Is VA Disability Compensation Not Taxed Under New Law?

[Crazy Noobie]

I read the Double Taxation Agreement between the US and Thailand. No where could I find anything about disability compensation. I am rated at 100% disabled veteran and I receive a monthly compensation sent to my US Bank account. Every month I transfer some of it to Thailand. In the US it is not taxed at all at the State level of Federal. I figure it would not be taxed in Thailand since it is a disability compensation. Does anyone know the answer to my question, is it taxed or not?

[CharlieH]

Moved to Finance forum

[bkk6060]

For Thais on disability, I believe the first 190,000 b is tax exempt.

Not sure it has been addressed for foreigners here.  But, the new resident tax rules are based on the Thai tax laws.  So, in theory anything over 190,000 b may indeed be taxed.

[Smokin Joe]

Your VA Disability is a Govt Pension and can not be taxed by Thailand per the DTA.

[sangtip2]

On 3/15/2024 at 4:55 PM, Smokin Joe said:

Your VA Disability is a Govt Pension and can not be taxed by Thailand per the DTA.

Does this mean that Social Security in non taxable?

[Smokin Joe]

6 minutes ago, sangtip2 said:

Does this mean that Social Security in non taxable?

 

Yes. US Social Security can not be taxed by Thailand.

 

My US Military Pension and Social Security are the only funds I will transfer to my Thai bank account so I have no concerns about the new rules. Neither are taxable by Thailand.

 

 

All Double Tax Agreements are available on the Thai Revenue Dept website.

 

https://www.rd.go.th/english/766.html

[timendres]

On 3/15/2024 at 4:55 PM, Smokin Joe said:

Your VA Disability is a Govt Pension and can not be taxed by Thailand per the DTA.

 

Do you see this addressed in the DTA?

It may not actually be considered a pension, so it might need to be specifically mentioned the way that pensions are.

[Smokin Joe]

6 hours ago, timendres said:

 

Do you see this addressed in the DTA?

It may not actually be considered a pension, so it might need to be specifically mentioned the way that pensions are.

 

I agree that VA disability may not be a classified as a pension but I believe that the DTA would still exempt it because of these two articles. The primary consideration IMO is that it is from government service.

Not everything has to be specifically mentioned. The phrases "...other similar remuneration..."  and "Remuneration, other than a pension,..." can cover a lot.

 

 

ARTICLE 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.

 

ARTICLE 21 Government Service  

 1. a) Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.             

 

BTW my military retirement pay for 20 years active duty service is not called a pension either.

[arjunadawn]

On 3/15/2024 at 4:55 PM, Smokin Joe said:

Your VA Disability is a Govt Pension and can not be taxed by Thailand per the DTA.

Va Disability is not Pension. VA Pension is pension. VA disability is emphatically declared NOT Income in the US Code, even the IRS can’t touch it. Pension is touchable. (I know. The IRS sought to levy my money and could not. It’s protected as not income). 

[Crazy Noobie]

On 3/15/2024 at 4:55 PM, Smokin Joe said:

Your VA Disability is a Govt Pension and can not be taxed by Thailand per the DTA.

I am sorry but you are wrong. VA Disability is just what it says it is: disability. Govt Pension is just that, a pension. Two totally different things. The VA Disability is not taxed by the Thai Govt or even the USA. Whereas, some pensions are taxed and some are not. You would have to check the DTA.