Tax On Pensions From Abroad

[Ai52b]

Hi all. I'm sorry if this has been a topic before but my search didn't bring any answers. I live here on a non-immigrant O retirement visa and has been living here for 6 years. I've never heard anybody mention anything about paying tax on pensions brougt into Thailand? I have been to a meeting with Revenue Department and they say they will start to tax all foreigners who is spending more than 180 days a year in LOS. Any comments?

[StreetCowboy]

I don't think "start" is the correct word.

Also, I think the threshold may be less than 180 days, but could well be wrong on that.

In my experience, pissed-up blokes in the pub don't necessarily provide the best advice on issues such as tax, and I doubt anyone else that posts in response to this thread will provide their credentials, evidence of sobriety and confirm that they are not in the pub; though to be sure, they are not in this one.

If you're really worried about getting stung for a massive tax bill, it might be worth putting your hand in your pocket and consulting a professional (while enjoying a game of trouser billiards)

SC

[ludditeman]

You don't bring your pension income into the country.

Let it accumulate in your home country, bring it in the next tax year.

Then it becomes 'savings' not 'income'

It's a very good reason to use the 800k in a Thai bank method for obtaining your retirement extension and not using a proof of income letter.

Edited October 8, 2011 by ludditeman

[Kwasaki]

' Hic ' I don't think this will happen ' Hic ' this Thai brandy is good ' Hic ' had awards you know but I think for cooking.

[Eff1n2ret]

Doesn't it depend on which country you come from and whether that country has a double taxation agreement with Thailand? - as the UK does - therefore if you have paid the tax in your own country you aren't taxed again in Thailand. Or does it work some other way?

[StreetCowboy]

Doesn't it depend on which country you come from and whether that country has a double taxation agreement with Thailand? - as the UK does - therefore if you have paid the tax in your own country you aren't taxed again in Thailand. Or does it work some other way?

I would hope that the UK does not deduct tax from the pensions of foreign pensioners, even if they are paid by UK companies into the bank accounts of the recipients. Personal tax is generally based on residence, and where the income is earned, but, as I understand, pensions are not considered as "earned income" until they are paid.

I can see now why I don't trust blokes like me, and prefer to consult a professional in the field. If you are worried about man-made fibres, I can offer you an overall risk assessment....

SC

[JimGant]

You don't bring your pension income into the country.

Let it accumulate in your home country, bring it in the next tax year.

Then it becomes 'savings' not 'income'

It's a very good reason to use the 800k in a Thai bank method for obtaining your retirement extension and not using a proof of income letter.

Good point. Specifically, pensions are subject to Thai taxation only if brought into Thailand in the year paid. And only if not protected from Thai taxation via a tax treaty.

For Yanks, government pensions are not taxable by the Thais according to the tax treaty. But private pensions are not specifically excluded. Thus, having your private pension paid directly to your Thai bank -- because it is brought into Thailand in the year paid -- could prove problematic. But, the tax treaty does provide against double taxation. So, if some how, Thai banks began withholding taxes on these funds, you'd get it back -- via tax credit on your US tax filing.

For non-Yanks, who don't pay taxes to their home countries because they're no longer residents there -- I might be worried that the Thais, with a little more sophistication, would start eyeballing any income streams coming into Thailand from any of these countries. And even with a tax treaty, where the bottom line is no double taxation -- well, if the home country is not doing any taxing, there's no double taxation taking place -- thus the Thais are free to jump in on income not specifically excluded.

Luddite's point about not using the income method is very valid, especially for those not paying taxes to the fatherland -- and might become even more so should Thailand become better able to sniff out new income sources from da farangs.

[Soutpeel]

If you are being taxed at source, and there is a reciprocal tax agreement in place (and you can prove all this) of course, then the Thai tax man will not bother you.

If you are being paid a pension which is not being taxed at source, ie its being brought into Thailand tax free, the Thai tax man is well within his rights to tax this money if the person concerend is in the country equal to or exceed 180 days. The law has always been there, but just not enforced

[billd766]

Doesn't it depend on which country you come from and whether that country has a double taxation agreement with Thailand? - as the UK does - therefore if you have paid the tax in your own country you aren't taxed again in Thailand. Or does it work some other way?

I would hope that the UK does not deduct tax from the pensions of foreign pensioners, even if they are paid by UK companies into the bank accounts of the recipients. Personal tax is generally based on residence, and where the income is earned, but, as I understand, pensions are not considered as "earned income" until they are paid.

I can see now why I don't trust blokes like me, and prefer to consult a professional in the field. If you are worried about man-made fibres, I can offer you an overall risk assessment....

SC

I am on a retirement visa extension

I receive a state pension, a military pension and a company pension.

I talked this over with the UK tax office and their reply was that as all 3 pensions were earned from the UK tax base I have to pay tax in the UK.

As their is a dual taxation agreement between the UK and Thailand and I am already paying tax I am not subject to paying tax in Thailand.

I would personally prefer to pay my tax in Thailand as I would pay less but alas, such is life.

Edited October 9, 2011 by billd766

[jagi00]

Doesn't it depend on which country you come from and whether that country has a double taxation agreement with Thailand? - as the UK does - therefore if you have paid the tax in your own country you aren't taxed again in Thailand. Or does it work some other way?

I would hope that the UK does not deduct tax from the pensions of foreign pensioners, even if they are paid by UK companies into the bank accounts of the recipients. Personal tax is generally based on residence, and where the income is earned, but, as I understand, pensions are not considered as "earned income" until they are paid.

I can see now why I don't trust blokes like me, and prefer to consult a professional in the field. If you are worried about man-made fibres, I can offer you an overall risk assessment....

SC

I am on a retirement visa extension

I receive a state pension, a military pension and a company pension.

I talked this over with the UK tax office and their reply was that as all 3 pensions were earned from the UK tax base I have to pay tax in the UK.

As their is a dual taxation agreement between the UK and Thailand and I am already paying tax I am not subject to paying tax in Thailand.

I would personally prefer to pay my tax in Thailand as I would pay less but alas, such is life.

I'm surprised that the UK HMRC is deducting tax if you are no longer resident in UK. I also have a military pension which is paid gross as I am no longer resident in UK and the same should apply to my state and private pensions when I claim them. It may be worthwhile checking on the requirement to qualify as non resident for UK tax - how long have you been out of UK?

[Eff1n2ret]

Doesn't it depend on which country you come from and whether that country has a double taxation agreement with Thailand? - as the UK does - therefore if you have paid the tax in your own country you aren't taxed again in Thailand. Or does it work some other way?

I would hope that the UK does not deduct tax from the pensions of foreign pensioners, even if they are paid by UK companies into the bank accounts of the recipients. Personal tax is generally based on residence, and where the income is earned, but, as I understand, pensions are not considered as "earned income" until they are paid.

I can see now why I don't trust blokes like me, and prefer to consult a professional in the field. If you are worried about man-made fibres, I can offer you an overall risk assessment....

SC

I am on a retirement visa extension

I receive a state pension, a military pension and a company pension.

I talked this over with the UK tax office and their reply was that as all 3 pensions were earned from the UK tax base I have to pay tax in the UK.

As their is a dual taxation agreement between the UK and Thailand and I am already paying tax I am not subject to paying tax in Thailand.

I would personally prefer to pay my tax in Thailand as I would pay less but alas, such is life.

I'm surprised that the UK HMRC is deducting tax if you are no longer resident in UK. I also have a military pension which is paid gross as I am no longer resident in UK and the same should apply to my state and private pensions when I claim them. It may be worthwhile checking on the requirement to qualify as non resident for UK tax - how long have you been out of UK?

http://www.hmrc.gov.uk/incometax/tax-leave-uk.htm#3 Tax on UK pensions "If you're non-resident, you'll pay UK tax on your UK pensions - including your State Pension. You may not pay UK tax if the country you live in has a 'double taxation' agreement with the UK."

The inference from that is that you are liable to pay tax on your pension, either to the UK, or if there is a double taxation agreement to the country where you are resident. Whether or how Thailand bothers to come after you if you do succeed in declaring yourself non-UK resident for tax purposes, I would be interested to learn.

[cmjantje]

Thailand has the rule that no taxes have to be paid for old age benefits and benefits for previous income. This is a general Thai tax rule.

[astral]

Doesn't it depend on which country you come from and whether that country has a double taxation agreement with Thailand? - as the UK does - therefore if you have paid the tax in your own country you aren't taxed again in Thailand. Or does it work some other way?

It certainly works that way between the UK and Thailand.

The local revenue lady was not happy when I pointed it out.

The UK document can be ordered from the Stationery Office, and has the English and Thai translations.

Just show documentation to cover the taxed income.

The saving rule, is a strange one, but a valid reason for not paying tax.

180 days has been the law for years, but the Revenue dept may have been lax in applying it.

PS In calculating tax you do get a personal allowance, and for wife and children, if applicable.

[Beetlejuice]

I have been to a meeting with Revenue Department and they say they will start to tax all foreigners who is spending more than 180 days a year in LOS. Any comments?

Rubbish.

[StreetCowboy]

I have been to a meeting with Revenue Department and they say they will start to tax all foreigners who is spending more than 180 days a year in LOS. Any comments?

Rubbish.

That's not very helpful. As I understand it, anyone who was in Thailand for 180 days (maybe 183) or more is, and always was elligible to pay tax on their earnings.

Its well worth relying on professional advice, and the best research you are able to, in order to find out where you stand.

There's not many on this forum will claim to know as little as I do - as if they could!

SC

[PostmanPat]

I have been to a meeting with Revenue Department and they say they will start to tax all foreigners who is spending more than 180 days a year in LOS. Any comments?

Rubbish.

I concur with the "rubbish" comment. If you have no income here, there is nothing to tax! They cant tax a person on savings from another country transferred here bank to bank....that would be a nonsense, even in Thailand!

By the way, I am a retired former Government worker in UK and spent 30 years with Inland Revenue. A UK generated company pension is subject to UK tax in exactly the same way as a salary is. With a pension, the number of days out of UK is irrelevant I m afraid to say. Would love to get my pensions gross but cant and never will!!

[JimGant]

Thailand has the rule that no taxes have to be paid for old age benefits and benefits for previous income. This is a general Thai tax rule.

Maybe a general Thai tax rule -- for Thai pensions and Thai social security payments. I dunno, as I can't find any reference.

But for foreigners, "income received from foreign sources brought into Thailand in the same year received" is subject to Thai income tax -- unless exempted by treaty. And I can find nothing about age-related income/pensions being exempted.

I would personally prefer to pay my tax in Thailand as I would pay less but alas, such is life.

I think the UK is just like the US, in that you get a credit for Thai tax paid -- but pay the difference between that and what you owe to the higher-tax-rate fatherland. Your pocketbook won't know the difference -- but Thailand gets a piece of your action.

[cmjantje]

I was wrong. See: http://www.siam-legal.com/Business-in-Thailand/thailand-income-tax.php

[true blue]

does not matter how long your out of uk,if you recieve pensions from uk,

(oap,company pension,self employed pension annuities,226a,)ect,you are eligible for tax,of course if your income is below your tax code,you can claim a rebate.if they have taken tax at source.

[harrry]

http://download.rd.go.th/fileadmin/download/nation/australia_e.pdf

THis is the Australia Thailand tax treaty. It would be good if a lawyer could put the Pension section into simple english.

http://www.rd.go.th/publish/766.0.html

links to many treaties.

Edited October 12, 2011 by harrry

[rak sa_ngop]

does not matter how long your out of uk,if you recieve pensions from uk,

(oap,company pension,self employed pension annuities,226a,)ect,you are eligible for tax,of course

Many UK social security benefits are non-taxable. This includes:

War Disablement Pension, including allowances

War orphan’s pension and War Widow’s/Widower's pension

So if you receive one of these pensions and are not taxed by the UK government maybe you can be taxed by the Thai authorities???

[robblok]

does not matter how long your out of uk,if you recieve pensions from uk,

(oap,company pension,self employed pension annuities,226a,)ect,you are eligible for tax,of course

Many UK social security benefits are non-taxable. This includes:

War Disablement Pension, including allowances

War orphan’s pension and War Widow’s/Widower's pension

So if you receive one of these pensions and are not taxed by the UK government maybe you can be taxed by the Thai authorities???

That is why many put 400k or 800k in the bank so the government never asks for your earnings. So they dont know about them. If you do show them your earnings they might tax you in the future.

[astral]

I concur with the "rubbish" comment. If you have no income here, there is nothing to tax! They cant tax a person on savings from another country transferred here bank to bank....that would be a nonsense, even in Thailand!

Income - money received, especially on a regular basis, for work or through investments.

Oxford English Dictionary

Good luck trying to convince a tax official that the money you receive and live on is not Income.

BTW We are lucky in the UK that the government does not tax overseas income, the US does.

Whether the funds remitted to Thailand are subject to tax depends mainly on whether the funds

have already been taxed at source.

[robblok]

I concur with the "rubbish" comment. If you have no income here, there is nothing to tax! They cant tax a person on savings from another country transferred here bank to bank....that would be a nonsense, even in Thailand!

Income - money received, especially on a regular basis, for work or through investments.

Oxford English Dictionary

Good luck trying to convince a tax official that the money you receive and live on is not Income.

BTW We are lucky in the UK that the government does not tax overseas income, the US does.

Whether the funds remitted to Thailand are subject to tax depends mainly on whether the funds

have already been taxed at source.

Also if they are taxable at all. If its money you had before (savings) then they cant tax it. Its also hard for them to know if its savings or something else.

[cmjantje]

http://download.rd.g...australia_e.pdf

THis is the Australia Thailand tax treaty. It would be good if a lawyer could put the Pension section into simple english.

http://www.rd.go.th/publish/766.0.html

links to many treaties.

Hi Harry!

The section means that if you have a pension or an annuity living in Thailand for more than 183 days (being a Thai resident) you have to pay taxes in Thailand.

The term annuity means all the money you get e.g. from some kind of insurance or whatever, from former labor like disablility paid by a government or by a (semi) private company is taxed in Thailand also. You have to pay both for a Lump Sum (money received only one time to "buy you of" or paid e.g. per year, quarter, month.

I hope this is clear for you

[GreenSnapper]

Pay your pension into a Singapore account.

Then you transfer only the money earned last year to Thailand. This will be tax free.

How can the tax office know which dollar is from last year and which from this year?

They cannot and they don't care.

If Thailand would start taxing me, in a few days I'd be over to Malaysia.

[StreetCowboy]

Pay your pension into a Singapore account.

Then you transfer only the money earned last year to Thailand. This will be tax free.

How can the tax office know which dollar is from last year and which from this year?

They cannot and they don't care.

If Thailand would start taxing me, in a few days I'd be over to Malaysia.

Let's hope they don't start taxing you, then.

SC

[theoldgit]

Has anybody actually persuaded the HMRC in the UK to let them have their pensions paid without tax and then paid tax in Thailand?

If so, do you think you were better off?

[Ai52b]

I was wrong. See: http://www.siam-lega...-income-tax.php

This is the very same law firm that told me I didn't have to pay tax on a non-immigrant O retirement visa.

"Thank you for contacting Siam Legal International regarding your recent inquiry. Please be advised that you don't have to pay taxes when you are in a retirement visa. The tax that I am referring to is the income tax return. But you will still be paying other taxes such as the value added tax (VAT) when you purchase goods and services."

Confused? I come from a country with tax agreement that gives Thailand sole right to tax my pension.

[JimGant]

Confused? I come from a country with tax agreement that gives Thailand sole right to tax my pension.

Not sure where you're from, but Norway is one such country whose tax treaty with Thailand states that all pension income (private and governmental) is taxable in Thailand -- *IF* brought into Thailand in the year received. Again, that key statement, which should preclude any expat's income from being taxed in Thailand. Some code citations:

In Thailand pension income is regarded as assessable income under Section 40 (1) of the Revenue Code. A resident of Thailand must declare his worldwide income on the basis that the income received from abroad in a tax year must be brought into Thailand within the same year, based on Section 41 paragraph 2 of the Revenue Code.

Somewhat awkward translation by the Thai revenue department -- but it definitely means, as explained elsewhere in this thread, that if you don't have your pension direct-deposited into Thailand, it would be almost impossible for Thai tax authorities to claim that your cash flow into Thailand is same-year pension monies. [And, of course, direct deposits of government pensions from countries whose tax treaties with Thailand exclude Thailand income tax -- like the US -- would be safe from the Thai revenuers.]

So, maybe Siam Legal is looking at the tax situation just from a practical standpoint, i.e., Thai tax authorities have no wish to waste time pushing a wet noodle. [And, if in the future they do decide to tighten-up, it would be relatively easy -- except for those living hand-to-mouth -- to have a plausible middleman in the cash flow to Thailand.]

Norway is an interesting example of just where some countries, who exclude taxes on non-residents, may be heading.

As mentioned, Norway gives Thailand the right to tax Norwegian pensions. So, until recently, a Norwegian expat could live in Thailand, on a cash stream attributable to a previous year, and pay neither Norway nor Thailand any income taxes. Sweet.

However, recently Norway imposed a withholding tax of 15% on *gross* Norway-related pensions being paid to non-resident expats. The only way to get relieve -- in the case of Thailand expats -- is to show a Certificate of Residency, and a receipt for Thai taxes paid. Then, Norway will give a credit for those Thai taxes (but, you still pay the difference between that and the 15% taxes withheld). No more good deals for Norwegians. I wonder who's next?

Here's a couple of references, if curious about the Norwegian situation. The second reference is by the Thai revenue department -- and is a very good layman's explanation of a tax treaty.

Ref 1

Ref 2