Registration as Taxpayer

[Gav Bic]

Greetings. I am now in the second month of a non immigrant O-A visa. My pension is taxed in my home country and the balance transferred to my Bangkok Bank account. I also have a long term investment with them. Do I need to register as a taxpayer in Thailand? Perhaps the question should be directed to the local revenue department and not this platform, however I am certain that one of the older members will know the answer to this. The legal requirement should also be of interest to other new members and prevent any unpleasant encounters with the taxman.

[ubonjoe]

No need to register with the revenue department. Pension income is not taxable.

If you are paying tax on interest earned here you can file a tax return and get it back unless it is more than about 210k baht.

[renevanb7]

I am from the Netherlands, there is a agreement between the Netherlands and Thailand where to pay tax. My state pension is taxable in the Netherlands and my pension from company's  (not government) is taxable in Thailand. So it depends on the agreement between the country where you're from and Thailand  where to pay tax. When you look in the Thai tax law you will see that you have to pay tax over your pension.

[ubonjoe]

12 minutes ago, renevanb7 said:

I am from the Netherlands, there is a agreement between the Netherlands and Thailand where to pay tax. My state pension is taxable in the Netherlands and my pension from company's  (not government) is taxable in Thailand. So it depends on the agreement between the country where you're from and Thailand  where to pay tax. When you look in the Thai tax law you will see that you have to pay tax over your pension.

Pensions in Thailand are not taxable. Only income from working is taxable and other sources but a pension is not mentioned.

See "2.1  Assessable Income" here  http://www.rd.go.th/publish/6045.0.html

 

[eisfeld]

6 hours ago, ubonjoe said:

Pensions in Thailand are not taxable. Only income from working is taxable and other sources but a pension is not mentioned.

See "2.1  Assessable Income" here  http://www.rd.go.th/publish/6045.0.html

 

 

Wouldn't the mentioned corporate pension fall under point 4. "other benefits from a juristic company"?

 

Or this from http://www.rd.go.th/publish/37749.0.html

 

Quote

Section 40 Assessable income is income of the following categories including any amount of tax paid by the payer of income or by any other person on behalf of a taxpayer.

(1) Income derived from employment, whether in the form of salary, wage, per diem, bonus, bounty, gratuity, pension, house rent allowance, monetary value of rent-free residence provided by an employer, payment of debt liability of an employee made by an employer, or any money, property or benefit derived from employment

 

BTW now that I'm going over the tax code, I can't spot the famous part that says income earned abroad but not brought into Thailand in the same year is not taxed. Anyone know the section? I find texts online that say Section 41 but it doesn't read that way to me.

[smedly]

Just while we are on the subject of tax

 

I registered in Sept 16 and brought all my bank nooks etc to reclaim the tax paid on interest, everything was completed in Jomtien without issue and I now have the tax number..........but

 

As I was leaving the girl said that the payment would be made by cheque and posted to me (at least I think that is what she said) I am still waiting, I am beginning to think that I should have gone back to the office to pick up the cheque - surely it cannot take this long

 

anyone have any idea about this

[mahjongguy]

The check should have arrived within 6 weeks.

 

Go to this website using Edge or Internet Explorer. Only!

http://www.rd.go.th/publish/27942.0.html

You can input your tax ID and see the status of your refund. The form is in Thai so you might need assistance.

[smedly]

thx guys for all the info, I think I will take a trip down there after the holidays and see what's going on, they did say 3 months I believe which would have been November then factor in the Thainess and Feb is probably about right lol

 

 

[thedemon]

Income tax refunds take 1-2 weeks nowadays. But those are filed between Jan & March 31st.

[bkkcanuck8]

Pension income is technically earned in the year that you deducted the contribution amount to put into the tax shelter -- but the tax has been deferred until the pension has been withdrawn under the concept that you would benefit the individual because of being in a lower "tax bracket" in the future.  Section 40 was probably meant to include Thai based pensions -- as they would have been tax deferred and still have the tax being owed.

[ubonjoe]

25 minutes ago, bkkcanuck8 said:

Pension income is technically earned in the year that you deducted the contribution amount to put into the tax shelter -- but the tax has been deferred until the pension has been withdrawn under the concept that you would benefit the individual because of being in a lower "tax bracket" in the future.  Section 40 was probably meant to include Thai based pensions -- as they would have been tax deferred and still have the tax being owed.

It think is a translation error or misunderstanding. I think it would of been called out on the page I posted a link to earlier they were taxable.

Pension's usage is different in some countries. Some call per diem pensions.

From: http://www.dictionary.com/browse/pension

Quote

1.a fixed amount, other than wages, paid at regular intervals to a personor to the person's surviving dependents in consideration of pastservices, age, merit, poverty, injury or loss sustained, etc.:

a retirement pension.

2. an allowance, annuity, or subsidy.

3.a boardinghouse or small hotel.

    b room and board.

 

[TerraplaneGuy]

12 hours ago, eisfeld said:

 

 

BTW now that I'm going over the tax code, I can't spot the famous part that says income earned abroad but not brought into Thailand in the same year is not taxed. Anyone know the section? I find texts online that say Section 41 but it doesn't read that way to me.

 I don't know the code reference but the Revenue Dept. website says "A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand."  Note it does not say anything about "the same year" and I would assume that if you bring the foreign income into Thailand in a year after the year in which it was earned it would become taxable in that later year.    http://www.rd.go.th/publish/6045.0.html

[Savilesghost]

15 hours ago, eisfeld said:

 

Wouldn't the mentioned corporate pension fall under point 4. "other benefits from a juristic company"?

 

Or this from http://www.rd.go.th/publish/37749.0.html

 

 

BTW now that I'm going over the tax code, I can't spot the famous part that says income earned abroad but not brought into Thailand in the same year is not taxed. Anyone know the section? I find texts online that say Section 41 but it doesn't read that way to me.

Yes it would your correct,

 

technically speaking once one is resident in Thailand more than 180 days, you are resident for tax purposes, and the tax man could make parties submit a tax return detailing all their incomes sources and prove tax has or hasnt been paid, on all revenue streams and if the full tax hasnt been taken from that money, The thai tax man has the legal  right to claim their pound of flesh as well, so lets say a pension attracts 20% tax in their own country, which taken at source, the balance is shipped to Thailand, and lets say on the same money, Thailand would taxed you at 30%, they would be within their rights to claim the 10% difference on a thai tax resident 

 

BTW there is no specfic paragraph in tax code which excludes pensions

 

One assumes they dont push this issue as its assumed all pensions are taxed at source and it would be too hard for them to chase, and like most things in Thailand the provisions of law are in place, just not implemented, a bit like motocycle helmet laws

 

Could they force this a nd make all long term farang residents declare all their income in Thailand, ? Yes the provisions are already in place 

 

In the case of the OP he couldnt register as a tax payer in Thailand right now as he has only been in country 60 days, he would need to be in Thailand 6 months ie 180 day+

 

Edited December 31, 2016 by Savilesghost

[TerraplaneGuy]

35 minutes ago, Savilesghost said:

 

 

BTW there is no specfic paragraph in tax code which excludes pensions

 

 

 

It's complicated.  I took another look and Section 40 expressly includes pension income as "assessable income".   On the face of it it makes no distinction between Thai and foreign pensions.  However, there is an exclusion in Section 42(12) for "special pension" and "inherited pension".  I don't know what those are and I don't see definitions.  Assuming one's pension does not fall within those terms, again it would seem to be included under Section 40.  But then you go to Section 41 which says that any person who derived assessable income " from an employment or from business carried on abroad or from a property situated abroad shall, upon bringing such assessable income into Thailand, pay tax ...".  This raises the question whether foreign pension income is "from an employment ... carried on abroad".  If it is a government pension it seems clearly not to be, and if it is a company pension it also seems not to be "from an employment" although perhaps an argument could be made that the pension is from (former) employment and therefore included.  Taking the view that neither kind is included, they do not fall within Section 41 and therefore are not taxable on bringing the money into Thailand.  But again, one really has to check with a Thai lawyer to be sure. We must remember that English translations of Thai laws are not binding.   Also, as noted by an earlier poster, one has to check the tax treaty between Thailand and one's home country because they have rules as to this and often expressly deal with pensions.  Some of the treaties, although they say that generally you are taxed in the country of residence (i. e. Thailand if you live here for more than 180 days/year), make exceptions for some kinds of income, including pensions, on which you are taxed in the country of your nationality.  

[JimGant]

Quote

 I don't know the code reference but the Revenue Dept. website says "A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand."  Note it does not say anything about "the same year" and I would assume that if you bring the foreign income into Thailand in a year after the year in which it was earned it would become taxable in that later year.

 

From KPMG:       https://home.kpmg.com/xx/en/home/insights/2011/12/thailand-income-tax.html

"Any capital gain or investment income from sources outside Thailand is not subject to taxation unless a resident taxpayer remitted the process into Thailand within the same calendar year it is received. "

"Salaries receive from employment exercises outside of Thailand are exempt from Thai tax, if not paid in or remitted into Thailand within the same calendar year it is received...."

 

And from Tilleke and Gibbons:

https://www.google.co.th/url?sa=t&rct=j&q=&esrc=s&source=web&cd=10&ved=0ahUKEwitgpH3kJ7RAhXGRo8KHTM2Ch0QFghTMAk&url=http%3A%2F%2Fwww.tilleke.com%2Fsites%2Fdefault%2Ffiles%2FThailand-Tax-Guide.pdf&usg=AFQjCNFDZSzz3a24JtCGLewhZEZoloiyQg&sig2=MlCwLmHcInxm0zg14FDouA

"A resident of Thailand is liable for personal income tax on income from sources inside Thailand and on assessable income derived from sources outside Thailand. However, the imposition of tax on income derived outside Thailand will apply only to income derived and brought into Thailand in the same year in which such income is earned."

KPMG didn't specifically mention pensions -- just the broad categories of earned and unearned income (which would umbrella pensions). Tilleke and Gibbons mention assessable income, which also covers pensions ("income from annuity"). Not slouch law firms, so presume they know from where in the Code this "not in year earned" derives.

 

Most tax treaties reserve the right to have taxation of all types of government pensions restricted to the issuing country. This is why we see some US retirees having their Social Security and military pension checks direct deposited to Bangkok Bank Thailand: No fear, due to tax treaty, that Thailand tax authorities could jump on these remittances, even tho' they are so obviously remitted in the year earned.

 

No such protection for non-governmental pensions, however: From the US/Thai tax treaty:

 

Quote

ARTICLE 20
Pensions and Social Security Payments
1. ...pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State.
2. Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned State.

 

For us Yanks, should we decide to have our Chrysler Motor's pension check direct deposited to Thailand, under the treaty, Thailand would have first dibs on taxing it (not that, unless you told, they ever would know about it, at least not under their current methods of tracking incoming deposits -- but stay tuned). However, since we have to also declare this income on our US tax return, we would get a credit for the Thai taxes paid -- so it would all be a wash. But, to avoid all of this, best just to have the Chrysler check deposited into your US bank account, then have the money, or whatever part of it you want, sent as a wire with no hint of Chrysler appearing. Assuming your account existed at least one year prior, and funded with an amount at least equal to amounts sent to Thailand, the fungibility of money is your friend -- should you ever (doubtfully) ever need one.

 

Other nationals, whose home countries maybe don't tax pensions remitted to Thailand, certainly would have much better reason to NOT have a direct deposit to Thailand.  [For renevan: Do you remit your non government pension to Thailand in year earned? If so, why not hold off 'til the following year to use the Thai 'out' for avoiding taxation. Or do the Dutch tax authorities need proof of paying Thai taxes in order to avoid theirs?]

[TerraplaneGuy]

1 hour ago, JimGant said:

 

 

1 hour ago, JimGant said:

 

And from Tilleke and Gibbons:

 

"A resident of Thailand is liable for personal income tax on income from sources inside Thailand and on assessable income derived from sources outside Thailand. However, the imposition of tax on income derived outside Thailand will apply only to income derived and brought into Thailand in the same year in which such income is earned."

 

 

Thanks, that's very interesting.  I agree your sources are good.  However, bear in mind they may be obsolete.  It seems one dates from 2009 and the other from 2011.  It's possible the income tax act was amended since then.  As I mentioned above, the current s.41, which seems to be the governing provision here, says nothing about "in the same year".  It just says the taxpayer " shall, upon bringing such assessable income into Thailand, pay tax." And I must say it's surprising if the law as stated by your sources, as it would seem to make it virtually effortless to avoid Thai tax on foreign income; you'd just have to wait a short time before bringing it in.  What could possibly be the rationale?  However, that question would have been as mysterious back in 2009/2011 as it would be today.  If anyone has explored this further it would be great to hear from them.

Edited December 31, 2016 by TerraplaneGuy
shorten

[eisfeld]

I have checked the revenue departments website back to the year 2008 and the wording hasn't changed much. It never included the sentence about the same year. But I found the same document in Thai which seems to differ from the english version. Even the article numbers don't match. Can someone with excellent Thai skills please translate the following paragraph?

 

Quote

(2) ผู้มีเงินได้ นำเงินได้นั้นเข้ามาในประเทศไทยในปีภาษีนั้นด้วย
ในการเสียภาษีเงินได้บุคคลธรรมดาบางกรณี ถ้าเกี่ยวข้องกับบุคคลของบางประเทศที่มี อนุสัญญาภาษีซ้อน* หรือความตกลงเพื่อป้องกันการเก็บภาษีซ้ำซ้อนกับประเทศไทยจำเป็นต้องพิจารณาถึงความ ตกลงหรืออนุสัญญาว่าด้วยการเว้นการเก็บภาษีซ้อนระหว่างประเทศไทยได้ทำความตกลงไว้ด้วย

 

Link http://www.rd.go.th/publish/552.0.html

[Maestro]

10 hours ago, TerraplaneGuy said:

 I don't know the code reference but the Revenue Dept. website says "A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand."  Note it does not say anything about "the same year" and I would assume that if you bring the foreign income into Thailand in a year after the year in which it was earned it would become taxable in that later year.    http://www.rd.go.th/publish/6045.0.html

 

Lets look at the full text of that paragraph:

 

Quote

Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

 

It starts out with talk about the tax year, defining it as the calendar year. In tis context, it would seem to be understood that the "income from sources in Thailand" and the "portion of income from foreign sources that is brought into Thailand" refers to income earned in a given tax year. Reagdless, what really matters is that the Revenue Department is applying it this way, which is the reason why law and accounting firms post this interpretation on their websites.

[TerraplaneGuy]

Maestro, you're probably right.   As a lawyer myself (admittedly NOT a Thai lawyer) I believe I can say that neither that summary on the Revenue Dept. website nor the Act itself (s. 41) would be read in the way you suggest if it were an English language statute.  But having said that, here's more support for your view:  I've found a more recent (2015) PWC publication which continues to state the "same year" principle:   http://www.pwc.com/th/en/publications/assets/thai-tax-2015-booklet-en.pdf  (See "Assessble Income").  Unfortunately again they don't give any authority for it so you may well be correct that it's based on Revenue Dept. practice rather than anything explicit in the Act.  If so this would appear to be a very generous benefit to Thai taxpayers who have investments overseas.  For example, it would seem that someone who receives dividends overseas from a foreign company (whether one they control or just hold some stock in) would only have to wait until the next tax year before bringing home the money in order to avoid any tax.

 

 

[JimGant]

Yeah, TGuy, this mysterious subject has been in previous threads -- without any resolution I can find. This thread is particularly interesting:

And, yes, some farangs do pay Thai income tax on their pensions. Norway's tax treaty with Thailand says Norwegian pensions, both governmental and civilian, are subject to Thai taxation on Norwegian expats resident in Thailand.

http://download.rd.go.th/fileadmin/download/nation/Norwegian_answer.pdf

 

Interesting this passage:

"Under Internal Regulations In Thailand In Thailand pension income is regarded as assessable income under Section 40 (1) of the Revenue Code. A resident of Thailand must declare his worldwide income on the basis that the income received from abroad in a tax year must be brought into Thailand within the same year, based on Section 41 paragraph 2 of the Revenue Code. Therefore for a Norwegian individual who has stayed in Thailand for more than 180 days in a tax year shall declare his worldwide income including pension income received in Norway and file tax return using the tax return form P.N.D. 90 or P.N.D. 91 (if the individual only receives pension income, P.N.D. 91 will be used)."

 

This indicates expat Norwegians are to bring all their pension earnings into Thailand in the year earned -- which is kind of nonsensical. But what if they don't...... This passage explains what happens:

"Where, under Article 18, pension income is relieved from Norwegian tax and, under the law in force in Thailand, a Norwegian pensioner is subject to tax by reference to the amount thereof which is remitted to or received in Thailand and not by reference to the full amount thereof, then the relief to be allowed under this Convention in Norway shall apply only to so much of the income as is taxed in Thailand."

Ok, so this says Norwegians don't have to bring all their pension earnings into Thailand, which certainly makes sense. And this passage is in context with getting a Norwegian tax credit for *only* those taxes paid to Thailand, whether on full pension amount, or partial pension amount (i.e., whichever is remitted to Thailand). And the Norwegians have a flat, no deduction, 15% withholding on all pensions paid to their expats not residing in the EU. And, if you're living in Thailand and want to get some of that back, then you have to show your Thai tax return to the Norwegian tax authorities.

 

Pretty ironclad. And it also seems to indicate that, if you bring 2016 pension earnings into Thailand in 2017, don't bother to include these earnings in your 2017 Thai tax return (or to file an amended 2016 Thai tax return). However, Norway doesn't have to reimburse you for Thai taxes not paid. Bottom line: Norwegians are paying at least 15% taxation on their pensions while living in Thailand -- and maybe more if their Thai taxes exceed 15%

 

Any Norwegians out there to explain this?

[TerraplaneGuy]

Thanks.  I'm not sure who wrote that passage but I believe it is probably written by a Thai lawyer whose English is imperfect (hence the mistake about "must be brought").  In any case, the writer ignores a fundamental point about the structure of the statute, which has also been ignored by many posters on this site (unless his use of the word "declare" rather than "pay tax on" is the source of the confusion).  The point is what I stated above:  According to s. 41, not all assessable income, as defined under s. 40, is subject to tax when received from abroad.  The Act starts with a broad definition of assessable income in s. 40, which expressly includes pensions.  It is all taxable if it is received from domestic sources.  But when it comes to foreign-source income, you must turn to s. 41.  Section 41 does not say that all assessable income from abroad is taxable. It names only certain kinds of assessable income and says they are taxable when remitted to Thailand.  Section 41 does not mention pensions  nor do the kinds of income it does mention include pensions by implication (unless, as I said above, you interpret company pensions to be income from employment, which is very doubtful).  If the intention had been to tax all kinds of assessable income received from abroad, it would have been easy for them to draft s. 41 that way.  But they chose to tax only certain specific kinds.  It appears there is no basis at all for the view that government pensions from abroad are taxable at any time in Thailand, whether or not they are brought into the country.  Neither the Act nor the PWC publication say they are.

[JimGant]

Quote

It appears there is no basis at all for the view that government pensions from abroad are taxable at any time in Thailand,

 

Tell that to the Norwegians (from the PDF I gave, above):

Quote

“Article 18: Pensions, Annuities, Payments under a Social Security System and Alimony

Pensions (including Government pensions and payments under a social security system) and annuities paid to a resident of a Contracting State shall be taxable only in that State.” The article gives the state of residence the sole taxing right to the pension income. Therefore a Norwegian who received pension income from Norway and is a resident of Thailand, either under the Article 4 paragraph 1 or paragraph 2 of the Thailand-Norway DTC, shall be taxable only in Thailand."

 

Quote

In Thailand pension income is regarded as assessable income under Section 40 (1) of the Revenue Code.

 

Interesting, because most tax treaties restrict taxation of government pensions and social payments to the issuing country.

[TerraplaneGuy]

Jim,

 

The Norwegian treaty does not mean that pensions are in fact taxed in Thailand.  The treaties only say who has the right to tax.  It means that if anybody is going to tax, it will be Thailand, so pensions are "taxable" in Thailand.  But it is up to Thailand whether or not to impose the tax, and in what circumstances if any.   

 

On your second point, I suggest you re-read my earlier email because I've agreed that pensions are assessable income in Thailand under s. 40.  That is not in dispute.   But as I've pointed out, Section 41 makes clear that not all assessable income is taxable in Thailand if it is received from abroad.   Section 41 limits that to certain types of assessable income and pensions are not included.

[JimGant]

Section 41:

"A resident of Thailand who in the previous tax year derived assessable income under Section 40 [which includes  a pension] from an employment or from business carried on abroad or from a property situated abroad shall, upon bringing such assessable income into Thailand, pay tax in accordance with the provisions of this Part" 

 

Anyway, this is becoming a circle jerk. Interpretation of the Thai code per each country's tax treaty with Thailand is what's important for their citizens. We've already read how Norway deals with this. That they allow Thailand first dibs on taxation of their expats government pensions is something the two countries worked out between themselves. Nothing in the Thai code dictated this element of the tax treaty.

 

[TerraplaneGuy]

Jim,  put it this way: in the case of a government pension, while it is indeed "assessable income", it is not "from an employment or from business carried on abroad or from a property situated abroad".   Note the absence of the phrase "from a government".  That being so, a government pension fails to meet the conditions of s. 41 and is not subject to tax under it.  It simply does not fall within the ambit of the provision.  There really is no other way that a court would read the section, as it is written in English (again I say that as a lawyer qualified in the U.K. and Canada, not Thailand).   A court would assume the legislature knew what it was doing and intended the limitations that result from inserting that italicized phrase; otherwise it could simply have said ""assessable income under Section 40 from abroad".  

 

Whether it has the same effect in the Thai version I don't know.   Anyway, I agree with you that we've probably said all we can on this point :)

[JimGant]

Yes, it's obvious you're a lawyer :)

[bandito]

On ‎12‎/‎30‎/‎2016 at 6:50 PM, renevanb7 said:

I am from the Netherlands, there is a agreement between the Netherlands and Thailand where to pay tax. My state pension is taxable in the Netherlands and my pension from company's  (not government) is taxable in Thailand. So it depends on the agreement between the country where you're from and Thailand  where to pay tax. When you look in the Thai tax law you will see that you have to pay tax over your pension.

 

ubonjoe is right, pensions are not taxable.

I  have a smal company pension from working in the Netherlands way far back.

OK, this is something the Netherlands taxman does'nt like and has a lot of silly reasons why you have to pay tax in Thailand from your pension.

A friendly accountant I know went to the tax office here in Thailand and got informed that I did not have to pay tax, only when I had a workpermit and was working in Thailand.

Well, you try to explain that to the taxman in the Netherlands, I tried and gave up there it is only Euro 12- what they deduct from that pension.

They can keep it and stick it where the sun never shines.