Thai tax double standards

[ezzra]

An article in the English newspapers has caught my eye this morning, it goes like that:

"Those staying in Thailand for an aggregated period of more than 180 days in a tax year are defined as Thai residents, making them liable to tax for income from sources in Thailand and on a portion of income..."

So, for tax purposes we're Thai residents, but not classified as such for visa purposes as resident,

am I getting it right here or my thinking here is wrong?......

[wprime]

Check if Thailand has a tax treaty with your home country. Chances are you can claim any tax you pay in Thailand against the tax in your home country.

[Koosdedooes]

The defintion as written is strictly not correct

Those staying in Thailand 180 days or more are defined as being "resident for tax purposes" not "thai residents" per se...

And no it doesnt give you any immigration/ visa or residency rights...it relates to tax only, and is common is just about every country in the world..so this is not unique to Thailand..before the Thai haters, whingers get on their high horses

[evadgib]

'Thin(k) too mutt!'

Edited May 23, 2016 by evadgib

[Farma]

Correct me if I'm wrong but i recall needing a tax clearance letter when departing Thai back in the 1980's if you spent 180 days or more in the country per year.

[DavisH]

Who are they trying to catch with this? I'v always needed a copy of my tax form and receipt to get my extension of stay based on the B visa. No documents = no extension.

[orientalist]

Correct me if I'm wrong but i recall needing a tax clearance letter when departing Thai back in the 1980's if you spent 180 days or more in the country per year.

Right. This was abolished when Anand was PM in the mid- or late-80s.

[mikebell]

'Check if Thailand has a tax treaty with your home country. Chances are you can claim any tax you pay in Thailand against the tax in your home country.'

I thought one of the reasons UK pensioners don't receive Index linked rises was because there is no tax agreement with Thailand. I am British & my pensions are taxed at source in UK. My Norwegian friend elected to be taxed in Thailand and this saves him thousands annually.

[KittenKong]

'Check if Thailand has a tax treaty with your home country. Chances are you can claim any tax you pay in Thailand against the tax in your home country.'

I thought one of the reasons UK pensioners don't receive Index linked rises was because there is no tax agreement with Thailand. I am British & my pensions are taxed at source in UK. My Norwegian friend elected to be taxed in Thailand and this saves him thousands annually.

UK state pensions are frozen in countries which have no reciprocal health care agreement with the UK. It has nothing to do with dual-taxation agreements.

There is a Thai-UK tax agreement.

[fletchsmile]

Many countries throughout the world have different criteria between "resident for tax purposes" and resident for immigration purposes.

Yes UK has a DTA with Thailand. It doesn't cover the basic state pensions which people get when they retire. However, it does cover certain government pensions. By government pensions I mean those for certain ex-government or official employees not the ones your average Joe gets. The UK government as usual looks after its own not you

[Koosdedooes]

'Check if Thailand has a tax treaty with your home country. Chances are you can claim any tax you pay in Thailand against the tax in your home country.'

I thought one of the reasons UK pensioners don't receive Index linked rises was because there is no tax agreement with Thailand. I am British & my pensions are taxed at source in UK. My Norwegian friend elected to be taxed in Thailand and this saves him thousands annually.

Nope there is a reciprocal tax agreement in place and its been in place since 1981

https://www.gov.uk/government/publications/thailand-tax-treaties-in-force

Edited May 24, 2016 by Koosdedooes

[mikebell]

Dear Mr Kong/Koos,

I have perused the 38 page document re - tax. I need someone knowledgeable to draw my attention to a specific page as I can't follow the legal language/exclusions.

Fletchsmile I understand my State Pension being taxed but you mention Government pensions - I have a teachers' pension; could this be taxed in Thailand?

[Koosdedooes]

Dear Mr Kong/Koos,

I have perused the 38 page document re - tax. I need someone knowledgeable to draw my attention to a specific page as I can't follow the legal language/exclusions.

Fletchsmile I understand my State Pension being taxed but you mention Government pensions - I have a teachers' pension; could this be taxed in Thailand?

Let me ask you this, and you don't need to answer if you don't want to, but what is your current tax rate in the UK, paying tax in Thailand, if you could pull it off you could see yourself paying more tax in Thailand than you are paying now with less allowances..top tax rate in Thailand is 35% with very few deductibles.

[mikebell]

Koos - I get a state pension of 8260 UKP (frozen for the last 8 years.) My personal allowance is 10,600. I am taxed at whatever the rate is for income over 27,700. I have no deductibles other than my personal allowance. All this is academic if UK taxpayers are taxed at source in UK?

[fletchsmile]

Dear Mr Kong/Koos,

I have perused the 38 page document re - tax. I need someone knowledgeable to draw my attention to a specific page as I can't follow the legal language/exclusions.

Fletchsmile I understand my State Pension being taxed but you mention Government pensions - I have a teachers' pension; could this be taxed in Thailand?

Not entirely sure on teacher's pensions to be honest. But:

This document gives a nice summary of the various UK DTAs around in an easier format than the cure for insomniacs in the original doc you mention

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/356800/Digest_of_Double_Taxation_Treaties.pdf

Thailand is on page 37, with the following quotes

Note 4: Treaty does not include an article dealing with Non-Government pensions. Also, no relief for State Pension or ‘trivial commutation lump sum’.

In the definitions near the start...

Government' pensions (pensions that are paid to former Government or local authority employees)

If you receive a pension that is paid for service to the UK Government or a local authority, it is important that you look at the text of the relevant double taxation treaty. ...........There is guidance on whether a particular pension is treated as being a ‘Government’ type pension in the HM Revenue & Customs International Manual at INTM343040.

The manual they refer to is here. I've looked at it these in the past but not for teachers. Unfortunately checking this time the bits on teachers aren't clear

https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343040

Edited May 24, 2016 by fletchsmile

[mikebell]

Thank you Mr Smile, what an incredibly thoughtful & detailed answer. If I am successful I will let you know.