Tax file: Remittance base; a preliminary judgement
Various emigrants have approached the tax authorities about applying the remittance base, Article 27 of the treaty between the two countries.
After all, in mid-2014 the Tax and Customs Administration adopted a different position, which you can read in the Post-Active Tax File, questions 6 to 9.
That vision has been abandoned, according to some letters. The tax authorities will apply Article 27 and we would like to draw your attention to a few important points.
- The tax authorities are of the opinion that only direct transfers by the pension or annuity body to a Thai bank account are sufficient. The money first received on one's own bank account (in the Netherlands or elsewhere but not in Thailand) is not considered to be in accordance with Article 27.
New decisions to be issued to the paying body will be subject to this condition and only if that body pays directly to a Thai bank account may it apply the exemption. If you do not provide a Thai bank account, wage tax will be withheld; it's that simple.
- Current decisions will not be revoked unless the decision is first revoked and then the new regime takes effect per the new decision that is then issued.
- Our opinion is that you should accept new dispositions with this condition and provide the paying agent with a bank account in Thailand; this can be a THB account or an account in euros or other currencies as long as it is with a bank branch IN Thailand.
According to the tax authorities, the fact that there are costs involved is no reason to just pass the treaty. After all, it is our choice to live outside a region where these types of transfers cost little or no money.
- This measure only applies to sources of income that are taxed in Thailand under the treaty.
- Of course, everyone is free to take a different point of view.
How to object to withholding wage tax is stated in the aforementioned file. Going to court involves (high) costs and a long period of uncertainty; we report it again.
- This is a rearguard action. It has already been noted that in the new treaty between the Netherlands and the Federal Republic of Germany, pensions (etc) are allocated for taxation to the paying country and we will not be surprised if this provision also appears in the new treaty between the Netherlands and Thailand.
As far as we know, the negotiations have yet to (re)start, so whether that new treaty will be there in the short term is not certain.
- Heerenveen, Lammert de Haan
- Nongkhai, Erik Kuijpers
It seems perfectly logical to me that people are taxable in the country where they live.
After all, people also use the general facilities in the country where they live.
If I live in Thailand, whatever I do, I don't see the logic of paying tax in NL, after all I get absolutely nothing in return, what's more, I can't get anything in return.
In this I completely escape the logic of paying AOW and pension into a Thai account.
Whether payment is made to a Dutch or Thai account is not important at all, is it?
I fear, if the Netherlands, against all logic, starts taxing payments to expats outside Europe, that Thailand will take this very highly and will continue to tax income, or even worse, income received on Thai accounts .
So just pay double tax, both in NL and in TH.
Nice prospect.
It seems to me that many of us MUST return to the Netherlands, and will end up completely in the benefit and subsidy circus there again.
And thus will negate the extra tax revenues of NL.
But don't count on living in Thailand for eight months and the rest in the Netherlands, because from 2017 medical expenses incurred in Thailand will no longer be reimbursed.
HansNL states: "It seems to me completely logical that one is liable to tax in the country where one lives...."
Disagree: in NL, the contributions in previous years have been deducted from tax, so it is more logical that you pay tax in NL on your pension, etc.
Furthermore, HansNL states that double taxation may have to be paid in the future. That seems very unlikely to me, because a tax treaty has been concluded for this purpose and the prevention of double payment is one of the most important items in it. Precisely that will be maintained in any new tax treaty.
HansNL also states: “It seems to me that many of us MUST return to the Netherlands, and will end up completely in the benefit and subsidy circus there again. And will therefore negate the extra tax revenues of NL.”
This is completely incorrect: which benefits? state pension? You already get that. Pension? You already get that. Oh, wait, maybe a small discount on public transport and museum tickets?
But where HansNL is especially wrong is that he states that if many have to return to NL, this will be detrimental to the Dutch State: on the contrary, if, for example, 1000 expats return, at least 1.000.000 euros more per month will enter the Dutch economy rightly so, from which the treasury (e.g. VAT) benefits.
For the sake of convenience, Kees 2 forgets to mention the return to the Dutch healthcare system here. What did you think it would cost with all those returning elderly Kees?
2,
Your response is short sighted.
But I will try to explain my story.
The revision of the tax treaty between NL and DE is based on reciprocity, Dutch citizens in Germany are taxed by the Netherlands, and Germans in the Netherlands are taxed by Germany.
Now it comes.
Since there are considerably more Germans in the Netherlands than Dutch people in Germany, you can only think that taxing the Dutch in Germany should be seen as a kind of morbid desire, simply because tax revenues from Germans in the Netherlands could be higher.
The point about levying double taxation and a possible new treaty between NL and TH is of course subject to the conclusion of a new treaty.
Suppose there is no treaty, the Netherlands starts levying taxes.
And Thailand sees its tax revenues disappear from the Dutch.
The chance that Thailand then says, bingo, we are indeed going to levy taxes, then who is with the fried pears?
Yes, you can then reclaim paid tax, but NL can simply refuse that.
Ergo, double taxation.
An unusually strange assumption?
No, it is not.
As far as paying taxes is concerned, a state, ie a government, can levy taxes to make provisions for, ultimately, the residents.
I don't live in the Netherlands, so I have to pay taxes, but unfortunately, big bump, I can't enjoy the provisions that the state makes with my tax.
On the other hand, the country where I live gives me the opportunity to enjoy the facilities it provides, including for me, but for which I do not pay anything.
Collecting taxes is not an end in itself, but a given to make provisions.
Therefore, it is illogical to fence with wages, deferred wages, tax benefits, and whatever.
It is improper to collect tax and not to make provisions for it that can be used by the taxpayer.
Seems logical to me.
The following is about the possible need to return of the Dutch.
The money tap from the Netherlands is increasingly being squeezed, while everything in Thailand is becoming much more expensive.
The fact that many Dutch people can no longer meet the income requirements and / or can no longer provide for themselves is indeed a possibility that is getting closer for many of us.
The return of the Dutch is described above as only beneficial for the treasury.
It is forgotten that the returnees will fully enjoy the pleasures of our facilities.
And that can cost something, right?
If 1000 expats return, more tax may be collected, but the State of the Netherlands does not look at the expenses that this raking in entails.
Dear Keith 2.
Your assertion that I am completely wrong in my assumptions is a remark on its own account.
I am certainly not wrong at all, dear Kees 2
In its lust for money, the State of the Netherlands belongs to the guild of thoughtless idiots.
Indeed, what I have painted above with regard to double taxation is a very good possibility.
And as far as returning expats are concerned, these are generally somewhat older people, who will certainly put a heavy burden on the facilities, and will therefore reasonably reduce or nullify the planned tax revenue.
A fact that is getting through to some politicians, as is the fact that, for example, taxing 10000 Germans in the Netherlands yields more than taxing 1000 Dutch people in Germany.
And then I'm not even talking about what Thailand's reaction could be if there were no new tax treaty, or the existing tax treaty is terminated by the Netherlands on the one hand.
Excuse my long windedness.
But I may be completely wrong in my assumptions.
But Kees 2 could very well be completely wrong.
Actually, his answer can be compared to an official answer.
For expats, things are different.
For expats it matters where you work contractually. If you have a Dutch employer, who pays you in the Netherlands, but you are in Thailand for your work, then I think you are liable to pay tax in the Netherlands.
If you are a Dutch citizen and your income originates from another country, that country is in principle entitled to withhold taxes. If they don't, the Netherlands can claim it (but there are some rules to get around it)
In itself, I don't find it very interesting to which bank account is paid out.
In the end I have to spend that money in Thailand anyway, so it has to end up in the bank here.
You can also consider whether it is so unfavorable to tax your money in the Netherlands.
The percentage of money that is taxed in Thailand is rising quite quickly.
Then it could be more attractive to have – part of – your income taxed in the Netherlands.
But you'll have to calculate that.
You may also be able to use an averaging of your income over 3 years if you receive 90% of your worldwide income in the Netherlands.
I have not yet found out whether that 90% of that worldwide income applies to the total income over 3 years, or 90% of each year that you want to average in that period.
It's not specifically stated in the text
An additional problem with tax returns in Thailand is that you need a statement from the Dutch tax authorities for the exemption from the Thai tax authorities for taxed income in the Netherlands.
But if you already have to file the return in Thailand, your tax in the Netherlands has not yet been processed by the tax authorities.
.
I myself am liable to pay tax in a country other than the Netherlands. But what I do there. Submit both declarations at the same time and include an attachment of my Dutch declaration. That is just accepted. Chances are Thailand will do the same.
Following up on the very last part, I have the following question.
Because most of the people in Thailand are Dutch pensioners, such a change would be financially drastic for most people.
What happens if you have been living in Thailand for years and have made this choice, partly on the basis of the existing tax treaty and its financial consequences.
Are there examples and experiences of other countries (such as Indonesia) where such a change has been introduced?
Do you have historical rights and, as you have already been deregistered from the Netherlands and registered in Thailand, you can continue to claim under the old regime.
Well that's nice...I do live in Thailand and am 'non-resident' in the Netherlands, but I still have quite a few costs that I have to pay in the Netherlands, including mortgage etc. of my Dutch house as well as sewer rights etc etc...so I am now obliged to send baths to my Dutch account... 2 x exchange rate losses ???? Or is it possible to open a euro account at Thai Bank where I can also transfer euros back to the Netherlands??
Like to hear
Piet
Thanks Eric for the update.
I would nevertheless like to make a few comments.
You write “Our opinion is that you should accept new orders with this condition”. I would rather say: "you are doing it wisely" and only if you are unable to reclaim the wage tax withheld.
If you pay tax in Thailand, it is very easy to reclaim the wage tax withheld in NL. In 2006 I managed to do this very easily and without legal proceedings.
If you don't pay tax in TH and don't intend to, you might be wise to accept the remittance base.
Finally: if I “reinterpret” what you write, then you say: specific objection procedures aimed at the recovery of payroll tax in connection with the application of remittance have not yet been conducted (and can therefore entail a lot of time and costs).
Thank you Erik Kuijpers and Lammert de Haan for the explanation and explanation of the decision of the Tax and Customs Administration.
At first they asked for proof of paying tax in Thailand, I objected to that. So I am now happily awaiting a response from the Tax and Customs Administration regarding a new application for exemption. If I may receive a similar letter regarding Remittance, I will agree to this condition. Incidentally, it shouldn't be a problem if I continue to have my AOW transferred to a Dutch bank account, right? I have indeed been paying tax since January 1, 2015 (applied to SVB myself). Savings in the Netherlands are not taken into account, may I assume?
Besides wage tax, is there still an item that is deductible? Social insurance premium? Can't that also be deducted?
Piet, you can open a currency account in Thailand and therefore also in euros. But there are costs associated with booking money back and forth.
RichardJ, we are not aware of any ongoing proceedings, but they are generally only published after a court decision in the last instance. We do not yet see anyone going to court because the financial interest is limited to bank costs and currency risk.
We also think that the tax authorities have a strong case.
Hi Eric,
I have tried to implement your suggestion regarding opening a Euro account.
You probably guessed it.
At my SCB Bank: absolutely impossible for a foreigner who does not have a work permit.
Funny answer from SCB because as a pensioner you MAY not even work and a work permit is virtually impossible. When asked if I could transfer my money back from Thailand from my SCB account to the original account in NL: NO, we don't.
Subsequently, 4 other large banks were asked the same question. For all banks, the answer to both questions was a short and clear NO.
This means that if your pension money is required to go to a Thai Bank account, you will never be able to get it to NL again.
Except in cash, I hope.
I know the rules regarding imports of more than €10.000 in NL.
Suppose I want to import €30.000 in Euros into the Netherlands, do I also have to declare this to Thai Customs upon export?
I ask this because I'm starting to get a bit tired of it and I'm seriously thinking about returning to NL. Taking my money with me of course 🙂
Too bad about a good marriage in Thailand, but it is actually made impossible for you to stay here today. And then we don't know what jokes are yet to come.
Regards and thank you very much for your update,
Wim de Visser
Dear Wim,
Coincidentally, something like this happened last year. A friend of mine had to return to the Netherlands for health reasons. Could not transfer money via internet banking. We had to come to the bank, fill in forms and money was neatly transferred to the Netherlands.
Regards,
Rob
Hi Wim,
I simply receive my income directly from ABP to the Bangkok Bank. I have internet banking with them. I can simply transfer money to the Netherlands. If I want to transfer to another account in the Netherlands, I cannot change it myself the first time because I have a “Foreigners who are permanent resident in Thailand without work permit”. At my branch, my details are entered as I wish, and then I can simply transfer via the internet. It is introduced as Salary Repatriation. So I don't see why everyone is making such a fuss about it.
Dear Mr. Wim de Visser.
I have been living here on a simple retirement extension for more than 11 years now.
I have been a customer of the bank of Ayuthaya for years, this bank has a yellow color.
I have an FCD account there, in Eurooos, at the Krungsri (Thai name) bank, which has also been running for many years.
Can transfer money from my Dutch bank accounts in EUR to Thailand and vice versa in Euros back to Holland.
You can also link a debit card to this FCD account, of course for an annual fee.
And you can withdraw money at the local ATM and convert it from EUR to THB.
It couldn't be simpler.
I therefore send money from, among other things, an annuity payment to my fcd in Thailand to save transfer costs 4 times or 2 times depending on the circumstances.
And if I like the rate, I exchange them for THB.
Jan Beute.
First of all my appreciation for the message from Lammert de Haan and Erik Kuijpers.
However, some nuances:
1. what is being reported about the new treaty with Germany is not entirely correct, but it would take us too far to go into it in depth, because it is not very relevant for pensioners in Thailand.
2. what people think of it personally and what personal (also fundamental) objections they have are also not very relevant; it's about how “Heerlen” deals with it, because that's what we're dealing with.
3. a few "smarties" have thus awakened the sleeping dog in "Heerlen"; not very useful!
4. Heerlen may demand direct transfer; if you do not want to comply with it, you will therefore not be exempt from withholding payroll taxes.
5. something completely different or direct transfer is required to get back the withheld payroll taxes by filing an income tax return (form C).
6. If you live in Thailand, you are in any case exempt from National Insurance contributions and Zvw contributions.
7. Thailand will (theoretically!) levy only on the income that has been transferred to Thailand.
8. Having a part taxed in the Netherlands and a part in Thailand (to dampen the progression) seems sensible, but should also be practically possible. If 1 has a pension, the benefits agency will probably not want to split the payment; but if you have several pensions, it is of course possible to have one pension paid out in the Netherlands and the other pension in Thailand.
9. The Netherlands wants to levy if Thailand does not levy, because people hate it when pensioners receive their pension completely tax-free; that was also the reason for amending the treaty with Germany.
Wisdom in making choices and in acting is required!
Joost (tax advisor)
A comment on point 7.
Thailand does not charge on the transferred income, but taxes on all money that is transferred to Thailand, unless you can provide proof from the tax authorities that tax has already been paid on the money in the Netherlands.
So also about savings that are transferred.
That is the outcome of a conversation with a very friendly official at the regional headquarters in Thailand.
How you come up with such proof is a different story, of course.
Especially since you have to file a declaration in Thailand before the end of March.
Then you have not yet received an assessment notice from the tax authorities in the Netherlands.
It was indeed a very friendly official, because after a pleasant conversation with a cup of tea, I received a receipt with the amount of 0,00 Baht on it.
I think that should have been a bit more.
Incidentally, being registered with the tax authorities is required by law if you stay in Thailand for more than 180 days in a calendar year.
Even though no work is currently being done on the implementation of that law.
I do expect that something will happen with it in the near future.
It's not that difficult after all.
Whether you have been in the country for 180 days can come straight out of the computer at immigration.
They may then ask for your proof of registration with the tax authorities.
Visa overruns are already being addressed.
Taxation will undoubtedly follow.
The Thai government can also use the money well.
Dear Ruud,
Regarding your first comment that Thailand would levy on everything transferred to Thailand, the following: I don't think what you say is entirely correct; but you must be able to demonstrate that you are not transferring income to Thailand, but (eg) savings. In the latter case, you do not pay in Thailand for the part that has been transferred. It is therefore a matter of proof, because you must be able to prove that it is real savings.
Sincerely, Joost Heringa
Just a hint Joost, in addition to the response I gave earlier.
Please contact one of our colleagues from Mazars, Bangkok. As I have experienced, they will speak to you very kindly. They can provide you with a wealth of information about the Thai tax system and its background. But you can bet that they will ask a lot about the Dutch system.
http://www.mazars.co.th/Home/Doing-Business-in-Thailand/Payroll/Personal-Income-Tax
Hi Erik,
I do wonder whether the AOW should also be transferred to Thailand. Don't we pay tax on that in the Netherlands?
Because the AOW is taxed in the Netherlands, there is therefore no reason to transfer it in connection with the exemption from payroll taxes. You could therefore use that AOW in the Netherlands for various financial obligations if necessary.
I understand the background of this story all too well .
I have also been a tax resident in Thailand for a few years now.
Thailand only taxes income that is actually transferred to Thailand.
The Dutch tax authorities are therefore afraid that there are many who would no longer be liable to pay tax in the Netherlands, but are now liable to pay tax in Thailand.
And then leave their pension or annuity payment in a Dutch bank account, so as not to have to pay tax anywhere.
I still transfer my annuity payments in a six-monthly installment, thus saving monthly transfer costs.
Jan Beute
But what if your pension fund does not want to deposit into a foreign account (because of previous problems with Yugoslavia). Was reported to me during an information meeting.
herman
Why is this article written in an incomprehensibly crippled Netherlands?
Which means: "Renewed decisions to be issued to the paying entity will include that condition and only if that entity pays directly to a Thai bank account may it apply the exemption."
And: "One will not go back on current decisions unless the decision is first revoked and then the new regime will take effect per the new decision that is then issued."
And: “The fact that there are costs involved is, according to the tax authorities, no reason to just pass the treaty.”
And: I would like a few more of these. . . . Even if there are costs involved, current decisions will not be subject to this condition, this condition will only apply if that body pays to a Thai bank account.
What kind of weird monkey cabbage is this? Write normally clear Dutch!
Joost
Rob1706, savings and other 'movable' property falls outside box 3 after emigration to Thailand. See the tax file for a summary of what remains taxed in box 3 in NL.
Joost, ad 3 seems strong to me, specialists in Heerlen have been hesitating for years against the fact that people in Thailand do not always want to describe for the income tax (I was also sent away after an extensive explanation in Thai, but the 'specialist' and the helpdesk knew better…);
ad 5, wonder who will take the step. I still have 5 years of exemption under the old rules so I don't have this problem. And in 5 years the treaty may be different and my company pension may also be taxed in NL.;
ad 8 is an option that can yield money if you stay in the first bracket in NL and that is a matter of calculation.
Dear Erik,
Re point 5: With regard to the application for an exemption, Heerlen can set the condition of direct transfer. But it is sufficient for the remittance rule that the money is transferred to Thailand (within 1 year) and therefore does not have to be transferred directly by the pension-paying institution to a Thai bank account.
It is certainly worth a procedure, because the outcome of that procedure applies for many years!
Sincerely, Joost Heringa
Someone asked about the future expectation with regard to the tax treaty: That is a bit of speculation, but I expect that a treaty change will take many years because Thailand has no interest in a change.
If there is a change, it will probably go in the direction of the treaty with Portugal, being that the Netherlands may levy if the country of residence does not levy (or perhaps, as with Germany, that the Netherlands may "additionally levy", as if it were in the Netherlands taxed (i.e. less what is levied in the country of residence)).
@ Eric,
In your answer regarding a possible procedure you apparently assume that going to court will be inevitable. I wonder if this would be the case. Can you indicate why you think this?
I imagine the following course of action:
The “remittance” decision that you receive from the BD is a conditional exemption. In the decision, the BD explicitly acknowledges that your pension is exempt from withholding payroll tax in the Netherlands. However, the actual exemption is subject to a “remittance” condition under Article 27.
Suppose you do not follow the BD's remittance proposal, with the result that the pension fund applies payroll tax to your pension.
Then, for example, after 6 months you transfer the total gross amount of the pension of those 6 months to your bank in Thailand.
Then you submit a notice of objection to the BD against the wrongful withholding of wage tax. The argument reads:
-that the pension is exempt from wage tax and national insurance contributions in accordance with its own decision and
-that in accordance with Article 27 the full pension income has been transferred to Thailand (submitting the bank statement).
@Joost,
In Erik's article I read:
6.This is a rearguard action. It has already been noted that in the new treaty between the Netherlands and the Federal Republic of Germany, pensions (etc) are allocated for taxation to the paying country and we will not be surprised if this provision also appears in the new treaty between the Netherlands and Thailand.
Because of this message, I and a lot of people with me are now very worried about their financial future.
In your response I read:
1. what is being reported about the new treaty with Germany is not entirely correct, but it would take us too far to go into it in depth, because it is not very relevant for pensioners in Thailand.
In:
9. The Netherlands wants to levy if Thailand does not levy, because people hate it when pensioners receive their pension completely tax-free; that was also the reason for amending the treaty with Germany.
Apparently you have a different opinion about the future content of the NL-TH tax treaty than Erik.
Can you explain your opinion to us in more detail?
Please see my follow-up response to Erik's response to my post.
Sincerely, Joost Heringa
RichardJ, your question is what happens if you do not have it transferred directly and have wage tax deducted in NL, and you later transfer the gross amount to Thailand and reclaim that wage tax in an objection or on a tax return.
I have a strong suspicion that the tax authorities will refuse a refund or settlement on the basis of the 'direct' criterion. Will they get the approval of the judge? Opinions on this are divided, but if it concerns my own case, I will not enter the procedure.
As mentioned earlier, direct transfer is only important with regard to the application for the exemption, but I think it should be sufficient for the remittance rule if the money is transferred to Thailand within a year.
As far as I'm concerned, it's definitely worth a procedure!
Sincerely, Joost Heringa
I am not sure on what grounds the tax authorities can refuse a refund/setoff.
You are registered as a non-resident taxpayer (I assume)
The application for the exemption may possibly be refused, but when filing a tax return in the Netherlands, you will simply have to be treated as a non-resident taxpayer, it seems to me.
What is the essential difference for Thailand at the moment between transferring money to your Thai bank account yourself or having this done directly by a pension fund? Looking into the future is given to few. Speculating what might happen is simply a matter of waiting. We have no influence on.
So that doesn't matter for Thailand; it is only important for the Dutch tax authorities to be able to levy. (In addition, you also have the option of transferring part yourself and not the rest, because I assume that a pension fund will not want to pay in splits.)
I once read that if your income in Thailand was not transferred to Thailand in the year of payment, you did not have to pay taxes on it.
If the procedure, as explained to me at the tax office in Thailand, is / will be generally applied, for exemption from taxation on money you bring into Thailand, you must demonstrate that you have already paid tax on it in the Netherlands.
With this, the Thai tax authorities place the burden of proof for not having to pay tax on the expat and delaying transferring money to Thailand is no longer worthwhile.
In fact, it could be difficult to prove that you have already paid tax in the Netherlands on the money you bring in, if you leave it in a Dutch account for a few years.
In that case, the Dutch government's arrangement to transfer money directly to Thailand will probably become a bit mustard after the meal.
REPLYING TO SOME COMMENTS SUBMITTED
Some reactions have already been answered by colleague Erik Kuijpers. However, there are still a few comments that require further explanation or a response. In addition, I will repeat as little as possible the texts to which I subsequently respond, in full. In principle, I suffice with a reference to the posted comment.
BA writes on 22 February 2016 at 20:59
“If you are a Dutch national and your income originates from another country, then that country has, in principle, the right to withhold taxes. If they do not, the Netherlands can claim it (but there are some rules to get around it).”
This is incorrect. If a country refuses to levy tax on you, the right to levy tax will not be revived for the Netherlands.
If the Netherlands has not concluded a tax treaty with the country in question, the Netherlands may levy taxes on 'the worldwide income' at all times. If the country in question also levies, the Dutch Decree on the Prevention of Double Taxation can be invoked in the Netherlands. However, this is subject to special conditions.
Arie February 22, 2016 at 13:37 PM
Wage tax and social security contributions are not “deductible” for income tax purposes. If these are due, they will be deducted from your wages or benefits or presented to you later by means of an assessment. Apart from exceptions, you no longer owe social insurance contributions if you live outside the Netherlands.
Joost February 22, 2016 at 15:17 PM
I will elaborate on some of your nuances:
Ad 1. If by “not quite correct” you mean “concise” then I have to agree with you. This was chosen for the same reason that you already indicated (it would indeed take too far and the finer points are also less relevant).
Re 5. You leave open what is so completely different when filing an income tax return (form C). You indicate that you are a 'tax advisor'. And then I should have expected a more thorough answer from you.
If you mean by this that you can designate a company pension that is in principle not taxable by the Netherlands as “not taxed in the Netherlands”, then you may well come home from a rude awakening. This is less true for 'Thailand goers': I can't imagine that the fairs are really cold there (but that's just a joke).
Thai law on this point:
“A resident will be taxable on income from all sources in Thailand on a cash basis regardless of where the money is paid, and on the portion of income that is brought into Thailand in the same year that it is earned.”
Demonstrating the 'introduction into Thailand' will probably not pose such a big problem. But you can immediately expect a question from the tax authorities to demonstrate that the funds brought in in Thailand were also obtained in the Netherlands in the relevant tax year ('earned' as Thai law indicates).
That is doable, but do ask for a perfectly maintained administration (which I will not go into too much detail in this context).
Ad 7. So not correct (see my earlier comment).
Ad 8. Most Dutch people residing in Thailand enjoy two sources of income from the Netherlands. Let me just call them both 'retirement' for the sake of convenience. This concerns the AOW benefit (taxed in the Netherlands) and a company pension (in principle taxed in Thailand).
If you do not need both pensions in full for costs to be incurred in Thailand and you want to pay as little tax as possible in the Netherlands, then at least transfer your company pension to Thailand. After all, your AOW benefit is always taxed in the Netherlands, including when you bring it in to Thailand!
Ad 9. The reason you give for changing the tax treaty with Germany is a completely different one. The correct answer to this is contained very correctly in the response of Kees 2 of February 22, 2016 at 13:53.
Incidentally, as a tax advisor you should know that the position of the Dutch government to bring back the taxation of income obtained from the Netherlands to the Netherlands dates from the late 1973s. Just for fun, take a look at the Tax Treaty Netherlands-Indonesia 2002 and the Tax Treaty Netherlands-Indonesia XNUMX and see what the policy has been in existence for many years.
I assume that you have access to both treaties, otherwise just send a message via my website: http://www.lammertdehaan.heerenveennet.nl
Ruud February 22, 2016 at 20:00 PM
Ruud, about transferring 'savings', read my previous response under ad 5 (“brought into Thailand in the same year that it is earned”).
Christiaan H 22 February 2016 at 15:59
You do indeed not have to transfer your AOW benefit to Thailand for the reasons you indicate yourself. See also my response to Joost, under ad 8.
Jan Beute February 22, 2016 at 16:28 PM
There is a danger in the six-monthly transfer, as I have already indicated in a few previous responses. After all, it is about 'contributing to Thailand' of (Dutch) income received in the tax year.
RichardJ February 23, 2016 at 04:51 am
I am afraid that a notice of objection due to the wrongful withholding of wage tax will not yield a positive result for you.
Just like the income tax, the wage tax is also a period tax. Subsequently, the period for payroll tax is one month. And if you cannot demonstrate over that period of a month that the income as earned in the tax year has actually been contributed to Thailand, then you cannot demonstrate that Thailand is allowed to levy on this (i.e. to the exclusion of the Netherlands).
The withholding of wage tax in the tax period in question was therefore justified.
You may then run into problems with your income tax return. See some previous comments.
RichardJ February 23, 2016 at 05:04 am
Why should you (and a lot of people with you) suddenly start worrying about your financial future?
I assume that you did not have to pay tax in the Netherlands and not in Thailand when you immigrated to Thailand. Nothing changes for you (and all those others). If you bring in your fully enjoyed company pension in Thailand in a tax year, Thailand MAY levy tax on it and the Netherlands cannot. And if the Thai tax authorities subsequently refuse to register you as a taxable person (which I hear all too often), the right to levy tax on this will not be revived for the Netherlands.
Rob1706 February 23, 2016 at 07:58 am
The essential difference between transferring money to your Thai bank account yourself or having it done directly by a pension fund lies in the fact that TWO criteria must be met in order for there to be an income to be (possibly) taxed by Thailand, viz. :
1. it must actually have been introduced in Thailand and
2. it must have been enjoyed in the same year of insertion.
If you do not have your pension transferred directly to Thailand, but do so yourself, it is your responsibility to demonstrate that the second criterion has been met and that it does not concern an old savings balance!
I wouldn't let it get to that point.
Incidentally, Rob1706, Erik and I do not look further into the future than what has already appeared on the horizon, such as the first tentative steps that have already been taken towards a revision of the Tax Treaty between the Netherlands and Thailand, knowing what the Dutch policy has been in place since the late XNUMXs.
We certainly do not look any further.
And if I may speak for myself for a moment: if I could look further into the future, I would no longer deal with international tax law on a daily basis, but I would set up a tent at the fair (just kidding).
Dear Lambert,
first of all thank you for your detailed answer. Had already come to the conclusion to leave AOW in the Netherlands and to transfer full company pension directly to Thailand if this is necessary to obtain an exemption. However, I am still awaiting a letter to that effect from the tax authorities. This rule was not mentioned in the letter of January 20, because they asked for proof of payment in terms of tax by means of a copy of the last tax return/assessment of the country of residence.
I have been transferring most of my company pension to Thailand for over 9 years. Must provide a statement of income every year when renewing non-immigrant retirement visas and therefore meet all conditions in Thailand.
My comment about not being able to look into the future has more to do with the fact that one should not worry too much about something that may happen. Glass half full, glass half empty, or a man suffers most from the suffering he fears. I'm too old to worry about that anymore. Abolishing the payroll tax credit as of January 1, 2015 also cost me money, I could worry about it or just get on with life and I did that. I'm not able to change such things anyway so I don't spend too much time on that.
Simply put: what changes and what is the best adjustment? If Remittance is required for exemption, I simply have my company pension transferred directly to my Thai bank account every month.
Good luck with your work, I myself participated in the labor process for over 41 years, but I'm glad that book is now closed.