Proposed changes to taxation

[Gaybutton]

Thank you 2lz2p, but obviously Thai immigration or whichever department handles taxes is not going to try to wade through a 34 page document written in American "legalese".

If Thailand tries to impose an income tax on me, and the amount is enough to motivate me to try to fight it, that's when I would go to a Thai attorney - perhaps one recommended by the embassy - give him a copy of the document, and let the professionals handle it from there.

Hopefully it won't come to that.

[2lz2p]

Thai immigration or whichever department handles taxes is not going to try to wade through a 34 page document written in American "legalese".

It most likely also has its own Thai translated version. Even so, it is in "legalese" and the Revenue Department has to come up with some way for its staff to be able to know what is or isn't subject to tax - not only for this document, but for another 60 of these with other countries.

Based on articles I have read, the Revenue Department has already acknowledged that they will have to wade through these Agreements in imposing the new Rule. Thus, the comments made by the Business Asia people at the PCEC meeting that imposition may be postponed for at least a year is a likely supposition.

I posted the information re the USA Agreement to hopefully let those with Social Security and pension income know at least what is in the Agreement Thailand has with the USA.

[Gaybutton]

it is in "legalese" and the Revenue Department has to come up with some way for its staff to be able to know what is or isn't subject to tax - not only for this document, but for another 60 of these with other countries.

The more we get into this, the more it becomes a highly complicated mess, and worse for the Thai authorities than for foreigners, especially when it is rather obvious that foreigners are not going to be income taxed in Thailand with these agreements in place.

Another idea that was pitched without being well thought through.

If Thailand is sensible about this, they ought to just drop the idea entirely. If they really need more money from us, relax the 800,000 baht rule and let us actually spend our money, which would likely mean much more money coming from us than taxing us would generate.

[Dodger]

Pensions and Social Security Payments

1. Subject to the provisions of paragraph 2 of Article 21 (Government Service), 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.

ARTICLE 21

Government Service

2. a) Any pension paid by, or out of funds created by, a Contracting State or political
subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

b) However, such pension shall be taxable only in the other Contracting State if the
individual is a resident of, and a national of, that other State.

Thank you for providing these details.

Based on what you found (as stated above) U.S. retired expats have absolutely nothing to be concerned about regarding their social security and/or pension income. Regardless if Thailand considers expats as "residents" or not, the fact that they are not "nationals" is all that matters according to the Tax Agreement (as you stated in b) above).

That leaves 60 more Double Tax Agreements that would have to be reviewed to see if retired expats from the other countries have the same level of protection. My assumption is that most probably do. Now if the Thai Revenue Dept. can interpret these Agreements correctly is another matter.

[Gaybutton]

Now if the Thai Revenue Dept. can interpret these Agreements correctly is another matter.

Imagine all the long "legalese" documents they would have to wade through, in a variety of languages, and then be certain they got it right. I find it difficult to imagine them doing it, especially when they know those under such agreements won't be taxed anyway. It would be a miracle if they actually do that and get everything correct and accurate.

I of course could be wrong, but I don't believe that will happen and once someone on the Thai side really thinks this through, the whole thing will simply fade away.

As I said, if they really want to see more money coming into their coffers from farang, all they have to do is relax that 800,000 baht retirement visa requirement and let us spend our money instead of forcing us to just keep it sitting there in a Thai bank account, doing nothing.

[bkkguy]

Regardless if Thailand considers expats as "residents" or not, the fact that they are not "nationals" is all that matters according to the Tax Agreement (as you stated in b) above).

if you meet Thailand's classification of "tax resident", eg spend more than 180 days in Thailand, then whether you are a Thailand "national" or not as specified in the agreement affects Thailand's ability to levy tax on your income, not their ability to require you to lodge a Thai tax return to include this income but show it as non-taxable

[Gaybutton]

not their ability to require you to lodge a Thai tax return to include this income but show it as non-taxable

As long as we don't have to pay the tax, I don't mind taking care of their paperwork - which I doubt we'll have to bother with anyway. But if we do, even if the paperwork is in English, I'll have a Thai accountant do mine.

[Dodger]

if you meet Thailand's classification of "tax resident", eg spend more than 180 days in Thailand, then whether you are a Thailand "national" or not as specified in the agreement affects Thailand's ability to levy tax on your income, not their ability to require you to lodge a Thai tax return to include this income but show it as non-taxable

That's true, the Thai Revenue Dept. can request tax reports from everyone classified by them as "resident" if they want to - but, due to the fact that taxes can not be levied on non-national expats retirement income they would just be wasting their time and money...not something I can see the Revenue Dept wanting to do at this juncture. Sending out Tax Notifications and reviewing countless tax reports and international tax agreements would just add to their burden (operational cots) without being able to collect a single satang. This is not something I can see happening in our lifetimes.

[Gaybutton]

This is not something I can see happening in our lifetimes.

I agree, but then again Thailand is no stranger to collecting useless paperwork - such as the 90-day address reports.

[Gaybutton]

Everyone should watch the following video:

viewtopic.php?p=111855#p111855