Paying tax in Thailand based on retirement visa

[Skeety65]

Would be grateful for any advice ref paying tax in Thailand.

Here's my situation. I'm 50 this year and I'm thinking of applying for an extension of stay based on my UK salary as I've been told that I can qualify either with 800K in a Thai bank, a pension or an income.

I work for an airline (2 weeks on 2 off) so spend 2 weeks per month in Thailand and I'm currently a non UK resident.

My question is will I have to pay tax in Thailand on my UK income if I obtain this visa? I've heard this could be the case but want to make sure before I start the process.

Any advice would be appreciated

Thanks

[paz]

First of all, to be in Thailand on a 14/14 rotation, you do not need any visa. You can do that as you please, moreover your airline credentials give you a practical advantage dealing with immigration.

Second, even if you had the what you call retirement visa, which actually is an extension of stay, nowhere the Thai tax code says that because of that you would have to pay taxes.

What the Thai tax code says... I recommend that you to research and discuss on the right forum:

http://www.thaivisa.com/forum/forum/13-jobs-economy-banking-business-investments/

Edited February 26, 2015 by paz

[Time Traveller]

Spend less than 180 days a year in thailand and you don't have to file a thai tax return. Otherwise technically yes you will need to report foriegn income that is brought into the country within the same year

[Skeety65]

Thanks for all your advice it's appreciated.

[pmarlin]

this site you can find a copy of tax treaties Thailand has with other nations. It may help you out. http://internationaltaxtreaty.com/treaty/thailand

[koo wallety tourist]

you have to sign a form that says you are not going to work. i dont think you would qualify as retired. you shouldnt need visas just the visa waiver stamp.

if you really need a domicile try cambodia. few hunderd dollars and you get a year visa.

[paz]

you have to sign a form that says you are not going to work. i dont think you would qualify as retired. you shouldnt need visas just the visa waiver stamp.

if you really need a domicile try cambodia. few hunderd dollars and you get a year visa.

The form may specify that one won't work in Thailand. Not about other places. Beside, the entire concept of "retirement" is just misleading, some people haven't worked a day in their life but have great income, others have worked all their life but have little or nothing. Anyway the OP is perfectly eligible for extension of stay, however as mentioned before, he doesn't even need that.

Sorry that your advertising for "Cambodia domicile" did not worked this time.

Edited February 26, 2015 by paz

[chiang mai]

As long as the money that you earn is not remitted to Thailand during the tax year that it was earned, your salary would not be taxable in Thailand.

[Soutpeel]

if your being paid in the UK how have you got Non-residency in the UK for tax purposes ?

or are you just saying you don't live their anymore ?

[rethaier]

you have to sign a form that says you are not going to work. i dont think you would qualify as retired. you shouldnt need visas just the visa waiver stamp.

if you really need a domicile try cambodia. few hunderd dollars and you get a year visa.

I believe that refers to work in Thailand.

[micmichd]

Im German, and I get 2 pensions.

If I declare them in Germany, I pay about 12pct taxes for the social security pension and about 40pct for the private pension.

If I declare them in Thailand, I pay about 10pct for both.

I need a yellow book to make sure I want to stay here.

Non Immigrant OA Visa is oK.

As someone else posted, you don't need a new retirement visa every year.

But for taxation, I surely prefer the Thai option.

Your very personal situation might vary, depends if you have a second pension with higher taxes than the first pension, and depends on permanent residence in Thailand.

Tax laws should be harmonized by now for all EEC.

[Skeety65]

I spend less than 90 days per year in the UK therefore I qualify for non residency. My job is cabin crew so even when I'm working my 2 weeks rotation I'm hardly ever there so have made my home in Thailand.

I understand that I don't need an extension of stay due to the nature of my working rotation however I was thinking some sort of visa would be necessary when Im applying for my next criminal record check, I need this to obtain my airside crew pass. . I can't do this in the UK anymore as I'm not resident so would need to get this done In Bangkok. Does anybody know if this would is possible on a visa waiver stamp.

Cheers

[Robert24]

@soutpeel: the UK has very favourable tax laws for non-domiciled people. There are a lot of people that work in the UK that benefit from the non-dom tax status because they travel a lot. I read once there are close to 5 million people benefiting from this status.

[ubonjoe]

In order to get police clearance certificate you may not be able to get one staying on exempt entries.

See this PDF file http://pcscenter.sb.police.go.th/filedownload/infomation-service-4.pdf from this website http://www.pcscenter.sb.police.go.th/eng/#

[Langsuan Man]

I don't understand why you think that you would eligible for an O visa for the purpose of retirement( other than being 50 years of age) . If you are receiving regular pay checks for employment how can this be construed as retirement income ?

Maybe the experts can jump in here and explain this disconnect

[Soutpeel]

I spend less than 90 days per year in the UK therefore I qualify for non residency.

Er you sure about that ?

if your being paid in the UK via a UK company, you will be taxed at source i.e. the UK and NI deductions made, the 90 day rule is not the only criteria for being non-resident for tax purposes.

[rayongchelsea]

Non domicile and non resident are completely different. If the guy is paid from the uk, he will be taxed as income arising in the uk and will need to do a tax return.

[nzexpat]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

I don't understand why you think that you would eligible for an O visa for the purpose of retirement( other than being 50 years of age) . If you are receiving regular pay checks for employment how can this be construed as retirement income ?

Maybe the experts can jump in here and explain this disconnect

There does not appear to be any disconnect!

The OP states he is over 50 and is therefore eligible to apply for an extension of stay based on retirement. He would , of course, have to meet the financial requirements which he says he can.

The fact that the OP works outside Thailand would be irrelevant to the application but the OP would require a multi re-entry permit to allow for his regular departures/arrivals

[micmichd]

No one is prohibited to work in Europe if he/she wants an OA visa.

The perequisite condition is: => 59yo and 60kb income or 800 kb property.

Nobody says source of income must be pensions only.

[Soutpeel]

@soutpeel: the UK has very favourable tax laws for non-domiciled people. There are a lot of people that work in the UK that benefit from the non-dom tax status because they travel a lot. I read once there are close to 5 million people benefiting from this status.

I' am fully aware of this as I am one of those people, the OP stated he was paid in the UK by presumably a UK company, hence the question of how he got Non-resident status for tax purposes

and besides Non-dom and Non-resident for tax purposes are not quite the same thing

Edited February 27, 2015 by Soutpeel

[Soutpeel]

Non domicile and non resident are completely different. If the guy is paid from the uk, he will be taxed as income arising in the uk and will need to do a tax return.

Thank you, that exactly what I was getting at

[ubonjoe]

No one is prohibited to work in Europe if he/she wants an OA visa.

The perequisite condition is: => 59yo and 60kb income or 800 kb property.

Nobody says source of income must be pensions only.

It is 50 years old or over with an income of 65k baht or 800k baht in the bank or a combination of the 2 totaling 800k baht.

[mxyzptlk]

I spend less than 90 days per year in the UK therefore I qualify for non residency.

Er you sure about that ?

if your being paid in the UK via a UK company, you will be taxed at source i.e. the UK and NI deductions made, the 90 day rule is not the only criteria for being non-resident for tax purposes.

Soutpeel you are exactly right. Residency is no longer only dependent on the number of days spent in the UK. Best for the OP to check HMRC website (which is as clear as mud) as it is not advisable to end up in a position where you owe HMRC money as it attracts interest on a daily basis. I have been in the UK for only 15 days in the last 6 years and I still had to file tax returns and pay tax as appropriate on property rental income earned in the UK. Any income earned in the UK is liable to UK tax.

[Skeety65]

Just to make it clear i don't pay tax in the UK as I'm non resident there. I have to submit a tax return every year which I do but I don't ever have to pay anything because I spend less than 90 days per annual in the UK. There's a lot of crew who are in the same position as me however some do pay tax in their chosen country of residence if they qualify to do so.

I guess I'm sort of a nomad where I don't qualify to pay tax in either country as even though I live in Thailand on my 2 weeks off I'm not there more than over 180 days per year. Some of you have mentioned the UK residency laws which the HMRC have recently changed but this doesn't affect me as I don't have family ties or have a home in the UK. If I lived in my own home there whilst on my working block or had kids in a UK school for example those 90 days I mentioned would decrease to around 45 which in would make it very difficult to keep my non resident status. I hope that makes my situation clear.

Anyway I'm 50 this year so I was thinking about applying for a extension of stay based on my UK salary which I have already been advised I can do? The reason I was thinking of doing this was because I will need to renew my crew ID at some stage as I need airside clearance to do my job and didn't know whether the Thai authorities would do this for me when I only have visa waiver stamps in my passport. I can't do this in the Uk anymore because of my non resident status.

Being on a 2 weeks on 2 weeks off rotation I realise I don't need a extension of stay however I may have to down this path to obtain a criminal record clearance. Prefer not to do this however I may not have a choice.

Once again thanks for all your replies as they've been very informative

Cheers

[SantiSuk]

Skeet, you don't make it clear what your domicile is. If you are UK domiciled and have any earnings arising in the UK you should be taxed on them in the UK no matter how few days a year you spend in the UK. The only explanation I can think of other than you being non dom UK is that airlines have some special deal with HMRC that regards the earnings as being not arising in the UK even though paid out in the UK.

[Soutpeel]

Skeet, you don't make it clear what your domicile is. If you are UK domiciled and have any earnings arising in the UK you should be taxed on them in the UK no matter how few days a year you spend in the UK. The only explanation I can think of other than you being non dom UK is that airlines have some special deal with HMRC that regards the earnings as being not arising in the UK even though paid out in the UK.

the fact the OP submits a tax return in the UK every year and has said he has no ties/property in the UK suggests the OP is not truly No-resident in the UK for tax purposes, he may not have to pay taxes into HMRC, but that doesnt make him non-resident

I have no ties in the UK, I am classed as non-resident and have no obligation to submit a tax return the UK, and in fact the last time I did was maybe 14-15 years ago

[Skeety65]

To be honest I don't know exactly as I have an accountant take care of it for me and yes airlines do have some sort of arrangement with the HMRC.

I think We've got side tracked though as my original post isn't about being non resident it's to do with paying tax based on extension of stay if you qualify based on an overseas income

Once again thanks for all your comments

[Soutpeel]

To be honest I don't know exactly as I have an accountant take care of it for me and yes airlines do have some sort of arrangement with the HMRC.

I think We've got side tracked though as my original post isn't about being non resident it's to do with paying tax based on extension of stay if you qualify based on an overseas income

Once again thanks for all your comments

the answer on the Thai tax thing is easy, your not going to be taxed in Thailand, I wouldn't worry about it

Edited March 1, 2015 by Soutpeel

[KamnanT]

Skeet, you don't make it clear what your domicile is. If you are UK domiciled and have any earnings arising in the UK you should be taxed on them in the UK no matter how few days a year you spend in the UK. The only explanation I can think of other than you being non dom UK is that airlines have some special deal with HMRC that regards the earnings as being not arising in the UK even though paid out in the UK.

As has been mentioned earlier in the thread, "residence", "ordinary residence" and "domicile" are three distinct concepts that all effect liability for income tax in the UK. Extracted from the HMRC website:

Residence

One of the many factors that determine an individual’s residence is the number of days they are physically present in the UK. The only occasion when days alone determine an individual’s residency is when they are here for 183 days or more during a tax year.

An individual may also be resident in the UK if they are here for fewer than 183 days in a tax year. This will depend on how often and how long they are here, the purpose and pattern of their visits and their connections to the UK. This might include the location of their family, their property, their work life and social connections.

If the nature and degree of ties to the UK show that it is usual for an individual to live in the UK, they are resident in the UK.

Ordinary residence

Ordinary residence is different from residence. The word ‘ordinary’ indicates that an individual’s residence in the UK is typical for them and not casual. If an individual has always lived in the UK then they are ordinarily resident here.

The pattern of an individual’s presence, both in the UK and overseas, is an important factor when deciding if they are ordinarily resident in the UK. You will need to take into account the reasons for them being in, coming to, or leaving the UK and their lifestyle and habits.

Domicile

Domicile cannot be defined precisely, but the concept rests on various basic principles.

• Every individual must have a domicile at all times. The law ascribes a domicile to those individuals it regards as lacking capacity to choose one.
• An individual cannot have more than one domicile at the same time for the same purpose. refer also to the note below)
• An existing domicile is presumed to continue until it is proven that a new domicile has been acquired.

It is, for example, entirely possible (albeit unusual) for an individual to be resident in Thailand, ordinarily resident in the UK and domiciled in Australia for the purposes of UK tax law.

Returning to the OP's original question, non-Thai source income (including income paid by a non-Thai entity outside Thailand for services rendered outside Thailand) would not be taxable in Thailand where the recipient was not a resident of Thailand for tax purposes (note that residency for tax purposes has nothing to do with immigration status). A tax resident of Thailand (generally speaking, someone who has been physically present in Thailand for 180 days or more in the calendar year) would be liable for income tax on such income only if it were remitted to Thailand in same year in which it was earned.

UK tax residence and domicile is a complex issue with a colourful body of case law. The actor Richard Burton was born in Wales, lived most of his life in the United States, died and was buried in Switzerland in 1984. However, the HMRC tax inspector concluded that he had never lost the domicile of his birth (Wales) and sent the estate a sizeable bill for inheritance tax. Apparently, one factor that influenced the inspector's decision was a photograph of Burton's coffin in Switzerland, draped in a Welsh flag.

[JimGant]

I have no ties in the UK, I am classed as non-resident and have no obligation to submit a tax return the UK, and in fact the last time I did was maybe 14-15 years ago

Soutpeel, does this mean you have no income from UK sources, including State, government, or private pensions? State pensions are apparently exempt from UK taxation if you're a non resident -- but the other kinds of income and pensions apparently are not.....

So, are you living on your State pension?

Edited March 1, 2015 by JimGant