No tax on Aussie pension

[dinga]

10 hours ago, TigerandDog said:

I'd ignore both Thai and expat tax agencies, they are just scaremongering and trying to drum up business. The reason I said that the Oz/Thai DTA has no impact on whether the age pension is taxable in Thailand is due to the fact that the DTA makes a generalised statement with regards to pensions, it makes no specific mention of the age pension.

 

What aussies should be taking notice of is Thai tax law, wherein it is clearly stated that social security payments are NOT assessable income, and the Oz age pension IS actually a social security payment, and the TRD recognise that as being the case, hence their position of the age pension not being taxable income.

Please provide the Revenue Code provision (the specific Clause) that "clearly stated that social security payments are NOT assessible income" 

[KhunHeineken]

OP, it's been well debated in the Australia Forum Pension thread. 

 

Article 18 and Article 19 of the Australia / Thailand DTA deal with pensions. 

 

Article 18 relies on the "provisions" of Article 19, and Article 19 deals with "Government Service Pensions."

 

A Centerlink old age pension IS NOT a government service pension.   A government service pension is a pension public service, such as a military pension etc.  

 

Therefore, a Centerlink old age pension is not covered by the DTA.

 

That said, paying tax in Thailand, if any, could be the least of your problems.  

 

There are proposed changes to Australia's tax residency laws.  It's all over the internet.  Here's just one link from a private firm.

 

https://hlb.com.au/tax-residency-changes-for-individuals/

 

You will note that Australia is moving from a "domiciled" residency model to a physical presence and time based model, the same as Thailand. 

 

For Australia, when these laws are passed, it will be 183 days inside / outside Australia. 

 

The pension is deemed an income. 

 

The pension is taxable. 

 

If you are outside of Australia for more than 183 days in a financial year you will be deemed a non resident for tax purposes.  Immigration records will prove the ATO's case. 

 

There are no exemptions, means testing, or changes to the non resident tax free thresholds mentioned in the proposed changes.  So the pension doesn't get a free pass. 

 

Non resident tax starts at $0 to $135,000 and is 30%. 

 

As a non resident you do not get the benefit of the tax free threshold.  Tax is paid from the first dollar. 

 

If you are wondering which political party supports these changes, both do.  A former Liberal government proposed them, and the current Labor government did not bin them. 

 

So, it's when, not if. 

 

https://www.afr.com/policy/tax-and-super/assistant-treasurer-flags-new-tax-residency-rules-20220826-p5bd1v

 

You are concerned about maybe paying a few thousand baht tax in Thailand, but perhaps you should be more concerned having thousands of AUD withheld from your pension in the future. 

 

Remember, the pension payer, Centerlink (government) is also the pension taxer, ATO (government) and they will know you are outside of Australia for more than 183 days, Immigration (government).

 

The system is already in place to cut off supplements to pensions when outside of Australia after 6 weeks.  It's not much effort for them to tweak that system and withhold 30% of your pension after 183 days outside of Australia. 

 

I would suggest, Thailand tax is the least of your problems going forward. 

[TigerandDog]

10 hours ago, KhunHeineken said:

OP, it's been well debated in the Australia Forum Pension thread. 

 

Article 18 and Article 19 of the Australia / Thailand DTA deal with pensions. 

 

Article 18 relies on the "provisions" of Article 19, and Article 19 deals with "Government Service Pensions."

 

A Centerlink old age pension IS NOT a government service pension.   A government service pension is a pension public service, such as a military pension etc.  

 

Therefore, a Centerlink old age pension is not covered by the DTA.

 

That said, paying tax in Thailand, if any, could be the least of your problems.  

 

There are proposed changes to Australia's tax residency laws.  It's all over the internet.  Here's just one link from a private firm.

 

https://hlb.com.au/tax-residency-changes-for-individuals/

 

You will note that Australia is moving from a "domiciled" residency model to a physical presence and time based model, the same as Thailand. 

 

For Australia, when these laws are passed, it will be 183 days inside / outside Australia. 

 

The pension is deemed an income. 

 

The pension is taxable. 

 

If you are outside of Australia for more than 183 days in a financial year you will be deemed a non resident for tax purposes.  Immigration records will prove the ATO's case. 

 

There are no exemptions, means testing, or changes to the non resident tax free thresholds mentioned in the proposed changes.  So the pension doesn't get a free pass. 

 

Non resident tax starts at $0 to $135,000 and is 30%. 

 

As a non resident you do not get the benefit of the tax free threshold.  Tax is paid from the first dollar. 

 

If you are wondering which political party supports these changes, both do.  A former Liberal government proposed them, and the current Labor government did not bin them. 

 

So, it's when, not if. 

 

https://www.afr.com/policy/tax-and-super/assistant-treasurer-flags-new-tax-residency-rules-20220826-p5bd1v

 

You are concerned about maybe paying a few thousand baht tax in Thailand, but perhaps you should be more concerned having thousands of AUD withheld from your pension in the future. 

 

Remember, the pension payer, Centerlink (government) is also the pension taxer, ATO (government) and they will know you are outside of Australia for more than 183 days, Immigration (government).

 

The system is already in place to cut off supplements to pensions when outside of Australia after 6 weeks.  It's not much effort for them to tweak that system and withhold 30% of your pension after 183 days outside of Australia. 

 

I would suggest, Thailand tax is the least of your problems going forward. 

the non resident rule you refer isn't a new provision it has actually been in place for at least the last 20 years, maybe longer, and their systems have been deducting the 30% tax for that entire period, and I have a couple of acquaintances that can testify to that as their pensions were impacted because they didn't notify the ATO they were permanently leaving Oz.

 When I left Oz for Thailand in 2014 my Oz tax accountant made me aware of this provision and he submitted an advice to the ATO that I was permanently leaving the country and never returning, not even for a holiday or to visit friends, and that I would be a tax resident of another country. Centrelink has never deducted any tax from my age pension and my Oz accountant has never received any notification from the ATO that I need to submit a tax return or owe any tax.