Thai tax tangle: Expats warned of new rules on overseas income

[Sheryl]

5 minutes ago, norsurin said:

My friend moved to Thailand last year He get taxed about 28.000 baht.He said the next one would be 65.000 baht so he is now changing his visa to a extension visa.He was told to bring pictures of his family life in Thailand with him to immigration.He is married to a thai and they have a daughter together.

Visa or extension type, anc marriage to a Thsi, has absolutely  no effect on tax liability.

 

The only factors are whether here 180 days or more in a year and the amount of assessable income either  earned in or remitted to Thailand. 

 

 

[giddyup]

It seems like Australians are the only ones liable to pay tax on their aged pensions. Is this correct?

[4myr]

42 minutes ago, giddyup said:

It seems like Australians are the only ones liable to pay tax on their aged pensions. Is this correct?

 

This is not correct. According to the Dutch DTA, the old age pension [AOW] is not explicitly excluded to be taxable only in the Netherlands. I think that US citizens are lucky where social security has been explicitly excluded.

 

However this does not mean that your local tax office know how to interpret each tax agreement.

 

From online stories I read, some offices apply the rule that old age pensions from the Netherlands are treated similarly to the old age pension/allowance in Thailand [ Revenue code section 42, clause 25], which is exempt from Thai tax. The term in Thai is referred to as prakan sangkhom.   

[oldcpu]

On 4/4/2025 at 3:59 PM, redwood1 said:

 

Never heard of a overseas bank wanting a Thai TIN  or even giving a rats azz if you have one or not....

 

My experience is typically overseas trading companies want the Thai TIN if one is assessed to be a Thai tax resident.

 

I am a Thai tax resident.  The Canadian Bank of Montreal (BMO) froze my trading accounts with them until I could provide a Thai TIN (after which they required I close my accounts with them as I was no longer a Canadian tax resident).

 

Subsequently, two Canadian mutual fund/stock trading companies, that would allow me (as a Canadian citizen, but non-resident to Canada) requested a Thai TIN for me to open up an account with them.   I had previous applied for a Thai TIN in Thailand, and I was denied such as I was bringing no money into Thailand. I was thou told by the Thai RD official, then if and when i were to get a Thai TIN, it may be the same as my Pink-ID (which I have).  The official advised my Pink-ID was not yet activated as a Thai TIN.

 

So I provided the two Canadian trading companies my pink-ID # (in lieu of a tax ID) and in the comment field beside the foreign Tax-ID I typed that the Tax-ID was not yet active.  They accepted that.

[oldcpu]

Duplicate post

[oldcpu]

1 hour ago, giddyup said:

It seems like Australians are the only ones liable to pay tax on their aged pensions. Is this correct?

 

No. I believe former German residents are potentially required to pay Thai tax on any Germany sourced  'aged' pension (but I suspect NOT required to pay Thai tax if their German pension is a German government worker pension).

 

Those in receipt of ANY Canadian sourced pensions, are only required to pay tax on those pensions in Canada, and NOT in Thailand.

[topt]

9 hours ago, giddyup said:

It seems like Australians are the only ones liable to pay tax on their aged pensions. Is this correct?

In the overall scheme of things (bearing in mind individual circumstances) this is one of the most ridiculous statements I have seen on a tax thread - and this from someone with a highly elevated post count......(maybe try reading more....) 

[NoDisplayName]

9 hours ago, giddyup said:

It seems like Australians are the only ones liable to pay tax on their aged pensions. Is this correct?

 

I would assume anyone from any of the 138 countries with which Thailand does NOT have a DTA would be liable for pension money brought in, with no offsetting tax credit available.

[ukrules]

2 hours ago, NoDisplayName said:

 

I would assume anyone from any of the 138 countries with which Thailand does NOT have a DTA would be liable for pension money brought in, with no offsetting tax credit available.

 

Perhaps, apparently according to some video I watched foreigners must be treated the same way Thais are treated and apparently Thais are not taxed on 'social security' - which is an often mistranslated term.

 

Are Thais taxed on pension income ?

The dude in the video seemed to think not and said this also applies to foreigners, perhaps this explains why some people have been told they don't have to pay anything while others have to pay something.

Anyway - it's Carden from AITA and here's the video at the exact part where he begins to discuss this equality thing : 
 

Is it accurate - who knows?

[NoDisplayName]

8 minutes ago, ukrules said:

 

Perhaps, apparently according to some video I watched foreigners must be treated the same way Thais are treated and apparently Thais are not taxed on 'social security' - which is an often mistranslated term.

 

Are Thais taxed on pension income ?

The dude in the video seemed to think not and said this also applies to foreigners, perhaps this explains why some people have been told they don't have to pay anything while others have to pay something.

 

 

Don't think it matters........Thai or foreigner, as it's foreign-sourced income.

 

Thais don't pay tax on capital gains from stock or fund sales, unless from foreign stocks, and I do believe taxed as ordinary income.

 

And apparently there is a catch in the Thai-US DTA!

 

The US-Thailand Tax Treaty stipulates that social security income and government pensions are only taxable by the US unless an individual becomes a resident and a Thai national.

[ukrules]

2 minutes ago, NoDisplayName said:

 

Don't think it matters........Thai or foreigner, as it's foreign-sourced income.

 

Thais don't pay tax on capital gains from stock or fund sales, unless from foreign stocks, and I do believe taxed as ordinary income.

 

This would apply to pensions only of course - he specifically speaks about pensions like the UK 'old age pension' - not a 'government pension' from being a pimms quaffing whitehall type civil servant (as exampted by the treaty, of course - these are the very people who negotiated the treaty and they exempted themselves) but the basic pension which most people seem to get which is essentially 'social security' and Thailand doesn't tax that for Thais so they can't tax it for foreigners because it would be discriminatory, now a DTA may come into play with a non discrimination clause - but maybe not - because if the Thais are not taxed on it then they can't just go ahead and tax the foreigner for whatever made up reason they want to.

This is the first time I've heard this argument presented by Carden and his team. His employee (the Thai accountant woman in the video) has been talking to the revenue department about it for a long time according to the video. Seems legit to me. Anyway I have no pension but I figured I'd mention it here because I know a lot you guys do.....and I like to think many people can avoid this completely

If I were a Thai tax resident I would speak to the one of the many Thai accountants who works at his company.
 

[NoDisplayName]

15 minutes ago, ukrules said:

Thailand doesn't tax that for Thais so they can't tax it for foreigners because it would be discriminatory,

 

Thailand doesn't tax THAI social security.

Thais don't pay tax on THAI social security, nor do foreigners.

Both could, if not exempt by DTA, tax foreign social security.

 

Similar argument to people claiming they could take deductions on their Thai taxes for contributions to "the pension fund", arguing that the text doesn't necessarily state the the pension fund must be the Thai pension fund.

 

If that info about the US DTA is correct, US social security is exempt from Thai tax for non-residents and non-nationals.  If a Thai spouse gets survivor benefits, or If an American gets Thai citizenship, and are tax-resident, then it seems US social security would be taxable.

 

**Makes me wonder about that "American" lawyer so prolific on YouTube these days.  He gained Thai citizenship, wonder if he'll have to pay tax on his US social security?

[ukrules]

12 minutes ago, NoDisplayName said:

Thailand doesn't tax THAI social security.

 

Indeed, which means they can not tax any other form of social security, Thai, foreign, whatever as it would be a breach of 'non discrimination' - that's the argument being put forward as far as I understand it.

It's a new angle and that's the first time I heard it, will be interesting if it plays out.

We already know some people have been turned away from filing tax returns, even when they tried multiple times - because they submitted pension income - which they thought would trigger taxation - perhaps this is the reason why.

I guess we will all know for sure in a year or two.

[NoDisplayName]

8 minutes ago, ukrules said:

Indeed, which means they can not tax any other form of social security, Thai, foreign, whatever as it would be a breach of 'non discrimination' - that's the argument being put forward as far as I understand it.

 

I don't believe that will fly.  The assessability of the income is based on the source.  Thai source = not taxed, foreign source = potentially taxed.

 

Non-discrimination would apply to the person, not the income stream.  Thai social security is not taxable, whether foreigner or Thai.  Foreign social security is taxable (unless excluded by DTA), whether foreigner or Thai.

 

Go back to stock sales.  SET registered = no capital gains tax, foreign registered = taxed as ordinary income.  That applies equally to nationals as to tax-resident foreigners.

 

Consider deductions and allowances.  Premiums paid to THAI insurance companies = deductible, premiums paid to foreign insurance companies = no deduction.  Same equal application here, as well.

[ukrules]

36 minutes ago, NoDisplayName said:

I don't believe that will fly.

 

Well I'd speak to an accountant about that if it affected me just in case.

 

[JimGant]

7 hours ago, NoDisplayName said:

If a Thai spouse gets survivor benefits, or If an American gets Thai citizenship, and are tax-resident, then it seems US social security would be taxable.

US Social Security is only taxable by the US - in all situations. A govt pension, however, can be taxable by Thailand -- if the recipient is both a resident and a citizen (solely) of Thailand. So your Thai wife, who lives in Thailand, is never taxable by Thailand on her survivor Social Security (or her own Social Security). However, if she's getting a survivor benefit from your govt pension -- and is a tax resident of Thailand -- she would be subject to Thai taxes on this survivor govt pension UNLESS she's a dual US-Thai citizen.

 

Quote

As a general matter, the result will be the same whether Article 20 or 21 applies, 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.

https://www.irs.gov/pub/irs-trty/thaitech.pdf

 

[rcjoop]

For social security benefits the USA DTA is clear, but in many other DTA’s these are not mentioned at all, meaning that the national law applies.

I am specifically interested in Dutch old age benefit AOW which is a social security benefit. In the discussions little reference is made to the Thai tax law and that surprises me.

Article 40 of the Thai tax law defines and describes 8 types of income that is assessable income and I really can not place the Dutch AOW or any other social security benefit in one of these 8 categories, hence my conclusion that it can not be taxed and is not assessable income.

But I am no tax lawyer so if a more knowledgeable person could point me out which of the 8 types applies or if none why it would still be taxable and by what rule, I would be grateful.

Joop

[NoDisplayName]

2 hours ago, JimGant said:

US Social Security is only taxable by the US - in all situations

 

So you're saying the internets tax expert I found online made a mistake saying that there is a technicality within the DTA making US social security taxable specifically in the case of non-resident non-citizens?

 

specifically states that social security income and govt pensions can only be taxed by the US unless you become a resident AND a Thai national.

 

Looks like the internets expert got confused with and/or logic.

 

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.

 

 

 

**OPINION ONLY.  NOT ADVICE.  NOT AN EXPERT!!!**

 

[JimGant]

1 hour ago, NoDisplayName said:

So you're saying the internets tax expert I found online made a mistake saying that there is a technicality within the DTA making US social security taxable specifically in the case of non-resident non-citizens?

Is that Thomas Carden? If so, stand by for a deluge on his lack of bonafides.

[Dogmatix]

12 hours ago, NoDisplayName said:

 

Thailand doesn't tax THAI social security.

Thais don't pay tax on THAI social security, nor do foreigners.

Both could, if not exempt by DTA, tax foreign social security.

 

Similar argument to people claiming they could take deductions on their Thai taxes for contributions to "the pension fund", arguing that the text doesn't necessarily state the the pension fund must be the Thai pension fund.

 

If that info about the US DTA is correct, US social security is exempt from Thai tax for non-residents and non-nationals.  If a Thai spouse gets survivor benefits, or If an American gets Thai citizenship, and are tax-resident, then it seems US social security would be taxable.

 

**Makes me wonder about that "American" lawyer so prolific on YouTube these days.  He gained Thai citizenship, wonder if he'll have to pay tax on his US social security?

 

I would argue that a state pension like the UK one that is not income from employment is non-assessable income in Thailand because, like Thai social security pensions, there is no mention of it under Section 40 of the Revenue Code that lists all types of assessable income.  Of course, there were no Thai social security pensions when the RC was drafted and it has never been amended to include or to specifically exclude them.  But a Bkk based British tax advisor at a well known firm told in a Q&A session that he or his people had asked the Thai RD about this and they told him that foreign state pensions would be considered assessable income because they would consider them income derived from employment, albeit indirectly.  This is, of course, totally at variance with the RD interpretation of Thai SS pensions being not derived from employment and therefore not assessable, despite the fact that both are contributory pensions indirectly derived from work in exactly the same way.  When I asked him how the Thai RD interprets Australian superannuation which can now be claimed by those who have never worked and thus not even indirectly derived from employment, he was stumped for an answer, as he had never heard of that. 

 

Bottom line is this in my opinion.  There is no logical way a UK state pension can be considered assessable income under the RC, given that the The SS pension that has an identical structure of being indirectly derived from employment is not considered income derived from employment and therefore non-assessable. However, if RD officers individually or collectively decide that foreign state pensions are assessable just because all farangs are richer than them and their state pensions are much bigger than Thai SS pensions or some such nonsense, then that is the interpretation that will prevail, unless there is a ruling to the contrary in the tax court.  However, given the pitiful value of frozen UK state pensions, it seems somewhat doubtful that any British pension will fund a case in the Tax Court.  So the RD can do what it feels like.  In fact the same applies to the RD's unilateral reinterpretation the RC to tax foreign income, regardless of when it arises which, should be amended by parliament, not the director general of the RD, if it needs amendment.  That could be overturned by the tax court but no sign of anyone taking action there. 

[ukrules]

3 hours ago, Dogmatix said:

This is, of course, totally at variance with the RD interpretation of Thai SS pensions being not derived from employment and therefore not assessable

 

That's where the 'equal treatment' part kicks in and it may be dependent on double taxation agreements specifying that foreigners be treated in the same way as Thai citizens when it comes to Thai law.

The relevant part of the Revenue code is Section 42, sub section 25 :

 

Quote

Section 42: The following incomes shall be exempt from income tax:

(25) Compensatory benefits received from the Social Security Fund under the law governing social security.

 

So if they don't tax Thais on it and there's an 'equality' clause in the DTA then if foreigners are treated the same as Thais as explained in the video I linked above - all pensions from countries where this equality is guaranteed in the DTA should have the very same law applied.

I spelled it out here as the specific section / sub section is buried deep in the video and I know hardly anyone will watch it.

In the video he speaks about 'non discrimination clauses' in the DTAs

 

This is from the youtube transcript :
 

Quote

non-discrimination clause I mentioned earlier Non-discrimination means that that the individual has to be treated the same as if he's a Thai citizen here and the income types have to be treated the same.

So like in the UK the old age pension is a social security equivalent Therefore while it's not specifically said in the in the UK Thailand tax treaty that's not that that's taxable only in the in the UK Thailand does not tax it by its law so unless they change that law they still have to treat it as social security here and it should not be taxable here.....

 

He then goes on to talk about 'sending it up the chain' inside the Revenue Department - I really think he's onto something here.