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.

[dinga]

20 hours ago, dinga said:

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

 

TigerandDog   I'm waiting anxiously.....

 

Well, what are the provisions of the Revenue Code that you claim "clearly stated that social security payments are NOT assessible income".???????

 

If you are deluded, just admit it and your incorrect statement will not mislead anyone else.

[treetops]

On 2/26/2025 at 9:33 AM, dinga said:

TigerandDog   I'm waiting anxiously.....

 

Well, what are the provisions of the Revenue Code that you claim "clearly stated that social security payments are NOT assessible income".???????

 

If you are deluded, just admit it and your incorrect statement will not mislead anyone else.

 

I'm not the guy you asked, but if I may chip in here I recall this being discussed before.  I'm quoting from a previous thread where it was mentioned:
 

Quote

Revenue Code (Official English Translation)

Chapter 3 Income Tax

Section 42 Exempt Income

Paragraph 25 Compensatory benefit received by the taxpayer from the social security fund under the law governing social security.

 

There followed some debate about whether this only related to Thai Social Security or Social Security from other countries too, but this may be what the poster is referring too.

[dinga]

On 2/27/2025 at 8:07 PM, treetops said:

 

I'm not the guy you asked, but if I may chip in here I recall this being discussed before.  I'm quoting from a previous thread where it was mentioned:
 

 

There followed some debate about whether this only related to Thai Social Security or Social Security from other countries too, but this may be what the poster is referring too.

Thanks - but the Thai Revenue Code is a Thai Law.  You'd have to be a cretin to selectively interprete that Paragraph (and all the others In Section 42) as relating to any happenings that occur outside of THAILAND.   No wonder TigerandDog has slunk off into the ether. 

 

For mine, is so absurd that it's not worth even considering getting a legal opinion from a credible Thai law firm.

[anrcaccount]

On 3/1/2025 at 6:33 PM, dinga said:

Thanks - but the Thai Revenue Code is a Thai Law.  You'd have to be a cretin to selectively interprete that Paragraph (and all the others In Section 42) as relating to any happenings that occur outside of THAILAND.   No wonder TigerandDog has slunk off into the ether. 

 

For mine, is so absurd that it's not worth even considering getting a legal opinion from a credible Thai law firm.

 

The Thai revenue code has no specific provisions relating to foreign income. 

 

However most DTA's, including the Australia / Thailand one,  have what's known as a non discrimination clause. That means Thai and foreigners are treated the same for tax collection. Therefore, the income equivalents, in terms of social security are exempt for Thais; and remitted social security is exempt for foreigners.

 

The TRD offices, based on multiple real world reports, are simply considering the Australian Old Age pension social security ( which it is) , therefore exempt for tax in Thailand. 

 

Nothing absurd about it. Makes sense. 

 

 

[dinga]

13 hours ago, anrcaccount said:

 

See comments/response in CAPS below:

 

The Thai revenue code has no specific provisions relating to foreign income.   

 

CORRECT - APPLIES TO ALL TAX PAYERS/RESIDENTS REGARDLESS (NO DISCRIMINATION)

 

However most DTA's, including the Australia / Thailand one,  have what's known as a non discrimination clause. That means Thai and foreigners are treated the same for tax collection. Therefore, the income equivalents, in terms of social security are exempt for Thais; and remitted social security is exempt for foreigners. 

 

DISAGREE  -  BEFORE RESORTING TO THE DTA, THE PROVISIONS OF THE THAI TAX LAW MUST BE FIRST CONSIDERED.  IN RELATION TO THE LATTER, SEEMS THERE ARE ONLY TWO POSSIBLE PROVISIONS UNDER SECTION 42 THAT EXEMPT ASSESSIBLE INCOME FROM TAX: 

(12) Special pension, special gratuity, inherited pension or inherited gratuity.

(25) Compensatory benefit received by the taxpayer from the social security fund under the law governing social security.

 

MY UNDERSTANDING IS THAT IT'S GENERALLY ACCEPTED THAT AUSTRALIAN SOCIAL SECURITY PAYMENTS - ESPECIALLY THE OAP - DO NOT FALL WITHIN (12).

 

IN MY VIEW, (25) CLEARLY DOES NOT APPLY TO AUSTRALIAN S/S PAYMENTS AS (A) OAPs ARE NOT 'COMPENSATORY BENEFITS'; (B) THEY ARE NOT PAID FROM 'THE SOCIAL SECURITY FUND UNDER THE LAW GOVERNING SOCIAL SECURITY' IN THAILAND, OR INDEED AUSTRALIA [THERE IS NO SUCH FUND].  WITHOUT GETTING TOO FAR INTO THE WEEDS, ON A CURSORY READ I COULD ONLY SEE ONE REFERENCE IN THE THAI SOCIAL SECURITY ACT THAT MENTIONS 'COMPENSATION' PAYMENTS - AND THIS ONLY APPLIES TO COMPENSATION FOR LOSS OF EARNINGS.

 

CLEARLY AUSTRALIAN OAP PAYMENTS ARE ASSESSIBLE INCOME, SO THE DTA DOESN'T COME INTO PLAY UNTIL IT'S DETERMINED THAT REMITTED AUSTRALIAN OAP PAYMENTS ARE NOT EXEMPT FROM THAI TAX.  MY RECOLLECTION IS THAT THE DTA CLEARLY PROVIDES THAILAND HAS THE RIGHT TO TAX OAP REMITTENCES.  IN THE EVENT BOTH COUNTRIES HAVE TAX RIGHTS ON INCOME, DTA'S PROVIDE PROTECTION FROM DOUBLE TAXATION BY ENSURING CREDITS ARE AVAILABLE WITH THE RESULT THAT ONLY THE HIGHEST TAX AMOUNT IS PAYABLE - AND NO MORE

 

The TRD offices, based on multiple real world reports, are simply considering the Australian Old Age pension social security ( which it is) , therefore exempt for tax in Thailand. 

 

I DON'T HAVE A DOG IN THIS FIGHT, BUT WHILE BENDING TAX PROVISIONS TO PROVIDE SOME SORT OF "DEFENSIBLE" POSITION MAY BE A STRATEGY, I FEAR IT IS BUILT ON QUICKSAND.  AGAIN, MY RECOLLECTION IS THAT A BUNCH OF TAX ADVISORS HAVE REACHED THE SAME CONCLUSIONS AS ME.  ALSO, I WOULD TAKE LITTLE CONFIDENCE FROM HOW DIFFERENT TRD OFFICES CURRENTLY INTERPRETE THE TAX LAWS  -  NO COMFORT AS I SEE THE REAL POSSIBILITY THAT A CLARIFYING EDICT WITH UNIVERSAL APPLICATION COULD BE ISSUED IN A HEARTBEAT, WITH NO PROTECTION FOR THE PAST.         

 

Nothing absurd about it. Makes sense. 

 

NOT TO ME.  BUT I WISH EVERYONE WELL IN THESE SOMEWHAT CONFUSING TIMES

[Ben Zioner]

Will take years for theThais to work out what is taxable or not. The wife went to the TO to make her return, so she queried if I had do make a return, (I have and LTR visa and haven't remitted funds earned in 2024), when she said my earning were from a UN pension, he just said: "oh not taxable". He didn't even want to read RD 743, or look at my statements, too complicated I guess.

 

But I am glad I have the LTR, as I could imagine a situation where, wrongly believing UN pensions aren't taxable in Thailand, I wouldn't make returns for years, and then caught in an audit by someone with different views...

[Sheryl]

Nothing in the tax form states the details/origin of pension income so no determination was made by RD about the assessibility of OP's old age pension from Oz.

 

Since he owed no  tax, one of 3 things likely occurred:

 

1. Total income inclusive of the pension was under 150k after personal exemptions,  old age allowance, expenses et al were deducted.

 

2. The accountant did not include the pension in the declared income i.e. treated it as non-assessable. If so would have to ask accountant for the reason. Might have had mistaken impression it is a government pension.

 

3. Accountant included the pension income in declared total income then listed it as an exemption on the line for Social Security income. Less likely but possible.

 

Should be quite obvious from the form which of these was the case. 

[treetops]

12 hours ago, dinga said:

IN MY VIEW, (25) CLEARLY DOES NOT APPLY TO AUSTRALIAN S/S PAYMENTS AS (A) OAPs ARE NOT 'COMPENSATORY BENEFITS'; (B) THEY ARE NOT PAID FROM 'THE SOCIAL SECURITY FUND UNDER THE LAW GOVERNING SOCIAL SECURITY' IN THAILAND, OR INDEED AUSTRALIA [THERE IS NO SUCH FUND].  WITHOUT GETTING TOO FAR INTO THE WEEDS, ON A CURSORY READ I COULD ONLY SEE ONE REFERENCE IN THE THAI SOCIAL SECURITY ACT THAT MENTIONS 'COMPENSATION' PAYMENTS - AND THIS ONLY APPLIES TO COMPENSATION FOR LOSS OF EARNINGS.

 

I know it's just another "expert" opinion, but this video claims US Social Security, UK State Pension, AUS and other country's equivalent benefit are all classified as Social Security and therefore not taxed in Thailand.  About the 21 minute mark where she refers to the non-discrimination clause meaning foreigners must be treated the same as Thais.

[Sheryl]

On 2/27/2025 at 8:07 PM, treetops said:

 

I'm not the guy you asked, but if I may chip in here I recall this being discussed before.  I'm quoting from a previous thread where it was mentioned:
 

 

There followed some debate about whether this only related to Thai Social Security or Social Security from other countries too, but this may be what the poster is referring too.

Note that it says : THE Social Security Fund". Not "a". 

 

It refers  to the Thai Social Security Fund.  Which is why no definition of "Social Security" provided; they literally mean a specific fund of  that exact name. 

[Sheryl]

1 hour ago, treetops said:

 

I know it's just another "expert" opinion, but this video claims US Social Security, UK State Pension, AUS and other country's equivalent benefit are all classified as Social Security and therefore not taxed in Thailand.  About the 21 minute mark where she refers to the non-discrimination clause meaning foreigners must be treated the same as Thais.

And they are.  Foreigners too can exempt income  received from the Thai Social Security Fund.

 

 

[dinga]

For OAP recipients, you may find it interesting to compare the size of your payments with the entitlements for the Thai Social Security Old Age Allowance (OAA) - and reflect on who's hard done by:

 

The amount payable under the OAA ranges from ฿600 to 1,000 per month, depending on the recipient’s age. Payments are not taxable, and the current rates are as follows:

• 60–69 years old: ฿600 per month
• 70–79 years old: ฿700 per month
• 80 to 89 years old: ฿800 per month
• 90 years old+: ฿1,000 per month

 

 

[KhunHeineken]

On 3/7/2025 at 2:56 AM, dinga said:

CLEARLY AUSTRALIAN OAP PAYMENTS ARE ASSESSIBLE INCOME, SO THE DTA DOESN'T COME INTO PLAY UNTIL IT'S DETERMINED THAT REMITTED AUSTRALIAN OAP PAYMENTS ARE NOT EXEMPT FROM THAI TAX.  MY RECOLLECTION IS THAT THE DTA CLEARLY PROVIDES THAILAND HAS THE RIGHT TO TAX OAP REMITTENCES.  IN THE EVENT BOTH COUNTRIES HAVE TAX RIGHTS ON INCOME, DTA'S PROVIDE PROTECTION FROM DOUBLE TAXATION BY ENSURING CREDITS ARE AVAILABLE WITH THE RESULT THAT ONLY THE HIGHEST TAX AMOUNT IS PAYABLE - AND NO MORE

 

Australia non resident tax is 30% for $0 to $135,000. 

 

Thai tax will be the least of Aussie expat problems when the proposed changes are passed and the 183 days outside Australia law kicks in.