Retirement Visa

[maewang99]

Thailand's response to recent politics and the global economy favors a "welfare state". This will affect compliance.... except for Marc Faber who like most of his class has professionals that know all the ins and outs of showing he was never here for 180 days in any one year, what might regular folks need to start thinking about, if anything at all, about paperword showing income of at least 80,000 baht a month? The double tax treaty merely gives us teh same rights as a Thai filing a US tax return (but in fact is unenforceable) and does nothing to preclude having to file a Thai tax return. I happen to know that I am one of the very few of Americans who files in Chiangmai. Seems funny. Or maybe not funny at all.. but I can't help wondering about these obvious dominoes getting louder (to an x-enrolled IRS agent).

[MikeOKitches]

Thanks for the post.

Even in Thailand, looks like USA guys can't escape the long tenacles of the IRS.

Back here in the good 'ole USA, the current administration is scouring the globe for every single USA citizen for every tax dollar possible.

Someone's got to pay for the government cheese and slurpees needed here for Paco, Leroy and the rest of the rabble here (especially in California).

[thaihome]

Interesting post. It sounds like you are referring to the income needed to be proved to obtain an extension for retirement and if Thai income tax is due on it requiring a Thai tax return to be filed. I believe that the Thai Revenue Dept exempts such foreign income if it is income from the previous year(s) and income tax in your home country was paid on it.

TH

[Naam]

Interesting post. It sounds like you are referring to the income needed to be proved to obtain an extension for retirement and if Thai income tax is due on it requiring a Thai tax return to be filed. I believe that the Thai Revenue Dept exempts such foreign income if it is income from the previous year(s) and income tax in your home country was paid on it.

TH

a slightly different version (not mentioning any taxes already paid abroad) is published since years by tax solicitors even though Thai Tax Law does NOT provide for any exemption. however, day-to-day practice demonstrates that foreigners living in Thailand based on retiree visas are not asked to pay any tax on income generated abroad no matter whether the money was already taxed and irrespective of the date it was transferred to Thailand.

de jure this practice is a violation of Thai tax laws, de facto... This Is Thailand

p.s. years ago when i was a newbie resident i was trying to pay income tax but... i was not allowed

[Maestro]

I believe that the de jure part of it depends on what the bilateral double taxation agreement says. Switzerland's agreement, for example, says that government pensions are taxed in the country that pays the pension. Therefore, even if I lived full time in Thailand and had the pension payments remitted directly to a bank account in Thailand, I would not be allowed to pay taxes on it in Thailand if I wanted to.

[Naam]

I believe that the de jure part of it depends on what the bilateral double taxation agreement says. Switzerland's agreement, for example, says that government pensions are taxed in the country that pays the pension. Therefore, even if I lived full time in Thailand and had the pension payments remitted directly to a bank account in Thailand, I would not be allowed to pay taxes on it in Thailand if I wanted to.

that pensions, based on double tax agreements, are not taxed is understood. however, i am referring to income not related to any pension or social insurance payments but generated offshore and then transferred to Thailand. the present practice seems to assume that retirees have no other income than pensions and that these retirees hail from countries that have signed a DTA with Thailand.

that's fine with me and i am not really complaining that i am not "allowed" to pay taxes on my income, respectively on the amount i transfer to Thailand every year. what i wanted to avoid is somebody telling me one rainy day that i am a tax evader, have violated thai laws for years and should therefore be deported after being punished.

[maewang99]

You remember weird stuff. I easily remember a night school class in the US of an appeal that hinged only on whether being in transit at a US airport between planes, but not leaving the airport, counted or did not count as a day towards the residency test or not. someone had stretched the rules right up to 180 days and were worth pursuit.

many countries are based on residency, not nationality. Thailand is one of them and they must begin to tighten up on revenues. it's not just a fad, the US is next.

there are unspoken issues involved but noone has managed to post anything to clue me in on anything different.

[JetsetBkk]

Can someone please delete this topic?

I hate to see the words "Thai tax" and "Retirement visa" used in the same sentence.

Let sleeping dogs lie, for chrissake.

[maewang99]

well I'll be darned. if it's a pension or social security, it's exempt by the US-Thai convention, article 20. I've read the convention before but for something else.

so as a general thing, it's true that a pension is not taxed by Thailand. however, teh small issue of whether other income is taxable and whether a Thai tax return should be filed, or could be required still stands. they will need to get tougher, in fact, just to be entirely fair.

ARTICLE 20

Pensions and Social Security Payments

1. Subject to the provisions of paragraph 2 of Article 21 (Government Service), pensions and other

similar remuneration paid to a resident of a Contracting State in consideration of past employment shall

be taxable only in that State.

2. Notwithstanding the provisions of paragraph 1, social security benefits and other similar public

pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the

United States shall be taxable only in the first-mentioned State.

[Naam]

The double tax treaty merely gives us teh same rights as a Thai filing a US tax return (but in fact is unenforceable) and does nothing to preclude having to file a Thai tax return. I happen to know that I am one of the very few of Americans who files in Chiangmai. Seems funny.

interesting! do you file a return concerning income outside Thailand? if yes, what kind of income, pension/social security or generated by investment?

[Thanyaburi Mac]

The double tax treaty merely gives us teh same rights as a Thai filing a US tax return (but in fact is unenforceable) and does nothing to preclude having to file a Thai tax return. I happen to know that I am one of the very few of Americans who files in Chiangmai. Seems funny.

interesting! do you file a return concerning income outside Thailand? if yes, what kind of income, pension/social security or generated by investment?

Naam

I file my IRS 1040 each year and do pay (not too happily) tax on my U.S. federal retirement/pension, plus tax on interested earned in bank accounts and IRA withdrawals.

I'm on a retirement extension of my Non-O visa and have been since May 1998.

Mac

[Naam]

The double tax treaty merely gives us teh same rights as a Thai filing a US tax return (but in fact is unenforceable) and does nothing to preclude having to file a Thai tax return. I happen to know that I am one of the very few of Americans who files in Chiangmai. Seems funny.

interesting! do you file a return concerning income outside Thailand? if yes, what kind of income, pension/social security or generated by investment?

Naam

I file my IRS 1040 each year and do pay (not too happily) tax on my U.S. federal retirement/pension, plus tax on interested earned in bank accounts and IRA withdrawals.

I'm on a retirement extension of my Non-O visa and have been since May 1998.

Mac

that goes without saying Mac because [un]fortunately you are a citizen of the Greatest Nation on Earth™ we are however talking about paying taxes to the Thai authorities on income generated by own investment which is not taxed by another country or covered by a double tax agreement.

p.s. in my view it's only a matter of time till european countries, the first one perhaps my home country Germany, will introduce income tax liability on the basis of citizenship. then those of us who live tax free in Thailand will stop pitying U.S. citizens and grind their teeth unless... they have already taken the necessary steps to jump that hurdle.

[rakman]

p.s. years ago when i was a newbie resident i was trying to pay income tax but... i was not allowed

But you do (as everyone else does) pay the VAT tax. I'm sure that raises more revenue than all the income taxes in Thailand, since everyone pays.

And yes, the only way to get out from under the IRS thumb and paying US taxes, where ever you live in the world, is to renounce US citizenship and become a legal resident of a different country. If one has enough money, one can become a legal resident of many countries....

[dancw3]

well I'll be darned. if it's a pension or social security, it's exempt by the US-Thai convention, article 20. I've read the convention before but for something else.

so as a general thing, it's true that a pension is not taxed by Thailand. however, teh small issue of whether other income is taxable and whether a Thai tax return should be filed, or could be required still stands. they will need to get tougher, in fact, just to be entirely fair.

ARTICLE 20

Pensions and Social Security Payments

1. Subject to the provisions of paragraph 2 of Article 21 (Government Service), pensions and other

similar remuneration paid to a resident of a Contracting State in consideration of past employment shall

be taxable only in that State.

2. Notwithstanding the provisions of paragraph 1, social security benefits and other similar public

pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the

United States shall be taxable only in the first-mentioned State.

Does this discussion make any sense? For income to be used to meet the 80,000 baht requirement for a retirement visa, it can't be earned in Thailand. Why would you get taxed by Thailand on income earned outside of Thailand, when your not a Thai citizen? Are there people out there who want to pay more tax? If so, why don't you come to the USA. I'm sure neither federal, state or local governments would turn down any tax money you sent them.

Come to think of it, I just picked up the 80,000 baht/month from a previous post. Unless its changed recently its 800,000 baht a year or 66,600 baht/month.

[lopburi3]

It is 65k per month - it has never been 66.6k.

[keith7777]

It is 65k per month - it has never been 66.6k.

I guess we should leave this alone, but my question is where do you pay tax on interest paid by thai banks on money deposited in a savings account. Just thought I would ask as I have no idea and I do have a large account?????

[lopburi3]

The money is taken out of your account by bank if tax payment is required. Should be listed as a line item in passbook. Most regular savings accounts are not large enough to draw tax and that may result in withdrawal and than deposit back.

[oldgeezer]

When I first retired in Thailand, the 65,000 baht equalled about $1550. Now it is the equivalent of $2170 a month. If they dont change the requirement, and if the baht gets much stronger, I will no longer qualify for a retirement extension.

Has anyone heard talk of changing the amount required for a retirement visa?

[lopburi3]

You can always deposit money in a bank account to make up the difference if short using income. Total of deposit and income must be 800k

[Billmont]

Recent changes in the UK tax law, by recent I mean several years, by the introduction of The Non_Resident Landlord tax section means that tax has to be paid on any rent irrespective when the landlord lives. When I lived in Cyprus in the 1990's I recevied my rent free of tax. Now you must apply and get agreement from HMRC to pay the tax yourself otherwise HMRC instructs tenants to deduct tax and pay same to them. The Landlord then has to file a return to claim any expenses that are allowed in order to reduce the tax and obtain a rebate. Also in the UK Private Pensions are taxed at source but this can be overcome by transferring your pension into a QROPS (Qualifying Recognised Overseas Pension Scheme) where the pension is paid without deduction of tax. There is also talk about the UK charging Tax to all British Citizens irrespective of Country of residents but this is some way off at the moment. Then if a double taxation agreeement exists the tax payer has a choice, albeit not a good one, to pick the country with the most favourable tax rates. I am not a tax specialist, this is just information I have been given.

[Pib]

We could all "what-if" ourselves to an early grave if worrying too much about what-if tax law/treaty/policy changes.

[Naam]

We could all "what-if" ourselves to an early grave if worrying too much about what-if tax law/treaty/policy changes.

some cases warrant a "what if" thinking to be prepared "in case of". imagine "what if" the thai authorities come up with the idea of asking back taxes for the last decade if somebody has lived her 10 years?

[Naam]

would any of the moderators be kind enough and merge this thread with

Edit - no need for move and merge makes a mess as posters only had half the story.