Australian OAP Taxation Issues.

[Pattaya57]

11 hours ago, KhunHeineken said:

WHEN the proposed changes to tax residency are passed, that "pretty standard info" changes the game for many.  Eg.  Pattaya57 has been outside of Australia for 183 days, thus, no a non resident for tax purposes, therefore, non resident tax brackets apply. 

That so called new bright line test has sat dormant for years and no word of if or when it'll ever be put into legislation.

 

You have it backwards anyway. What's proposed is If you are living in Australia for 183+ days you are automatically a resident for tax. If you lived in Australia less than 183 days you can be declared a resident if you're a citizen and stay for minimum 45 days in one of the previous 3 income years. Only less than 45 days for 3 income years straight would someone be declared a non-resident.

 

Edited June 25 by Pattaya57

[KhunHeineken]

On 6/25/2024 at 7:12 AM, Pattaya57 said:

That so called new bright line test has sat dormant for years and no word of if or when it'll ever be put into legislation.

Has the Assistant Treasurer for Labor, Stephen Jones, forgot about it?  Liberal surely haven't, they proposed them. 

 

The current laws are 90 years old.  For how much longer do you think they will last before being moderized? 

 

https://www.afr.com/policy/tax-and-super/assistant-treasurer-flags-new-tax-residency-rules-20220826-p5bd1v

 

On 6/25/2024 at 7:12 AM, Pattaya57 said:

You have it backwards anyway. What's proposed is If you are living in Australia for 183+ days you are automatically a resident for tax. If you lived in Australia less than 183 days you can be declared a resident if you're a citizen and stay for minimum 45 days in one of the previous 3 income years. Only less than 45 days for 3 income years straight would someone be declared a non-resident.

What about meeting the factor tests?

 

What about expat retirees who haven't been home in years?  Any advice for these people, when the proposed changes are passed? 

[Bvor]

13 hours ago, KhunHeineken said:

The current laws are 90 years old.  For how much longer do you think they will last before being moderized? 

I'm with you that change will eventually occur (calm down KH bashers) but it appears been sitting in the Khun Jones in tray for 2 years or so plus the time elapsed since libs first proposed them makes forecasting how much longer somewhat tedious - bit like some LOS proposed changes. 

[KhunHeineken]

On 6/27/2024 at 9:39 AM, Bvor said:

I'm with you that change will eventually occur (calm down KH bashers) but it appears been sitting in the Khun Jones in tray for 2 years or so plus the time elapsed since libs first proposed them makes forecasting how much longer somewhat tedious - bit like some LOS proposed changes. 

Every May budget and every 1st July they are not passed I celebrate another year of not paying non resident tax. 

 

The party has to end one day, but ostriches don't like hearing about it. 

[KhunHeineken]

Haven't heard from Ego about this youtube clip at 18:50 minutes.

 

Maybe he missed it. 

 

https://www.youtube.com/watch?v=y1chBfp8_XE

 

We could all do with his expert interpretation on it. 

[Bvor]

50 minutes ago, KhunHeineken said:

We could all do with his expert interpretation on it. 

I sent him a query weeks ago, which he received but has not yet answered, whether the application of SAPTO is deemed to have paid the tax payable on my OAP -  ie tax has been met in Australia - what is your take?

It may be irrelevant to my intended <180 stays in LOS but I still would like clarification specific to my query as I may decide to go 180> sometime down the track .

Attached is screen shot from youtube clip re DTA and OAP. 

      

[KhunHeineken]

8 minutes ago, Bvor said:

I sent him a query weeks ago, which he received but has not yet answered, whether the application of SAPTO is deemed to have paid the tax payable on my OAP -  ie tax has been met in Australia - what is your take?

It may be irrelevant to my intended <180 stays in LOS but I still would like clarification specific to my query as I may decide to go 180> sometime down the track .

Attached is screen shot from youtube clip re DTA and OAP. 

      

Well, I thought Ego would "come out to play" but I guess not.  I remember him posting something about me having my tail between my legs on this issue.  Interesting he hasn't posted how wrong this guy is.  He was quite vocal about Article 18, and how we all should "forget about Article 19."

 

Article 18 and Article 19 of the DTA between Australia and Thailand was put forward as the big victory for Aussie pensioners, alas, at least one professional doesn't see it that way. 

 

Perhaps Lacessit can post about it. He claimed Article 18 and Article 19 clearly set out why Aussie aged pensioners will not be taxed.  Maybe he will be more forthcoming on how this professional is wrong. 

 

It just leaves me wondering if the information from Jim Quinn, from the ATO, is accurate, or not, particularly as there were a few other staff members from the ATO that said non resident tax must be paid by aged pensioners living overseas. 

 

Hopefully Ego and / or Lacessit will be along soon to clear it all up. 

[Bvor]

4 minutes ago, KhunHeineken said:

Hopefully Ego and / or Lacessit will be along soon to clear it all up. 

 That's all very well for the DTA/OAP bizzo but what's your take and or anybody elses take on my SAPTO tax met in Oz query.

[TigerandDog]

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.)

 

 

Regardless of whether you have a Thai tax file number or not, under the Australia/Thai DTA Oz CANNOT legally tax you, even at non resident rates as long as you are a resident for Thai taxation purposes (viz 180 days or more per calendar year). The DTA stipulates that ONLY the country where a person is a resident for tax purposes can tax that person, viz. Thailand. All you need to be able to do is prove to the ATO, preferably using a tax accountant who has full knowledge of the DTA, that you have been a Thai resident for tax purposes for those 4 or 5 years and submit a claim for a FULL refund of all taxes paid to the ATO during that period.  Earlier this year I telephoned a tax accountant in Melbourne who specialises in DTA's, with regards to my Oz Age pension to be told that even though it was tax free in Oz it was assessable income here in Thailand, and during that conversation he told me about one of his clients who had been living fulltime in Thailand for the previous 15 years and being taxed by the ATO at the Oz non-resident tax rate of 32,5% on his age pension. The accountant lodged a claim with the ATO making them aware that under the relevant section of the DTA that the ATO could not legally tax their client on any income as he was aThai resident for taxation purposes. The client received a FULL refund  of the tax paid over those 15 years. 

 

The thing to keep in mind is that as per several posts by Mike Lister, there is a full range of deductions that we can claim to reduce the actual assessable amount thus reducing the amount of tax payable if any. In my case those deductions will reduce the annual amount of my assessable income (age pension only) to below the 120,000 baht level thus resulting in my still having to lodge a tax return BUT not having to pay any tax whatsoever.  The other step yhou should take, via a tax accountant, is to have the ATO notified that your last tax return was your final one as you would not be returning to Australia.

[mfd101]

1 hour ago, TigerandDog said:

Regardless of whether you have a Thai tax file number or not, under the Australia/Thai DTA Oz CANNOT legally tax you, even at non resident rates as long as you are a resident for Thai taxation purposes (viz 180 days or more per calendar year). The DTA stipulates that ONLY the country where a person is a resident for tax purposes can tax that person, viz. Thailand. All you need to be able to do is prove to the ATO, preferably using a tax accountant who has full knowledge of the DTA, that you have been a Thai resident for tax purposes for those 4 or 5 years and submit a claim for a FULL refund of all taxes paid to the ATO during that period.  Earlier this year I telephoned a tax accountant in Melbourne who specialises in DTA's, with regards to my Oz Age pension to be told that even though it was tax free in Oz it was assessable income here in Thailand, and during that conversation he told me about one of his clients who had been living fulltime in Thailand for the previous 15 years and being taxed by the ATO at the Oz non-resident tax rate of 32,5% on his age pension. The accountant lodged a claim with the ATO making them aware that under the relevant section of the DTA that the ATO could not legally tax their client on any income as he was aThai resident for taxation purposes. The client received a FULL refund  of the tax paid over those 15 years. 

 

The thing to keep in mind is that as per several posts by Mike Lister, there is a full range of deductions that we can claim to reduce the actual assessable amount thus reducing the amount of tax payable if any. In my case those deductions will reduce the annual amount of my assessable income (age pension only) to below the 120,000 baht level thus resulting in my still having to lodge a tax return BUT not having to pay any tax whatsoever.  The other step yhou should take, via a tax accountant, is to have the ATO notified that your last tax return was your final one as you would not be returning to Australia.

Thanks for that. I will take it on board as I head towards taking out a Thai TIN in January next. Meantime I will talk to my current (Canberra) accountants re the DTA - it may be news to them(!).

[Fat is a type of crazy]

2 hours ago, TigerandDog said:

Regardless of whether you have a Thai tax file number or not, under the Australia/Thai DTA Oz CANNOT legally tax you, even at non resident rates as long as you are a resident for Thai taxation purposes (viz 180 days or more per calendar year). The DTA stipulates that ONLY the country where a person is a resident for tax purposes can tax that person, viz. Thailand. All you need to be able to do is prove to the ATO, preferably using a tax accountant who has full knowledge of the DTA, that you have been a Thai resident for tax purposes for those 4 or 5 years and submit a claim for a FULL refund of all taxes paid to the ATO during that period.  Earlier this year I telephoned a tax accountant in Melbourne who specialises in DTA's, with regards to my Oz Age pension to be told that even though it was tax free in Oz it was assessable income here in Thailand, and during that conversation he told me about one of his clients who had been living fulltime in Thailand for the previous 15 years and being taxed by the ATO at the Oz non-resident tax rate of 32,5% on his age pension. The accountant lodged a claim with the ATO making them aware that under the relevant section of the DTA that the ATO could not legally tax their client on any income as he was aThai resident for taxation purposes. The client received a FULL refund  of the tax paid over those 15 years. 

 

The thing to keep in mind is that as per several posts by Mike Lister, there is a full range of deductions that we can claim to reduce the actual assessable amount thus reducing the amount of tax payable if any. In my case those deductions will reduce the annual amount of my assessable income (age pension only) to below the 120,000 baht level thus resulting in my still having to lodge a tax return BUT not having to pay any tax whatsoever.  The other step yhou should take, via a tax accountant, is to have the ATO notified that your last tax return was your final one as you would not be returning to Australia.

I think you are mistaken i.e. if the income is sourced in Australia it may be taxable in Australia at non-resident rates e.g. the government super pension mentioned, rental income on Australian property, etc. Of course interest earned in Australia is still taxed at 10 per cent for non residents. You can likely get a tax credit for tax paid in the other country but the way your post reads is once you are a resident of Thailand and pay tax in Thailand on all income there is no tax to pay in Australia full stop. 

This post was quite good in the name of Dinga - it is  looking at the new tax rules for Thailand but discusses the Double Taxation Agreement and tax for non residents of Australia. 

https://aseannow.com/topic/1306896-thai-government-to-tax-remitted-income-from-abroad-for-tax-residents-starting-2024/page/282/

 

Edited Monday at 01:23 PM by Fat is a type of crazy

[Fat is a type of crazy]

On 3/30/2024 at 1:28 PM, 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 have noted this in other posts I think but the post above notes that what they call civil service pensions - which I assume includes employee superannuation like the CSS and PSS pensions - are specifically excluded by the Double Tax Agreement and only taxable in the state that disperses them and are not taxable in Thailand. So that to me indicates you have been taxed correctly up till now and will not be taxed in Thailand on this income but not a bad idea to look into it further as the other poster says.

 

[mfd101]

1 hour ago, Fat is a type of crazy said:

I have noted this in other posts I think but the post above notes that what they call civil service pensions - which I assume includes employee superannuation like the CSS and PSS pensions - are specifically excluded by the Double Tax Agreement and only taxable in the state that disperses them and are not taxable in Thailand. So that to me indicates you have been taxed correctly up till now and will not be taxed in Thailand on this income but not a bad idea to look into it further as the other poster says.

 

Noted, thanks. I agree.

 

The key point is that the Oz federal government CSS issue is DIFFERENT from age pension matters. It is a particular issue arising from the long-closed superannuation CSS which was not taxed going in, so is now taxed coming out. And now complicated for me as a 'non-resident for tax purposes' in Oz. Which doesn't mean that I'm not taxed there; it means I'm taxed at a higher rate (32.5%) than age pensioners.

 

There's also the difficulty that arises from first reading of article 19 of the DTA ['Government Service'] which seems to have a bob each way. Careful reading & rereading clarifies this: My CSS super is taxable ONLY in Oz [at the confiscatory rate of 32.5%] and will continue to be so & there's nothing I can do about it.

 

I will nevertheless follow up with my Canberra accountants when I'm preparing inputs to my 23/24 tax return.

Edited Tuesday at 01:31 AM by mfd101

[KhunHeineken]

14 hours ago, TigerandDog said:

Regardless of whether you have a Thai tax file number or not, under the Australia/Thai DTA Oz CANNOT legally tax you, even at non resident rates as long as you are a resident for Thai taxation purposes (viz 180 days or more per calendar year).

Link please.

 

14 hours ago, TigerandDog said:

The DTA stipulates that ONLY the country where a person is a resident for tax purposes can tax that person, viz. Thailand. All you need to be able to do is prove to the ATO, preferably using a tax accountant who has full knowledge of the DTA, that you have been a Thai resident for tax purposes for those 4 or 5 years and submit a claim for a FULL refund of all taxes paid to the ATO during that period. 

Didn't you just said you can not be taxed, therefore, how can you be refunded?

 

Another member posted a link to the thread, but here's the link to the actual youtube video.  Also, a member has posted a screenshot. 

 

 

Have a look at around 18:50 minutes.  It states there is no exclusion for the Australian aged pension in the DTA.

 

There's also this from these from the ATO.

 

https://community.ato.gov.au/s/question/a0J9s0000002ngF/p00172380

 

https://community.ato.gov.au/s/question/a0J9s000000O2y4/p00197245

 

In fairness, a screenshot was posted by a member that was from another ATO staff member who said no tax was payable due to the DTA, but it's a screenshot and I can't link it. 

 

Article 18 and Article 19 of the DTA relate to pensions.  

 

An aged pension is not a civil service pension. 

[KhunHeineken]

1 hour ago, mfd101 said:

The key point is that the Oz federal government CSS issue is DIFFERENT from age pension matters.

Correct. 

 

1 hour ago, mfd101 said:

There's also the difficulty that arises from first reading of article 19 of the DTA

Those pesky "provisions" in Article 19 that Article 18 relies upon.