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Declaring OS income whilst a retiree in Thailand


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I understand if you stay in Thailand for over 180 days, regardless of your visa type, you are technically considered a resident in Thailand for income tax purposes. Which means even with a retirement visa, the pension your receive from overseas or any other source of income you may receive to your Thai bank account is taxable. Can I ask experts in this forum if this is technically correct? And so, what is the best tax management approach in this regard? Thanking you in advance.

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Thailand is somewhat unusual in this respect. You are liable to pay tax on overseas income, but only if the income is brought into Thailand within 12 months of when it is earned. Assuming you have savings to provide a buffer, you can legally avoid tax by carefully separating current year income from money transferred to Thailand.

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Poor suckers.... I do not know what nationality you are. But for scandinavians who has a bilateral (correct name??) agreement with Thailand. The rule is that where you have earned your money THERE is where you shall pay your eventual taxes.

 

For retirementfunds or payouts from the scandinavian countries they are already being taxed in our homecountries and we NEVER have any issues at all, NEVER.....

 

Your 180 days? isn´t that the law from YOUR homeountry whereever that might be?? I mean in Sweden, I am swedish, after living abroad for more than 180 days I will be outsourced from Sweden and considerated to live somewhere else, abroad..

 

Glegolo

Edited by glegolo
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58 minutes ago, DGS1244 said:

Depending upon the foreign countries agreement with Thailand you can opt to pay tax in either country.

Maybe in YOUR country ,,, but certaiunlky NOT when it comes to the scandinavian countries,

 

The agreement is like I said, where you have earned your money... There you shall pay your taxes... fullstop...

 

Glegolo

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8 hours ago, BritTim said:

Thailand is somewhat unusual in this respect. You are liable to pay tax on overseas income, but only if the income is brought into Thailand within 12 months of when it is earned. Assuming you have savings to provide a buffer, you can legally avoid tax by carefully separating current year income from money transferred to Thailand.

This is my reading of Thai tax regulations also.

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1 hour ago, glamont002 said:

The "remittance" rule in Thailand is that offshore income is not taxable here unless it is remitted into Thailand in the same calendar year as it is earned. Since money is fungible there is no effective way to determine what the source of cash remitted into Thailand is. Thus, effectively no one pays tax on offshore income. This rule also applies to Thai citizens and not just foreigners residing here.

Best answer.

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The OP will be popular with everybody who qualifies on these terms for paying tax. All visa runners probably TE members etc. qualify but don't have to prove income, yet! All retirees get at least 65000 Bt per month too. Authorities are missing a trick here, if they wanted to be awkward this is a good a stick as any with which to beat unwelcome long stayers.


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2 hours ago, glegolo said:

Maybe in YOUR country ,,, but certaiunlky NOT when it comes to the scandinavian countries,

 

The agreement is like I said, where you have earned your money... There you shall pay your taxes... fullstop...

 

Glegolo

UK taxes my pensions so Thailand does not require me to pay any tax here. If I changed my UK status for tax then I would be liable to pay tax on the money if it arrives in Thailand in the same year it's paid in UK.

Scandies seem to be stuck with a different system.

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1 hour ago, overherebc said:

UK taxes my pensions so Thailand does not require me to pay any tax here. If I changed my UK status for tax then I would be liable to pay tax on the money if it arrives in Thailand in the same year it's paid in UK.

Scandies seem to be stuck with a different system.

Yes we are, but "stuck" is not the correct word in this case, I think "blessed" is a better one..

 

Glegolo

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My OAP from OZ is tax-free - I have a letter from the ATO stating that.

My Canadian Pensions are taxed at 15% at source.

 

So no way I'd get my knickers in a knot over this - they are transferred as they are paid.

 

 

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As far as I am aware if you are staying in Thailand on a retirement extension then you are

not resident, merely on an extension of permission of temporary stay in Thailand and

therefore not liable for Thai tax. Similar, but I am sure not exactly the same, as a tourist.

The UK tax authorities accepted this when I put it to them when they sent me forms

regarding reciprocal tax agreements between UK and THailand.

I am no expert and am open to correction if wrong? 

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6 minutes ago, phuketjock said:

As far as I am aware if you are staying in Thailand on a retirement extension then you are

not resident, merely on an extension of permission of temporary stay in Thailand and

therefore not liable for Thai tax. Similar, but I am sure not exactly the same, as a tourist.

The UK tax authorities accepted this when I put it to them when they sent me forms

regarding reciprocal tax agreements between UK and THailand.

I am no expert and am open to correction if wrong? 

From the Thai revenue department website: http://www.rd.go.th/publish/6045.0.html

 

Quote

1.Taxable Person
            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. 

 

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7 minutes ago, ubonjoe said:

From the Thai revenue department website: http://www.rd.go.th/publish/6045.0.html

 

 

Thanks Joe I was actually correct but did not realise why.

Basically anyone on a retirement extension is unlikely to have income from a source

in Thailand ( not allowed to work ) so non-resident retiree not liable for Thai tax.

Edited by phuketjock
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15 minutes ago, phuketjock said:

Thanks Joe I was actually correct but did not realise why.

Basically anyone on a retirement extension is unlikely to have income from a source

in Thailand ( not allowed to work ) so non-resident retiree not liable for Thai tax.

Not quite.

"Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. 

 

So if you are here more than 180 days in a tax year you are liable for tax on income from within Thailand AND from outside. Unless the income from outside is already taxed and that country had a bilateral agreement with Thailand.

Is my understanding.

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3 minutes ago, CharlieH said:

Not quite.

"Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. 

 

So if you are here more than 180 days in a tax year you are liable for tax on income from within Thailand AND from outside. Unless the income from outside is already taxed and that country had a bilateral agreement with Thailand.

Is my understanding.

I understand what you are saying Charlie but how can you be a resident if you are here on

a temporary stay? Because that is all a retirement extension is, or in fact any extension.

I am sure there are some "tourists " who spend more than 180 days in Thailand in a year,

so you are saying some tourists are liable for Thai tax, That is not going to happen is it? 

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1 hour ago, overherebc said:

UK taxes my pensions so Thailand does not require me to pay any tax here. If I changed my UK status for tax then I would be liable to pay tax on the money if it arrives in Thailand in the same year it's paid in UK.

Scandies seem to be stuck with a different system.

I think this is maybe incorrect

 

As a retired UK Chartered Accountant, I believe what ever your status is in the UK any pension or other income generated in the UK is liable to UK tax and there is no way round that whatsoever

 

In my case My UK OAP is just below £10,000 pa and as the personal allowance is above this and I have no other UK income I am taxed at 0% in the UK on my UK pension

 

Thailand says I believe pension income is tax free here in Thailand

 

I have another pension from A QROPS in Gibraltar this gets taxed at 2.5% in Gibraltar but there is no further tax to pay whenever I bring it to thailand as it is pension income, Gibraltar has no double taxation agreement with Thailand so I believe

 

If your QROPS were in Malta you would suffer 30% Maltese withholding tax and as there is no Malta /thailand double taxation agreement, you would be unable to reclaim that tax deducted, so choice of location for QROPS is critical

 

I am no Thailand tax expert but believe my understanding to be correct

 

 

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16 minutes ago, CharlieH said:

Not quite.

"Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. 

 

So if you are here more than 180 days in a tax year you are liable for tax on income from within Thailand AND from outside. Unless the income from outside is already taxed and that country had a bilateral agreement with Thailand.

Is my understanding.

I believe this is not totally correct read what ubonjoe posted only taxed on income brought into thailand in the same year as it is earnt, so leave that income outside thailand for the tax year and it becomes savings, and no tax on savings brought in 

 

 

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1 hour ago, ubonjoe said:

From the Thai revenue department website: http://www.rd.go.th/publish/6045.0.html

 

 

But it also depends on whether the country you pay tax in has a double taxation agreement with Thailand and the precise details of the agreement. These are bi-lateral agreements between the two countries involved, so the rules will be different for each county. This meams that what is true for Swedes may not be true for Aussies.

 

For example, Australia has a agreement with Thailand that effectively means the taxpayer can elect to pay tax in either county but will not be taxed on the same income in both.

 

Not sure what that means if income is tax free in Australia such as a pension. I do know that if the situation was reversed, i.e. Income was received in Thailand but you were a tax resident in Australia, the Australian Tax Office would tax you on the difference between the tax you paid in Thailand and what you would have paid in Australia. In other words you receive "tax credits" for overseas tax paid but still pay the same rate of tax in Australia.

 

I guess this means that theoretically you could still be taxed in Thailand on tax free income received in Australia if different rules and tax rates existed in Thailand. However, this is all hypothetical if you can satisfy the rule that says you only pay tax on overseas income in Thailand in the year it is received. This will never change, as far too many wealthy Thais use the rule to minimise tax.

 

It does mean it is probably not wise to have your pension paid directly into a Thai bank account directly from the source though.

Edited by mngmn
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48 minutes ago, phuketjock said:

I understand what you are saying Charlie but how can you be a resident if you are here on

a temporary stay? Because that is all a retirement extension is, or in fact any extension.

I am sure there are some "tourists " who spend more than 180 days in Thailand in a year,

so you are saying some tourists are liable for Thai tax, That is not going to happen is it? 

Dont shoot the messenger.

You are classed as "resident" for tax purposes,  if more than 180 days in any tax year (irrespective of visa etc). Income received from outside if not already taxed is taxable.

 

To use your example of "tourist" it is unlikely they would have a residence nor bank account nor be receiving regular "income" from overseas if on tourist visas and not many spend over 6 months "on holiday" (there are exception to everything but generally speaking.)

 

Big difference in "resident" and "resident for tax purposes" thats the key here. If your overseas pension isnt taxed at source and is paid regularly into a Thai account and you spend more than 180 days in any tax year here then technically you are liable for tax on that income.

 

But as we all know TIT and not all rules/laws etc are enforced but that doesnt mean they are not there should someone choose to enforce them.

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The 180 days does not depends on your visa it is purely based on the number of days you stay in Thailand. Same rules apply in Australia. My wife once paid Australian tax on unearned income while on a tourist visa.

Edited by mngmn
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28 minutes ago, CharlieH said:

Dont shoot the messenger.

You are classed as "resident" for tax purposes,  if more than 180 days in any tax year (irrespective of visa etc). Income received from outside if not already taxed is taxable.

 

To use your example of "tourist" it is unlikely they would have a residence nor bank account nor be receiving regular "income" from overseas if on tourist visas and not many spend over 6 months "on holiday" (there are exception to everything but generally speaking.)

 

Big difference in "resident" and "resident for tax purposes" thats the key here. If your overseas pension isnt taxed at source and is paid regularly into a Thai account and you spend more than 180 days in any tax year here then technically you are liable for tax on that income.

 

But as we all know TIT and not all rules/laws etc are enforced but that doesnt mean they are not there should someone choose to enforce them.

Agree.

 

In fact you could spend 181 days on holiday in Thailand and then depart for your home country never to visit Thailand again that tax year and you would still be a tax resident of Thailand for that tax year and liable for tax on any money that you brought into Thailand during your 181 day stay. But stress again this is all hypothetical because you would have had the foresight to only transfer money to Thailand from your saving that had been earned in the previous Thai tax years.

 

Note Thai Tax year is the same as the calendar year, UK tax year from from 6 April  to 5 April and Australian tax year from 1st July to 30th June.  For Thai tax, only the Thai tax year is relevant.

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Talking about pension income, which is not taxable

 

I am likely to die before my wife she is 30 yrs younger than me 

 

I will leave a substantial nest egg off shore for my wife, and I wonder if she can take the income as pension and legally avoid paying tax on it, any knowledgeable input appreciated

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Two things in life are certain, death and taxes as the old saying goes.

 

Dependent on her overall financial situation there is a high probabilty that "technically" she would be liable to pay tax on that income. Whether or not she did in reality is entirely another issue.

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8 minutes ago, al007 said:

Talking about pension income, which is not taxable

 

I am likely to die before my wife she is 30 yrs younger than me 

 

I will leave a substantial nest egg off shore for my wife, and I wonder if she can take the income as pension and legally avoid paying tax on it, any knowledgeable input appreciated

Do you mean that pension income is not taxed in Thailand?  It certainly is in UK and in Australia (unless it is received from a registered superannuation fund in Australia's case).  Have also heard of Aussies who become non-tax residents of Australia, losing their 17k personal allowance and are then taxed on their Australian state pension!

 

Don't know which country you are from, but in Australia's case, your wife would be a non-resident for tax purposes and she would pay Australian tax unless you set up a superannuation fund for her which I believe would be difficult as as she is a non-resident.

 

Tax is incredibly complex.  Best to get a trust worthy tax advisor in your home country to do your estate planning.  Beware of local advice and most certainly do not do your estate planning based on any information you receive on this forum - including myself!

Edited by mngmn
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5 minutes ago, mngmn said:

Do you mean that pension income is not taxed in Thailand?  It certainly is in UK and in Australia (unless it is received from a registered superannuation fund in Australia's case).  Have also heard of Aussies who become non-tax residents of Australia, losing their 17k personal allowance and are then taxed on their Australian state pension!

 

Don't know which country you are from, but in Australia's case, your wife would be a non-resident for tax purposes and she would pay Australian tax unless you set up a superannuation fund for her which I believe would be difficult as as she is a non-resident.

 

Tax is incredibly complex.  Best to get a trust worthy tax advisor in your home country to do your estate planning.  Beware of local advice and most certainly do not plan on any information you receive on this forum - including myself!

I am talking about a thai wife resident in thailand, and the income would be defined as widows pension

 

I have a better tax knowledge than most as a simple retired Chartered Accountant

 

But to get a definitive answer I probably need a local thai tax expert

Edited by al007
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