Is pension income subject to Thai income tax?...continued

[JimGant]

Yes Norwegian pensioners have to pay tax of their pension, i am one of the falang taxpayers in Thailand.

Interesting that you didn't use the "pension paid in year not brought in" routine to avoid Thai taxes..... If I understand the Norwegian tax code for expats of three years or longer, they'll withhold a flat 15% of your gross Norwegian pension. But, if you paid taxes to, in this case, Thailand -- you can get a refund (credit up to 15%) from Norway tax folks by submitting proof of filing Thai taxes. So, if you paid Thai taxes of 10% on your pension, nothing to be gained by filing Thai taxes -- as you'll still be out 15%, since Norway will still take the remaining 5% after all the paperwork shuffle to file Thai taxes, and then apply for your 10% tax credit with Norway. And, if your Thai taxes are more than 15%, it definitely makes no sense to file Thai taxes -- if you didn't have to.

Were you advised that the "pension paid in year not brought in" was not a viable option? After all, this has been the stated rule for quite a long time (except maybe for recently -- that mystery, hopefully, will soon be resolved).

Or, are you indeed living strictly on your current pension, with no prior savings to wire to Thailand in lieu of current pension.....?

[JimGant]

I asked the manager of the Bangkok Bank and he told me no. I asked the manager of the Pension accounts at the Bangkok Bank and she told me no.

Obviously money brought into Thailand is not realistically considered subject to Thai taxation -- as long as the law says "not if it's earned in a previous year." So, Thai tax authorities realistically don't pursue money brought into Thailand, assuming most folks involved had accounts abroad from the previous year, containing funds equivalent to what's been wired in current year. Even barring that, one could just argue that, money wired to Thailand is not "assessable income," having been inherited from Aunt Agnes, or whatever. No, Thai tax authorities don't have the resources to investigate the taxability of money brought into Thailand.

Unless they change (or have changed) the 'not in year earned' clause. Which would make fiscal sense for Thailand, 'cause they could potentially gain a lot of taxes from foreign retirees -- and Thai fat cats, for whom the original exclusion was enacted.

Not for Yanks, however. Even tho' Thailand would have "exclusive" tax authority over expat resident's non government pensions (and some other income), the "savings clause" (see: www.irs.gov/pub/irs-trty/thaitech.pdf) in the Tax Treaty allows the US to tax income also subject to Thai tax -- then solve the dual taxation issue through credits. (Who gets the credit advantage isn't too clear, i.e., do we file Thai taxes, then offset our US taxes with credits paid to Thailand -- or offset Thai taxes with US tax credits, which, for me, would mean, no Thai taxes owed -- and maybe no filing required with Thailand, as is pretty much the current situation for me.)

But for some Europeans, not paying any tax on their pensions, they may now be subject to Thai taxes, if 'not in year earned' clause is cancelled, 'cause there's no dual taxation issue involved, so no tax credits to offset Thai taxes..

Sorry, Old World