Australian Aged Pension - Income Taxes in Thailand

TroubleandGrumpy · July 29

This post is provided as a personal opinion and is meant to be nor is being presented as legal, financial or taxation advice. The writer is not a tax lawyer or a tax adviser, and everyone should get their own taxation advice from an accredited professional. This information is provided merely as one person’s experiences and opinions, and is not to be taken as advice.

I am posting this to provide a simple and clear summary, as I see it, of the income tax situation in Thailand as at July 2024 for Aussies living in Thailand who are not working here or otherwise earning money in Thailand (online sales, investments, market sales, etc etc). I decided to provide what I have calculated and utilised for the basis of my decisions regarding the potential income taxes to be paid by myself (and Wife) as an Australian in Thailand. Rather than just add this to the existing large threads regarding income taxes, I have created it as a separate thread for Aussies. Obviously some of the points are applicable to those Expats from other countries, but this is really focused only on this new tax regime as it affects myself and other Aussies.

Any feedback about matters I have missed and/or errors that I have made would be appreciated.

EVERYTHING WRITTEN BELOW IS ‘IMO’ (IN MY OPINION)

If you want official or guaranteed information – pay for and get written advice from a tax consultant, tax accountant, or tax lawyer

DEFINITIONS

Tax resident – 180 or more days in total within any calendar year.

Resident and resident – A ‘Resident’ is someone that has the legal right to live and stay in a country. A ‘resident’ does not have that legal right.

Please note - in Thailand many documents are less than ‘professional’ and the need to be distinct when referring to a ‘Resident’ verus a ‘resident’ is not always evident.

Very few Expats are Residents of Thailand, even fewer are Citizens, but the vast majority of us are residents.

Just because you may have an LTR Visa does not make you a legal Resident – it is legally a ‘long term resident’ Visa.

Taxable Income (under new rule) – Income earned after 1 Jan 2024 that is remitted into Thailand by a tax resident in a calendar year (2024 for this case).

Obviously the money that an Expat is earning in Thailand is taxable – whether a tax resident or not (requires a work permit usually).

Income – money earned from working or investment returns etc. as defined in the TRD Tax Code – it is not savings, superannuation, etc. (as also defined).

Below are links to the relevant important TRD websites regarding PIT in Thailand. For whatever reasons when copying from the webites or my source document, the pasted links are not links. So I have had to just paste the web addresses.

https://www.rd.go.th/english/6045.html (TRD - Personal Income Tax – includes tax rates)

https://www.rd.go.th/english/38306.html (TRD - Tax Revenue Code - everything)

https://www.rd.go.th/english/65308.html (TRD – 2023 Personal Income Tax Guides)

https://www.rd.go.th/fileadmin/download/english_form/2023/GUIDE_90_66_Complete.docx - (ภ.ง.ด.90 Lodgement Form) - ภ.ง.ด.90 is the one for income ‘not only employment’ (TRD words)

Rather than start this post with all my reasons why IMO the Aust Aged Pension is not taxable income when remitted into Thailand under the Aust-Thai DTA, I have decided to provide the ‘basic numbers’ first. I have made these calculations based upon the standard exemptions and allowances in the Thailand Tax Code and 2023 Lodgement Guides, and as previously advised and summarised in the other ‘tax threads’. After this first step, I will below put forward why I think the Aust-Thai DTA actually means for the Aged Pension.

Part 1 – Taxes Payable when the Pension is Taxable Income when remitted to Thailand (I do not think so - but just for this part of the exercise)

On the basis that the Australian Age Pension when remitted into Thailand is taxable income - the following is provided.

Payment schedule and rates for people outside Australia - Age Pension - Services Australia

Maximum Overseas Single Pension Rate (July 2024) $27,271 AUD

Maximum Overseas Pension Rate - Married (July 2024) $20,607 AUD

Centelink Exchange Rate – July 2024 ฿25.53

Maximum Overseas Single Pension Rate (July 2024) ฿696,229 BAHT

Maximum Overseas Pension Rate - Married (July 2024) ฿526,097BAHT

Please note that these figures are all using the current official Centrelink exchange rate.

I have also calculated the numbers using the ‘real’ current exchange rate – which is what matters – the actual income remitted.

Tax Exemptions, Deductions and Allowances (TEDA) – Married Couple

a) Personal Allowance for self (PA1) - 60,000 ฿60,000

b) Personal Allowance for wife (PA2) - 60,000 ฿60,000

c) Over age 65 years exemption (OAE) - 190,000 ฿190,000

d) 50% of Pension up to 100k (PD) - 100,000 ฿100,000

e) 0-150,000 TAX FREE ฿150,000

Total Deductions Exemptions and Allowances ฿710,000

Therefore after TEDA IMO a married Expat receiving the Aust Age Pension has no income taxes to pay when he and she lodge a joint tax return, and they both make no other additional taxable income.

Additionally, that same married Expat and his wife can remit an additional 183,903 Baht before income tax is payable.

Like I said above, any income earned by the Expat, or his wife, in Thailand is taxable income and would be added to the age pension (if it was taxable).

Tax Exemptions, Deductions and Allowances (TEDA) – Single

a) Personal Allowance for self (PA1) - 60,000 ฿60,000

c) Over age 65 years exemption (OAE) - 190,000 ฿190,000

d) 50% of Pension up to 100k (PD) - 100,000 ฿100,000

e) 0-150,000 TAX FREE ฿150,000

Total Deductions Exemptions and Allowances ฿500,000

Therefore after a single Expat receiving and remitting all the Aust Age Pension has a total income of ฿196,229 after TEDA.

I have calculated that the taxes payable on that amount of taxable income payable would be ฿12,122.

However, those figures above assume all of the age pension is remitted into Thailand, and all of it is at the Centelink Exchange Rate in July 2024 of ฿25.53

If it was all remitted at the current today’s Wise rate (฿23.52) the total Single Pension would be ฿641,413.

Which would mean a total taxable income after TEDA of ฿141,413 which equates to income tax payable of ฿7,070.

However, there are additional TEDA allowances/exemptions, such as Health Insurance premiums.

Each Expat needs to check the numbers in the TRD Tax Guide and Revenue Code, based upon their own financial situation.

Part 2 – The Australian Age Pension is Not Taxable Income when remitted to Thailand (IMO)

https://www.rd.go.th/english/859.html (The Thai-Aust DTA)

Many people think a ‘DTA’ only refers to double taxation and tax credits – that is common, but it is not the case.

As per the title – it is an Agreement between Thailand and Australia for the avoidance of double taxation and the prevention of fiscal evasion regarding taxes on income.

Under that agreement, in addition to the agreed rules for avoiding double taxation by tax credits, are also agreed rules as to which country can tax which income.

There is also detailed the overall rights of the Citizens of both countries – in order to protect their interests when living/working in the other country.

The big issue for retired/married Aussies in Thailand, is whether the Age Pension is taxable in Thailand under the Thai-Aust DTA.

And there is not one single clause under which that is made clear – it is like all Agreements where several Clauses can have impact on any matter.

Part A – Article 18 and the Clause mentioning the word ‘pension’

https://www.rd.go.th/english/856.html#article18

“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.”

Some have said that the Clause means Age Pension is taxable income for a tax resident in Thailand.

But others have stated that is not the case and that it is not the intent of that Clause.

I emphatically agree with those in the latter group – because the Australian Age Pension is ONLY payable to Residents of Australia (not residents).

You cannot apply for and get the Pension when not a Resident of Australia – you must be a qualified Resident or Citizen of Australia and show you have a home there and intend the stay.

After being away and returning, then only after 2 years of being on the Pension can you apply for and get ‘Portability’, but that does not mean you are no longer qualified as a Resident.

What that means is that your Pension has become ‘portable’, but your qualifications to receive the payment as a ‘qualified Resident’ remain in place – they are just made ‘portable’.

Becoming a tax resident of any other country does not change that qualification – you take that qualification with you – hence the legal term ‘portability’.

What is missing in that Clause within the DTA, is the intent with regards to Government paid Age Pensions – versus private pensions as a means of payment for services rendered.

Private pensions and annuities are certainly taxable in the other State, but IMO Government Pensions are not intended to be taxed in the another State.

The following is Clauses from other DTAs that Thailand has with other countries covering that matter (Government paid Age Pensions)

IN OTHER DTAs

1. Subject to the provisions of paragraph 2 of Article 19, 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.

2. Notwithstanding the provisions of paragraph 1, pensions paid and other similar payments made under a public scheme which is part of the social security system of a Contracting State shall be taxable only in that State.

ALSO IN OTHERS DTAs

Any pension paid by the Government of one of the Contracting States to any individual, may be taxed only by that Contracting State.

AND THE THAI-USA DTA

Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first- mentioned State.

IMO the intent of the Clause is to ensure that Government Pensions paid by one State are not taxed by the other State – what Govt wants their taxpayer’s money going to another State?

Private pensions and annuities are certainly taxable in the other State, but IMO Government Pensions are not intended to be taxed in the other State.

I note that the Thai-Aust DTA has not been updated for a long time, and it is clear that Article 18 and its associated Clauses need updating, as other DTAs have been.

Unfortunately, when I looked through the various DTAs of countries, it was very evident that when these were written (back in the 80s) the main thing they were thinking about was the payment of a Government pension or wage to citizens of their own country who were working in the other country as a Government employee (such as in Embassies). They did not want those ‘pensions’ and wages paid to their Government employees and ex-employees taxed in Thailand. Unlike some DTAs that have been updated since then (as above), the Aust-Thai DTA has not been updated to reflect the large number of Australian retirees living in Thailand, and I am certain the Aust Govt wants their taxpayer’s money being paid to the Government of Thailand.

Part B – What the TRD defines as a ‘Pension payment’

https://interweb1.rd.go.th/cgi-bin/intra_search?q=PENSION;t=5;field=1;page=1;long=1 (open and click ‘translate to English’)

The Company is obliged to pay a pension to the wife as a monthly alimony until the wife dies or remarries.

Pension paid by the Company does not qualify as a non-independent personal service under Article 16 of the Convention between the Government of the Kingdom of Thailand and the Government of the United Kingdom of Great Britain and Northern Ireland because it is money paid due to Mr. Chen's past work.

This is a ruling from the TRD regarding a decision made whether payments are taxable income or not (in this case they are).

What it shows is that a ‘pension payment’ is understood by TRD to be other than what some people think – which is a payment from a Govt funded social welfare system.

When the words 'pension payments' are referred to by TRD, that is not related to a Government Aged Pension – the definition very much is focused on a private pension payment.

Part C – Article 25 – Non-Discrimination

https://www.rd.go.th/english/855.html#article25

Nationals of a Contracting State shall not be subjected in the other contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States.

Under that Clause above, Australian Citizens are entitled to the same taxation ‘rules and requirements’ as that which is applied to the Citizens of Thailand.

Thailand does not tax the Aged Pension of its Citizens that receive their ‘Aged Pension’, and therefore under this Clause they cannot tax the Aged Pensions of Australian Nationals.

Part D – DTAs FAQ Answers from TRD

https://www.rd.go.th/english/23520.html

5. What happens if the rate of tax stipulated in the Revenue Code is different from that of an agreement?

- Apply the rate which is more beneficial to the taxpayer.

Under that TRD answer, any tax rate as applicable to Australian Nationals must be applied in the equal beneficial manner by Thailand.

Australian Nationals are not taxed on their Aged Pensions payments, whether they are a tax resident or not.

Therefore Thailand should apply the rate that is more beneficial to Australians as tax residents of Thailand, which means Aged Pensions are not taxable income (remitted or not).

Part E – TRD Definitions for all DTAs with all countries (The Elimination Method)

https://www.rd.go.th/english/21973.html

C. Elimination of double taxation

The focus of a DTA is the elimination of double taxation. Each DTA may prescribe different methods of elimination of double taxation of a person by the resident country:

(1) Exemption method

The country of residence does not tax the income which according to the DTA is taxed in the source country.

The Aust Aged Pension payments are ‘taxable income’ in Australia, so that anyone earning additional income over the Pension does not get the full tax free threshold.

The Australian Government applies a zero rate of tax on the Aged Pension payments - it is taxable but they elect not to tax it.

Therefore the Australian Pension is ‘taxed’ in the source country, and Thailand should also not tax those Pension payments.

Part F – Government Aged Pensions are not income – as per the TRD Definitions of what is Income

https://www.rd.go.th/english/6045.html#:~:text=Taxpayers are classified into “resident,any tax (calendar) year.

2.1 Assessable Income

Income chargeable to the PIT is called “assessable income”. The term covers income both in cash and in kind. Therefore, any benefits provided by an employer or other persons, such as a rent-free house or the amount of tax paid by the employer on behalf of the employee, is also treated as assessable income of the employee for the purpose of PIT. Assessable income is divided into 8 categories as follows :

income from personal services rendered to employers;
income by virtue of jobs, positions or services rendered;
income from goodwill, copyright, franchise, other rights, annuity or income in the nature of yearly payments derived from a will or any other juristic Act or judgment of the Court;
income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a juristic company, juristic partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings;
income from letting of property and from breaches of contracts, installment sales or hire-purchase contracts;
income from liberal professions;
income from construction and other contracts of work;
income from business, commerce, agriculture, industry, transport or any other activity not specified earlier.

As can be clearly shown from the list above, a Government paid pension is not listed as taxable income.

I think that is because in Thailand all Govt pension payments are not a taxable income.

Therefore, as per the list above (and Article 25) Gover Pensions are not taxable income.

Likewise, as per Part B above, where TRD details in a ruling what a 'pension payment' is, under Section 40, Government Pensions are not included in the list of assessable incomes.

Section 40 Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer.

(1) Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment.

Those are all methods of income from being paid for from employment and a Government Pension payment is not included.

As to the last two statements, it is my opinion that a lot of people/experts have 'assumed' Government Pensions are taxable because of the word 'pension' in TRD documents.

But as shown above, 'pensions' to the TRD are private pensions and not a Government Pension, and the Age Pension is not 'from employment'. Anyone who is a qualified Resident can receive the Aged Pension - whether they worked or not.

Part F – Summary

Whether the TRD would accept or not any of those legal arguments above about the Australian Aged Pension not being taxable income, is debatable. Plus there are many clarifications and information updates that TRD are supposed to provide - the issue of what constitutes assessable income is just one of them. The only rule that has changed is that the loophole whereby income such as capital gains and rent would be seasoned for 12 months and then remitted tax free no longer exists.

Expats have been for decades remitting their pensions and savings into Thailand - nothing has changed with regards to that money, and Expats have never before been required to pay income taxes on that money. The strict ‘rules’ are not always the issue in Thailand as most Expats know - it is what they decide to enforce, and how they interpret them. There is a rule in the TRD Tax Code that states all foreigners leaving Thailand must first get a tax clearance certificate - what really matters and what the reality is, is that the rule is no longer enforced. So Thailand is moving to a ‘tax regime’ as the TRD GM said, where Expats are now expected to pay their share of income taxes. That probably means that their past non-enforcement of the tax rules for Expats with regards to remitted income no longer applies.

However, that does not mean that the rules do not apply under which Thailand can tax the money Expats remit into Thailand, both in terms of what is income and what is not, and what is excluded under their own DTAs. But there are things done in Thailand that are not in compliance with the Rules/Laws by the Thai Authorities. Likewise, there are many ‘interpretations’ of the Thai Rules/Laws by Thais in authority that are not strictly in compliance with those Rules/Laws, and those interpretations change form location to location, and from month to month. The other issue that Expats need to also understand, is that unlike in the West where Govt People are trained, consistent (usually) and managed to comply with the Rules/Laws and as advised though rulings and determinations, Thai people in authority have a lot of arbitrary powers and they can do what they want (within reason).

Most Thai ‘officers’ are fair and reasonable, but some are not. Many are well trained and know all the rules/laws, but some have no idea and don’t give a rat’s rear end, and most are somewhere in between those two extremes. The other thing to remember going forward, is that in the West you have many avenues of Appeal - and western Govt staff are well aware they will be hauled through the coals if they cause an Appeal that results in their decision being over-turned. But in Thailand, your rights to appeal as a Foreigner are very limited and over-turning a decision can be extremely difficult (whether correct or not).

My strategy is to avoid dealing with the TRD for the next few years, unless absolutely necessary. This will all settle down and the reality of the situation and what Thailand decides to enforce and not, will hopefully by then be clear. If that was to become clear sooner, then that would not be unwelcome either way. When it comes to taxation and the severe penalties possible after several years of accidental (or deliberate) tax evasion, it is far far better to have certainty, rather than the uncertainty that currently exists.

It is my opinion that if the TRD starts taking tax money from Australians on the Pension, the Aust Govt will respond and update/amend the DTA to specifically exempt those Pension payments, like most other countries have done. The net says there are 20K Aussies living in Thailand, and if only half of those are on the pension and single, then Thailand will be reaping about $3-4 million from the Australian taxpayer.

Tony M · August 3

On 7/29/2024 at 5:28 PM, TroubleandGrumpy said:

This post is provided as a personal opinion and is meant to be nor is being presented as legal, financial or taxation advice. The writer is not a tax lawyer or a tax adviser, and everyone should get their own taxation advice from an accredited professional. This information is provided merely as one person’s experiences and opinions, and is not to be taken as advice.

I am posting this to provide a simple and clear summary, as I see it, of the income tax situation in Thailand as at July 2024 for Aussies living in Thailand who are not working here or otherwise earning money in Thailand (online sales, investments, market sales, etc etc). I decided to provide what I have calculated and utilised for the basis of my decisions regarding the potential income taxes to be paid by myself (and Wife) as an Australian in Thailand. Rather than just add this to the existing large threads regarding income taxes, I have created it as a separate thread for Aussies. Obviously some of the points are applicable to those Expats from other countries, but this is really focused only on this new tax regime as it affects myself and other Aussies.

Any feedback about matters I have missed and/or errors that I have made would be appreciated.

EVERYTHING WRITTEN BELOW IS ‘IMO’ (IN MY OPINION)

If you want official or guaranteed information – pay for and get written advice from a tax consultant, tax accountant, or tax lawyer

DEFINITIONS

Tax resident – 180 or more days in total within any calendar year.

Resident and resident – A ‘Resident’ is someone that has the legal right to live and stay in a country. A ‘resident’ does not have that legal right.

Please note - in Thailand many documents are less than ‘professional’ and the need to be distinct when referring to a ‘Resident’ verus a ‘resident’ is not always evident.

Very few Expats are Residents of Thailand, even fewer are Citizens, but the vast majority of us are residents.

Just because you may have an LTR Visa does not make you a legal Resident – it is legally a ‘long term resident’ Visa.

Taxable Income (under new rule) – Income earned after 1 Jan 2024 that is remitted into Thailand by a tax resident in a calendar year (2024 for this case).

Obviously the money that an Expat is earning in Thailand is taxable – whether a tax resident or not (requires a work permit usually).

Income – money earned from working or investment returns etc. as defined in the TRD Tax Code – it is not savings, superannuation, etc. (as also defined).

Below are links to the relevant important TRD websites regarding PIT in Thailand. For whatever reasons when copying from the webites or my source document, the pasted links are not links. So I have had to just paste the web addresses.

https://www.rd.go.th/english/6045.html  (TRD - Personal Income Tax – includes tax rates)

https://www.rd.go.th/english/38306.html  (TRD - Tax Revenue Code - everything)

https://www.rd.go.th/english/65308.html  (TRD – 2023 Personal Income Tax Guides)

https://www.rd.go.th/fileadmin/download/english_form/2023/GUIDE_90_66_Complete.docx   - (ภ.ง.ด.90 Lodgement Form) - ภ.ง.ด.90 is the one for income ‘not only employment’ (TRD words)

Rather than start this post with all my reasons why IMO the Aust Aged Pension is not taxable income when remitted into Thailand under the Aust-Thai DTA, I have decided to provide the ‘basic numbers’ first. I have made these calculations based upon the standard exemptions and allowances in the Thailand Tax Code and 2023 Lodgement Guides, and as previously advised and summarised in the other ‘tax threads’. After this first step, I will below put forward why I think the Aust-Thai DTA actually means for the Aged Pension.

Part 1 – Taxes Payable when the Pension is Taxable Income when remitted to Thailand (I do not think so - but just for this part of the exercise)

On the basis that the Australian Age Pension when remitted into Thailand is taxable income - the following is provided.

Payment schedule and rates for people outside Australia - Age Pension - Services Australia

Maximum Overseas Single Pension Rate (July 2024)          $27,271 AUD

Maximum Overseas Pension Rate - Married (July 2024)      $20,607 AUD

Centelink Exchange Rate – July 2024                                   ฿25.53

Maximum Overseas Single Pension Rate (July 2024)          ฿696,229 BAHT

Maximum Overseas Pension Rate - Married (July 2024)      ฿526,097BAHT

Please note that these figures are all using the current official Centrelink exchange rate.

I have also calculated the numbers using the ‘real’ current exchange rate – which is what matters – the actual income remitted.

Tax Exemptions, Deductions and Allowances (TEDA) – Married Couple

a) Personal Allowance for self (PA1) - 60,000                       ฿60,000

b) Personal Allowance for wife (PA2) - 60,000                      ฿60,000

c) Over age 65 years exemption (OAE) - 190,000                ฿190,000

d) 50% of Pension up to 100k (PD) - 100,000                      ฿100,000

e) 0-150,000 TAX FREE                                                        ฿150,000

e) 0-150,000 TAX FREE                                                         ฿150,000

Total Deductions Exemptions and Allowances                ฿710,000

Therefore after TEDA IMO a married Expat receiving the Aust Age Pension has no income taxes to pay when he and she lodge a joint tax return, and they both make no other additional taxable income.

Additionally, that same married Expat and his wife can remit an additional 183,903 Baht before income tax is payable.

Like I said above, any income earned by the Expat, or his wife, in Thailand is taxable income and would be added to the age pension (if it was taxable).

Tax Exemptions, Deductions and Allowances (TEDA) – Single

a) Personal Allowance for self (PA1) - 60,000                       ฿60,000

c) Over age 65 years exemption (OAE) - 190,000                ฿190,000

d) 50% of Pension up to 100k (PD) - 100,000                      ฿100,000

e) 0-150,000 TAX FREE                                                         ฿150,000

Total Deductions Exemptions and Allowances                ฿500,000

Therefore after a single Expat receiving and remitting all the Aust Age Pension has a total income of ฿196,229 after TEDA.

I have calculated that the taxes payable on that amount of taxable income payable would be ฿12,122.

However, those figures above assume all of the age pension is remitted into Thailand, and all of it is at the Centelink Exchange Rate in July 2024 of ฿25.53

If it was all remitted at the current today’s Wise rate (฿23.52) the total Single Pension would be ฿641,413.

Which would mean a total taxable income after TEDA of ฿141,413 which equates to income tax payable of ฿7,070.

However, there are additional TEDA allowances/exemptions, such as Health Insurance premiums.

Each Expat needs to check the numbers in the TRD Tax Guide and Revenue Code, based upon their own financial situation.

Part 2 – The Australian Age Pension is Not Taxable Income when remitted to Thailand (IMO)

https://www.rd.go.th/english/859.html  (The Thai-Aust DTA)

Many people think a ‘DTA’ only refers to double taxation and tax credits – that is common, but it is not the case.

As per the title – it is an Agreement between Thailand and Australia for the avoidance of double taxation and the prevention of fiscal evasion regarding taxes on income.

Under that agreement, in addition to the agreed rules for avoiding double taxation by tax credits, are also agreed rules as to which country can tax which income.

There is also detailed the overall rights of the Citizens of both countries – in order to protect their interests when living/working in the other country.

The big issue for retired/married Aussies in Thailand, is whether the Age Pension is taxable in Thailand under the Thai-Aust DTA.

And there is not one single clause under which that is made clear – it is like all Agreements where several Clauses can have impact on any matter.

Part A – Article 18 and the Clause mentioning the word ‘pension’

https://www.rd.go.th/english/856.html#article18

“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.”

Some have said that the Clause means Age Pension is taxable income for a tax resident in Thailand.

But others have stated that is not the case and that it is not the intent of that Clause.

I emphatically agree with those in the latter group – because the Australian Age Pension is ONLY payable to Residents of Australia (not residents).

You cannot apply for and get the Pension when not a Resident of Australia – you must be a qualified Resident or Citizen of Australia and show you have a home there and intend the stay.

After being away and returning, then only after 2 years of being on the Pension can you apply for and get ‘Portability’, but that does not mean you are no longer qualified as a Resident.

What that means is that your Pension has become ‘portable’, but your qualifications to receive the payment as a ‘qualified Resident’ remain in place – they are just made ‘portable’.

Becoming a tax resident of any other country does not change that qualification – you take that qualification with you – hence the legal term ‘portability’.

What is missing in that Clause within the DTA, is the intent with regards to Government paid Age Pensions – versus private pensions as a means of payment for services rendered.

Private pensions and annuities are certainly taxable in the other State, but IMO Government Pensions are not intended to be taxed in the another State.

The following is Clauses from other DTAs that Thailand has with other countries covering that matter (Government paid Age Pensions)

IN OTHER DTAs

1.             Subject to the provisions of paragraph 2 of Article 19, 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.

2.             Notwithstanding the provisions of paragraph 1, pensions paid and other similar payments made under a public scheme which is part of the social security system of a Contracting State shall be taxable only in that State.

ALSO IN OTHERS DTAs

Any pension paid by the Government of one of the Contracting States to any individual, may be taxed only by that Contracting State.

AND THE THAI-USA DTA

Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first- mentioned State.

IMO the intent of the Clause is to ensure that Government Pensions paid by one State are not taxed by the other State – what Govt wants their taxpayer’s money going to another State?

Private pensions and annuities are certainly taxable in the other State, but IMO Government Pensions are not intended to be taxed in the other State.

I note that the Thai-Aust DTA has not been updated for a long time, and it is clear that Article 18 and its associated Clauses need updating, as other DTAs have been.

Unfortunately, when I looked through the various DTAs of countries, it was very evident that when these were written (back in the 80s) the main thing they were thinking about was the payment of a Government pension or wage to citizens of their own country who were working in the other country as a Government employee (such as in Embassies). They did not want those ‘pensions’ and wages paid to their Government employees and ex-employees taxed in Thailand. Unlike some DTAs that have been updated since then (as above), the Aust-Thai DTA has not been updated to reflect the large number of Australian retirees living in Thailand, and I am certain the Aust Govt wants their taxpayer’s money being paid to the Government of Thailand.

Part B – What the TRD defines as a ‘Pension payment’

https://interweb1.rd.go.th/cgi-bin/intra_search?q=PENSION;t=5;field=1;page=1;long=1  (open and click ‘translate to English’)

The Company is obliged to pay a pension to the wife as a monthly alimony until the wife dies or remarries.

Pension paid by the Company does not qualify as a non-independent personal service under Article 16 of the Convention between the Government of the Kingdom of Thailand and the Government of the United Kingdom of Great Britain and Northern Ireland because it is money paid due to Mr. Chen's past work.

This is a ruling from the TRD regarding a decision made whether payments are taxable income or not (in this case they are).

What it shows is that a ‘pension payment’ is understood by TRD to be other than what some people think – which is a payment from a Govt funded social welfare system.

When the words 'pension payments' are referred to by TRD, that is not related to a Government Aged Pension – the definition very much is focused on a private pension payment.

Part C – Article 25 – Non-Discrimination

https://www.rd.go.th/english/855.html#article25

Nationals of a Contracting State shall not be subjected in the other contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States.

Under that Clause above, Australian Citizens are entitled to the same taxation ‘rules and requirements’ as that which is applied to the Citizens of Thailand.

Thailand does not tax the Aged Pension of its Citizens that receive their ‘Aged Pension’, and therefore under this Clause they cannot tax the Aged Pensions of Australian Nationals.

Part D – DTAs FAQ Answers from TRD

https://www.rd.go.th/english/23520.html

5.   What happens if the rate of tax stipulated in the Revenue Code is different from that of an agreement?

- Apply the rate which is more beneficial to the taxpayer.

Under that TRD answer, any tax rate as applicable to Australian Nationals must be applied in the equal beneficial manner by Thailand.

Australian Nationals are not taxed on their Aged Pensions payments, whether they are a tax resident or not.

Therefore Thailand should apply the rate that is more beneficial to Australians as tax residents of Thailand, which means Aged Pensions are not taxable income (remitted or not).

Part E – TRD Definitions for all DTAs with all countries (The Elimination Method)

https://www.rd.go.th/english/21973.html

C.   Elimination of double taxation

The focus of a DTA is the elimination of double taxation. Each DTA may prescribe different methods of elimination of double taxation of a person by the resident country:

(1)   Exemption method

The country of residence does not tax the income which according to the DTA is taxed in the source country.

The Aust Aged Pension payments are ‘taxable income’ in Australia, so that anyone earning additional income over the Pension does not get the full tax free threshold.

The Australian Government applies a zero rate of tax on the Aged Pension payments - it is taxable but they elect not to tax it.

Therefore the Australian Pension is ‘taxed’ in the source country, and Thailand should also not tax those Pension payments.

Part F – Government Aged Pensions are not income – as per the TRD Definitions of what is Income

https://www.rd.go.th/english/6045.html#:~:text=Taxpayers are classified into “resident,any tax (calendar) year.

2.1 Assessable Income

Income chargeable to the PIT is called “assessable income”. The term covers income both in cash and in kind. Therefore, any benefits provided by an employer or other persons, such as a rent-free house or the amount of tax paid by the employer on behalf of the employee, is also treated as assessable income of the employee for the purpose of PIT. Assessable income is divided into 8 categories as follows :

income from personal services rendered to employers;

income by virtue of jobs, positions or services rendered;

income from goodwill, copyright, franchise, other rights, annuity or income in the nature of yearly payments derived from a will or any other juristic Act or judgment of the Court;

income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a juristic company, juristic partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings;

income from letting of property and from breaches of contracts, installment sales or hire-purchase contracts;

income from liberal professions;

income from construction and other contracts of work;

income from business, commerce, agriculture, industry, transport or any other activity not specified earlier.

As can be clearly shown from the list above, a Government paid pension is not listed as taxable income.

I think that is because in Thailand all Govt pension payments are not a taxable income.

Therefore, as per the list above (and Article 25) Gover Pensions are not taxable income.

Likewise, as per Part B above, where TRD details in a ruling what a 'pension payment' is, under Section 40, Government Pensions are not included in the list of assessable incomes.

Section 40 Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer.

(1) Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment.

Those are all methods of income from being paid for from employment and a Government Pension payment is not included.

As to the last two statements, it is my opinion that a lot of people/experts have 'assumed' Government Pensions are taxable because of the word 'pension' in TRD documents.

But as shown above, 'pensions' to the TRD are private pensions and not a Government Pension, and the Age Pension is not 'from employment'. Anyone who is a qualified Resident can receive the Aged Pension - whether they worked or not.

Part F – Summary

Whether the TRD would accept or not any of those legal arguments above about the Australian Aged Pension not being taxable income, is debatable. Plus there are many clarifications and information updates that TRD are supposed to provide - the issue of what constitutes assessable income is just one of them. The only rule that has changed is that the loophole whereby income such as capital gains and rent would be seasoned for 12 months and then remitted tax free no longer exists.

Expats have been for decades remitting their pensions and savings into Thailand - nothing has changed with regards to that money, and Expats have never before been required to pay income taxes on that money. The strict ‘rules’ are not always the issue in Thailand as most Expats know - it is what they decide to enforce, and how they interpret them. There is a rule in the TRD Tax Code that states all foreigners leaving Thailand must first get a tax clearance certificate - what really matters and what the reality is, is that the rule is no longer enforced. So Thailand is moving to a ‘tax regime’ as the TRD GM said, where Expats are now expected to pay their share of income taxes. That probably means that their past non-enforcement of the tax rules for Expats with regards to remitted income no longer applies.

However, that does not mean that the rules do not apply under which Thailand can tax the money Expats remit into Thailand, both in terms of what is income and what is not, and what is excluded under their own DTAs. But there are things done in Thailand that are not in compliance with the Rules/Laws by the Thai Authorities. Likewise, there are many ‘interpretations’ of the Thai Rules/Laws by Thais in authority that are not strictly in compliance with those Rules/Laws, and those interpretations change form location to location, and from month to month. The other issue that Expats need to also understand, is that unlike in the West where Govt People are trained, consistent (usually) and managed to comply with the Rules/Laws and as advised though rulings and determinations, Thai people in authority have a lot of arbitrary powers and they can do what they want (within reason).

Most Thai ‘officers’ are fair and reasonable, but some are not. Many are well trained and know all the rules/laws, but some have no idea and don’t give a rat’s rear end, and most are somewhere in between those two extremes. The other thing to remember going forward, is that in the West you have many avenues of Appeal - and western Govt staff are well aware they will be hauled through the coals if they cause an Appeal that results in their decision being over-turned. But in Thailand, your rights to appeal as a Foreigner are very limited and over-turning a decision can be extremely difficult (whether correct or not).

My strategy is to avoid dealing with the TRD for the next few years, unless absolutely necessary. This will all settle down and the reality of the situation and what Thailand decides to enforce and not, will hopefully by then be clear. If that was to become clear sooner, then that would not be unwelcome either way. When it comes to taxation and the severe penalties possible after several years of accidental (or deliberate) tax evasion, it is far far better to have certainty, rather than the uncertainty that currently exists.

It is my opinion that if the TRD starts taking tax money from Australians on the Pension, the Aust Govt will respond and update/amend the DTA to specifically exempt those Pension payments, like most other countries have done. The net says there are 20K Aussies living in Thailand, and if only half of those are on the pension and single, then Thailand will be reaping about $3-4 million from the Australian taxpayer.

Wow. Excellent information, but it will take many readings (by me) to even start to understand it. Many thanks !

TroubleandGrumpy · August 4

18 hours ago, Tony M said:

Wow. Excellent information, but it will take many readings (by me) to even start to understand it. Many thanks !

Cheers mate.

Take your time - I have been trying to learn/read everything since Sept 2023.

norbra · August 4

On 7/29/2024 at 5:28 PM, TroubleandGrumpy said:

This post is provided as a personal opinion and is meant to be nor is being presented as legal, financial or taxation advice. The writer is not a tax lawyer or a tax adviser, and everyone should get their own taxation advice from an accredited professional. This information is provided merely as one person’s experiences and opinions, and is not to be taken as advice.

I am posting this to provide a simple and clear summary, as I see it, of the income tax situation in Thailand as at July 2024 for Aussies living in Thailand who are not working here or otherwise earning money in Thailand (online sales, investments, market sales, etc etc). I decided to provide what I have calculated and utilised for the basis of my decisions regarding the potential income taxes to be paid by myself (and Wife) as an Australian in Thailand. Rather than just add this to the existing large threads regarding income taxes, I have created it as a separate thread for Aussies. Obviously some of the points are applicable to those Expats from other countries, but this is really focused only on this new tax regime as it affects myself and other Aussies.

Any feedback about matters I have missed and/or errors that I have made would be appreciated.

EVERYTHING WRITTEN BELOW IS ‘IMO’ (IN MY OPINION)

If you want official or guaranteed information – pay for and get written advice from a tax consultant, tax accountant, or tax lawyer

DEFINITIONS

Tax resident – 180 or more days in total within any calendar year.

Resident and resident – A ‘Resident’ is someone that has the legal right to live and stay in a country. A ‘resident’ does not have that legal right.

Please note - in Thailand many documents are less than ‘professional’ and the need to be distinct when referring to a ‘Resident’ verus a ‘resident’ is not always evident.

Very few Expats are Residents of Thailand, even fewer are Citizens, but the vast majority of us are residents.

Just because you may have an LTR Visa does not make you a legal Resident – it is legally a ‘long term resident’ Visa.

Taxable Income (under new rule) – Income earned after 1 Jan 2024 that is remitted into Thailand by a tax resident in a calendar year (2024 for this case).

Obviously the money that an Expat is earning in Thailand is taxable – whether a tax resident or not (requires a work permit usually).

Income – money earned from working or investment returns etc. as defined in the TRD Tax Code – it is not savings, superannuation, etc. (as also defined).

Below are links to the relevant important TRD websites regarding PIT in Thailand. For whatever reasons when copying from the webites or my source document, the pasted links are not links. So I have had to just paste the web addresses.

https://www.rd.go.th/english/6045.html  (TRD - Personal Income Tax – includes tax rates)

https://www.rd.go.th/english/38306.html  (TRD - Tax Revenue Code - everything)

https://www.rd.go.th/english/65308.html  (TRD – 2023 Personal Income Tax Guides)

https://www.rd.go.th/fileadmin/download/english_form/2023/GUIDE_90_66_Complete.docx   - (ภ.ง.ด.90 Lodgement Form) - ภ.ง.ด.90 is the one for income ‘not only employment’ (TRD words)

Rather than start this post with all my reasons why IMO the Aust Aged Pension is not taxable income when remitted into Thailand under the Aust-Thai DTA, I have decided to provide the ‘basic numbers’ first. I have made these calculations based upon the standard exemptions and allowances in the Thailand Tax Code and 2023 Lodgement Guides, and as previously advised and summarised in the other ‘tax threads’. After this first step, I will below put forward why I think the Aust-Thai DTA actually means for the Aged Pension.

Part 1 – Taxes Payable when the Pension is Taxable Income when remitted to Thailand (I do not think so - but just for this part of the exercise)

On the basis that the Australian Age Pension when remitted into Thailand is taxable income - the following is provided.

Payment schedule and rates for people outside Australia - Age Pension - Services Australia

Maximum Overseas Single Pension Rate (July 2024)          $27,271 AUD

Maximum Overseas Pension Rate - Married (July 2024)      $20,607 AUD

Centelink Exchange Rate – July 2024                                   ฿25.53

Maximum Overseas Single Pension Rate (July 2024)          ฿696,229 BAHT

Maximum Overseas Pension Rate - Married (July 2024)      ฿526,097BAHT

Please note that these figures are all using the current official Centrelink exchange rate.

I have also calculated the numbers using the ‘real’ current exchange rate – which is what matters – the actual income remitted.

Tax Exemptions, Deductions and Allowances (TEDA) – Married Couple

a) Personal Allowance for self (PA1) - 60,000                       ฿60,000

b) Personal Allowance for wife (PA2) - 60,000                      ฿60,000

c) Over age 65 years exemption (OAE) - 190,000                ฿190,000

d) 50% of Pension up to 100k (PD) - 100,000                      ฿100,000

e) 0-150,000 TAX FREE                                                        ฿150,000

e) 0-150,000 TAX FREE                                                         ฿150,000

Total Deductions Exemptions and Allowances                ฿710,000

Therefore after TEDA IMO a married Expat receiving the Aust Age Pension has no income taxes to pay when he and she lodge a joint tax return, and they both make no other additional taxable income.

Additionally, that same married Expat and his wife can remit an additional 183,903 Baht before income tax is payable.

Like I said above, any income earned by the Expat, or his wife, in Thailand is taxable income and would be added to the age pension (if it was taxable).

Tax Exemptions, Deductions and Allowances (TEDA) – Single

a) Personal Allowance for self (PA1) - 60,000                       ฿60,000

c) Over age 65 years exemption (OAE) - 190,000                ฿190,000

d) 50% of Pension up to 100k (PD) - 100,000                      ฿100,000

e) 0-150,000 TAX FREE                                                         ฿150,000

Total Deductions Exemptions and Allowances                ฿500,000

Therefore after a single Expat receiving and remitting all the Aust Age Pension has a total income of ฿196,229 after TEDA.

I have calculated that the taxes payable on that amount of taxable income payable would be ฿12,122.

However, those figures above assume all of the age pension is remitted into Thailand, and all of it is at the Centelink Exchange Rate in July 2024 of ฿25.53

If it was all remitted at the current today’s Wise rate (฿23.52) the total Single Pension would be ฿641,413.

Which would mean a total taxable income after TEDA of ฿141,413 which equates to income tax payable of ฿7,070.

However, there are additional TEDA allowances/exemptions, such as Health Insurance premiums.

Each Expat needs to check the numbers in the TRD Tax Guide and Revenue Code, based upon their own financial situation.

Part 2 – The Australian Age Pension is Not Taxable Income when remitted to Thailand (IMO)

https://www.rd.go.th/english/859.html  (The Thai-Aust DTA)

Many people think a ‘DTA’ only refers to double taxation and tax credits – that is common, but it is not the case.

As per the title – it is an Agreement between Thailand and Australia for the avoidance of double taxation and the prevention of fiscal evasion regarding taxes on income.

Under that agreement, in addition to the agreed rules for avoiding double taxation by tax credits, are also agreed rules as to which country can tax which income.

There is also detailed the overall rights of the Citizens of both countries – in order to protect their interests when living/working in the other country.

The big issue for retired/married Aussies in Thailand, is whether the Age Pension is taxable in Thailand under the Thai-Aust DTA.

And there is not one single clause under which that is made clear – it is like all Agreements where several Clauses can have impact on any matter.

Part A – Article 18 and the Clause mentioning the word ‘pension’

https://www.rd.go.th/english/856.html#article18

“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.”

Some have said that the Clause means Age Pension is taxable income for a tax resident in Thailand.

But others have stated that is not the case and that it is not the intent of that Clause.

I emphatically agree with those in the latter group – because the Australian Age Pension is ONLY payable to Residents of Australia (not residents).

You cannot apply for and get the Pension when not a Resident of Australia – you must be a qualified Resident or Citizen of Australia and show you have a home there and intend the stay.

After being away and returning, then only after 2 years of being on the Pension can you apply for and get ‘Portability’, but that does not mean you are no longer qualified as a Resident.

What that means is that your Pension has become ‘portable’, but your qualifications to receive the payment as a ‘qualified Resident’ remain in place – they are just made ‘portable’.

Becoming a tax resident of any other country does not change that qualification – you take that qualification with you – hence the legal term ‘portability’.

What is missing in that Clause within the DTA, is the intent with regards to Government paid Age Pensions – versus private pensions as a means of payment for services rendered.

Private pensions and annuities are certainly taxable in the other State, but IMO Government Pensions are not intended to be taxed in the another State.

The following is Clauses from other DTAs that Thailand has with other countries covering that matter (Government paid Age Pensions)

IN OTHER DTAs

1.             Subject to the provisions of paragraph 2 of Article 19, 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.

2.             Notwithstanding the provisions of paragraph 1, pensions paid and other similar payments made under a public scheme which is part of the social security system of a Contracting State shall be taxable only in that State.

ALSO IN OTHERS DTAs

Any pension paid by the Government of one of the Contracting States to any individual, may be taxed only by that Contracting State.

AND THE THAI-USA DTA

Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first- mentioned State.

IMO the intent of the Clause is to ensure that Government Pensions paid by one State are not taxed by the other State – what Govt wants their taxpayer’s money going to another State?

Private pensions and annuities are certainly taxable in the other State, but IMO Government Pensions are not intended to be taxed in the other State.

I note that the Thai-Aust DTA has not been updated for a long time, and it is clear that Article 18 and its associated Clauses need updating, as other DTAs have been.

Unfortunately, when I looked through the various DTAs of countries, it was very evident that when these were written (back in the 80s) the main thing they were thinking about was the payment of a Government pension or wage to citizens of their own country who were working in the other country as a Government employee (such as in Embassies). They did not want those ‘pensions’ and wages paid to their Government employees and ex-employees taxed in Thailand. Unlike some DTAs that have been updated since then (as above), the Aust-Thai DTA has not been updated to reflect the large number of Australian retirees living in Thailand, and I am certain the Aust Govt wants their taxpayer’s money being paid to the Government of Thailand.

Part B – What the TRD defines as a ‘Pension payment’

https://interweb1.rd.go.th/cgi-bin/intra_search?q=PENSION;t=5;field=1;page=1;long=1  (open and click ‘translate to English’)

The Company is obliged to pay a pension to the wife as a monthly alimony until the wife dies or remarries.

Pension paid by the Company does not qualify as a non-independent personal service under Article 16 of the Convention between the Government of the Kingdom of Thailand and the Government of the United Kingdom of Great Britain and Northern Ireland because it is money paid due to Mr. Chen's past work.

This is a ruling from the TRD regarding a decision made whether payments are taxable income or not (in this case they are).

What it shows is that a ‘pension payment’ is understood by TRD to be other than what some people think – which is a payment from a Govt funded social welfare system.

When the words 'pension payments' are referred to by TRD, that is not related to a Government Aged Pension – the definition very much is focused on a private pension payment.

Part C – Article 25 – Non-Discrimination

https://www.rd.go.th/english/855.html#article25

Nationals of a Contracting State shall not be subjected in the other contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States.

Under that Clause above, Australian Citizens are entitled to the same taxation ‘rules and requirements’ as that which is applied to the Citizens of Thailand.

Thailand does not tax the Aged Pension of its Citizens that receive their ‘Aged Pension’, and therefore under this Clause they cannot tax the Aged Pensions of Australian Nationals.

Part D – DTAs FAQ Answers from TRD

https://www.rd.go.th/english/23520.html

5.   What happens if the rate of tax stipulated in the Revenue Code is different from that of an agreement?

- Apply the rate which is more beneficial to the taxpayer.

Under that TRD answer, any tax rate as applicable to Australian Nationals must be applied in the equal beneficial manner by Thailand.

Australian Nationals are not taxed on their Aged Pensions payments, whether they are a tax resident or not.

Therefore Thailand should apply the rate that is more beneficial to Australians as tax residents of Thailand, which means Aged Pensions are not taxable income (remitted or not).

Part E – TRD Definitions for all DTAs with all countries (The Elimination Method)

https://www.rd.go.th/english/21973.html

C.   Elimination of double taxation

The focus of a DTA is the elimination of double taxation. Each DTA may prescribe different methods of elimination of double taxation of a person by the resident country:

(1)   Exemption method

The country of residence does not tax the income which according to the DTA is taxed in the source country.

The Aust Aged Pension payments are ‘taxable income’ in Australia, so that anyone earning additional income over the Pension does not get the full tax free threshold.

The Australian Government applies a zero rate of tax on the Aged Pension payments - it is taxable but they elect not to tax it.

Therefore the Australian Pension is ‘taxed’ in the source country, and Thailand should also not tax those Pension payments.

Part F – Government Aged Pensions are not income – as per the TRD Definitions of what is Income

https://www.rd.go.th/english/6045.html#:~:text=Taxpayers are classified into “resident,any tax (calendar) year.

2.1 Assessable Income

Income chargeable to the PIT is called “assessable income”. The term covers income both in cash and in kind. Therefore, any benefits provided by an employer or other persons, such as a rent-free house or the amount of tax paid by the employer on behalf of the employee, is also treated as assessable income of the employee for the purpose of PIT. Assessable income is divided into 8 categories as follows :

income from personal services rendered to employers;

income by virtue of jobs, positions or services rendered;

income from goodwill, copyright, franchise, other rights, annuity or income in the nature of yearly payments derived from a will or any other juristic Act or judgment of the Court;

income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a juristic company, juristic partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings;

income from letting of property and from breaches of contracts, installment sales or hire-purchase contracts;

income from liberal professions;

income from construction and other contracts of work;

income from business, commerce, agriculture, industry, transport or any other activity not specified earlier.

As can be clearly shown from the list above, a Government paid pension is not listed as taxable income.

I think that is because in Thailand all Govt pension payments are not a taxable income.

Therefore, as per the list above (and Article 25) Gover Pensions are not taxable income.

Likewise, as per Part B above, where TRD details in a ruling what a 'pension payment' is, under Section 40, Government Pensions are not included in the list of assessable incomes.

Section 40 Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer.

(1) Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment.

Those are all methods of income from being paid for from employment and a Government Pension payment is not included.

As to the last two statements, it is my opinion that a lot of people/experts have 'assumed' Government Pensions are taxable because of the word 'pension' in TRD documents.

But as shown above, 'pensions' to the TRD are private pensions and not a Government Pension, and the Age Pension is not 'from employment'. Anyone who is a qualified Resident can receive the Aged Pension - whether they worked or not.

Part F – Summary

Whether the TRD would accept or not any of those legal arguments above about the Australian Aged Pension not being taxable income, is debatable. Plus there are many clarifications and information updates that TRD are supposed to provide - the issue of what constitutes assessable income is just one of them. The only rule that has changed is that the loophole whereby income such as capital gains and rent would be seasoned for 12 months and then remitted tax free no longer exists.

Expats have been for decades remitting their pensions and savings into Thailand - nothing has changed with regards to that money, and Expats have never before been required to pay income taxes on that money. The strict ‘rules’ are not always the issue in Thailand as most Expats know - it is what they decide to enforce, and how they interpret them. There is a rule in the TRD Tax Code that states all foreigners leaving Thailand must first get a tax clearance certificate - what really matters and what the reality is, is that the rule is no longer enforced. So Thailand is moving to a ‘tax regime’ as the TRD GM said, where Expats are now expected to pay their share of income taxes. That probably means that their past non-enforcement of the tax rules for Expats with regards to remitted income no longer applies.

However, that does not mean that the rules do not apply under which Thailand can tax the money Expats remit into Thailand, both in terms of what is income and what is not, and what is excluded under their own DTAs. But there are things done in Thailand that are not in compliance with the Rules/Laws by the Thai Authorities. Likewise, there are many ‘interpretations’ of the Thai Rules/Laws by Thais in authority that are not strictly in compliance with those Rules/Laws, and those interpretations change form location to location, and from month to month. The other issue that Expats need to also understand, is that unlike in the West where Govt People are trained, consistent (usually) and managed to comply with the Rules/Laws and as advised though rulings and determinations, Thai people in authority have a lot of arbitrary powers and they can do what they want (within reason).

Most Thai ‘officers’ are fair and reasonable, but some are not. Many are well trained and know all the rules/laws, but some have no idea and don’t give a rat’s rear end, and most are somewhere in between those two extremes. The other thing to remember going forward, is that in the West you have many avenues of Appeal - and western Govt staff are well aware they will be hauled through the coals if they cause an Appeal that results in their decision being over-turned. But in Thailand, your rights to appeal as a Foreigner are very limited and over-turning a decision can be extremely difficult (whether correct or not).

My strategy is to avoid dealing with the TRD for the next few years, unless absolutely necessary. This will all settle down and the reality of the situation and what Thailand decides to enforce and not, will hopefully by then be clear. If that was to become clear sooner, then that would not be unwelcome either way. When it comes to taxation and the severe penalties possible after several years of accidental (or deliberate) tax evasion, it is far far better to have certainty, rather than the uncertainty that currently exists.

It is my opinion that if the TRD starts taking tax money from Australians on the Pension, the Aust Govt will respond and update/amend the DTA to specifically exempt those Pension payments, like most other countries have done. The net says there are 20K Aussies living in Thailand, and if only half of those are on the pension and single, then Thailand will be reaping about $3-4 million from the Australian taxpayer.

Superb post,great relevant easily read details.

More informative than all the waffle published by tax "professionals" to date.

grs90 · August 6

On 7/29/2024 at 5:28 PM, TroubleandGrumpy said:

Tax Exemptions, Deductions and Allowances (TEDA) – Married Couple

a) Personal Allowance for self (PA1) - 60,000                       ฿60,000

b) Personal Allowance for wife (PA2) - 60,000                      ฿60,000

c) Over age 65 years exemption (OAE) - 190,000                ฿190,000

d) 50% of Pension up to 100k (PD) - 100,000                      ฿100,000

e) 0-150,000 TAX FREE                                                        ฿150,000

e) 0-150,000 TAX FREE                                                         ฿150,000

Total Deductions Exemptions and Allowances                ฿710,000

Great and useful post thanks. But could you just clarify why you are using (e) 0-150,000 twice in the example above please?

I am assuming that it's because both of the married couple are making remittance from abroad in to Thailand? So if all the income was being remitted by one partner then the only tax benefit from being married is from (b) above, Is that correct or am I missing something?

Thanks

TroubleandGrumpy · August 6

9 minutes ago, grs90 said:

Great and useful post thanks. But could you just clarify why you are using (e) 0-150,000 twice in the example above please?

I am assuming that it's because both of the married couple are making remittance from abroad in to Thailand? So if all the income was being remitted by one partner then the only tax benefit from being married is from (b) above, Is that correct or am I missing something?

Thanks

Same reason used 60K allowance twice - both myself and wife have the 60K allowance, and we both have the 0-150K exemption. That is why only 1 x 190K allowance because wife not yet over 65, and also only 1 x 100K Pension allowance as wife does not get a Pension. Essentially it is 2 tax returns combined together - the total income we both earn combined, and the allowances we both have also combined.

grs90 · August 6

Again, thanks for the reply.

So following that logic each of the tax bands should be treated the same way?

Wife I and I would both get 150K TAX FREE, we would both get the next band of 5% tax etc. That makes a huge difference to my calculations where previously I'd assumed, as I was the only one actually remitting the money, there would only be a single set of the various tax bands applicable to my remittances.

As Chief Brody would have said, we're gonna need a bigger spreadsheet!

TroubleandGrumpy · August 8

On 8/6/2024 at 10:29 PM, grs90 said:

Again, thanks for the reply.

So following that logic each of the tax bands should be treated the same way?

Wife I and I would both get 150K TAX FREE, we would both get the next band of 5% tax etc. That makes a huge difference to my calculations where previously I'd assumed, as I was the only one actually remitting the money, there would only be a single set of the various tax bands applicable to my remittances.

As Chief Brody would have said, we're gonna need a bigger spreadsheet!

Yes mate - my spreadsheet is a little complicated.

But the basics are that you add all your and your wife's incomes together (100K + 0 = 100K)

Then you add all your combined TEDAs together (including the first 150K each).

I only included the basic TEDA items - there are more available but I did not bother because our total TEDA is above our total income.

I did not count withdrawals from my Super as that is retirement savings built up over many decades - it is not income.

Note that I only counted the Age Pension payments for the exercise - I believe the Age Pension is not taxable income in Thailand.

But it is good to know that even if it was, I dont have to pay any income taxes.

And I have received advice from a tax accountant/law firm that under the current TRD lodgement rules, because I dont have to pay any income taxes, then I dont have to lodge a tax return (30+ million Thais also do not lodge tax returns).

I was 'talking' to a bloke the other day and he reckoned that if TRD tries to enforce the lodgement of income taxes by all non-working Expats they will be in breach of many legal and human rights rules (that would not stop them of course). But there would be an outcry if they dont also force all Thais to also lodge a tax return too - but that would mean their immediate crash in the polls and a total destruction at the next election.

Like myself, he reckons the best thing to do is not go out on the water with a small boat - avoid having anything to do with the TRD 'shark' for a few years at least. If you dont have to lodge a tax return by your own calculations, including DTA interpretations, then IMO dont. The TRD system is a self assessment system - they dont proactively calculate people's taxes like those in the West do. They may ask one day 'why you no lodge return' so always keep your records and calculations.

grs90 · August 8

Regrettably I think that combining allowances & tax bands, other than the 190K aged 65/disabled allowance which looks like it can be claimed twice, is not possible.

I thought this was looking too good to be true and have since added a new document to my reading list. This is from the Thai Revenue Department at. https://www.rd.go.th/fileadmin/download/english_form/030265guide91.pdf

The last page of the document, page 16, gives an example of the tax filing for a married man who has a wife with no income. This would seem to suggest that only one lot of TEDA 150,000baht is tax free. And also suggests that the subsequent tax bands can not be combined either. So my brief optimism has evaporated!

Agree with your approach of keeping your head down and will be doing the same.

Thanks anyway for the replies to my questions. It was nice to have a ray of hope for a while!

Cheers

TroubleandGrumpy · August 10

On 8/8/2024 at 2:11 PM, grs90 said:

Regrettably I think that combining allowances & tax bands, other than the 190K aged 65/disabled allowance which looks like it can be claimed twice, is not possible.

I thought this was looking too good to be true and have since added a new document to my reading list. This is from the Thai Revenue Department at. https://www.rd.go.th/fileadmin/download/english_form/030265guide91.pdf

The last page of the document, page 16, gives an example of the tax filing for a married man who has a wife with no income. This would seem to suggest that only one lot of TEDA 150,000baht is tax free. And also suggests that the subsequent tax bands can not be combined either. So my brief optimism has evaporated!

Agree with your approach of keeping your head down and will be doing the same.

Thanks anyway for the replies to my questions. It was nice to have a ray of hope for a while!

Cheers

Got some good advice - as far as I know (no confirmation only consultant advice), you have misinterpreted that TRD taxation advice.

Firstly - this is the link to the latest 2023 TRD guides and taxation forms - Year 2023 | The Revenue Department (English Site) (rd.go.th)

As you will note there are two guides/forms - one for 'only employment' (ภ.ง.ด.91) and one for 'not only employment' (ภ.ง.ด.90)

There is no guide/form for someone who has no employment income.

The advice I have is that your 'method' is only applicable when only one of the taxpayers has earned income from employment, and that is so that a person cannot claim two 0-150K deductions and thereby get a tax refund on tax money already paid to TRD by their employer.

My understanding is that when all the taxable money is only from investments and overseas earnings etc etc then the income and deductions for both spouses is used. However, having said that, I must also say that the TRD has not to my knowledge confirmed that arrangement in the Laws or Rules or any Court decisions - I believe that it is just 'common practice'. Same 'common practice' that there is no need to lodge a tax return if you do not have to pay any income taxes. TRD is setup for PIT is only to deal with the taxation requirements of Thais employed by businesses that pay tax withdrawal money to TRD, and those who also earn money from investments. The wealthy Thais all use companies to earn their money and tax accountants to lodge their returns.

Yes mate - the best advice I got, and always give, is to keep your head down and stay away from TRD for as long as possible. And if ever questioned in the future and then told to pay up (very unlikely), plead ignorance and beg for forgiveness. Wait and see how things develop over the next year or two - then and only then will we know what TRD's 'common practice' will be regarding Expats who are retired/married.

Qld4000 · August 13

Regarding Australian Expats living in Thailand or any other Overseas destination , that are receiving the Age Pension as their prime income source.

Given that the Age Pension IS Taxable income , but due to SAPTO rebates most recipients are not liable for Tax on it if total taxable income is under $32,300 approx.

Here’s an issue. Resident & Non Resident Tax.

If you’re actually living overseas for an extended period most Aussies would be considered as Non-Resident for tax purposes & subject to 32.5% flat from the get-go. So on approx $27,300- Pension Income , that would equate to $8865- TAX….OUCH?

I’m yet to meet an Australian retiree “living “ overseas that’s ever been Taxed on their Pension income , even tho they’d highly likely be classified as Non-Resident for Tax purposes in Australia.

Anyone with a heads-up on this matter.

TroubleandGrumpy · August 14

21 hours ago, Qld4000 said:

Regarding Australian Expats living in Thailand or any other Overseas destination , that are receiving the Age Pension as their prime income source.

Given that the Age Pension IS Taxable income , but due to SAPTO rebates most recipients are not liable for Tax on it if total taxable income is under $32,300 approx.

Here’s an issue. Resident & Non Resident Tax.

If you’re actually living overseas for an extended period most Aussies would be considered as Non-Resident for tax purposes & subject to 32.5% flat from the get-go. So on approx $27,300- Pension Income , that would equate to $8865- TAX….OUCH?

I’m yet to meet an Australian retiree “living “ overseas that’s ever been Taxed on their Pension income , even tho they’d highly likely be classified as Non-Resident for Tax purposes in Australia.

Anyone with a heads-up on this matter.

The ATO does not tax any Centrelink Payments as a blanket rule - but it does include most of them as 'taxable' income' in a tax return. This so that anyone who receives a Govt Payment who then also earns additional income that year, then their taxable income calculation for the threshold, starts at the total for the counted Centrelink Payments.

The Age Pension is one that is counted, but with the SAPTO people are allowed to earn additional income tax free to help them out - hence you see a few older aged people doing part-time work in roles such as traffic control outside schools. There is a lot of misinformation out there, because the age pension is 'taxable income' and is not 'tax free income'.

The Age Pension is not taxed. The SAPTO is not about not being taxed on the Age Pension payments that are above the tax-free threshold. If you have no additional income, other than the Age Pension, there is no SAPTO calculation required. However, as with most bureaucrat written articles these days, that fact is as plain as mud on the website. When you read the ATO information on their website, you have to look at every statement from the point of view of someone lodging a tax return. They say Age Pension is 'taxable income', and they also do not include it in the list of tax-exempt or tax-free payments, because people will not include it in their tax returns if they do. Rather than explain it correctly, they focus on the dumbest lowest educated and intelligent taxpayer, so that they will include it in their tax return.

When it comes to the Age Pension continuing to not be taxed for those living overseas (about 100K of us), nothing precludes overseas recipients of the Age Pension being afforded the same benefits as those living in Australia. Taxing Age Pension payments for those living overseas is not IMO possible for those that have previously met the qualification requirements for both receiving the pension and for 'portability' of those qualifications. Plus IMO if the Aust Govt ever does try to change that situation, they will immediately have a raft of human rights complaints (and many racial discrimination complaints too). That will not stop them in the future making changes for those yet to qualify for the pension and portability, but IMO even that would be a hard sell to not be a for of 'aged discrimination'. Also, because many Age Pensioners living overseas are also citizens of the other country, any such change could easily be seen as being racist.

KhunHeineken · August 15

On 8/13/2024 at 6:11 AM, Qld4000 said:

Regarding Australian Expats living in Thailand or any other Overseas destination , that are receiving the Age Pension as their prime income source.

Given that the Age Pension IS Taxable income , but due to SAPTO rebates most recipients are not liable for Tax on it if total taxable income is under $32,300 approx.

Here’s an issue. Resident & Non Resident Tax.

If you’re actually living overseas for an extended period most Aussies would be considered as Non-Resident for tax purposes & subject to 32.5% flat from the get-go. So on approx $27,300- Pension Income , that would equate to $8865- TAX….OUCH?

I’m yet to meet an Australian retiree “living “ overseas that’s ever been Taxed on their Pension income , even tho they’d highly likely be classified as Non-Resident for Tax purposes in Australia.

Anyone with a heads-up on this matter.

Not much difference, but the rate is now down from 32.5% to 30% for non residents for tax purposes.

KhunHeineken · August 15

22 hours ago, TroubleandGrumpy said:

The ATO does not tax any Centrelink Payments as a blanket rule - but it does include most of them as 'taxable' income' in a tax return. This so that anyone who receives a Govt Payment who then also earns additional income that year, then their taxable income calculation for the threshold, starts at the total for the counted Centrelink Payments.

The Age Pension is one that is counted, but with the SAPTO people are allowed to earn additional income tax free to help them out - hence you see a few older aged people doing part-time work in roles such as traffic control outside schools. There is a lot of misinformation out there, because the age pension is 'taxable income' and is not 'tax free income'.

The Age Pension is not taxed. The SAPTO is not about not being taxed on the Age Pension payments that are above the tax-free threshold. If you have no additional income, other than the Age Pension, there is no SAPTO calculation required. However, as with most bureaucrat written articles these days, that fact is as plain as mud on the website. When you read the ATO information on their website, you have to look at every statement from the point of view of someone lodging a tax return. They say Age Pension is 'taxable income', and they also do not include it in the list of tax-exempt or tax-free payments, because people will not include it in their tax returns if they do. Rather than explain it correctly, they focus on the dumbest lowest educated and intelligent taxpayer, so that they will include it in their tax return.

When it comes to the Age Pension continuing to not be taxed for those living overseas (about 100K of us), nothing precludes overseas recipients of the Age Pension being afforded the same benefits as those living in Australia. Taxing Age Pension payments for those living overseas is not IMO possible for those that have previously met the qualification requirements for both receiving the pension and for 'portability' of those qualifications. Plus IMO if the Aust Govt ever does try to change that situation, they will immediately have a raft of human rights complaints (and many racial discrimination complaints too). That will not stop them in the future making changes for those yet to qualify for the pension and portability, but IMO even that would be a hard sell to not be a for of 'aged discrimination'. Also, because many Age Pensioners living overseas are also citizens of the other country, any such change could easily be seen as being racist.

It's been proven the aged pension is deemed an income at law.

It's been proven the age pension is taxable.

When the proposed changes are passed, if you are outside of Australia for 183 days, which is the majority of expats living in Thailand, you will be deemed a non resident for tax purposes. No application for review, no appeals. Immigration records will show this in black and white.

Non resident tax brackets start from $0, no tax free threshold.

As for discrimination and racism, that's the "pensioners will be up in arms" argument. I asked the question in the pension thread, not one member said they went to the Australian Embassy and voted at election time. Why would pensioners living in Australia care about a policy that doesn't effect them, especially if the government "spins" it that by passing such a tax pensioners in Australia will receive more money and / or better services.

On the above point, I can't see this being an election issue, despite at any one point in time there being approximately 1 million Aussies living / working overseas. (link previously provided) I say this because Liberal proposed it, and Labor didn't scrap it, and in fact, Labor took it to the consultation stage. So, it will eventually sail through parliament regardless of what party is in government.

The current tax residency laws are 90 years old with more holes in them than Swiss cheese. Myself, and some friends here, are using some of these loopholes. The current laws are no longer fit for purpose. They will be changed to a physical presence and time based model, like many other countries have, even Thailand.

What's interesting is expat pensioners are taking seriously that Thailand can / will tax their pension as a tax resident of Thailand after 180 days, yet see it as an absolute impossibility for Australia to implement a similar policy that taxes their pension as a non resident of Australia tax purposes after 183 days. :smile:

Foreign resident tax rates 2020 to 2025

Foreign resident tax rates for 2019–20 to 2024–25.

Foreign resident tax rates 2024–25
Taxable income	Tax on this income
0 – $135,000	30c for each $1
$135,001 – $190,000	$40,500 plus 37c for each $1 over $135,000
$190,001 and over	$60,850 plus 45c for each $1 over $190,000

Edited August 15 by KhunHeineken

TroubleandGrumpy · August 15

42 minutes ago, KhunHeineken said:

It's been proven the aged pension is deemed an income at law.

It's been proven the age pension is taxable.

When the proposed changes are passed, if you are outside of Australia for 183 days, which is the majority of expats living in Thailand, you will be deemed a non resident for tax purposes. No application for review, no appeals. Immigration records will show this in black and white.

Non resident tax brackets start from $0, no tax free threshold.

As for discrimination and racism, that's the "pensioners will be up in arm" argument. I asked the question in the pension thread, not one member said they went to the Australian Embassy and voted at election time. Why would pensioners living in Australia give a <deleted> about a policy that doesn't effect them, especially if the government "spins" it that by passing such a tax pensioners in Australia will receive more money and / or better services.

I see you are back on that issue you have with 'tax residency' in Australia and the impact any change might have on people living overseas and who no longer a tax resident. Sorry but you are still wrong. I am not writing this as an argument with yourself - that is over and I will not respond further - this is written for others to read and form their own opinion.

Once you live outside Australia for more than 2 years it is very hard to maintain tax residency - after 3-4 years it is extremely hard - 5 years and it is a done deal. There are about 50-60K Aust pensioners living overseas who are not tax residents and have not been for many years - their pensions are not taxed. The ATO does not tax age pension payments - ever - if you can prove that they do, then put up or shut up. The age pension is 'taxable income' but it is not taxed - if you can prove anyone has had their pension taxed - then prove it.

Discrimination and Human Rights is nothing about the general public or elections - it is about the rights of individuals. If they impose taxes on my pension while not doing the same to those in Australia, then I and 10s of thousands of others, will lodge discrimination claims against the ATO. I cant speak for racism directly, but I do understand that 10s of thousands of pensioners living overseas are citizens of other countries and were not born in Australia - they will have grounds for a racist based human rights claim too. Also, Australia is a signatory to the UN human rights charter that covers International Social Security payments, and I think they will be in breach of that too - I will certainly give it a try anyway.

Edited August 15 by TroubleandGrumpy

KhunHeineken · August 15

2 hours ago, TroubleandGrumpy said:

I see you are back on that issue you have with 'tax residency' in Australia and the impact any change might have on people living overseas and who no longer a tax resident. Sorry but you are still wrong. I am not writing this as an argument with yourself - that is over and I will not respond further - this is written for others to read and form their own opinion.

Once you live outside Australia for more than 2 years it is very hard to maintain tax residency - after 3-4 years it is extremely hard - 5 years and it is a done deal. There are about 50-60K Aust pensioners living overseas who are not tax residents and have not been for many years - their pensions are not taxed. The ATO does not tax age pension payments - ever - if you can prove that they do, then put up or shut up. The age pension is 'taxable income' but it is not taxed - if you can prove anyone has had their pension taxed - then prove it.

Discrimination and Human Rights is nothing about the general public or elections - it is about the rights of individuals. If they impose taxes on my pension while not doing the same to those in Australia, then I and 10s of thousands of others, will lodge discrimination claims against the ATO. I cant speak for racism directly, but I do understand that 10s of thousands of pensioners living overseas are citizens of other countries and were not born in Australia - they will have grounds for a racist based human rights claim too. Also, Australia is a signatory to the UN human rights charter that covers International Social Security payments, and I think they will be in breach of that too - I will certainly give it a try anyway.

I have addressed this already, several times.

The current 90 year old laws have more holes than Swiss cheese. That's why myself, and many others, have paid no tax. That's why I don't know anyone on a pension who has paid non resident tax.

This is exactly why the proposed changes were drafted, and accepted by both major political parties. All those loopholes are closed, and iron clad closed. Simple as that.

We know the pension is deemed an income.

We know the pension is taxable.

We know expats that haven't been back to Australia in years are non residents for tax purposes.

We know non resident tax is 30% from $0.

Put all the above together and there is cause for concern.

As for human rights, do you really think this will end up a UN issue. :cheesy:

Fat is a type of crazy · August 15

8 hours ago, TroubleandGrumpy said:

I see you are back on that issue you have with 'tax residency' in Australia and the impact any change might have on people living overseas and who no longer a tax resident. Sorry but you are still wrong. I am not writing this as an argument with yourself - that is over and I will not respond further - this is written for others to read and form their own opinion.

Once you live outside Australia for more than 2 years it is very hard to maintain tax residency - after 3-4 years it is extremely hard - 5 years and it is a done deal. There are about 50-60K Aust pensioners living overseas who are not tax residents and have not been for many years - their pensions are not taxed. The ATO does not tax age pension payments - ever - if you can prove that they do, then put up or shut up. The age pension is 'taxable income' but it is not taxed - if you can prove anyone has had their pension taxed - then prove it.

Discrimination and Human Rights is nothing about the general public or elections - it is about the rights of individuals. If they impose taxes on my pension while not doing the same to those in Australia, then I and 10s of thousands of others, will lodge discrimination claims against the ATO. I cant speak for racism directly, but I do understand that 10s of thousands of pensioners living overseas are citizens of other countries and were not born in Australia - they will have grounds for a racist based human rights claim too. Also, Australia is a signatory to the UN human rights charter that covers International Social Security payments, and I think they will be in breach of that too - I will certainly give it a try anyway.

The age pension and other taxable pension payments are taxed for residents and or non residents who lodge tax returns and have other income that puts them in the taxable range. For non-residents that's from first dollar. One simple example for residents would be if you had say a $50,000 net capital gain and say $20,000 in pension - the pension would be included in the tax return - total income $70000 - and taxed at marginal rates like other income. The proof is by looking at a tax return - filling it out - and you'll see it's included.

TroubleandGrumpy · August 15

35 minutes ago, Fat is a type of crazy said:

The age pension and other taxable pension payments are taxed for residents and or non residents who lodge tax returns and have other income that puts them in the taxable range. For non-residents that's from first dollar. One simple example for residents would be if you had say a $50,000 net capital gain and say $20,000 in pension - the pension would be included in the tax return - total income $70000 - and taxed at marginal rates like other income. The proof is by looking at a tax return - filling it out - and you'll see it's included.

I see you are one of the confused. Let me try this.

Tax free threshold is $18,200

Single Age Pension payments in a year is $29,021

No pensioner pays taxes on the amount above $18,200 - which is $10,832 - that is a fact.

Yes it is taxable income - but only for totaling with any other earnings - the pension amount is not taxed.

KhunHeineken · August 15

1 hour ago, TroubleandGrumpy said:

I see you are one of the confused. Let me try this.

Tax free threshold is $18,200

Single Age Pension payments in a year is $29,021

No pensioner pays taxes on the amount above $18,200 - which is $10,832 - that is a fact.

Yes it is taxable income - but only for totaling with any other earnings - the pension amount is not taxed.

Can you post a link showing a tax free threshold for non residents for taxation purposes?

With a pension being deemed an income, and taxable, and the government eventually being able to classify an individual as a non resident for tax purposes by proving one has been outside of Australia for several years, what, exactly, are you relying on that ensures pensions are not taxed at non resident rates, the same as any other income?

rhodie · August 15

Guys, please stop feeding the troll. Just ignore his posts. It's the only way he might be starved of the oxygen he so desperately needs.

Fat is a type of crazy · August 15

10 hours ago, TroubleandGrumpy said:

I see you are one of the confused. Let me try this.

Tax free threshold is $18,200

Single Age Pension payments in a year is $29,021

No pensioner pays taxes on the amount above $18,200 - which is $10,832 - that is a fact.

Yes it is taxable income - but only for totaling with any other earnings - the pension amount is not taxed.

It's all part of your taxable income. If you don't reach the threshold you are not taxed - be it net capital gain, pension, or something else. If it's over you get taxed. You seem to be suggesting that the age pension is treated differently but it's not - it is part of income and it is taxed as part of total income if you reach the the threshold to pay tax.

This is not to suggest that the guys in Thailand long term should alter what they are doing - only that the pension is taxable same as other sorts of income.

Fat is a type of crazy · August 15

11 hours ago, TroubleandGrumpy said:

I see you are one of the confused. Let me try this.

Tax free threshold is $18,200

Single Age Pension payments in a year is $29,021

No pensioner pays taxes on the amount above $18,200 - which is $10,832 - that is a fact.

Yes it is taxable income - but only for totaling with any other earnings - the pension amount is not taxed.

To clarify a bit further - the statement that - 'The ATO does not tax age pension payments - ever - if you can prove that they do, then put up or shut up' - is clearly wrong. My example of a combined income of $70000 is to show you are taxed on the $70,000 - offsets may apply as they do at the lower end meaning you may pay no tax - but the age pension is taxable and taxed in the same way as the capital gain.

Edited August 16 by Fat is a type of crazy

rhodie · August 16

47 minutes ago, Fat is a type of crazy said:

My example of a combined income of $70000 is to show you are taxed on the $70,000

Can you show an example of someone who only gets the pension, which is clearly above the tax threshold, being taxed? I have never heard of it.

Are you implying that if someone on the full pension received additional income of $100 in interest they would be taxed on the combined earnings of the pension plus the interest? So, about $3000 in tax?

Anybody out there that has had this happen?

Pattaya57 · August 16

13 hours ago, TroubleandGrumpy said:

I see you are one of the confused. Let me try this.

Tax free threshold is $18,200

Single Age Pension payments in a year is $29,021

No pensioner pays taxes on the amount above $18,200 - which is $10,832 - that is a fact.

Yes it is taxable income - but only for totaling with any other earnings - the pension amount is not taxed.

To hopefully clarify the above, according to the ATO the aged pension is taxable income, however they provide a "Seniors and Pensioners tax offset" (SAPTO) of $2230 for a single. This means a single pensioner can have a taxable income of $32,279 without having to pay any tax (after tax free threshold + $2230 tax rebated)

Edited August 16 by Pattaya57

Fat is a type of crazy · August 16

58 minutes ago, rhodie said:

Can you show an example of someone who only gets the pension, which is clearly above the tax threshold, being taxed? I have never heard of it.

Are you implying that if someone on the full pension received additional income of $100 in interest they would be taxed on the combined earnings of the pension plus the interest? So, about $3000 in tax?

Anybody out there that has had this happen?

The pension is taxable but there is the tax free threshold for residents and offsets such as the Seniors and Pensioners tax offset that apply. Often meaning no tax with or without the extra 100 of interest.

To work out tax you decide if you are a resident - take your income - work out tax - apply tax offsets - and that's your tax payable. I used a higher income example to show that a pension is taxable and can have tax on it - to clarify the other posters comments which I felt were not correct as written.

Note too for non residents interest would normally have withholding taken from it as has been discussed.

seajae · August 16

does the aussie dissability pension come under the same requirements as the age pension or is it different due to a persons physical dissability and medical requirements

Edited August 16 by seajae

TroubleandGrumpy · August 16

4 hours ago, rhodie said:

Can you show an example of someone who only gets the pension, which is clearly above the tax threshold, being taxed? I have never heard of it.

Are you implying that if someone on the full pension received additional income of $100 in interest they would be taxed on the combined earnings of the pension plus the interest? So, about $3000 in tax?

Anybody out there that has had this happen?

Mate - thanks for asking - I have no idea how to answer people like that guy (and I tend to be aggressive towards them).

TroubleandGrumpy · August 16

Lots of confusion - I will try to explain yet again.

The total Single Age Pension payments in a year in Aust is $29,021

The Tax free threshold is $18,200

The Pension payments total is $10,832 above the tax free threshold of $18,200

The SAPTO maximum is $2230 for a single pensioner

The threshold ($18,200) plus max SAPTO ($2230) total is only $20,430

The total Single Age Pension payments in a year in Aust is $29,021

Pensioners do not pay any income taxes on their Pension payments - fact

Even though the total money received is above the threshold plus SAPTO - fact

That is because ATO does not apply taxes to the Pension (and other Govt payments)

They are included in 'taxable income' in order to calculate total taxable income.

The SAPTO is only for when a Pensioner earns additional income during the year (eg. a short term part-time job).

If you have come this far then you do want to know why it is so confusing - below is my views on why it is a classic cluterpharrk of government idiocy, combined with the general ignorance of the public because of how complicated the tax system has become.

The ATO website advice is all about how to complete a Tax Return (it is not general advice). So any Google search will inevitably take you to a section within the ATO online guide to complete a tax return. It is all very misleading and confusing - and any complaints get ignored because the ATO claims that if they advised that the Pension was tax free people would not include it in their tax returns as 'taxable income' in their declared list of incomes. In the past many people made that mistake and it was a big problem trying to explain to them that they dont get the tax free threshold when they have received the Pension.

My Mother and Father received the Age Pension until very recently, and neither of them had to pay income taxes - ever. I receive the Age Pension (both in Aust and here) and I have never had to pay income taxes - and I complete a return every year just to make sure (I have a Super Fund).

Please dont confuse the Age Pension with a 'Pension payment' which is an option that is regularly paid by a Super Fund to someone that has reached the qualification age. I have not taken that option, even though it would mean that my Super Fund earnings would not be taxed. I did not do that option because any money received under that 'pension' is taxable income, and I would have to pay tax on it. So I kept my Super Fund in 'accumulation phase' and the Fund pays tax on the earnings, but I can withdraw money as and when needed, and it is tax free.

Edited August 16 by TroubleandGrumpy

Pattaya57 · August 16

48 minutes ago, TroubleandGrumpy said:

Lots of confusion - I will try to explain yet again.

The total Single Age Pension payments in a year in Aust is $29,021

The Tax free threshold is $18,200

The Pension payments total is $10,832 above the tax free threshold of $18,200

The SAPTO maximum is $2230 for a single pensioner

The threshold ($18,200) plus max SAPTO ($2230) total is only $20,430

You don't add $2230 SAPTO to $18,200 tax free threshold. $2230 is a tax rebate for tax due, whereby it takes about $14,000 income above threshold to get $2230 tax due (at new 16% rate)

Using your figures of $29,021 Pension - $18,200 tax free = $10,821 taxable @ 16% = $1731 tax due. As this is less than the $2230 SAPTO rebate, no tax to pay

Edited August 16 by Pattaya57

Fat is a type of crazy · August 16

4 hours ago, TroubleandGrumpy said:

Lots of confusion - I will try to explain yet again.

The total Single Age Pension payments in a year in Aust is $29,021

The Tax free threshold is $18,200

The Pension payments total is $10,832 above the tax free threshold of $18,200

The SAPTO maximum is $2230 for a single pensioner

The threshold ($18,200) plus max SAPTO ($2230) total is only $20,430

The total Single Age Pension payments in a year in Aust is $29,021

Pensioners do not pay any income taxes on their Pension payments - fact

Even though the total money received is above the threshold plus SAPTO - fact

That is because ATO does not apply taxes to the Pension (and other Govt payments)

They are included in 'taxable income' in order to calculate total taxable income.

The SAPTO is only for when a Pensioner earns additional income during the year (eg. a short term part-time job).

If you have come this far then you do want to know why it is so confusing - below is my views on why it is a classic cluterpharrk of government idiocy, combined with the general ignorance of the public because of how complicated the tax system has become.

The ATO website advice is all about how to complete a Tax Return (it is not general advice). So any Google search will inevitably take you to a section within the ATO online guide to complete a tax return.  It is all very misleading and confusing - and any complaints get ignored because the ATO claims that if they advised that the Pension was tax free people would not include it in their tax returns as 'taxable income' in their declared list of incomes. In the past many people made that mistake and it was a big problem trying to explain to them that they dont get the tax free threshold when they have received the Pension.

My Mother and Father received the Age Pension until very recently, and neither of them had to pay income taxes - ever.  I receive the Age Pension (both in Aust and here) and I have never had to pay income taxes - and I complete a return every year just to make sure (I have a Super Fund).

Please dont confuse the Age Pension with a 'Pension payment' which is an option that is regularly paid by a Super Fund to someone that has reached the qualification age. I have not taken that option, even though it would mean that my Super Fund earnings would not be taxed. I did not do that option because any money received under that 'pension' is taxable income, and I would have to pay tax on it. So I kept my Super Fund in 'accumulation phase' and the Fund pays tax on the earnings, but I can withdraw money as and when needed, and it is tax free.

Sorry but there's further misinformation here.

Hopefully you now realise that the age pension is taxable and how tax offsets work.

It sounds like you don't pay tax nor did your parents because your income is mainly or only the age pension - the super fund being taxed separately.

One part I am getting my head around is annuities where you can move your super from an accumulation phase at 15 per cent to an annuity and pay nil tax on income. The annuity rules seem fairly flexible too where you can take out small amounts or large amounts depending on what you need. However if you get the age pension it may then affect the income and or assets test for the pension depending on the balance of your fund.

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Australian Aged Pension - Income Taxes in Thailand

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