Taxation In Thailand

[ronthailand]

From my (limited) reading on the subject, it is my understanding that only (we) farangs living in Thailand more than 180 days of the year are required to file a tax return......my reading also concludes me to believe that "ONLY MONEY BROUGHT INTO THAILAND IS TAXABLE"....??

I have a pension paid by my former employer; directly deposited into my U.S. bank account, from which I access as needed. I do have a Thai bank account, and make periodic deposits.

Can anyone advise me on what actions are and are not necessary in order to stay in compliance with Thai law concerning personal income given my circumstances as noted above?

[astral]

Strictly you are liable for tax on money your earn and bring into Thailand in the same year,

unless the money has already been taxed at source and you country has a

dual tax agreement with Thailand.

For this reason the tax man usually takes no interest in retired foreigners.

Living off savings income is not taxable. Don't ask me why.

[ronthailand]

Strictly you are liable for tax on money your earn and bring into Thailand in the same year,

unless the money has already been taxed at source and you country has a

dual tax agreement with Thailand.

For this reason the tax man usually takes no interest in retired foreigners.

Living off savings income is not taxable. Don't ask me why.

That's what I'm talkin' about !!! Anyone else with an uplifting response? Go ahead...make my day!

[lanny]

Generally, the tax treaty between Thailand and the US does not do much for expats living here. Your situation is one of the two or three exceptions. The treaty has a couple of provisions that apply specifically to pensions. For a Thai national (who has not become a US citizen) who worked in the US and is not drawing a pension from the US, that pension is not subject to US taxes. For a US citizen drawing a pension (including social security) from the US, the pension is exempt from tax in Thailand in accordance with the treaty.

I am not an authority on Thai taxes (US taxes and the tax treaty being my field) but I understand that pensions are not taxed here.

[Tywais]

That's what I'm talkin' about !!! Anyone else with an uplifting response? Go ahead...make my day!

I happen to be on both sides of the issue. I work here and pay Thai taxes but do not have to pay US taxes on it if under $80,000. I also have a pension in the US where US taxes are paid on it but not required to pay Thai taxes on it. I use a debit card to access my funds from my retirement account in the US and as such not really much of a paper trail. Also a few years ago I transferred a large amount from the US to Thailand and no problems at all regarding Taxes even though it was not from a pension account.

[Cassandra]

Strictly you are liable for tax on money your earn and bring into Thailand in the same year,

unless the money has already been taxed at source and you country has a

dual tax agreement with Thailand.

For this reason the tax man usually takes no interest in retired foreigners.

Living off savings income is not taxable. Don't ask me why.

Anyone know whether an expat resident in Thailand (ie more than 180 days per year) without a work permit but possessing a long term visa has to submit a Thai tax return?

[lanny]

Anyone know whether an expat resident in Thailand (ie more than 180 days per year) without a work permit but possessing a long term visa has to submit a Thai tax return?

This could be tricky. If you do not have a work permit, what income could you have from Thai sources? If your only income is from foreign sources, you probably do not have a liability for Thai taxes. But, if you do have income (other than interest) you could be in trouble over the lack of a work permit.

[Cassandra]

Anyone know whether an expat resident in Thailand (ie more than 180 days per year) without a work permit but possessing a long term visa has to submit a Thai tax return?

This could be tricky. If you do not have a work permit, what income could you have from Thai sources? If your only income is from foreign sources, you probably do not have a liability for Thai taxes. But, if you do have income (other than interest) you could be in trouble over the lack of a work permit.

Thanks.I should have made myself clearer.The scenario I had in mind -which could be me in a few years time-is someone who has a yearly retiremant visa or maybe permanent residence in Thailand.He has no income at all however from Thailand sources but a pension from overseas.Given that he is resident in Thailand (more than 180 days per year) is he required to file a Thai tax return even if this shows a "nil" assesssment?An additional query is that for various reasons it is possible this pension from overseas may not be taxed at source.Therefore if one was very honest one should presumably declare it for income tax purposes to the Thai authorities or at least that part of it brought into the country.Have I got this right?

[dutch]

I have to send the proof of my Thai tax paying to the Dutch tax office.

If not,they will not renew the approval to the pension fund to pay gross/net and at the same time they will tax me for the previous year.

There is some discussion going on about the right of the Dutch tax office to control if and how much I pay in Thailand. But this discussion between tax lawyers will take some time ,I guess

(The law tells the pension funds to withdraw tax b4 paying. However there is a tax treaty between Thailand and Holland. Question is;is Holland allowed to control if I am paying here?)

[astral]

If you have any worries, go to your local tax office and they will issue you

with a tax number and a card.

Then in January you can submit your tax return.

I am luck that I have investment income in addition to my contract work overseas.

I only declare the income I bring into Thailand showing that this from my

investments and has already been taxed in the UK.

Anything over my taxed income is covered by my personal allowance

and one for my wife. Possibly I end up paying a few 100 baht in tax.

Makes them happy and keeps me on the right side of the law.

Probably a good idea to get a copy of the Dual Tax Agreement between your

country and Thailand to see exactly what it says. It will be in Thai and your language

which comes in useful if you have any disagreement with the Thai tax people.

Edited January 11, 2006 by astral

[jbaldwin]

I am a UK citizen some why away from retirement age. At present I pay no tax. My only income is from savings in the UK. I do not pay UK tax as I am not resident in the UK for tax purposes and I do not pay Thai tax because the income is not remitted to Thialand.

When I receive a pension, is this subject to Thai tax if the money is not remitted to Thailand? My understanding is that a UK pension can only be paid without tax deducted if it is paid into a foreign bank account. However, if it is paid into a UK account but you are not a UK resident for tax purposes then you can reclaim the tax whether or not you paid overseas tax. The double tax agreements, I think, only apply to individuals that are classed as resident in more than on country.

[Nomad97]

I am no tax expert but in reply to jbaldwin I will give you the benefit of my limited UK tax knowledge.

If you are ordinarily non-resident for UK tax purposes then any income earned overseas is free of UK tax. However, I understand that any income generated in the UK, e.g. interest from your savings account, is liable to UK taxation. However, you are also entitled to a UK tax allowance that should cover the interest received from a modest savings account. Hence you would not pay tax if the interest received is less than the tax allowance. The UK tax allowance is 4895 pounds sterling for the Tax Year beginning April 2005.

Secondly, I think I am right in saying that under the terms of the double taxation agreement between Thailand and the UK, your UK pension is not exempt from UK tax. As above, you can offset your personal tax allowance against your pensionable income to minimise your tax liability. As your pension is taxed in the UK you should not pay tax in Thailand.

[Oswulf]

Secondly, I think I am right in saying that under the terms of the double taxation agreement between Thailand and the UK, your UK pension is not exempt from UK tax. As above, you can offset your personal tax allowance against your pensionable income to minimise your tax liability. As your pension is taxed in the UK you should not pay tax in Thailand.

This is wrong. The UK/Thailand agreement gives full relief for government pensions (i.e. pensions paid to former government employees), but not for the state pension (i.e. the "normal" one), or private pensions. (See http://www.hmrc.gov.uk/cnr/dtdigest.pdf, page 20.) In other words, one's state and private pensions will definitely be taxed by the UK, and are (at least in theory) taxable in Thailand, too.

[bigprop]

I have a tax question which some one might be able to help. I work offshore and earn a tax free salary. I am non resident in the UK have been for about 4 years. I dont think i will be liable for tax in Thailand as I will only enter for 27 days at a time on a tourist visa and will be in the country less than 180 days a year. However my partner (Ex pat) will be in Thailand firstly on a 60 day tourist visa will be in the country over the 180 days. she will be living in a house I rent and will be getting an allowance from me to live there. She will not be working will she be liable for any tax or will i be liable for any tax on the money I give ger.Eventually she will get a part time job and will work and pay tax

can anyone help

Edited January 14, 2006 by bigprop

[Cassandra]

I am no tax expert but in reply to jbaldwin I will give you the benefit of my limited UK tax knowledge.

If you are ordinarily non-resident for UK tax purposes then any income earned overseas is free of UK tax. However, I understand that any income generated in the UK, e.g. interest from your savings account, is liable to UK taxation. However, you are also entitled to a UK tax allowance that should cover the interest received from a modest savings account. Hence you would not pay tax if the interest received is less than the tax allowance. The UK tax allowance is 4895 pounds sterling for the Tax Year beginning April 2005.

Secondly, I think I am right in saying that under the terms of the double taxation agreement between Thailand and the UK, your UK pension is not exempt from UK tax. As above, you can offset your personal tax allowance against your pensionable income to minimise your tax liability. As your pension is taxed in the UK you should not pay tax in Thailand.

That seems clear enough.One question I can't get an answer to is as follows.Even if one has no liability for tax in Thailand (eg because pension taxed in the UK and no other Thai generated income) is it a requirement as a Thai resident to submit a tax return to the Thai authorities even if this shows nil liability?

I

[Web_Director]

From my (limited) reading on the subject, it is my understanding that only (we) farangs living in Thailand more than 180 days of the year are required to file a tax return......my reading also concludes me to believe that "ONLY MONEY BROUGHT INTO THAILAND IS TAXABLE"....??

I have a pension paid by my former employer; directly deposited into my U.S. bank account, from which I access as needed. I do have a Thai bank account, and make periodic deposits.

Can anyone advise me on what actions are and are not necessary in order to stay in compliance with Thai law concerning personal income given my circumstances as noted above?

I think it's only half correct. As a tax adviser, I would say that Thailand taxes income on 2 basis. One is from the resident rule and the second one is the source rule.

Under the resident rule, you will be deemed a Thai tax resident if you are present in Thailand exceeding 180 days in a period or periods in a tax year, and you receive income from certain reasons, you are liable to Thai personal income tax.

Under the source rule, if you receive income paid from or in Thailand from the certain reasons, you are liable to Thai personal income tax.

Good luck

[lanny]

I think that the sum total of all these responses has been to confuse the issue. I know nothing about UK taxes, so I can't tell you how a Brit would be taxed. Nor am I really an authority on Thai taxes but I've been through two audits of my own Thai income tax returns, so I do have some experience. Finally, as I make my living on US taxes, I can address the effect on US taxpayers.

Under the tax treaty between the US and Thailand, pensions paid by a pension plan in the US are not taxable in Thailand. Even is the US taxpayer has a salary or other income in Thailand, only that income is taxable. Finally, if there is no taxable income, you do not have to file a Thai tax return. You do not need a Thai tax number, either. The last time my return was auditer, I was receiving Social Security benefits. The Revenue Department asked some questions about it but soon lost interest. They only wanted to know about any salary, etc. in Thailand.

In summary, then, if your only income is a pension or Social Security from the US, you do not have to file a tax return in Thailand and you do not owe the government here any taxes.