to enforcement, they could tax all remitted funds into Thai bank accounts at the highest marginal rate, and then give a refund when the foreigner submits a tax return, or, they could take out tax at the end of the financial year, based on the flow of money through the account.  If the balance is too low to pay the tax, they keep what's in the account and close the account and black list the foreigner from opening another account until they have paid their tax bill.  That black list could also be sent to immigration, so no extension and you are an overstay until you pay your tax. 

 

They have many options available to them, and they don't have to chase anyone for the money.  Foreigners will have to go to them. 

 

Resident tax rates 2023–24

Taxable income	Tax on this income
0 – $18,200	Nil
$18,201 – $45,000	19c for each $1 over $18,200

Edited February 19 by KhunHeineken

[4MyEgo]

As expected, it didn't take long for the high jacker to high jack this topic.

 

Oh well, I'm not going to respond to someone who has no idea what he is on about, sighting DTA's in other countries that have nothing to do with the current status here in Thailand, clearly no idea on what I was talking about. 

 

Edited February 19 by 4MyEgo

[KhunHeineken]

43 minutes ago, 4MyEgo said:

As expected, it didn't take long for the high jacker to high jack this topic.

 

Oh well, I'm not going to respond to someone who has no idea what he is on about, sighting DTA's in other countries that have nothing to do with the current status here in Thailand, clearly no idea on what I was talking about. 

 

Seriously? 

 

I'm on topic and not hijacking. 

 

I've commented on the points in your post. and supplied links as you requested. 

 

Taxation, residency, DTA's, percentages, thresholds, enforcement etc are all part of a taxation system that we are all in whether we like it, or not. 

 

This thread was launched to discuss such things with the people who wanted to.  You are seeking to turn it into another KH bashing thread like the Australian Pension thread. 

 

If my post breaches forum rules, a Mod will delete it, but why personally attack me on a thread specifically set up to discuss taxation on pensions?  

 

You really have to stop thinking pensioners and pensions are a protected species.  Times are changing  and taxes are changing. 

 

I have posted a link in the other thread how Australia is currently updating all of its DTA's with contracting countries, Thailand being one of them.  The Thailand DTA is dated 1989.  It can't remain in place forever.  At some stage it has to be updated as it's 35 years old.

 

They are currently updating Korea, which was 1981, and from memory, Sweden, which was 1984.  I would suggest updating Thailand's is not far away. 

 

By all means work with the current DTA, because that's the one in force at the moment, but there's nothing wrong considering, based on more recent DTA's, what the new DTA with Thailand may look like in the near future. 

 

Legislation and policies change, so do taxes and governments. Look how quickly Thailand implemented its new tax on foreigners remitting funds.

 

If you think the DTA's with Germany and Iceland are irrelevant, that's your opinion.  My opinion is different, and I have given them some consideration and explained why. 

 

Put me on ignore or don't read my posts, but why continue to personally attack me because I disagree with your opinions? 

Edited February 19 by KhunHeineken

[Mike Lister]

This thread looks like it's going to go the same way as others before it and for the same reasons. Posters have specifically opened a new thread to move away from what went before but it seems to have not had the desired effect.

 

I'm going to take the unusual step here of asking KH to open his own thread to discuss whatever he wants to discuss and hopefully that will attract like minded debaters who wish to enjoin his debate.

 

That will leave this thread to discuss what the OP intended at the outset.

 

BUT, all parties need to remain in their respective threads, all crossovers get deleted without warning. If that means one thread attracts lots of people and healthy vigorous debate and the other attracts nobody, so be it. 

 

 

[Mike Lister]

Just now, KhunHeineken said:

I'm not questioning moderation. 

 

What do you suggest the title of the thread should be? 

 

The title of this thread is "Australia"  "Old Age Pension" "Tax" "Issues."  

 

All of what has been discussed in the last few posts are on topic for these four key words.  How has my last post "hijacked" this thread, which has been alleged by another member? 

I don't mind what posters want to call their threads, it's their choice. 

 

But what is going to happen is a parting of the ways, without further discussion, with immediate effect.. 

[4MyEgo]

On 2/18/2024 at 1:55 PM, Will27 said:

As previously advised, I've created this new thread for issues involving being taxed in Thailand and or Australia, both resident and non-resident rates.

Pretty much anything to do with what rates you can or could be taxed at.

 

The Australian Aged Pension thread can be used for a host of other queries and issues.

 

Keeping the thread going as I found this article interesting which again, supports what I was saying about the age pension in Australia not being taxed, "if it is your only source of income".

 

https://www.firstsuper.com.au/retirement/planning-for-retirement/super-and-the-age-pension/#:~:text=Tax on the Age Pension,your only source of income.

 

Please continue reading below the highlights in the link as it makes it more clearer as to when the tax free threshold applies, again, if you have any other sources of income, it will get added to your age pension amount and the threshold will come into play, as will you paying tax, that said, if you have no other income, then no tax is payable IMO.

 

Naturally as an Australian Resident for tax purposes, you would have to lodge a tax return stating what you have earned in that tax year, and if it was only the Age Pension, then you won't be paying any tax.

 

Be interesting to hear back from others if they believe it's any different to the way I am stating, all except one person please, as I am not interested in his views or opinions of any kind. 

 

 

Edited February 20 by 4MyEgo

[xenophon]

Like most, I am not interested in a pissing competition between posters.

 

I thank 4MyEgo and encourage him to persist in his efforts to clarify this important and worrisome issue for some. Have a question:

Are there any real (not hearsay or anecdotal) examples yet of an expat being quizzed by the authorities about the tax status of his/her pension since the new tax  announcement? If so, what happened in this case?

[mfd101]

On 3/23/2024 at 12:51 PM, xenophon said:

Are there any real (not hearsay or anecdotal) examples yet of an expat being quizzed by the authorities about the tax status of his/her pension since the new tax  announcement? If so, what happened in this case?

On 2 or 3 occasions in the last 2 years I have received queries from my various Oz financial institutions (including NAB) as to my tax status in Thailand. In (then) total ignorance of the Thai proposals & decisions to follow, I replied in each case (truthfully) that I don't have a TIN & I have no income sourced in Thailand ie all my income comes from Oz. At the time I thought that was an end of the matter.

 

In addition, for the last 4 or 5 years, without consultation the ATO has treated me as non-resident for tax purposes. Fair enough I guess, and it means I now have to pay additional tax (AUD8 or 9K) at the end of each FY as I have no 32% tax-free threshold.

 

My income is entirely Federal government public service superannuation (CSC/CSS - long-since closed).

 

Question: What happens when, later this year, I take out a TIN and prepare my first tax statement for Thailand starting 1Jan24? Noting the DTA, will that mean I cease to pay any Oz tax? And can I get refunded on the Oz tax I will already have paid from January this year? (Without knowing the likely Thai taxes I will have to pay it's hard to decide whether I'll be better off taxwise here, but I think with the ATO now swiping 32% of my total income I'm likely to be better off paying ONLY Thai tax.)

 

 

[CharlesHolzhauer]

In your particular case, I would recommend consulting with a CPA, especially considering the unusual treatment by the ATO automatically categorizing you as a non-resident for tax purposes.

Following the advice of my former tax accountant, I sold all my shares and investment products that I had purchased as a resident, filed a final tax return, and paid the required taxes. Subsequently, I repurchased most of my shares and investment products as a non-resident for tax purposes.

As a non-resident for tax purposes, aside from withholding tax, which is automatically deducted, you won't be required to file an Australian tax return. This means you won't owe any taxes in Australia on dividends, capital gains, etc.

I obtained a Thai Tax Identification Number (TIN) and provided it to the bank and broker I am dealing with in Australia without any issues.

Depending on how your income is classified, you will need to pay taxes in Thailand accordingly. If you have decided not to return to Australia as a tax resident, you would probably be better off paying taxes in Thailand, IMHO.

[mfd101]

9 hours ago, CharlesHolzhauer said:

In your particular case, I would recommend consulting with a CPA, especially considering the unusual treatment by the ATO automatically categorizing you as a non-resident for tax purposes.

Following the advice of my former tax accountant, I sold all my shares and investment products that I had purchased as a resident, filed a final tax return, and paid the required taxes. Subsequently, I repurchased most of my shares and investment products as a non-resident for tax purposes.

As a non-resident for tax purposes, aside from withholding tax, which is automatically deducted, you won't be required to file an Australian tax return. This means you won't owe any taxes in Australia on dividends, capital gains, etc.

I obtained a Thai Tax Identification Number (TIN) and provided it to the bank and broker I am dealing with in Australia without any issues.

Depending on how your income is classified, you will need to pay taxes in Thailand accordingly. If you have decided not to return to Australia as a tax resident, you would probably be better off paying taxes in Thailand, IMHO.

Yes, thanks for that. I plan to live in Thailand for the rest of my life (currently age 74 & healthy) so the sooner I get rid of the Oz tax burden the better. I'll start by consulting with Findex in Canberra (who prepare my annual tax return) and point out what they should have been advising me on before now (!).

[CharlesHolzhauer]

15 hours ago, mfd101 said:

I'll start by consulting with Findex in Canberra (who prepare my annual tax return) and point out what they should have been advising me on before now (!).

Before your tax accountant lodges the FINAL tax return for you, ensure that your bank and broker will continue to service your account when you become 'officially' a non-resident for tax purposes. If not, consider changing to institutions that offer services for non-residents. Make sure to thoroughly research and clearly and assertively communicate your needs to your tax accountant, as in the future, you may no longer require their services.

[mfd101]

2 minutes ago, CharlesHolzhauer said:

Before your tax accountant lodges the FINAL tax return for you, ensure that your bank and broker will continue to service your account when you become 'officially' a non-resident for tax purposes. If not, consider changing to institutions that offer services for non-residents. Make sure to thoroughly research and clearly and assertively communicate your needs to your tax accountant, as in the future, you may no longer require their services.

Noted, thanks. The bank & the manager of my small investments will both continue without difficulty. The Findex accountants will be the interesting ones as they're the people who will have to take the appropriate measures vis-à-vis the ATO. Once all business concluded, I would assume I won't need them any more. We shall see.

[CharlesHolzhauer]

21 minutes ago, mfd101 said:

Once all business concluded, I would assume I won't need them any more.

Given your instructions to your tax accountant, which likely involve selling all your investments in Australia, paying CGT and repurchasing them as a non-resident, it's most probable that you won't require their services in the future. As previously mentioned, ensure thorough research is conducted. Additionally, unless your investments are held in an Account-Based Pension, you will not be eligible to receive franking credits for certain Australian domiciled investment products as a non-resident.

[mfd101]

3 minutes ago, CharlesHolzhauer said:

Given your instructions to your tax accountant, which likely involve selling all your investments in Australia, paying CGT and repurchasing them as a non-resident, it's most probable that you won't require their services in the future. As previously mentioned, ensure thorough research is conducted. Additionally, unless your investments are held in an Account-Based Pension, you will not be eligible to receive franking credits for certain Australian domiciled investment products as a non-resident.

Of my small investments, the main part is indeed in an account-based pension (as it is the remains of the lump sum part of my payout when I retired from the Australian Public Service in 2004). Apart from that the remains of my Canberra sellup when we left Oz in late 2015 to build & live here in Surin are now vanishingly small so barely worth worrying about.

 

But I thank you for your comments. They are invaluable to me as I'm far from being expert in all these matters.

[CharlesHolzhauer]

25 minutes ago, mfd101 said:

They are invaluable to me as I'm far from being expert in all these matters.

Pension payments from an Account-Based Pension are typically tax-free. Your platform operator will likely facilitate the transfer of your pension payments to a bank account of your choice, which can then be transferred to Thailand via a money/exchange transfer company such as Wise to your Thai bank account. Proactively providing your Thai Tax Identification Number (TIN) to your Australian-based bank is advisable. It is also advisable reading through the pertinent articles in the OZ/Thai Dual Tax Agreement (DTA) as the Thai Revenue Department may treat your income transferred to Thailand as assessable (taxable) income which is subject to taxation depending on the amount transferred.

Source: https://aseannow.com/topic/1319807-personal-income-tax-guide-for-foreigners-thailand/

 

The Thai tax system contains a series of Tax Exemptions, Deductions and Allowances (TEDA) that will help you reduce your tax bill and they are very generous. It is easily possible for the average expat foreign retiree to reduce their taxable income by 500,000 baht or more each year. For example, 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 (PA1) - 60,000
b) Personal Allowance for wife (PA2) - 60,000
c) Over age 65 years exemption (OAE) - 190,000
d) 50% of pension income received, up to 100k (PD) - 100,000
e) In addition, the first 150,000 of assessable income is zero rated and free of tax (ZR)

Source:https://aseannow.com/topic/1323489-new-tax-laws/page/3/

 

The tax tables are here:
1. 0 to 150,000 THB is exempted from income tax.
2. 150,001 to 300,000 THB is subject to a 5% tax rate.
3. 300,001 to 500,000 THB is subject to a 10% tax rate.
4. 500,001 to 750,000 THB is subject to a 15% tax rate.
5. 750,001 to 1,000,000 THB is subject to a 20% tax rate.
6. 1,000,001 to 2,000,000 THB is subject to a 25% tax rate.
7. 2,000,001 to 5,000,000 THB is subject to a 30% tax rate.
8. 5,000,001 THB or more is subject to a 35% tax rate.

Source: https://aseannow.com/topic/1323489-new-tax-laws/page/4/

Cheers and good luck.

[TroubleandGrumpy]

On 2/19/2024 at 10:28 AM, 4MyEgo said:

From my understanding/interpretation, if you like, Age Pensions paid to Australia expats living in Thailand since 1989/90 under the DTA have been blanketed from paying any tax in Australia as the DTA states that Thailand (the state) where the expat/resident resides shall pay tax, pretty straight forward for the majority of members to understand, i.e. Article 18 which is what the Age Pensions falls under, end of story on that.

I just found this thread - please Mods could you please pin this thread to the start page - like most I only looked at the first page for whats new.

 

@4MyEgo  My understanding is that your statement above is incorrect for the majority of Aussie Pensioners living in Thailand.  The Aust Age Pension IMO is not taxable in Thailand - the story is not ended. I know one website stated that it is taxable - but that is an opinion given by a staffer in that company who wrote the piece and it is not based on facts. The matter has not been tested in a Court or Tribunal.  I have been seeking feedback and opinion from ATO, but I have received no reply. Unfortunately we are about to leave for golf and I have not had a chance to read all the posts - perhaps someone else has already pushed back on this issue. I will do that when we get back later today (after a snooze). Suffice to say now that if you read the DTA in full, there are many reasons/exemptions why most Aussies are not liable to pay income tax to Thailand on their Aust Pension payments. 

[scorecard]

I have a question, it's been suggested to post the question here:

 

"And still not clear whether the Australian Old Age Pension, transferred to Thailand, is exempt from Thai personal taxation, especially where the recipient has no other income."

 

Or perhaps the question is whether the Oz OAP (alone) is considered to be income under the Thai RD regulations?

 

I'm just guessing but I suspect a few Aussies on the OAP living in Thailand will be interested in this point. Thanks for any advice you can share.

[4MyEgo]

On 4/2/2024 at 1:44 PM, TroubleandGrumpy said:

Suffice to say now that if you read the DTA in full, there are many reasons/exemptions why most Aussies are not liable to pay income tax to Thailand on their Aust Pension payments. 

 

Do please enlighten me/us with your findings, you can copy and paste them here, or the link, outlining which section of the DTA states that Aussies are not liable to pay income tax to Thailand on their Aust Pension payments.

 

Nothing posted with a link is like posting words, words to no effect IMO.

[4MyEgo]

21 hours ago, scorecard said:

Or perhaps the question is whether the Oz OAP (alone) is considered to be income under the Thai RD regulations?

 

In my opinion, from what I have read, it states that the AP is taxable in Thailand, now whether they enforce that or not is up to them.

 

I take it, that since it has been in place since the DTA came into effect in the 80,s, if I'm not mistaken, that they won't enforce it, like many things in Thailand, i.e. unless they want to open the flood gates for many expats on age pensions from all countries to leave as the cost of living in Thailand would have become that more expensive to live due to any taxes enforced on their age pensions.

[TroubleandGrumpy]

21 hours ago, scorecard said:

I have a question, it's been suggested to post the question here:

"And still not clear whether the Australian Old Age Pension, transferred to Thailand, is exempt from Thai personal taxation, especially where the recipient has no other income."

Or perhaps the question is whether the Oz OAP (alone) is considered to be income under the Thai RD regulations?

I'm just guessing but I suspect a few Aussies on the OAP living in Thailand will be interested in this point. Thanks for any advice you can share.

IMO the Australian Pension is NOT subject to income taxes in Thailand.  There are several reasons for that opinion.  Taxation is an extremely complicated and 'difficult' area - in Aust we are extremely lucky to have the ATO - they are IMO the best in the world (I worked in IT in Canberra for 20+ years).  Often this tax rule states this, and that rule states that, and both are in conflict, and another one says another thing altogether. Over many years those rules and situations are rigorously 'fine tuned' and publicised and the tax experts and public are 'educated'.  ATO has over the last 3-4 decades done a great job in doing that - the TRD are a total clusterphaarrk of disjointed and conflicting arbitrary rules and interpretations. Most TRD clarifications come from Court cases - they are not rigorously removing conflicts, confusions. ommissions and errors.  

 

The issue with your question starts with being a tax resident in Thailand and/or a tax resident in Australia.  I am both at the moment, and if you pay taxes in Australia (which you have already on any earnings/super etc) you probably are one too.  That is a huge issue and grwatly affects income taxation in any other country.  

The secondary issue of whether a Govt Pension is taxable in Thailand is confusing, but IMO TRD does not consider a Government Pension (in their Taxation Rules) as taxable - but it is very much (like everything to do with TRD) open to interpretation.  A  'Pension' in the TRD guidelines is any regular payment made to a person - some Companies pay a person a 'Pension' over many years in return for their service - that is taxable.

The next level is whether under the DTA the Aust Govt Pension is taxable. There are many clauses and interpretations possible - mine is that it is not taxanble in Thailand.  If this matter ever goes to a Thai Court for a decision - then and only then will it be clear. But even that will be subjected to 'correction' - I just cannot see the Aust Taxpayer (and therefore Govt) being happy to pay their taxes straight to the Thai Government for every person on a Penbsion and residing in Thailand for 180+ days each year. 

There are more complications than those above that I have only just touched on - this could go on for hours. IMO the ASust Govt Pension is not taxable.

 

Having said that, I know one of the 'confusing' facts that has IMO caused the misinterpretation that the Pension is taxable.  In Australia, the Pension (like most CLink payments) is considered 'taxable income' - but as you know it is not taxed - it is subjected to and then exempted from tax by the ATO.  When a person recieves the Pension they are 'deemed' to have a taxable income that is above the tax free threshold, then if they earn money from another source, then that income is 100% subject to payment of income taxes, because it is above the tax free threshold. I think some people have confused the Pension being taxable income with being taxable in Thailand.  IMO the Aust Govt under the DTA does not want its taxpayer's money being paid to the Thailand Government, and the DTA does not clearly state that the Govt Pension is taxable in Thailand.  Now what TRD might think about that is unknown (they dont make the DTAs) and IMO is best left alone like a sleeping dog. 

 

IMO all Expats should avoid lodging a tax return in Thailand unless they are clearly earning income overseas (real income, not Pension) and are bringing that income into Thailand untaxed. If, like me, you dont think you have to pay income taxes in Thailand, then keep records of all payments in Australia, all transfers to Thailand, and all deposits in Thailand, and write down the reasons why you think you are not liable for income taxes (keep a file each year). Then if I am wrong (could be - doubt it - but could be) and the TRD comes knocking asking why you have not lodged a tax return, then and only then, go see a tax expert/consultant and get formal advice. If you see one now, IMO they will say "yes yes pay us money and we do a tax return for you' now and every year going forward. If you want to play it completely safe, then go see one towards the end of this year - when things will hopefully be clearer.  In Thailand it can take many years to resolve the simplest of issues (criminal cases, maryjane laws, covid mandates, etc etc) - IMO this new 'tax regime' will take 2-3 years to sort itself out - best to stay quiet until then. 

 

All Thailand has to do is release a statement (like Malysia and Philippines have done and others?) making it clear that they have no intention of taxing Retired Expats who bring their own money into Thailand under their implementation of the required OECD CRS driven tax laws, designed to reduce money laundering and tax fraud. That Thailand has not yet done that despite the clearly concerned Expats (and poptential Expats) could mean they do want our money, but more likely it is because they are dont know what to do and how to do it (and refuse to look, listen and learn from their neighbours).  

 

[TroubleandGrumpy]

21 minutes ago, 4MyEgo said:

 

Do please enlighten me/us with your findings, you can copy and paste them here, or the link, outlining which section of the DTA states that Aussies are not liable to pay income tax to Thailand on their Aust Pension payments.

 

Nothing posted with a link is like posting words, words to no effect IMO.

You sound like someone else mate - argumentative and never wrong (enlighten me/us).  

Please read my latest post vefore this and then please read the TRD Guidlines for 2022 and the Australian Thai DTA - all of them.

Then and only then will you see what I have seen which make it IMO not taxable.  

PS - also look up the Thai definition of the word Pension.

 

You are one of the many that have stated that the pension is taxable - please provide where it states clearly that the Pension is subject to income taxes in Thailand.  Please post everything you have - so I can refute/correct it all in one go. 

 

Year 2022 | The Revenue Department (English Site) (rd.go.th)

 

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

 

Edited April 3 by TroubleandGrumpy

[TroubleandGrumpy]

17 minutes ago, 4MyEgo said:

 

In my opinion, from what I have read, it states that the AP is taxable in Thailand, now whether they enforce that or not is up to them.

 

I take it, that since it has been in place since the DTA came into effect in the 80,s, if I'm not mistaken, that they won't enforce it, like many things in Thailand, i.e. unless they want to open the flood gates for many expats on age pensions from all countries to leave as the cost of living in Thailand would have become that more expensive to live due to any taxes enforced on their age pensions.

 

We clearly have different opinions about whether it is taxable in Thailand.  Hopewfully our discussions on the matter will give members what they need to make their own decision/s.  Looking forward to your post with link/proof it is taxable.  PS - anything from a tax accountant stating it is taxable is not worth the paper it is printed on - they are after your business and will and do say anything - there are SFA consumer laws here, and the TRD does not manage taxation 'experts' like the ATO and Consumer Affairs and Financial Advisers Ombudsman does in Australia.  

 

I agree 100% with your second paragraph, but I will point out that unlike the TAT and Thai Immigration, TRD do not care one bit about Expats leaving Thailand - that is not their issue and they will not take that issue into account (unless told to back down). 

 

[TroubleandGrumpy]

On 3/30/2024 at 9:28 AM, mfd101 said:

On 2 or 3 occasions in the last 2 years I have received queries from my various Oz financial institutions (including NAB) as to my tax status in Thailand. In (then) total ignorance of the Thai proposals & decisions to follow, I replied in each case (truthfully) that I don't have a TIN & I have no income sourced in Thailand ie all my income comes from Oz. At the time I thought that was an end of the matter.

 

In addition, for the last 4 or 5 years, without consultation the ATO has treated me as non-resident for tax purposes. Fair enough I guess, and it means I now have to pay additional tax (AUD8 or 9K) at the end of each FY as I have no 32% tax-free threshold.

 

My income is entirely Federal government public service superannuation (CSC/CSS - long-since closed).

 

Question: What happens when, later this year, I take out a TIN and prepare my first tax statement for Thailand starting 1Jan24? Noting the DTA, will that mean I cease to pay any Oz tax? And can I get refunded on the Oz tax I will already have paid from January this year? (Without knowing the likely Thai taxes I will have to pay it's hard to decide whether I'll be better off taxwise here, but I think with the ATO now swiping 32% of my total income I'm likely to be better off paying ONLY Thai tax.)

 

I know of a few people in the same position as yourself - paying taxes on their Aust Govt pension payments.  That is taxed now only because the contributions made into that Govt super fund were given additional taxation benefits and done at a much higher rate.  Other Super funds did not have those same taxation benefits, and that is why payments from them are not considered by the ATO as taxable income.  

 

I would get the latest information regarding paying income taxes in Thailand, inluding all the deductions and allowances applicable to yourself, and calulate exactly how much tax you would pay in Thailand versus in Australia.  I have heard there are a few Scandinavians in Thailand who are getting their 'retirement' payments sent direct to their banks in Thailand, because Thailand taxes them a lot less than their home country does. But it means going through the process of dealing with the home country tax office (ATO for you) to set things up in that way - once done the ATO will stop taxing your Pension payments - but I dont think it will be easy. 

  

[mfd101]

1 hour ago, TroubleandGrumpy said:

I know of a few people in the same position as yourself - paying taxes on their Aust Govt pension payments.  That is taxed now only because the contributions made into that Govt super fund were given additional taxation benefits and done at a much higher rate.  Other Super funds did not have those same taxation benefits, and that is why payments from them are not considered by the ATO as taxable income.  

 

I would get the latest information regarding paying income taxes in Thailand, inluding all the deductions and allowances applicable to yourself, and calulate exactly how much tax you would pay in Thailand versus in Australia.  I have heard there are a few Scandinavians in Thailand who are getting their 'retirement' payments sent direct to their banks in Thailand, because Thailand taxes them a lot less than their home country does. But it means going through the process of dealing with the home country tax office (ATO for you) to set things up in that way - once done the ATO will stop taxing your Pension payments - but I dont think it will be easy. 

  

Yes, I understand your 1st para., which I have always known.

 

And I will certainly be pursuing the 2nd para matters, noting also CH's excellent contributions above. The CSC/CSS were certainly not willing to pay direct to my Thai account when I first left Oz permanently in late 2015. Whether it will be worth pursuing further depends on the comparison of the Oz tax I currently pay vs any Thai tax. That calculation is the basis of what happens next: If the difference is large in favour of TRD, then I'll certainly make the effort. But if it's small, probably not worth the huffing 'n puffing I'll have to go thru..

[4MyEgo]

2 hours ago, TroubleandGrumpy said:

You sound like someone else mate - argumentative and never wrong (enlighten me/us). 

 

You know, every now and again another dipstick comes along, albeit it the last one put his tail under his legs and hasn't surfaced since I shamed him, that said, I don't have the time to argue with thick headed people who believe what they believe, I know from the research that I have provided also in another topic Australian Age Pensions which was started 10 + years ago, that all of the links and confirmations from others as well, points to Australian Age Pensions being taxable in Thailand.

 

You have come out of nowhere and are trying to stir up the hornets nest as did someone else, and to be honest, I am not buying into it as I have more important things to do earning a buck then to try and convince some Troubled Grumpy guy who thinks he knows everything, no thanks.

 

I'm out of here, maybe the others can entertain you, but if you did read the 3rd post in this topic, it should have gotten through, maybe your name is something other than what it says who has come back to start up again.  

 

Edited April 3 by 4MyEgo

[CharlesHolzhauer]

1 hour ago, mfd101 said:

Whether it will be worth pursuing further depends on the comparison of the Oz tax I currently pay vs any Thai tax

It's essential to focus on your personal situation and not be swayed by opinionated individuals citing hearsay on remitting procedures by other nationalities. If your investment products are placed in an Account Based Pension, you pay zero taxes, PERIOD. None of the Account Based Pension platform operators will remit pension payments to an overseas account; you'll need to arrange it yourself.

Go to <https://aseannow.com/topic/1318120-revenue-department-contact-reports/#comment-18647010> and locate poster 'pauku1' and download his excell spreadsheet to compute your taxes if any - you might be pleasantly surprised.