Thai gov. to tax (remitted) income from abroad for tax residents starting 2024 - Part II

[The Cyclist]

10 hours ago, topt said:

Disagree - I know many who aren't. IE they are on state/private pensions and as such potentially taxable......

 

I do not think that there is any dispute that the UK State Pension or Private Pensions are potentially taxable in Thailand.

 

The circles that you move in, and the area that you live will largely dictate the people that you meet and come across. Therefore I wont come across many / any that are living solely on a State Pension. Probably a different story in towns and Cities.

 

Therefore peoples experiences can, and do, differ.

 

Another thought also occurred as I was typing. It is perfectly plausible that some of those Private Pensions people that you meet / know, might actually be on a Government Pension and simply refer to it as a Private Pension.

 

Of course, the noise around the topic of the thread will now have people nailing down their type of pension, since it hit the headlines just over a year ago.

 

I think I can stand by what I said previously.

 

The biggest cohort I knew when I first came to Thailand were O & G workers, predominantly in the late 30's to mid 50's age group.

 

When I retired fully, the small circle of expats that I currently  know are mostly Government Pension holders. Some will also be Private Pension holders.

 

Ex Police / Ex Military / an ex fireman and a couple of others. These are people that I know and meet up with regularly, usually on a golf course or a restaurant

 

Not in the habit of grilling people who I bump into when I visit town or less frequently, the city, on their Pension status.

[topt]

22 minutes ago, The Cyclist said:

I think I can stand by what I said previously.

Apologies I should have said that my experience was different to yours.

The people who I am referring to I have had conversations with bout what they used to do before retiring. 

[The Cyclist]

8 minutes ago, topt said:

Apologies I should have said that my experience was different to yours.

 

No worries, life would be rather crap if we all had the same experiences.

 

9 minutes ago, topt said:

The people who I am referring to I have had conversations with bout what they used to do before retiring. 

 

Sometimes a source of confusion, depending on your age and previous experience, or how someone puts it across to someone else.

 

Retired Military - Someone who could have retired at 40 with a Government Pension.

 

Retired Police Officer - Someone who retired after ( I think ) 25 years with a Government Pension.

 

Same with Firemen and a whole load of others.

 

All retired,  in receipt of a Government Pension, and not old enough to qualify for a retirement visa / extension in Thailand.

[sometimewoodworker]

13 hours ago, topt said:

Also, and here recent memory may be more faulty, but I don't remember @sometimewoodworker even being part of any earlier finance discussions....

You are absolutely correct for the previous 16 years from April 2007 I had no particular interest as the situation was rather well defined and didn’t have anything special to contribute so I only participated In areas where I had actual knowledge or experience to gain or give (FWIW over 10k posts mostly in the property and some in the immigration fora). However the Por 161 and Por 162 changed the structure and I needed to pay attention and discover exactly how I needed to arrange my finances and understand both the sections of the U.K. DTC and Thai tax code that now effect me and of course others.

 

The ability to understand both are not exactly simple and require time, work and a mindset that appreciates paying attention to exact wording. In most other areas this would be described as being overly pedantic and nitpicking, but in tax and immigration law/rules it’s a distinct advantage or even a requirement.

[KhunHeineken]

13 hours ago, The Cyclist said:

 

No worries, life would be rather crap if we all had the same experiences.

 

 

Sometimes a source of confusion, depending on your age and previous experience, or how someone puts it across to someone else.

 

Retired Military - Someone who could have retired at 40 with a Government Pension.

 

Retired Police Officer - Someone who retired after ( I think ) 25 years with a Government Pension.

 

Same with Firemen and a whole load of others.

 

All retired,  in receipt of a Government Pension, and not old enough to qualify for a retirement visa / extension in Thailand.

Interestingly, it's those occupational government pensions that are covered in many DTA's with Thailand, not an aged pension, based on welfare / benefits.  

 

Many members see the word "pension" in their DTA and think they are fine.  That may not be the case. Many DTA's cover only specific pensions, not all pensions. 

[The Cyclist]

9 hours ago, KhunHeineken said:

Interestingly, it's those occupational government pensions that are covered in many DTA's with Thailand, not an aged pension, based on welfare / benefits.  

 

Not really

 

Inter- Governmental Treaties will always favour Government workers.

 

The other point to remember, is that when the UK - Thai DTA was signed off in the early 80''s. Very few people had Occupational Pensions and the UK State Pension was worth about £30 a month.

 

Welfare / benefits is a different kettle of fish. The State Pension only became a ' Benefit ' around 2014, when the Pensions Act was amended and updated.

 

Others are free to think why this was done. My own opinion is that is was done to make it easier to ' Means Test ' it, probably in the not too distant future.

 

9 hours ago, KhunHeineken said:

Many members see the word "pension" in their DTA and think they are fine.  That may not be the case. Many DTA's cover only specific pensions, not all pensions. 

 

Agreed 100%. The UK State Pension and other forms of Pensions are all potentially taxable in Thailand. What happens in reality, remains to be seen.

[KhunHeineken]

3 hours ago, The Cyclist said:

Inter- Governmental Treaties will always favour Government workers.

 

The other point to remember, is that when the UK - Thai DTA was signed off in the early 80''s. Very few people had Occupational Pensions and the UK State Pension was worth about £30 a month.

 

Welfare / benefits is a different kettle of fish. The State Pension only became a ' Benefit ' around 2014, when the Pensions Act was amended and updated.

 

Others are free to think why this was done. My own opinion is that is was done to make it easier to ' Means Test ' it, probably in the not too distant future.

Sure, and this was the topic of some debate in the Australia Pension thread.  Some members just saw pensions were exempt in Article 18 of the Australia / Thailand DTA, but Article 18 relied on the provisions in Article 19, and Article 19 set out that it was occupational government pensions that were covered, not the aged pension which is welfare.  

 

3 hours ago, The Cyclist said:

Agreed 100%. The UK State Pension and other forms of Pensions are all potentially taxable in Thailand. What happens in reality, remains to be seen.

I agree.  Interesting times ahead. 

[The Cyclist]

1 hour ago, KhunHeineken said:

Sure, and this was the topic of some debate in the Australia Pension thread.  Some members just saw pensions were exempt in Article 18 of the Australia / Thailand DTA, but Article 18 relied on the provisions in Article 19, and Article 19 set out that it was occupational government pensions that were covered, not the aged pension which is welfare.  

 

I dont know anything about Aussie Pensions or the Aussie - Thai DTA. I do remember asking a specific question in that thread, which was something to do with Aus Mil Pension and the OAP Pension, Something to do with if you had the Mil Pension you didn't get the OAP Pension, or something like that.

 

1 hour ago, KhunHeineken said:

I agree.  Interesting times ahead. 

 

Yes, I think so.

 

[stat]

9 hours ago, KhunHeineken said:

Sure, and this was the topic of some debate in the Australia Pension thread.  Some members just saw pensions were exempt in Article 18 of the Australia / Thailand DTA, but Article 18 relied on the provisions in Article 19, and Article 19 set out that it was occupational government pensions that were covered, not the aged pension which is welfare.  

 

I agree.  Interesting times ahead. 

DTAs are a difficult beast in every aspect... If possible make a dry run and test by only transmitting a small percentage of your penion and see how your taxes are calculated/accepted by TRD.

[UKresonant]

4 hours ago, stat said:

DTAs are a difficult beast in every aspect... If possible make a dry run and test by only transmitting a small percentage of your penion and see how your taxes are calculated/accepted by TRD.

Hopefully in about 7 weeks or so, we'll maybe get some actual reports, from.folk that  have done just that...

[chiang mai]

I'm cross posting this because it's a first hand report of a conversation with TRD about the need to file. notably it was held in Bangkok.

 

 

[KhunHeineken]

On 11/20/2024 at 6:14 AM, The Cyclist said:

I dont know anything about Aussie Pensions or the Aussie - Thai DTA. I do remember asking a specific question in that thread, which was something to do with Aus Mil Pension and the OAP Pension, Something to do with if you had the Mil Pension you didn't get the OAP Pension, or something like that.

If you get a Vet's pension, you can't get an aged pension. 

 

There was a member who posted he was on a Vet's pension, and then at another time he posted he was on an aged pension.  You can't be on both pensions, and I called him out on it and it started some debate. 

 

The Vet's pension is covered under Article 18 and Article 19 of the DTA between Australian and Thailand.  The aged pension isn't, despite many Australian pensioners on this forum wanting it to be.  

 

The aged pension is not an occupational pension, as mentioned in Article 19.  It's as simple as that. 

[KhunHeineken]

20 hours ago, stat said:

DTAs are a difficult beast in every aspect... If possible make a dry run and test by only transmitting a small percentage of your penion and see how your taxes are calculated/accepted by TRD.

I am not on aged pension.  I am a self funded retiree.   

[KhunHeineken]

15 hours ago, UKresonant said:

Hopefully in about 7 weeks or so, we'll maybe get some actual reports, from.folk that  have done just that...

I believe we will have to wait until early April 2025.  Isn't the 31st March the deadline to file?

[KhunHeineken]

12 hours ago, chiang mai said:

I'm cross posting this because it's a first hand report of a conversation with TRD about the need to file. notably it was held in Bangkok.

 

 

As I have said in the past, interesting times ahead. 

 

It may be more "interesting" in some Thai Provinces than others, if you know what I mean. 

[scottiejohn]

4 minutes ago, KhunHeineken said:

It may be more "interesting" in some Thai Provinces than others, if you know what I mean.

No I Don't!

What do you mean?

[scottiejohn]

8 minutes ago, KhunHeineken said:

Isn't the 31st March the deadline to file?

File what and how?

[chiang mai]

I'll ask the question here before reading the US/THAI DTA if necessary, just in case someone familiar with the DTA knows the answer:

 

US Social Security payments (SSc) paid to US citizens in Thailand are tax exempt under the terms of the DTA but are taxable when paid to Thai citizens. 

 

My question is, what is the tax status of these payments when they are made to recipients who are not American or Thai citizens? 

 

 

 

[chiang mai]

57 minutes ago, chiang mai said:

I'll ask the question here before reading the US/THAI DTA if necessary, just in case someone familiar with the DTA knows the answer:

 

US Social Security payments (SSc) paid to US citizens in Thailand are tax exempt under the terms of the DTA but are taxable when paid to Thai citizens. 

 

My question is, what is the tax status of these payments when they are made to recipients who are not American or Thai citizens? 

 

 

 

 

A late edit on this:

 

I am pretty certain that payments are tax exempt although I have never looked at the exact form of words that conforms this. From memory, the DTA says something like, US citizens and residents" but goes on to distinguish between residents and Thai nationals. If anyone has looked at this more closely, I will be grateful.

[gamb00ler]

14 minutes ago, chiang mai said:

 

A late edit on this:

 

I am pretty certain that payments are tax exempt although I have never looked at the exact form of words that conforms this. From memory, the DTA says something like, US citizens and residents" but goes on to distinguish between residents and Thai nationals. If anyone has looked at this more closely, I will be grateful.

From the technical interpretation of the Thai/USA tax treaty, the saving clause states:

 

Paragraph 2 contains the traditional saving clause found in all U.S. treaties. The
Contracting States reserve their rights, except as provided in paragraph 3, to tax their residents
and citizens as provided in their internal laws, notwithstanding any provisions of the Convention
to the contrary.

 

That phrasing seems to mean that the USA considers its residents to have the same rights and obligations as its citizens for the entirety of the treaty.

[chiang mai]

27 minutes ago, gamb00ler said:

From the technical interpretation of the Thai/USA tax treaty, the saving clause states:

 

Paragraph 2 contains the traditional saving clause found in all U.S. treaties. The
Contracting States reserve their rights, except as provided in paragraph 3, to tax their residents
and citizens as provided in their internal laws, notwithstanding any provisions of the Convention
to the contrary.

 

That phrasing seems to mean that the USA considers its residents to have the same rights and obligations as its citizens for the entirety of the treaty.

Except....

 

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.

 

https://library.siam-legal.com/thai-law/u-s-thai-tax-treaty-pensions-and-social-security-payments-article-20/

[gamb00ler]

42 minutes ago, chiang mai said:

Except....

 

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.

 

https://library.siam-legal.com/thai-law/u-s-thai-tax-treaty-pensions-and-social-security-payments-article-20/

 

Earlier in the US/Thai DTA a "resident" was defined to mean a person with the status of tax resident.

 

I think the key to understanding this paragraph of the US/Thai DTA is the use of the word "or".  There are two categories of people covered by this paragraph.

 

This paragraph applies to all US SSA benefits.

It is applicable to two groups:

 

Thai tax residents  OR  US citizens in Thailand but not a Thai tax resident

 

Warning:   I have no status as a tax or legal expert  ... just a taxpayer subject to this treaty as a US and Thai tax resident.

 

[KhunHeineken]

16 hours ago, scottiejohn said:

No I Don't!

What do you mean?

Meaning, some TRD staff may say one thing in one province, while other TRD staff in another province say another thing. 

 

We have already had a members post they have been given different information from different TRD offices in regards to obtaining a TIN. 

[KhunHeineken]

16 hours ago, scottiejohn said:

File what and how?

Tax declaration.

 

Online deadline is 8th April, and in person deadline is 31st March.

 

Or, use a tax agent to do it for you. 

[JimGant]

7 hours ago, chiang mai said:

My question is, what is the tax status of these payments when they are made to recipients who are not American or Thai citizens? 

Makes no difference, from the Thai taxation perspective. US Social Security payments made to anybody are exclusively taxable only by the US-- regardless of citizenship or residency. Thailand need not know about any such payments, to include payments to their resident citizens, since they have no taxation authority over them, at least per DTA:

 

Quote

......since social security benefits are taxable exclusively by the source country and so are government pensions. The result will differ only when the payment is made to a citizen and resident of the other Contracting State, who is not also a citizen of the paying State. In such a case, social security benefits continue to be taxable at source while government pensions become taxable only in the residence country.

This quote, from the technical explanation, points out that govt pensions paid for govt service -- are exclusively taxable ONLY by the US -- UNLESS the recipient is a Thai citizen residing in Thailand. BUT, Social Security payments don't fall under this exception -- and remain the exclusive domain of US regardless of citizenship and resident of payee.

 

This is handy news for those of us married to dual US-Thai citizens -- as neither my wife's Social Security, nor her Air Force survivor pension, will be taxable by Thailand.

 

And, for you as a Brit, receiving a US SS payment, even if remitted to Thailand -- is not required to be listed as assessable income on your Thai tax return.

 

BUT ,BUT, BUT -- this is, of course, only one man's opinion. Horror, if considered tax advice.

[ukrules]

On 11/20/2024 at 8:37 AM, The Cyclist said:

Inter- Governmental Treaties will always favour Government workers.

 

No coincidence that a bunch of government workers who negotiated these treaties exempted their own pensions and ignored everyone else.

 

That's the civil service for you.

[stat]

56 minutes ago, ukrules said:

 

No coincidence that a bunch of government workers who negotiated these treaties exempted their own pensions and ignored everyone else.

 

That's the civil service for you.

While I hate statist government you are wrong on this one. Actually the government workers are worse off because their pension is taxed in their home country which usually has higher taxes  then TH. The main concern was to keep as much tax in the home country while drafting the DTA. Example Germany: Pensioner living in TH would be tax tax free (if not remitted or no one cares even if remitted) but as GER reserves the right to tax the pension the pernsioner pays the very high German tax. Ergo Pensioner are worse off but the (home) state is better off.

[stat]

https://www.pattayamail.com/latestnews/news/pattaya-tax-lawyer-pensioners-worries-and-overseas-transmitted-income-480825

 

"For example, whether use of foreign credit cards in Thailand is remitted income or not is still much debated."

 

Do not shoot the messenger...

[The Cyclist]

1 hour ago, ukrules said:

 

No coincidence that a bunch of government workers who negotiated these treaties exempted their own pensions and ignored everyone else.

 

That's the civil service for you.

 

There are about 300 different types of Government Pension. A large majority of these are ' Unfunded ' and a large majority are also ' Non-Contributory '

 

These pensions come fron General taxation.

 

They are only taxable in the UK, because the UK, lets face it,  needs the money.

 

Other UK Pensions, less the State Pension, you can cease paying UK tax on it and opt to pay tax in Thailand instead.

 

Once the dust settles in Thailand, I'll crunch the numbers on my Private Pension, but I think I would gain by having it taxed in Thaiand, rather than a straight 20% in the UK.

 

But that is for next year at the earliest

 

The other thing to remember is that in the early 80's when the UK - Thai DTA was signed, sealed and delivered. Very few people had Private Pensions and the State Pension was about £30 a month

[UKresonant]

On 11/22/2024 at 11:45 AM, The Cyclist said:

Other UK Pensions, less the State Pension, you can cease paying UK tax on it and opt to pay tax in Thailand instead.

I had understood that a NT tax code was almost impossible to obtain  from the UK tax authority HMRC, in relation to residency in Thailand. It was likely stay to stay that way, as long as Thailand was remittance based tax.  Could reclaim using a Thai tax cert against UK tax though.

 

Has UK HMRC  issued any updates?