Norwegian pensioners abroad – 15% tax

[Max2000]

15% more tax for Norwegian pensioners living in Thailand.

The Norwegian goverment has decided that all Norwegian pensioners living in Thailand, must pay a new tax of 15% to Norway, starting 01 January 2010

This applies to both sosial security and disability benefits.

Most pensioners will get equal to THB 10.000 - 25.000 THB less per month in pension from this New Year.

The new 15% tax is automatically deducted from all Norwegian pensioners in Thailand, unless they can prove that they pay tax in Thailand or other country abroad. No less than 15%.

Norwegian authorities also require that the Norwegians submit a "Certificate Of Residence" and also proof of paid tax in another country.

Citizens of Norway who wish to submit a complaint can contact me by PM (private message) for links related to this case, and email adresses to the Finance and Prime minister in Norway.

Mods: please allow this thread as it concerns all Norwegians pensioners living in Thailand.

[galvheim]

This is the Norwegian tax-tyranny as usual. No-one is to escape from these maniacs. I don't know, but I think many will come below the 15'000 NOK pr. month mark set by Thai-officials as the limit of income to be admittet their 1 year retirement-visas.

[Max2000]

"Equality for all" is their reason. No one should be able to escape from the tax, wherever they live. This is how they justify it.

Interesting though that those with small pensions in Norway get tax exemption = 0% tax.

However if the same person choose to move abroad, they will get deducted minimum 15% tax.

Pensioners say they have already paid tax on their salary when they was working, so tax deduction also on pension are in fact double taxing.

Many retirees receive very small pensions so they have to apply social security as well. Many of them move to a cheaper country. That option is now less interesting after the new tax.

An earlier prime minister moved abroad, and the people found out that the person did not pay any tax to Norway. People were furious and demanded that the ex-minister also should pay tax.

So the Goverment had to implement a new law says minimum 15% tax for all. But if you choose to live in Norway, tax exemption is still possible for those with lowest pensions.

A Norwegian who pay tax i.e 7% to Thailand, must pay a additional 8% to Norway, so the total minimum is 15%.

Norway is one of the most expensive country in the world. An average low income industrial worker pays 33% tax. If you put in some extra hours at work, you get punished even harder.

My dad paid 61% tax!

There are tax heaven, and there is tax hel_l.

Edited December 8, 2009 by Max2000

[Nignoy]

If 15 or 20% extra tax is all you have to worry about, for gods sake dont retire to Australia, australian citizens who also have an overseas pension or income from investments, have from 49% minimum to 62% maximum deducted from those incomes!! immaterial if you pay tax at source or not, and any yearly increases which are not registered within 28 days of receipt personally by the recipient, letter, email or phonecall is not enough, result in pension stoppages,

[Maestro]

Off-topic posts about f*uck, crime, US war funding sales tax and global warming and the replies to them have been deleted.

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Maestro

[Maestro]

Please note that the topic title is wrong. Reading the attachment to the OP, you will see that it is about a 15% tax on Norwegian pension income, not an increase in an already existing tax. Also, it appears that this tax notification applies to all Norwegian pensioners resident outside Norway, not only those resident in Thailand. The correct topic title would seem to be "Norwegian pensioners abroad – 15% tax"

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Maestro

P.S. Topic title changed.

Edited December 8, 2009 by Maestro
Added postscript - Maestro

[Maestro]

Max2000, I wonder whether Norwegian pensioners resident in Norway also must pay income tax on their pension income.

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Maestro

[Maestro]

Let’s look at the practical side of it. So there is going to be a withholding tax of 15% on Norwegian pensions paid abroad, but if the recipient can prove that he pays income tax on it in another country he can claim a refund from the Norwegian tax man if there is a double-taxation agreement..

The first question obviously is: do Norway and Thailand have a double-taxation agreement?

Max2000, why don't you call your consulate and find out? (I cant find anything on the web)

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Maestro

[Maestro]

This is the Norwegian tax-tyranny as usual. No-one is to escape from these maniacs. I don't know, but I think many will come below the 15'000 NOK pr. month mark set by Thai-officials as the limit of income to be admittet their 1 year retirement-visas.

What effect does this have on the Norwegian withholding tax? The attachment to the OP does not mention a minimum monthly pension amount for the withholding tax. (Discussion of income requirement for retirement extension in Thailand is off topic here)

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Maestro

[taxout]

Do Norway and Thailand have a double-taxation agreement?

Yes.

http://www.rd.go.th/publish/782.0.html

[Max2000]

The topic title was not wrong.

Many norwegian pensioners in Norway and abroad with low pension had until 31.12.2009 Zero% tax.

Therefore 15% more tax in the title was correct.

Its a NEW TAX, starting 1.1.2010 and I myself did not not know anything about it before last week, therefore again "more tax" is correct for all those who had 0% tax until now.

Norway pensioners in Norway only have to pay tax IF their pension is above a minimum level. The Authorities look at the individuals debts, as this can lead to 0 % tax, or "freecard" as we say locally.

Don't need to contact consulate, Norway and Thailand do now have a tax agreement. This topic is avaiable on the Norwegian tax authorities webpage as well as the Government webpage.I have many links related to this topic, I waiting for answer from Mods if they allow it or not. The Links are all in norwegian though.

It appears that there is no minimum amount. All pensioners who receive any kind of pensions will be deducted this 15% tax.

My sole purpose for this topic was to inform my own countrymen living in Thailand. Not to discuss it in public, but rather by private message. As mentioned, I received the first info about this new Tax last week. Loosing 10-25.000 Baht per month might be a serious problem for many.

Edited December 8, 2009 by Max2000

[Max2000]

Edit: I got ok fra Admin, here are the government links:

http://www.skatteetaten.no/no/Artikler/200...att-pa-pensjon/

http://www.regjeringen.no/nb/dep/fin/tema/....html?id=547283

I will not debate this topic, it's not Thailand related and against Forum Rules.

People from Norway living in Thailand can send me a private message.

[Maestro]

Now that it is confirmed that there is a double taxation agreement between Thailand and Norway we should look at how one can get a Thai tax ID and pay taxes in Thailand without having a work permit. From topics on this subject in the past I believe it is possible and it should result in a lower tax amount than the 15% Norwegian withholding tax on the full pension amount, because personal and family deductions are allowed in Thailand. I don’t remember the details but other members will surely come and post them.

1. How to get a Thai tax ID?

2. What is the income tax rate in Thailand?

This information will be useful also to citizens of other countries who are subjected to a similar system as the Norwegians.

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Maestro

[Maestro]

...My sole purpose for this topic was to inform my own countrymen living in Thailand. Not to discuss it in public, but rather by private message...

This is wrong. ThaiVisa is for public discussion and this topic is of general interest. If you want a private discussion you can go on Facebook and make people register to join.

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Maestro

[LaoPo]

Now that it is confirmed that there is a double taxation agreement between Thailand and Norway we should look at how one can get a Thai tax ID and pay taxes in Thailand without having a work permit. From topics on this subject in the past I believe it is possible and it should result in a lower tax amount than the 15% Norwegian withholding tax on the full pension amount, because personal and family deductions are allowed in Thailand. I don’t remember the details but other members will surely come and post them.

1. How to get a Thai tax ID?

2. What is the income tax rate in Thailand?

This information will be useful also to citizens of other countries who are subjected to a similar system as the Norwegians.

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Maestro

From the Thailand/Norway tax treaty, article 18:

http://www.rd.go.th/publish/1764.0.html#article18

"1. Pensions (including Government pensions and payments under a social security system) and annuities paid to a resident of a Contracting State shall be taxable only in that State."

note: The tax treaty had a: Last update : Friday, December 15, 2006

LaoPo

[Maestro]

Thank you for ferreting that out, Lao Po. If that tax treaty of 2006 is still in force one might wonder if the new Norwegian withholding tax for citizens who have established their tax residence in Thailand is even legal. Perhaps it is, because the Norwegian government allows an exemption from, or a reduction of, the withholding tax if the pension income is declared as income in the country of residence.

From the notification attached to the OP:

You may be entitled to full or partial tax exemption pursuant to the tax treaty with the country in which you are resident.

Based on the clause in the tax treaty between Norway and Thailand – always assuming that this is the version still valid today – a Norwegian paying his tax in Thailand would be fully exempt from the withholding tax, even if the tax payable under the Thai tax laws were less than 15%.

I saw a link once to a web page giving information about the rates of personal income tax in Thailand and permissible deductions. I don’t have that link any more and think it would be useful if somebody could post it here.

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Maestro

[Maestro]

…Pensioners say they have already paid tax on their salary when they was working, so tax deduction also on pension are in fact double taxing…

In many European countries the contributions paid to retirement funds are allowed dedutcions from the gross income and thus this part of the gross income is not part of the taxable income of the employed taxpayer. I wonder if this deduction is also allowed in Norway. This is usually the reason that a government gives for the addition of the income from pensions to the total income for the purpose of calculating the taxable income.

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Maestro

[moe666]

They pay a high tax but look at the social welfare system they have.

[Maestro]

I did a search on all my hard disks and found the link to the web page about personal income tax on the website of the Thai Revenue Department:

http://www.rd.go.th/publish/6045.0.html

This topic, which Max2000 has kindly brought to our attention, has been running for three days now and we have not heard from any Norwegian retiree in Thailand. If there aren’t any, or if none of them is reading this topic, I might as well cease my efforts to find ways of minimising their tax on the Norwegian pension income. There definitely appear to be ways of paying less than the 15% Norwegian withholding tax.

On the other hand, as an academic exercise, it may be worthwhile to continue this research. It is one of my hobbies to avoid (legal) – not evade (illegal) – taxes as much as possible.

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Maestro

[LaoPo]

I did a search on all my hard disks and found the link to the web page about personal income tax on the website of the Thai Revenue Department:

http://www.rd.go.th/publish/6045.0.html

This topic, which Max2000 has kindly brought to our attention, has been running for three days now and we have not heard from any Norwegian retiree in Thailand. If there aren’t any, or if none of them is reading this topic, I might as well cease my efforts to find ways of minimising their tax on the Norwegian pension income. There definitely appear to be ways of paying less than the 15% Norwegian withholding tax.

On the other hand, as an academic exercise, it may be worthwhile to continue this research. It is one of my hobbies to avoid (legal) – not evade (illegal) – taxes as much as possible.

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Maestro

.....I'm not so sure (talking about your last bold sentence) if the Government withholds the 15% before paying/distributing the payment out.

I also doubt if the Thai government could tax the pension -again- since most pensions are already taxed (in European countries) when they're paid out.

But, I'm not an expert on the Norway/Thailand tax treaty

LaoPo

[jackr]

Paying tax on a pension while living overseas... that is just morally wrong. You work all your life, get taxed to the hilt and are then squeezed some more for the benefit of others.

[WeeGB]

Mastro wrote:

" On the other hand, as an academic exercise, it may be worthwhile to continue this research. It is one of my hobbies to avoid (legal) – not evade (illegal) – taxes as much as possible. "

Now that's a hobby worth pursuing.

Shame on the Norwegian government for introducing this tax. I've met many Norwegians here in Thailand over the years, invariably they are nice people, good luck to them in avoiding this outrageous new tax.

I agree with jackr, paying taxes on a pension you have worked all your life for is morally wrong.

[PoorSucker]

They pay a high tax but look at the social welfare system they have.

Like the hospitals, where 60% of money put in goes to administration.

[Maestro]

... I might as well cease my efforts to find ways of minimising their tax on the Norwegian pension income. There definitely appear to be ways of paying less than the 15% Norwegian withholding tax.

.....I'm not so sure (talking about your last bold sentence) if the Government withholds the 15% before paying/distributing the payment out.

I also doubt if the Thai government could tax the pension -again- since most pensions are already taxed (in European countries) when they're paid out.

Normally, a tax authority collects a withholding tax for payments to persons with tax residence abroad and then leaves it to the tax payer whether or not to claim a refund. Based on the notification attached to the OP, for the pension payments the Norwegian government handles it slightly differently: the recipient of a Norwegian pension with tax residence in Thailand may apply for an exemption to the withholding tax under the terms of the double-taxation treaty and if this exemption is granted the fund will not withhold the Norwegian withholding tax.

The pension payer shall deduct 15 per cent tax from the gross pension amount.

...

You may be entitled to full or partial tax exemption pursuant to the tax treaty with the country in which you are resident.

The way I read it, this gives the recipient of a Norwegian pension with tax residence in Thailand these two choices:

1. Do nothing, ie tacitly accept the deduction of 15% Norwegian withholding tax.
   
2. Apply for an exemption to the 15% withholding tax. He would have to find out from his pension fund in what form and with what supporting documents this application needs to be made.
   

Under the double-taxation treaty the recipient of the Norwegian pension with tax residence in Thailand has the obligation to declare this pension income to the Thai tax authorities.

1. Pensions (including Government pensions and payments under a social security system) and annuities paid to a resident of a Contracting State shall be taxable only in that State.

Of course, it is up to the pension recipient whether or not to comply with this requirement. I hope somebody will go through this procedure and then report his experience here.

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Maestro

[Maestro]

… paying taxes on a pension you have worked all your life for is morally wrong.

It would indeed be nice if governments did not collect tax on income from pensions. In the context of this topic this leads to the question if pension income is considered “assessable income” in Thailand for the purpose of personal income tax calculation. From this web page of the Thai Revenue Department:

Assessable income is divided into 8 categories as follows :

(1) income from personal services rendered to employers;

(2) income by virtue of jobs, positions or services rendered;

(3) income from goodwill, copyright, franchise, other rights, annuity or income in the nature of yearly payments derived from a will or any other juristic Act or judgment of the Court;

(4) income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a juristic company, juristic partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings;

(5) income from letting of property and from breaches of contracts, installment sales or hire-purchase contracts;

(6) income from liberal professions;

(7) income from construction and other contracts of work;

(8) income from business, commerce, agriculture, industry, transport or any other activity not specified earlier.

Is it perhaps “(8) income from… other activity not specified earlier”?

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Maestro

[Felt 35]

Maestro

I don’t know but I think many pensioners have resigned because of a very short time frame to get all the documentation required to avoid to pay the extra 15% source tax to Norway and to arrange all the documents showing that they pay tax to Thailand.

We are also talking about pensioners (old age)here and there is quite a lot of documentation I believe many don’t even know how to get, if at all possible to get. Example, how do you get a Thai tax id living here on multiple non immigrant visa which many do!

Below is some of what the Norwegian tax authorities demanded ready to 1. January 2010 and most pensioners first got information about it end of November.

Certificate of Residence from the tax authorities in Thailand.

A self declaration stating that the pension will be declared for taxation in Thailand 2010.

Documentation that pension received in 2008 is declared for taxation in Thailand.

Certificate of Residence must be issued by the tax authorities of Thailand and specifically confirm that the person Is living in Thailand on the basis of the taxation treaty with Norway. The confirmation must be in original and not older than 3 months.

The filed income tax returns e.g. P.N.D. 1, P.N.D. 90, P.N.D. 91, P.N.D. 93.

and the document called ”tax receipt”.

Income Tax Payment certificate is also required.

[manarak]

As long as the tax treaty is in force and says that the pensions can only be taxed in Thailand, Norway cannot levy tax on the pensions, because international treaties rank higher than national laws.

What happens in Norway is one more nail in the coffin for Europe's pension and welfare system.

And the baby boomers aren't even here yet!

I'm outta here as soon as possible.

[Felt 35]

As long as the tax treaty is in force and says that the pensions can only be taxed in Thailand, Norway cannot levy tax on the pensions, because international treaties rank higher than national laws.

me

Unfortunately is there an article in this treaty which will make the pensioners pay up one or another way.

Article 23

ELIMINATION OF DOUBLE TAXATION

3. In Norway, double taxation shall be eliminated as follows:

(e) Where, under any provision of this Convention, income is relieved from Norwegian tax and, under the law in force in Thailand, an individual in respect of the said income is subject to tax by reference to the amount thereof which is remitted to or received in Thailand and not by reference to the full amount thereof, then the relief to be allowed under this Convention in Norway shall apply only to so much of the income as is taxed in Thailand.

What happens in Norway is one more nail in the coffin for Europe's pension and welfare system.

Sure it is and it will be worse.

And the baby boomers aren't even here yet!

Then it probably will be impossible to emigrate with pension!

I'm outta here as soon as possible.

You better be quick

[manarak]

About the Double Taxation treaty Norway-Thailand:

I think the article you mentioned can be used to avoid tax if one has enough cash to buffer the pension for a year.

As far as I know, Thai tax law says that income derived from abroad and which stays abroad for a minimum of one year without being brought into Thailand is taxed at a rate of 0% in Thailand.

So, if one is able to buffer the income (i.e. effectively using monies made two years ago instead of using the pension immediately), Thai tax will be 0%, and at the same time the full income amount will have been declared in Thailand and fully taxed in Thailand (albeit at 0%). So, no portion of the income remains to be taxed in Norway.

Maybe specialists of Thai tax law can confirm this or tell me that I am totally off the mark.

About pensions:

In my country we STILL can opt for a lump sum instead of getting a pension, if we leave the country.

It is possible at any age, and that is what I will do.

Edited January 7, 2010 by manarak

[Felt 35]

In theory and before the new tax on source it could have been possible to avoid the Thai tax. (maybe its one of the reasons to that Norway now set a flat rate on source tax for everyone!)

However after the new rules started 1. January 2010 the only way Norwegian pensioners can avoid to pay the new tax to Norway is to prove that they pay tax in Thailand with all the necessary document mentioned in my first post.

If the pensioners not can prove that they pay tax in Thailand either its because of difficulties to find a way through the bureaucratic papermil here to do so or because of fear ending up paying even more tax than 15% to Thailand doesn’t really matter. Norwegian tax authorities will tax them the 15% source tax.