Taxation Of Australian-based Super Pension

[vincent13]

I'm thinking about moving to Thailand to live. My income will be solely derived from an Australian superannuation pension once I retire (I'm currently an Australian Government employee). Will my super pension be taxed in Australia even thouigh I will ber a resident of Thailand? Thanks in advance for any advice.

[Mario2008]

Normaly it will be taxed in your home country and Thailand won't tax it.

[Lite Beer]

Moved to here.

[InterestedObserver]

Be careful, the Thai tax code is written such that any money (pension) derived from sources outside Thailand and remitted to Thailand in a given tax year is assessable income. Best to keep your money outside Thailand for at least 1 year. Not usually enforced for retirees, but still the law. Does Australia have a tax treaty with Thailand?

Edited September 10, 2009 by InterestedObserver

[scorecard]

Normaly it will be taxed in your home country and Thailand won't tax it.

You mighty like to get some quite specific advice on this from Australia, in regard to being offshore (and I'm assuming you mean permanently).

For example:

- Australians cannot get an old age pension or a war veterans pension unless you are full time resident in Australia (unless the rules have changed within the last 12 months).

- But maybe you mean a pension or superannuation or whatever the naming is, which is from a company fund or similar, which of course is quite different to the old age or war service pensions?

If your 'income' is from 'company' type fund then I would still check very carefully whether being 'permanently' off-shore from Australia changes anything in terms of benefits and/or taxation.

Or perhaps being permanantly offshore changes your responsibility or the methodology by which you are required to keep the fund advised that your still alive.

Some funds have a clause whereby their is an entitlement to a final lump-sum payment to surviving widow or other relatives.

Some funds have a clause whereby a surviving widow or other relatives continue receive a monthly income from the fund until their death.

If there are such continuing benefits then I would suggest checking whether such benfits are available to Australian based widow or relatives or are they available to a non Australian person who is the widow or other relatives.

If there is such an entitlement for non Australian widow etc., then I would ensure that the names, addresses, ID card numbers or whatever are recorded quickly with the fund and I would follow up after the registration of the names to be very sure there is no screw up in these registrations.

And does any of the above change your taxation responsibilities and or how/where the taxes must be paid.

And does it (on your death) introduce other taxation resposibilities for the survivor receiving the lump-sum or cotinuing regular income?

- On a different slant of this, some Australians declare themselves to be 'non-resident' with various Australian government agencies. I'm not sure what the full reasons, consequences or perhaps benefits are of doing this, but I do know that it cancels the possibility of being fined for not voting in elections etc.

But before doing this I would be very sure of what effects it might have on taxation.

NOTE: Are any Australian forum members aware of any changes to the laws about payment of old age or war service pensions for Australian citizens living off shore?

[vincent13]

Be careful, the Thai tax code is written such that any money (pension) derived from sources outside Thailand and remitted to Thailand in a given tax year is assessable income. Best to keep your money outside Thailand for at least 1 year. Not usually enforced for retirees, but still the law. Does Australia have a tax treaty with Thailand?

No tax treaty between Australia and Thailand. I don't mind paying tax in Thailand as it will be far less than if it is taxed in Australia. I know that Australian super pensions paid to Aussies who are residents of the Phillipines are not taxable in Australia. Can't seem to easliy find out what the situation is for Aussie expats who are resident in Thailand.

[lectito]

Be careful, the Thai tax code is written such that any money (pension) derived from sources outside Thailand and remitted to Thailand in a given tax year is assessable income. Best to keep your money outside Thailand for at least 1 year. Not usually enforced for retirees, but still the law. Does Australia have a tax treaty with Thailand?

No tax treaty between Australia and Thailand.

On the contrary, there is a tax treaty, signed in 1989, called "Agreement between Australia and the Kingdom of Thailand for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income". A copy is at austlii.edu.au/au/other/dfat/treaties/1989/36.html

You really need to talk with your accountant as to what the implications are of trying to declare yourself a non-resident.

[jackspratt]

Be careful, the Thai tax code is written such that any money (pension) derived from sources outside Thailand and remitted to Thailand in a given tax year is assessable income. Best to keep your money outside Thailand for at least 1 year. Not usually enforced for retirees, but still the law. Does Australia have a tax treaty with Thailand?

No tax treaty between Australia and Thailand. I don't mind paying tax in Thailand as it will be far less than if it is taxed in Australia. I know that Australian super pensions paid to Aussies who are residents of the Phillipines are not taxable in Australia. Can't seem to easliy find out what the situation is for Aussie expats who are resident in Thailand.

And further to the contrary, if you are under 60, your Australian super may be taxed - I know, because I pay tax.

If you are over 60, generally you will not be taxed in Australia. However, as you will be drawing a public service "pension", I believe it may be subject to tax, even if you are over 60. The reason, I understand, is that payments into (some) public service super funds are not taxed on the way in (unlike private enterprise funds), and are therefore taxed on the way out.

But I am not a tax professional - get some proper advice.

[antony77]

Be careful, the Thai tax code is written such that any money (pension) derived from sources outside Thailand and remitted to Thailand in a given tax year is assessable income. Best to keep your money outside Thailand for at least 1 year. Not usually enforced for retirees, but still the law. Does Australia have a tax treaty with Thailand?

No tax treaty between Australia and Thailand.

On the contrary, there is a tax treaty, signed in 1989, called "Agreement between Australia and the Kingdom of Thailand for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income". A copy is at austlii.edu.au/au/other/dfat/treaties/1989/36.html

You really need to talk with your accountant as to what the implications are of trying to declare yourself a non-resident.

I wrote to the tax authorities in Australia and told them I was residing permanently in Thailand. I got a ruling from them that my superannuation would not be taxable in Australia, they did say that it would be taxable in Thailand. But as a retiree I dont have to declare an income or pay tax. I do however declare this income in order to get a retirement visa

[seadoo]

I'm thinking about moving to Thailand to live. My income will be solely derived from an Australian superannuation pension once I retire (I'm currently an Australian Government employee). Will my super pension be taxed in Australia even thouigh I will ber a resident of Thailand? Thanks in advance for any advice.

What Kevin Rudd is retiring to Thailand - if that's the case, I'm moving back to Australia

Edited September 11, 2009 by seadoo

[david96]

If you claim your superannuation as an "allocated pension" you can get your allocated pension paid directly to your nominated bank account every month.

It will not be subject to Australian Income Tax. However if you withdraw all of your super you may be subject

to income tax.

You should check with your super fund as to the latest requirements as you are a public servant. Quote your account number if enquiring by telephone.

There is a tax treaty between Australia and Thailand. For infomation contact the ATO office.

Edited September 11, 2009 by david96

[InterestedObserver]

I wrote to the tax authorities in Australia and told them I was residing permanently in Thailand. I got a ruling from them that my superannuation would not be taxable in Australia, they did say that it would be taxable in Thailand. But as a retiree I dont have to declare an income or pay tax. I do however declare this income in order to get a retirement visa

Where in the Thai tax code does it say that retirees are exempt from Personal Income Tax. People residing in Thailand for more than 180 days per tax year are supposed to file a tax return and declare their assessable income. Just because the Thai tax authorities don't press the issue does not mean that retirees are exempt.

[samran]

Be careful, the Thai tax code is written such that any money (pension) derived from sources outside Thailand and remitted to Thailand in a given tax year is assessable income. Best to keep your money outside Thailand for at least 1 year. Not usually enforced for retirees, but still the law. Does Australia have a tax treaty with Thailand?

This would be his superannuation though, monies he has saved away during his working life based on the 9% super contribtion that all Australian tax payers make to their retirement accounts (ie it is his money saved up compulsorily over many years). As such, I dare say that the monies have been sufficently 'rested' outside of TH for more than a year.

[vincent13]

All advice and comments much appreciated.

Thanks lectito for pointing out there is an Australia-Thailand Taxation Treaty. Had a quick look but not being a lwayer it's difficult to understand.

Thanks antony77 about the ATO ruling you obtained. Mine will be a "public service" pension. Is your pension something similar or privately funded?

I will write to ATO and seek some advice. I will post on this forum once I receive it.

[lectito]

You really should sit down with an accountant or financial planner, to discuss all the implications of declaring yourself as being a non-resident for tax (and Medicare Levy) purposes. In particular, after a period of time of being a non-resident you may find there are consequences in terms of whether you can access hospitals/doctors in Australia under Medicare.

[vincent13]

You really should sit down with an accountant or financial planner, to discuss all the implications of declaring yourself as being a non-resident for tax (and Medicare Levy) purposes. In particular, after a period of time of being a non-resident you may find there are consequences in terms of whether you can access hospitals/doctors in Australia under Medicare.

Thanks, I agree maybe unforeseen implications I haven't yet considered.

[newcomer01]

Each person is different and you need to see an accountant and or inquire with the ATO.

Any income earned in Australia is taxable the only thing is the rate (sometimes 0). If you get any income in Australia you are required to do a tax return. If you live here you inform the Tax office on the first tax return and you will be deemed as a non resident for tax purposes. This means that if you have money in the bank and earn interest, you will pay 10%, have the bank deduct at source and the amounts do not go on the tax return. All shares that are fully franked are deemed as income tax paid hence they are not entered on the tax return. You do not pay the medicare levy. It doesn't really matter even if you paid you are not eligible after being out of the country for 5 years. They are quite happy to take the money though. So if you want to be covered medically you need insurance and if you are over 60 prepare to pay and arm and leg.

All income is then worked out and taxed at the rate for non residents. Rates available on the tax return and the ATO website. There is no non taxable amount. Income and deductions from properties are are done the same on the tax return.

With the means testing you probably wouldn't get the old age pension anyway. War service pensions are payable anywhere and are subject to CPI increase. War service medical treatment last I heard is only available in Australia.

If for some obscure reason you get taxed here on your super in Thailand (which is 15%) then the amount paid here will be deducted from what is owed on the Australian tax. You noted that it was a government pension so it will depend on what age you are and how you are to receive it. Pretty good rule of thumb is if you had to pay tax on it if you were living in Australia you still will have to pay it if you live here. One old ways of the old ways of minimizing tax was to take it as a lump sump and tell the ATO you are leaving the country permanently. Make sure you check.

Best of luck!

[Nignoy]

Be careful, the Thai tax code is written such that any money (pension) derived from sources outside Thailand and remitted to Thailand in a given tax year is assessable income. Best to keep your money outside Thailand for at least 1 year. Not usually enforced for retirees, but still the law. Does Australia have a tax treaty with Thailand?

No tax treaty between Australia and Thailand. I don't mind paying tax in Thailand as it will be far less than if it is taxed in Australia. I know that Australian super pensions paid to Aussies who are residents of the Phillipines are not taxable in Australia. Can't seem to easliy find out what the situation is for Aussie expats who are resident in Thailand.

And further to the contrary, if you are under 60, your Australian super may be taxed - I know, because I pay tax.

If you are over 60, generally you will not be taxed in Australia. However, as you will be drawing a public service "pension", I believe it may be subject to tax, even if you are over 60. The reason, I understand, is that payments into (some) public service super funds are not taxed on the way in (unlike private enterprise funds), and are therefore taxed on the way out.

But I am not a tax professional - get some proper advice.

I am australian receive age pension and diverse other small over seas pensions, australian pension is taxfree but anyother offshore income no matter how small is taxed at 49 cents on the dollar!! soon to go up up to 55cents on the dollar, please believe me Centrelink are fast becoming the daylight robbers of the computer age, being able to access all bank accounts concerning australian citizens on and of shore(1exception is OLD CROC) we know he keeps his money underguard in Swiss and Cayman islands

[someoneelse]

First, as an Australian tax professional - please seek your own professional advice. About a third of the information above is correct, and the rest is misleading or downright wrong.

That being said, subarticle 19(2) of the DTA with Thailand (Schedule 30 of the International Tax Agreements Act 1953) would appear to apply to your situation (receipt of an Australian government pension in Thailand):

"2. Any pension paid to an individual in respect of services rendered in the discharge of governmental functions to [Australia] shall be taxable only in [Australia]. Such pension shall, however, be taxable only in [Thailand] if the recipient is a resident of, and a citizen or national of, [Thailand]."

So, unless the OP will be a citizen of Thailand, under the treaty the pension should be taxable only in Australia (which it should be, given that it will be paid from an untaxed source).

However, you should seek Thai tax advice as well - each country has discretion as to how the terms of the treaty are applied. As an example, section 6 of the Act provides that Article 23 of the US-Australia DTA has no force of law in Australia (there are no such disclaimers in respect of the Thai agreement).

[vincent13]

Have sought a ruling from the ATO. Will post the outcome on forum.

Someoneelse and Jackspratt - I take your point about the pension being paid from an "untaxed source". The pension is comprised of the employer contribution which is not taxed "on the way in".

However, I have sighted ATO rulings where Australian Government/Comsuper pensions are non-taxable in Australia for residents of the Phillipines or New Zealand.

The outcome I'm looking for is to pay tax on it in Thailand rather than Australia, on the assumption that it will be subject to significantly less tax in Thailand.

[BillyBloggs]

On 9/10/2009 at 6:44 PM, scorecard said:

You mighty like to get some quite specific advice on this from Australia, in regard to being offshore (and I'm assuming you mean permanently).

For example:

- Australians cannot get an old age pension or a war veterans pension unless you are full time resident in Australia (unless the rules have changed within the last 12 months).-

 

You are eligible for an old age pension its pro rata to the time you have been in Australia, if you live overseas and have for sometime for over at least 3 years to claim you must be in Australia and if you meet the criteria you are granted a pension, now to take it overseas you must stay for 2 years in Australia, you can leave for up to 6 weeks but as soon as you leave the pension stops and starts again when you get back, stay out longer than 6 weeks and you start the 2 years over again, the time you are outside isnt added to the 2 years.

 

[scorecard]

8 hours ago, BillyBloggs said:

 

 

There's more details.

 

If the pensioner has qualified for 'portability' then that pensioner can receive their OAP payments transferred permanently by international funds transfer from C'link directly into an offshore bank account of their choice every 4 weeks for life. 

 

Mine goes directly into a K Bank savings account, every 4 weeks.

[georgegeorgia]

On 3/1/2024 at 3:03 AM, scorecard said:

 

There's more details.

 

If the pensioner has qualified for 'portability' then that pensioner can receive their OAP payments transferred permanently by international funds transfer from C'link directly into an offshore bank account of their choice every 4 weeks for life. 

 

Mine goes directly into a K Bank savings account, every 4 weeks.

Absolutely

You Sir are a genius too 👍

[dinga]

On 9/15/2009 at 6:04 PM, vincent13 said:

Have sought a ruling from the ATO. Will post the outcome on forum.

Someoneelse and Jackspratt - I take your point about the pension being paid from an "untaxed source". The pension is comprised of the employer contribution which is not taxed "on the way in".

However, I have sighted ATO rulings where Australian Government/Comsuper pensions are non-taxable in Australia for residents of the Phillipines or New Zealand.

The outcome I'm looking for is to pay tax on it in Thailand rather than Australia, on the assumption that it will be subject to significantly less tax in Thailand.

Did you ever get that Ruling???