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

[JimGant]

1 hour ago, Presnock said:

she will need to notify the IRS of this fact, so that the US doesn't tax that annuity

I assume, then, she is not a dual Thai-US citizen?

[Presnock]

1 minute ago, JimGant said:

I assume, then, she is not a dual Thai-US citizen?

correct she is a Thai  ... I presume that if she held dual citizenship (thai-USA) and was a tax-resident living in Thailand that she would have to pay Thai taxes on that annuity.  I am not a tax expert by any means and don't know is that is in fact how it would be decided.  Our daughter has dual citizenship and if she worked for the US govt and retired with an annuity, I am unsure how they would respond if she was a Thai tax resident too.

[Ricardo]

5 hours ago, TroubleandGrumpy said:

It is 'counted' but not taxed (in most situations).

 

The UK Old-Age-Allowance is definitely taxable, but HMRC prefer to collect from one of your private-pensions, telling the administrators to use a revised tax-code to collect it, rather than saddling their colleagues at the DWP with the extra administration.  Which their admin-systems may not be set up to do.

 

Given that they can take 3-4 months to pay-up, on a legal-uplift due-to-temporary-visit, and that there's no simple online-form to claim that uplift (you have to phone-in or write) , my view is that their systems are not very good.  

 

So you're absolutely correct in what you say above.

 

As frozen personal-allowances continue, and some other sources of UK-arising income increase, more retired-people are finding that they now owe UK Income-Tax again  ...  but whether the relatively-small sums collected are worth the extra revenue raised, is a moot point.

[Presnock]

5 minutes ago, Presnock said:

correct she is a Thai  ... I presume that if she held dual citizenship (thai-USA) and was a tax-resident living in Thailand that she would have to pay Thai taxes on that annuity.  I am not a tax expert by any means and don't know is that is in fact how it would be decided.  Our daughter has dual citizenship and if she worked for the US govt and retired with an annuity, I am unsure how they would respond if she was a Thai tax resident too.

a question in my mind has come to be about Donald Trump's promise to stop taxation of US social security for elders - would that meant that the Thais could then tax US social security?  or would the DTA still be valid in SS only by the US?  Just wondering.

 

[chiang mai]

5 minutes ago, Ricardo said:

 

The UK Old-Age-Allowance is definitely taxable, but HMRC prefer to collect from one of your private-pensions, telling the administrators to use a revised tax-code to collect it, rather than saddling their colleagues at the DWP with the extra administration.  Which their admin-systems may not be set up to do.

 

Given that they can take 3-4 months to pay-up, on a legal-uplift due-to-temporary-visit, and that there's no simple online-form to claim that uplift (you have to phone-in or write) , my view is that their systems are not very good.  

 

So you're absolutely correct in what you say above.

 

As frozen personal-allowances continue, and some other sources of UK-arising income increase, more retired-people are finding that they now owe UK Income-Tax again  ...  but whether the relatively-small sums collected are worth the extra revenue raised, is a moot point.

As things stand presently, the maxi8mum UK State Pension is 221 Pounds per week, the sum of which is less than the annual Personal Allowance hence it cannot yet be taxed on a stand alone basis. Maintaining the triple lock whilst freezing the PA is a political land mine and will be an own goal, because that will mean the UK State Pension is capable of being taxed, in its own right.

[chiang mai]

1 minute ago, Presnock said:

a question in my mind has come to be about Donald Trump's promise to stop taxation of US social security for elders - would that meant that the Thais could then tax US social security?  or would the DTA still be valid in SS only by the US?  Just wondering.

 

Non resident green card holders who receive their US SSc in Thailand, see 24.5% with holding on all payments. The last time Trump was in office he removed the ability of those people to claim a personal deduction when filing a return, which meant the SSc payment was taxable but not reclaimable. 

[Presnock]

7 minutes ago, chiang mai said:

Non resident green card holders who receive their US SSc in Thailand, see 24.5% with holding on all payments. The last time Trump was in office he removed the ability of those people to claim a personal deduction when filing a return, which meant the SSc payment was taxable but not reclaimable. 

Nice to know - what an a-hole.  Would that be the same for a dual American-Thai  do you think? or the fact that they were green card holders so not actually full US citizen-Thai.  I really don't think it will be questionable but was just wondering since I am sure there must be some others in that same boat.  But am sure by the time that rolls around 40 years from now who knows what the tax situation might be or even the world situation.

[chiang mai]

Just now, Presnock said:

Nice to know - what an a-hole.  Would that be the same for a dual American-Thai  do you think? or the fact that they were green card holders so not actually full US citizen-Thai.  I really don't think it will be questionable but was just wondering since I am sure there must be some others in that same boat.  But am sure by the time that rolls around 40 years from now who knows what the tax situation might be or even the world situation.

I imagine/believe so but it may be down to DTA wording. In my case, I'm a Brit who receives his SSc here in Thailand, minus tax. But if in the UK, no tax is withheld and no need to file a US return. FWIW I expect fully that Trump will move against non resident Green Card holders who receive SSc abroad, I think we're first in the firing line for any new policy to ensure the SSc fund remains viable.

[Presnock]

9 minutes ago, chiang mai said:

I imagine/believe so but it may be down to DTA wording. In my case, I'm a Brit who receives his SSc here in Thailand, minus tax. But if in the UK, no tax is withheld and no need to file a US return. FWIW I expect fully that Trump will move against non resident Green Card holders who receive SSc abroad, I think we're first in the firing line for any new policy to ensure the SSc fund remains viable.

Yeah, the Congress/ government robbed the SS fund and never paid it back so now the future senior folks who worked all their life but never got a pension since so many businesses dropped that benefit may never get their fair share either.  And looking at costs today just for housing and transportation besides food to eat, I don't see how those seniors are going to survive on just a ss payment. It would probably be best if my wife didn't choose to stay in Thailand at that time but who knows what will be happening with this or the next local government.  Thanks to all for the information you did send me, I appreciate that courtesy.

[sometimewoodworker]

6 hours ago, TroubleandGrumpy said:

Looks like a Government Pension to me

It doesn’t matter that it looks like a government pension.

Because it is only pensions in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof that are covered by the DTC.

I certainly isn’t one of those 

[sometimewoodworker]

53 minutes ago, Ricardo said:

Given that they can take 3-4 months to pay-up, on a legal-uplift due-to-temporary-visit, and that there's no simple online-form to claim that uplift (you have to phone-in or write)

Your experience is very different from mine, I got my increase on my next payment each time I called and notified them, so around 3~4 weeks

[chiang mai]

Just now, sometimewoodworker said:

Your experience is very different from mine, I got my increase on my next payment each time I called and notified them, so around 3~4 weeks

That's my experience also.

[mudcat]

https://www.ssa.gov/international/AlienTax.html

This applies only to non-resident aliens, not dual nationals.  Makes me glad I insisted that wife get her U.S. citizenship before moving here.

 

Similar 30% withholding applies to retirement account distributions as taxes are generally due on withdrawals:

https://www.irs.gov/retirement-plans/plan-distributions-to-foreign-persons-require-withholding

[norbra]

For all those seeking answers to varying situations,here is my experience applying for a Taxation Identification Number for personal income tax at a Bangkok Revenue department.

The officer advised this is not required as my income is in my home country currency,only Thai income is assessed and we do not tax pensions.

So make the effort to sort your own circumstances by visiting your local RD office.

[chiang mai]

1 minute ago, norbra said:

For all those seeking answers to varying situations,here is my experience applying for a Taxation Identification Number for personal income tax at a Bangkok Revenue department.

The officer advised this is not required as my income is in my home country currency,only Thai income is assessed and we do not tax pensions.

So make the effort to sort your own circumstances by visiting your local RD office.

May I ask which TRD office that was?

[norbra]

3 minutes ago, chiang mai said:

May I ask which TRD office that was?

Bangkok area office in Minburi

[chiang mai]

5 minutes ago, norbra said:

Bangkok area office in Minburi

I think an Area Office oversees Regional offices, which are also known as District offices. If that is correct, the Area Office should be a reliable source of information. But that's not to say that everyone who works at an Area Office is fully familiar with all aspects of tax! The quoted statement is confusing because we know for a fact that income from non-Thai's is assessed plus we know pensions are assessed.

 

https://www.rd.go.th/english/21972.html

[norbra]

17 minutes ago, chiang mai said:

I think an Area Office oversees Regional offices, which are also known as District offices. If that is correct, the Area Office should be a reliable source of information. But that's not to say that everyone who works at an Area Office is fully familiar with all aspects of tax! The quoted statement is confusing because we know for a fact that income from non-Thai's is assessed plus we know pensions are assessed.

 

https://www.rd.go.th/english/21972.html

This is why it is best to go to your RD office as I wrote. Thai income not income of Thais.

Also they may assess pensions but what action is taken.

 

[chiang mai]

3 minutes ago, norbra said:

This is why it is best to go to your RD office as I wrote. Thai income not income of Thais.

Also they may assess pensions but what action is taken.

 

I also struggled with that term, "Thai income", I couldn't decide if he meant income from Thai people only or income from within Thailand only. But since Por 161 is aimed at overseas income, it can't be that. And since we know that foreigners are not exempt from tax in Thailand.....you see the quandary with the statement

 

I've been filing taxes here since about 2012. For the first few years I let the TRD people do it for me but after a while I got the hang of what was involved and I started to do it myself. In the first year, I only had pension income, my deductions, TEDA in TRD speak, were enough to cover the funds that I remitted to Thailand so the TRD staff told me, no tax to pay. In the second year of filing, I had unusually high pension income and I calculated I did have some tax to pay, which I didn't object to. In subsequent years I mostly stayed under the threshold for paying tax but a couple of times I miscalculated and ended up paying a couple of thousand baht because I took SIPP income also. In my case, there is no other action taken, I file, I pay or don't pay and that's it.

.

[norbra]

18 minutes ago, chiang mai said:

I also struggled with that term, "Thai income", I couldn't decide if he meant income from Thai people only or income from within Thailand only. But since Por 161 is aimed at overseas income, it can't be that. And since we know that foreigners are not exempt from tax in Thailand.....you see the quandary with the statement

 

I've been filing taxes here since about 2012. For the first few years I let the TRD people do it for me but after a while I got the hang of what was involved and I started to do it myself. In the first year, I only had pension income, my deductions, TEDA in TRD speak, were enough to cover the funds that I remitted to Thailand so the TRD staff told me, no tax to pay. In the second year of filing, I had unusually high pension income and I calculated I did have some tax to pay, which I didn't object to. In subsequent years I mostly stayed under the threshold for paying tax but a couple of times I miscalculated and ended up paying a couple of thousand baht because I took SIPP income also. In my case, there is no other action taken, I file, I pay or don't pay and that's it.

.

I feel the officer took into account my age when he stated home country currency income/pension is exempt,only income from employment within Thailand is assessable 

 

[chiang mai]

2 minutes ago, norbra said:

I feel the officer took into account my age when he stated home country currency income/pension is exempt,only income from employment within Thailand is assessable 

 

That would make perfect sense of his answer.

[stat]

13 hours ago, Presnock said:

I kind of agree with some of the other people on this forum.  Taxation without representation just doesn't make sense to me.  That was a major situation a couple of hundred years ago for the British colonies in in which birthed the US  of A.  As long a everyone does continue or starts paying taxes somewhere, then that also means to me no paying a "fair share".  That is also one of the stated reasons for 138 countries to sign on to the OECD agreement of 2023.  I guess if the govt does go to a worldwide income taxation it will really affect retirement in this country by foreigners.  It does seem to me that they want all they can get from foreigners but they sure don't seem to want to give us any breaks except for the LTR so far.

Someday maybe they will appreciate the monies that the expats do provide here without getting any benefits.  My opinion only of course but I have paid taxes since I started working as a teenager and haven't missed paying them every year since then.  Good luck to all.

Boston tea party is a different ballgame as the US guys where paying a foreign government to reign their country. If I or Somchai go to live in the US or the UK nowaday or pretty much any country I have to pay taxes in said country without any representation whatsoever.

 

Do I like to pay taxes in TH? Hell no especially for the low service the government provides.

 

 

[JimGant]

On 8/4/2024 at 11:44 AM, chiang mai said:

HMRC appears to make a clear distinction between government and state pensions and their ability to be taxed.

Indeed. Too bad the UK-Thai DTA doesn't read like the Spanish one, where Spain has exclusive taxation rights of all UK pensions (paid to residents of Spain), except pensions paid in reference to govt service.

Quote

Subject to the provisions of paragraph 2 of Article 18 [govt pensions], pensions and other similar remuneration paid to an individual who is a resident of a Contracting State, shall be taxable only in that State.

 

As such, the UK pension recipient in Spain can just ask the HMRC to refund all previous UK taxation, and forego any future UK taxation on such income. Doesn't matter if Spain even taxes that income -- as exclusive tax authority, per DTA, the UK has no taxation rights to this income. Thus, this is not a one for one tax credit situation, where one country in the DTA has primary taxation authority, and the other country has secondary taxation authority (rental income is good example of this) -- and as secondary, has to absorb a tax credit, while the primary taxing authority gets to keep all collected taxes.

 

Too bad, with a silent DTA, UK pension recipients in Thailand apparently don't have the same luxury for exemption, with HMRC, as UK pension recipients in Spain [and other countries, with specific DTA language -- Spain isn't the only one]. In fact, the lack of language in the UK-Thai DTA even leaves to question which country -- Thailand or UK -- has primary taxation rights, and thus gets to keep all the tax collection (while the secondary country only get to collect, if anything, what's left after absorbing a tax credit). However, looking at DTAs, based on OECD Model tax treat language, where there's  a DTA article entitled Other Income: 99% of "other income," meaning it's not addressed in any of the Articles in the DTA, has the country of residence as the primary taxation authority.

 

I guess if I were a Brit, I'd like to get an HMRC readout of the above.

 

 

[TroubleandGrumpy]

On 8/4/2024 at 1:31 PM, Phulublub said:

How many people, how may times, have to point out to your that the State Pension is not a Government Pension?  The term "Government Pension" has a clearly defined meaning.  

 

PH

Link to TRD website/statement or Court interpretation confirming that claim you have made.

Or - as I suspect - are you being so blinkered about things, that you think that the definition that matters is what the UK Government thinks??

There is only one authority in Thailand about what anything means regarding taxation rules and regulations and practices - and that is the Thailand Revenue Department - and any legal rulings made by the Thailand Courts.

[TroubleandGrumpy]

On 8/4/2024 at 3:16 PM, Ricardo said:

 

The UK Old-Age-Allowance is definitely taxable, but HMRC prefer to collect from one of your private-pensions, telling the administrators to use a revised tax-code to collect it, rather than saddling their colleagues at the DWP with the extra administration.  Which their admin-systems may not be set up to do.

 

Given that they can take 3-4 months to pay-up, on a legal-uplift due-to-temporary-visit, and that there's no simple online-form to claim that uplift (you have to phone-in or write) , my view is that their systems are not very good.  

 

So you're absolutely correct in what you say above.

 

As frozen personal-allowances continue, and some other sources of UK-arising income increase, more retired-people are finding that they now owe UK Income-Tax again  ...  but whether the relatively-small sums collected are worth the extra revenue raised, is a moot point.

Thanks - glad to see some people have a solid understanding of how the taxation system works and how specific matters are not as they think they are because of what they were told many years ago. I also think they (and Aust and NZ) will not bother to collect the amounts in question, although they may implement a deduction at the source arrangement (based on the last tax year), such that the small amounts are deducted, and it is then up to the tax payer to claim them back as appropriate.

[TroubleandGrumpy]

On 8/4/2024 at 4:07 PM, sometimewoodworker said:

It doesn’t matter that it looks like a government pension.

Because it is only pensions in respect of services of a governmental nature rendered to that State or subdivision or local authority thereof that are covered by the DTC.

I certainly isn’t one of those 

Depends upon the DTA you mean (they change a lot).  Check again my statements and other people's views - there is more to the DTAs (and yes they do vary a lot) than just that one Clause.  That Clause is referring to Public Servants who usually have their own Retirement Pension arrangements (especially the Politicians and Senior Execs) and they (authors) did not want their own Pensions to be taxable if they decided to live/retire in the other country.  There are other referrals to Government Payments and publicly funded Pensions - and it varies a lot from DTA to DTA. Let me know if you are an Aussie - I have a separate post about the Thai-Aust DTA and its affect on the Aged Pension.

 

However - please understand that there is no definite TRD or Court ruling or interpretation on this issue, as far as I know. Just broad statements by 'tax experts' drumming up business - but not the TRD or Courts - although some Expats have gone into their local TRD Office and have been told that the Pensions are not taxed.  My 'statement' that IMO the UK State Pension looks like a Government Pension to me (and the link to a UK Government website) is only my opinion - but I reckon that Somchai in the local TRD Office would probably agree with that statement when told that and shown that UK Gov website.  And that is all that counts - what TRD views - not us armchair experts on AN.  If I was told by the local TRD Office that Pensions are not taxable, then what sort of idiot would I be if I argued with them and tried to 'correct them??  Likewise, I have formal written advice from a tax expert, confirmed by a TRD employee friend of my wife's Sister, that if someone does not have to pay income taxes after TEDA, then they dont have to lodge a tax return - which is what 30+ million Thais do (not lodge a tax return). TiT.

[chiang mai]

16 minutes ago, TroubleandGrumpy said:

Link to TRD website/statement or Court interpretation confirming that claim you have made.

Or - as I suspect - are you being so blinkered about things, that you think that the definition that matters is what the UK Government thinks??

There is only one authority in Thailand about what anything means regarding taxation rules and regulations and practices - and that is the Thailand Revenue Department - and any legal rulings made by the Thailand Courts.

I don't understand your logic regarding the UK State Pension. The UK government confirms it is not a government pension, which means it is assessable, that is the worst case scenario. If TRD were, for some completely bizarre reason, decide to classify it as a government pension, that would take away their ability to tax that income and they would lose revenue. Is that what you are suggesting might happen?

[UKresonant]

On 8/3/2024 at 4:37 AM, Tony M said:

Thanks for the response. I'm not sure that I understand the last part of your reply ?   Take what scheme at face value (that may be taxed) ?

The other scheme segment mentioned  has a title that may suggest a Gov connection, but it is not paid by the Gov so is not on the "Taxed only in UK" list. But it is also a UK DB pension, assessable but hopefully  credit relief should be relevant

[topt]

1 hour ago, chiang mai said:

I don't understand your logic regarding the UK State Pension. The UK government confirms it is not a government pension, which means it is assessable, that is the worst case scenario. If TRD were, for some completely bizarre reason, decide to classify it as a government pension, that would take away their ability to tax that income and they would lose revenue. Is that what you are suggesting might happen?

Personally I think he is just being "difficult" which unfortunately has been a long standing trait in these threads. 

I wouldn't presume to offer an opinion on Oz taxation but ...........

[topt]

1 hour ago, TroubleandGrumpy said:

Or - as I suspect - are you being so blinkered about things, that you think that the definition that matters is what the UK Government thinks?

No, what has been said is that the "State" pension is definitely not classed as a govt. pension under the terms of the DTA from a UK perspective and as such potentially assessable.

However, again as previously stated, how TRD will view it is potentially open to interpretation.

You just seem to want to keep on stirring the pot for no discernible reason......

 

Oh and to one of your other posts about collecting tax see here potentially for relevance - make of it what you will - 

https://www.thisismoney.co.uk/money/bills/article-13687737/Half-million-taxpayers-set-receive-tax-demand-letter-HMRC-Heres-one.html?ico=mol_desktop_money-newtab&molReferrerUrl=https%3A%2F%2Fwww.dailymail.co.uk%2Fmoney%2Findex.html