Thai Retirement Visa Holder Pays Thai Taxes?

[GreenGrasser]

I did some searches on this site and I read:

www.thaivisa.com/318.0.html?&no_cache=1&sword_list[]=retir&sword_list[]=visa about retirement visa and

www.thaivisa.com/thailand_income_tax.0.html on personal income tax.

What I am trying to figure out are for a person holding a Thailand retirement visa:

1. Whether monthly payments from a pension (a form of annuity) subject to Thailand tax?

2. Whether income from US social security subject to Thailand tax?

I apologize in advance if these questions have been asked and answered before.

Thanks in advance for definitive answers to my questions or for recommendations for a good lawyer in Bangkok.

[Noel]

I did some searches on this site and I read:

www.thaivisa.com/318.0.html?&no_cache=1&sword_list[]=retir&sword_list[]=visa about retirement visa and

www.thaivisa.com/thailand_income_tax.0.html on personal income tax.

What I am trying to figure out are for a person holding a Thailand retirement visa:

1. Whether monthly payments from a pension (a form of annuity) subject to Thailand tax?

2. Whether income from US social security subject to Thailand tax?

I apologize in advance if these questions have been asked and answered before.

Thanks in advance for definitive answers to my questions or for recommendations for a good lawyer in Bangkok.

Simply put, no, you will not be subject to Thai tax.

If the recent influx of wanna-be Thai tax experts whom I doubt have ever been to Thailand say otherwise, do yourself a favour and ignore them...

[GreenGrasser]

Simply put, no, you will not be subject to Thai tax.

Noel, thanks for your response.

Can you (or, anyone else) provide a url or web site page for that answer?

I like that answer, but I would like to check a good source again like just buying a Pattaya (or elsewhere) condo in case the Thai regulations change.

[Tordy]

I did some searches on this site and I read:

www.thaivisa.com/318.0.html?&no_cache=1&sword_list[]=retir&sword_list[]=visa about retirement visa and

www.thaivisa.com/thailand_income_tax.0.html on personal income tax.

What I am trying to figure out are for a person holding a Thailand retirement visa:

1. Whether monthly payments from a pension (a form of annuity) subject to Thailand tax?

2. Whether income from US social security subject to Thailand tax?

I apologize in advance if these questions have been asked and answered before.

Thanks in advance for definitive answers to my questions or for recommendations for a good lawyer in Bangkok.

Simply put, no, you will not be subject to Thai tax.

If the recent influx of wanna-be Thai tax experts whom I doubt have ever been to Thailand say otherwise, do yourself a favour and ignore them...

[Tordy]

http://www.rd.go.th/publish/6045.0.html

[Artamus]

http://www.rd.go.th/publish/6045.0.html

I was under the impression, as mentioned in one of the replies above, that there was no tax on income from abroad for retired visa holders. However, the above link contains the phrase

"A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless where the money is paid, as well as on the portion of income from foreign sources that is brought into Thailand. "

I would have thought that the last part on "income from foreign sources" would imply tax on income brought into the country on which to live.

Can someone clarify further?

[wpcoe]

Following is the definition of "assessable income" for taxation purpose, i.e. taxable income.

In which of the following would you say pension would be included? My impulse is to say "none of them" and hence pension income from overseas would be non-taxable.

It also seems to exclude bank interest overseas, as #4 says "interest on deposits with banks in Thailand."

Now, overseas dividends, overseas rental property income, and overseas mutual fund income are not so clear.

Assessable income is divided into 8 categories as follows:

(1) income from personal services rendered to employers;

(2) income by virtue of jobs, positions or services rendered;

(3) income from goodwill, copyright, franchise, other rights, annuity or income in the nature of annual payments derived from a will or any other juristic Act or judgment of the Court;

(4) income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a juristic company, juristic partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings;

(5) income from letting out of property on hire and from breaches of installment sales or hire-purchase contracts;

(6) income from liberal professions;

(7) income from construction and other contracts of work;

(8) income from business, commerce, agriculture, industry, transport or any other activity not specified earlier.

[lopburi3]

Nobody on retirement visas is being asked to pay tax. Many would be exempt at any rate due to tax treaties. Like most Thai laws (very broad) the implementation is by policy rather than literally spelled out by the laws. The general policy is that money brought into Thailand in the year earned is taxed. If it is from another year, savings, it is not.

[wpcoe]

Nobody on retirement visas is being asked to pay tax. Many would be exempt at any rate due to tax treaties. Like most Thai laws (very broad) the implementation is by policy rather than literally spelled out by the laws. The general policy is that money brought into Thailand in the year earned is taxed. If it is from another year, savings, it is not.

The "Personal Income Tax" page doesn't even make reference to the year it was earned.

I wonder if part of the confusion is reading the sentence: "A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless where the money is paid, as well as on the portion of income from foreign sources that is brought into Thailand" out of context. The context being, that it then has to be "assessable income" as listed in the next paragraph.

I agree with lopburi3 that nobody on retirement visas is asked to pay tax.

[astral]

Tordy was right to refer you to the Thai Tax dept page.

Technically you are liable for tax, and I would suggest you register at your local tax office.

Very simple, but best to have a Thai speaker with you to help.

However at the end of the day it is unlikely you will pay anything,

especially if you live on a pension already taxed overseas.

If you live off investment income it may be more difficult but generally can be avoided by only bringing in interest earned in the previous year.

[JonnieB]

Simply put, no, you will not be subject to Thai tax.

Noel, thanks for your response.

Can you (or, anyone else) provide a url or web site page for that answer?

I like that answer, but I would like to check a good source again like just buying a Pattaya (or elsewhere) condo in case the Thai regulations change.

Relax, do you think there would be all the retirees in Thailand if their foreign source pensions and other income was subject to Thai income taxes!!!

Besides, this "income" is taxed every time it is spent on some good or service (well, most services that is ).

I have lived here over 5 years and have paid plenty of Thai taxes (car registrations, VAT, etc) but never any income taxes...the whole subject is just about laughable

[astral]

You can go with JonnieB and his friends and take the risk.

With all the tightening up you may land in trouble.

Better to be able to show your tax card and that you are clear of any tax liability.

[GreenGrasser]

Thanks, everyone.

I appreciate the different perspectives and actual experiences.

It appears that if I were to pay Thai taxes on my expected pension income, Thailand would give me credit for the taxes that I would have to pay under US federal income tax system -- due to a US-Thailand tax treaty. But, I would have to pay additional taxes, which would go to Thailand, because its income tax rates are higher than the US. One area for question is whether Thailand would give credit also to income taxes paid to a state government in the US; but, I doubt it.

My concern about Thailand income tax is to try to calculate how much money I would have left to live on.

Thanks again.

[Naam]

"I have lived here over 5 years and have paid plenty of Thai taxes (car registrations, VAT, etc) but never any income taxes...the whole subject is just about laughable"

not much to laugh about if the tax authorities change their mind how to proceed and those of us (including me) who pay no taxes (as they should according to the law) are prosecuted for tax evasion.

by the way, i too heard the story "taxable only when earned and brought into Thailand the same year". that would be a nice way out as nobody can prove when income was earned offshore. i could instruct my bank to issue whatever documentation is rewuired. however, NOWHERE in the official tax regulations CAN that claim be verified.

i'd appreciate very much if somebody would post a relevant and OFFICIAL link.

[Naam]

"taxable only when earned and brought into Thailand the same year"

addendum: i am not talking about pensions or social insurance payments but of income out of private and personal investment. pensions are definitely tax free if a double tax agreement exists no matter whether taxes are levied in the country of origin.

[Firefan]

Greengrasser/Dr. Naam: I do not disagree that enforcement might change in the future but as things stand today in "real life" one does not pay taxes on foreign income. If the change came - I expect it to be announced and having a real starting date (like the visa rules. Many of them were not new but just not enforced).

only one way to find out really. Walk up to the tax authorities and DEMAND to pay your taxes . I see the conversation go something like this:

Dr. N.: I want tax ID and reporting paper for foreign income taxes

Officer: eh..you work here? Have WP? Thai company? Thai investment/rental income?

Dr. N.: No to all. I want you to tax my foreign income/pension/savings

Officer: stop wasting my time!

Things can change - we will see. Cheers!

[LoveDaBlues]

"taxable only when earned and brought into Thailand the same year"

addendum: i am not talking about pensions or social insurance payments but of income out of private and personal investment. pensions are definitely tax free if a double tax agreement exists no matter whether taxes are levied in the country of origin.

I have a pension and also income from investments; all in USA. As I pay taxes on all my income in USA I don't owe any taxes in Thailand because of the dual taxation treaty.

[dutch]

A lot depends on the tax treaty.

At the moment I got paid gross/nett in Holland,provided I proof my tax paying in my country of residency.

There is dicussion going on at the moment if they have to right to request that.

On the other hand I have an email correspondence with a fellow countryman who got an tax bill of 12.000 euro from the tax office in Holland(as he could not proof the tax paying elsewhere)

[Naam]

"Dr. N.: No to all. I want you to tax my foreign income/pension/savings

Officer: stop wasting my time!"

*****

i'd like that very much Firefan!

BUT... will the officer give me his statement in writing? i am a bloody 'tscherman' who lived -before moving to Thailand- 15 years in the U.S. and always scared sh*tless of the IRS although i always paid income tax on the amount that corresponded my local expenses. what my real income was and where i spent what amount could not be traced.

the funny thing was that when i stopped paying income tax in Germany (after selling my home in 1999) i had a hard time to convince the IRS that i am not only eligible but supposed to pay U.S. income tax. it took me several months till they accepted my money!

am i stupid? perhaps... i am!

[Naam]

as we are discussing taxes i have a relevant question:

does any of you own immobile property through means of a Thai company? if yes do you pay rent to that company and is this copany paying corporate tax on that income (minus applicable tax reliefs such as depreciation, maintenance, etc.)?

what is your point of view and/or advice for me? to pay or not to pay as i was advised not "to wake sleeping dogs"?

answers besides "in real life.." and "technically yes.. but..." very much appreciated.

what are the experts like "sunbeltasia" saying???

[WilliamIV]

Is a Retirement Visa holder - "Resident"?

In UK Residency in Tax terms is Complex.

As for Thailand - I read somwehere -

that if you are not actually IN Thailand for

more than 6 months in a Tax Year

- you are not regarded

as Resident for Tax purposes anyway.

[WilliamIV]

Does UK have a Double Taxation agreement with Thailand?

[Firefan]

Dr. Naam - you are certainly not stupid. You are bringing up a valid worry, but not even Sunbelt can give you a clear answer. Sunbelt?

Cheers!

[astral]

It appears that if I were to pay Thai taxes on my expected pension income, Thailand would give me credit for the taxes that I would have to pay under US federal income tax system -- due to a US-Thailand tax treaty. But, I would have to pay additional taxes, which would go to Thailand, because its income tax rates are higher than the US. One area for question is whether Thailand would give credit also to income taxes paid to a state government in the US; but, I doubt it.

You are making it much more complicated that it is.

All you need is the payment slip for your pension, showing the US tax has been deducted already.

There is no comparing rates and paying "extra".

It has been taxed and that is all.

For another poster, Yes the UK does have a dual tax agreement with Thailand.

You can get a copy from HM Stationery Office for a small fee.

It is printed in Thai and English which can be useful if you have a dispute with the Thai Tax office.

[Naam]

"90% of my money I intend to spend on wild women, booze, and good times and the other 10% I will spend foolishly."

i would like do do that too. however... my wife has certain objections. are there laws which entitle a wife to object that a husband has fun?

[lopburi3]

The US tax treaty with Thailand only applies to a very limited number of government type pensions in my reading (many years ago) so believe it is Thai policy rather than tax treaty that limits Thai tax collection from many of those on retirement extensions of stay. But the fact is there is no effort to tax old people (that's us).

[Naam]

"There is no comparing rates and paying "extra". It has been taxed and that is all."

that statement is not correct Astral. almost all double tax agreements contain a clause which entitles the "secondary" tax authority to levy the difference between taxes already paid and taxes due.

example: if a thai resident earns income 'X' in country 'A' having a double tax agreement with Thailand and pays the amount 'Y' in country 'A' which is less than thai income tax 'Z' then thai tax authorities can levy the difference between 'Z' and 'Y' assuming 'Z' is greater than 'Y'.

that's the legal part. what happens in "real life" might be a different story.

[JimGant]

whether Thailand would give credit also to income taxes paid to a state government in the US;

Presumably, you're still living the majority of the time in the US(?) ..... otherwise, why would you still be maintaining a state/local residency?

(Plus, after credit for US Federal taxes paid, I doubt there's anything left subject to Thai income tax, so credit for state/local taxes shouldn't come into play.)

[GreenGrasser]

I am not an expert on taxes, but I pay them and various colleagues have told me the following.

Many state governments of the USA are very aggressive in collecting state income taxes, which seems to average about 5 percent for an annual income of $50,000. They take the position that even when a US citizen works and lives outside the USA, that person has a residence in one of the 50 states and consequently must pay state income taxes. Their position might be derivative of the federal government's position that a US citizen who works and lives outside the USA must pay federal income taxes on ALL sources of income, except on the first $70,000 or $80,000 (I forget what it is now).

Some organizations that are paying your salaries and pensions will automatically withhold federal, state, and local income taxes from each payment. They do it to avoid having their own tax problems with the tax authorities.

At this time, there are five states (Florida, Texas, Washington, Nevada, Wyoming) which do not tax personal income. However, they collect taxes in other ways, such as a high sales tax, property (eg, car, boat, house) tax, estate (ie, dead people, trusts) tax, corporate tax, etc. There have been talk that even those states may begin to levy personal income tax. There are also other states that do not tax some or all of certain types of income, such as social security income. Do a google.com search to locate web sites that list which states have what kind of taxes and the tax rates.

Did you know that the US government considers bartering (swapping items, like a tennis racket for a coffee pot) to be an income-producing activity and therefore subject to federal tax? It also considers company pension to be income and consequently subject to income taxes.

Taxes are oppressive. Jailing people for not paying taxes is a favorite weapon of the US Government. It was used to jail Al Capone, a famous mafioso. So, even criminals will file income tax return and pay taxes on illicit income to avoid prosecution for tax evasion.

My retirement plan is to move to one of the five states, establish residence (usually a minimum of 30 days evidenced by a lease, state driver's license, voter registration, a local bank account, etc) and rent a self-storage locker for my treasured personal effects. Then travel the world searching for the holy grail, fountain of youth, El Dorado, etc and Karma (or Carmen or whatever her name was).