Application or follow-up application for exemption from wage tax and premium

It can also be done differently, if you have money in the bank here, for example a deposit, you will receive interest on that. A standard 15% tax on the interest is deducted there. Go to the tax office in your area, you will receive a tax number, you have to file a return and you will get that 15% back. That should be enough for the Netherlands, after all, you have demonstrated that you are a tax resident of Thailand.

Succes

I could handle many of the above tax matters. I am a retired tax partner of Deloitte and still active.

You can get a TIN number (tax number) at the tax office in Thailand. Then you can pay tax here. Only AFTER you have paid taxes here for the past year, will you receive from the tax office in Thailand an official document for the tax authorities in your previous home country as proof that you have paid taxes here. It states, among other things, how much you declared it as income and how much tax you paid here.

The problems with the Foreign Office of the Tax Authorities are regularly discussed in Thailand Blog. Loyal readers should by now know from the inside out how things work out. I have also written about this repeatedly and will now limit myself to the main points.

The most normal thing in the world is that the Tax Authorities / Foreign Office asks you to prove that you are a tax resident of Thailand. After all, she needs to know whether you enjoy treaty protection and which of the nearly 90 treaties concluded by the Netherlands to prevent double taxation are concerned. If you live in Timbuktu in Mali, you have a problem. The Netherlands has not concluded a treaty with that country. You then pay tax on your (world) income in both the Netherlands and Mali.

Until the end of November 2016, you could prove by any means that you were tax resident of (in this case) Thailand.

Since the end of November 2016, the Tax and Customs Administration only accepts as proof of being a tax resident:
a. a recent tax liability declaration in country of residence, signed and stamped by the competent authority of Thailand;
b. a recent tax return and associated income tax assessment.

Instead of her own statement drawn up in English, she also accepts recent statements from the tax authorities of the country of residence, the content of which corresponds to that of the Dutch statement. It must therefore contain a statement that you are a tax resident for income tax purposes in Thailand. To this end, the Thai tax authorities use form RO 22. This Thai statement (translated into English) is even more correct than its Dutch counterpart, because it lacks a lot from a tax-legal point of view.

By merely accepting the conditions under a. and b. However, the Tax and Customs Administration goes far beyond its book in these documents and commits an unlawful government act. It is not the Tax Authorities that determines what is allowed as proof of being a tax resident of a country. Within the framework of the doctrine of free evidence that applies within Administrative Law, only the Administrative Court decides what is allowed as evidence. The attitude of the Tax and Customs Administration is therefore arrogance at its best!

To demonstrate that you are a tax resident of Thailand, the Treaty for the prevention of double taxation concluded between the Netherlands and Thailand contains a large number of points of reference.

First of all, it must be established under Article 4(1) of the Convention that you are subject to tax under the laws of Thailand on the basis of your place of residence.

The Revenue Department of Thailand writes about this on its website:

“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 are brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.”

NOTE: the Treaty is based on 183 days!

Under Article 4(2) of the Convention, you are deemed to be resident for tax purposes (and also in this order):
a. of the State where you have a permanent home at your disposal; if you have a permanent home available to you in both States, you shall be deemed to be a resident of the State with which your personal and economic relations are closer (centre of vital interests);
b. if the State in which you have your center of vital interests cannot be determined, or if you do not have a permanent home available to you in either State, you shall be deemed to be a resident of the State in which you have an habitual abode;
c. if you have an habitual abode in both States or in neither of them, you shall be deemed to be a resident of the State of which you are a national;
d. if you are a national of both States or of neither of them, the competent authorities of the States shall settle the matter by mutual agreement.

Explanation of Article 4(2) of the Convention

You have deregistered from the Netherlands and no longer have a permanent home available to you here. In Thailand you rent a house. In that case, it becomes very easy to prove that you are tax resident of Thailand: you send proof of registration with your municipality, the rental contract and proof of (also recent) rent payments and payments for the supply of water and energy costs. That is the way I usually go with Thai customers who are not registered with the Thai tax authorities. After all, it is about demonstrating that you have a sustainable home at your disposal in Thailand, while that is not the case in the Netherlands.

In addition, you can also think of additional evidence, such as your bills for your telephone and internet connection, receipts and so on, to also indicate where the center of your financial/economic interests lie.

Your bank statements can be of great importance, both from your Thai and from your Dutch bank account. After all, they also provide a lot of information about the center of your financial/economic vital interests. In addition, it can be used to determine where you usually stay (especially if debit card payments are made here). You can also prove where you usually reside with the stamps in your passport.

Are you married or do you have a long-term relationship with perhaps a child, also state that. With this you indicate that your personal vital interests are also located in Thailand.

I also always add all this to a request for exemption, if one does not have one of the documents required by the tax authorities.

It is certain that you will encounter a lot of resistance from the tax authorities. They canonized their new policy introduced at the end of November 2016. An “impediment” retired a week and a half ago, namely mrs. V (also well known to Erik!). However, last Friday I found out in an appeal case concerning a Thai customer that a new "prophet" has already arisen.

If you do not have one of the documents required by the Tax Authorities, obtaining an exemption from payroll tax withholding is a long-winded and very time-consuming process. Your application for exemption will not be processed. You cannot lodge an objection against this. However, this is possible against the first withholding of wage tax from, for example, your private pension. This objection will be irrevocably rejected by the tax authorities. The way is then open to the Administrative Court for lodging an appeal.

I currently have 2 appeals pending at the Court of Zeeland – West Brabant against the inspector of the Tax and Customs Administration/Office Abroad. However, you have to count on a lead time of one year. This Court is dying in work. It even organizes court days at other Courts, such as the North Holland Court. The latter would suit me well since I prefer to travel from Heerenveen to Haarlem than to Breda.

I have compiled an extensive document on the matter of applying for an exemption from wage tax withholding, filing a notice of objection against the withholding and lodging an appeal. I will send that document upon request. Then do so by email: [email protected].

Lammert de Haan, tax specialist (specialized in international tax law and social insurance).