No tax on Aussie pension

[Chris BKK]

I am an Aussie who previously had a work permit in Thailand, but retired and went back to Australia for the required 2 years to be able to receive the Centrelink pension while living in Thailand. I receive the Centrelink (Asssie gov pension) payment into my BBL account each 4 weeks. I also earn some commissions from a Thai company (less then allowed earnings under Centrelink rules). The Thai company takes 5% withholding tax from my commission. I recently had my Thai tax return submitted on line by a Thai accountant,

I received all the withholding tax back this week. I did provide the accountant with a 1 year bank statement from BBL plus copies of the Centrelink details of pension payments.

The Revenue Department obviously did not require and tax to be payable on my Aussie pension.  There is a DTA Thailand & Australia which states tax on pensions is not payable here. Other country pensions I have no idea about and don't care. But Aussie pensioners here should be breathing easier.

[Captain Flack]

I have moved to the correct forum where OP should get a response.

[anrcaccount]

Thanks for your report. This is an example of where the THEORY does not equal the REALITY.

 

THEORY: Your remitted Australian Age Pension is taxable in Thailand.

 

REALITY : It isn't. 

 

However the predatory 'expat' tax agencies  that have sprung up, will tell you to file with them and they'll declare this for you.

 

A Thai accountant, files to the TRD, this isn't taxable. 

 

Anyone using these 'expat' tax agencies should really think twice, right?

 

 

 

 

 

 

[LosLobo]

3 hours ago, Chris BKK said:

There is a DTA Thailand & Australia which states tax on pensions is not payable here.

I would suggest that there are two DTAs regarding pensions: one exempts tax on state (Govt employee) pensions, while the other imposes tax on aged pensions.

[oldcpu]

4 hours ago, LosLobo said:

I would suggest that there are two DTAs regarding pensions: one exempts tax on state (Govt employee) pensions, while the other imposes tax on aged pensions.

 

Unfortunately when it comes to this forum and the definition of pensions (government vs state) not everyone uses the same terminology.

 

I believe the consensus as you note, is that the word 'government' pensions is nominally to refer to the pension of a 'civil-servant' or an 'ex-military' pension.  And the word 'state' pension is referred to as the old age pension that almost anyone  (who worked in the country and paid taxes in that country for more than some small TBD # of years) qualifies for.

 

Many DTAs, as you note, distinguish between the two types of pensions, but the DTAs use different wording other than 'government' and different other than 'state' for pensions.

 

This thread is about Aussie pensions , so that is the most important aspect here in regards to the Thai-Australia DTA.

 

As I posted before, DTAs for other countries can be different.  The German-Thai DTA has the 'state' (old age type) pension nominally taxable only in Thailand , and I have been told the German-Thai DTA has the 'government' (civil service/ex-military) pension taxable only in Germany. I struggle to find that last bit in the Thai - German DTA, but I have read (on this forum) that is the case.

 

Another example, in the case of the Thai-Canada DTA, where ALL Canadian sourced pensions (and similar remunerations)  are only taxed in Canada and not in Thailand. This is not the fabulous deal that it sounds, as Thai income tax rates tend to be less than Canadian in some cases, and it would possibly be better for Canadians in Thailand to have such pensions (and similar remunerations) taxable only in Thailand (and not taxable in Canada).

 

Hopefully, for Australian government pensions, state pensions, private pensions, and similar remunerations, it becomes more clear to all as to the Thailand tax filing requirements.

[ronnie50]

I've seen a few of the Thai DTA's as well (but not the Thai-Australian DTA). As @oldcpu says above, what I've also noticed in common is they refer to a former 'government' worker's occupational pension that would not be taxed in Thailand, but all other pensions, like the ones most people get in their old age from their governments, no matter where they worked - let's call it the State Pension - is taxable here.  If I had to guess at why that's so common, it's probably because it allows the source country to keep the tax directly - so most countries would want that. Other Aussies can probably best answer this case.

[LosLobo]

5 hours ago, LosLobo said:

I would suggest that there are two DTAs regarding pensions: one exempts tax on state (Govt employee) pensions, while the other imposes tax on aged pensions.

Must admit my post was a little ambiguous should have been Federal or State (Govt. employees).

But on actually reading the actual Aussie DTA I am more confused than ever.

My unqualified understanding of this document now has me doubting my initial assessment. 

Update and possibly apologies may follow.

https://www.austlii.edu.au/au/other/dfat/treaties/1989/36.html

Refer Articles 18 and 19.
 

[LosLobo]

I had a closer look at the document and no doubt now, my initial post was correct.

[Lacessit]

5 minutes ago, LosLobo said:

I had a closer look at the document and no doubt now, my initial post was correct.

The OP's post  states: "I receive the Centrelink (Asssie gov pension) payment into my BBL account each 4 weeks"

 

It is somewhat ambiguous as to whether it is the Age Pension, or a government pension. Do both come from Centrelink?

 

 

[anrcaccount]

8 minutes ago, Lacessit said:

The OP's post  states: "I receive the Centrelink (Asssie gov pension) payment into my BBL account each 4 weeks"

 

It is somewhat ambiguous as to whether it is the Age Pension, or a government pension. Do both come from Centrelink?

 

 

Only the OP can 100% confirm - but judging by his statement of “going back for 2 years”,  one can safely assume it’s the normal Age Pension ( administered by Centrelink).

 

 

[LosLobo]

27 minutes ago, Lacessit said:

The OP's post  states: "I receive the Centrelink (Asssie gov pension) payment into my BBL account each 4 weeks"

 

It is somewhat ambiguous as to whether it is the Age Pension, or a government pension. Do both come from Centrelink?

No government pensions come from superannuation schemes or specific pension funds established for public sector employees.

[Lacessit]

1 hour ago, LosLobo said:

No government pensions come from superannuation schemes or specific pension funds established for public sector employees.

So the OP is saying based on his experience, the Centrelink Age Pension is not taxable?

[LosLobo]

11 minutes ago, Lacessit said:

So the OP is saying based on his experience, the Centrelink Age Pension is not taxable?

That's what he is saying based on 'the accountant's' assessment but I suggest the OP will still be responsible if the accountant is wrong.

[Lacessit]

35 minutes ago, LosLobo said:

That's what he is saying based on 'the accountant's' assessment but I suggest the OP will still be responsible if the accountant is wrong.

He says he got his withholding tax back. He also says his age pension is paid into a BB account monthly.

 

A years' pension, disclosed to the TRD, is approximately 600,000 baht on current exchange rates.

 

Logic says the TRD would not have paid the withholding tax back if tax was assessable on his pension.

 

Whether or not the accountant is wrong is immaterial. The TRD has accepted the return, and responded with a refund.

[LosLobo]

36 minutes ago, Lacessit said:

He says he got his withholding tax back. He also says his age pension is paid into a BB account monthly.

 

A years' pension, disclosed to the TRD, is approximately 600,000 baht on current exchange rates.

 

Logic says the TRD would not have paid the withholding tax back if tax was assessable on his pension.

 

Whether or not the accountant is wrong is immaterial. The TRD has accepted the return, and responded with a refund.

Good point!

You’re taking the OP at face value, and I’m playing devil’s advocate here, but do you really know how thoroughly the TRD checks these things? I don’t. The refund suggests no issue, but the TRD might not do a deep dive unless something stands out. If the accountant missed something, the OP is still responsible down the line.
 

Just because the refund was issued doesn’t guarantee everything’s perfect. And the aged pension is conclusively exempt from tax under the DTA.

I have no skin in my opinion and hope the OP is correct...