Reader question: What about the tax in Thailand?
Dear readers,
What about the tax in Thailand?
- The embassy states that you do not have to pay taxes in Thailand, because you have no income in Thailand (retirement visa).
- The tax authorities say that you will not be registered because you have no income in Thailand.
- The following provisions can be found on the internet.(www.rd.go.th/publish/6045.0.html)
a. 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.
This defines me as a holder of a retirement visa so a taxpayer.
b. A taxpayer has the following duties : File tax returns and pay proper tax. Register for tax identification number. A taxpayer must also notify the Revenue Department officers of any changes in his particular details. Provide relevant documents and accounts as the law requires. This includes receipt, profit and loss statement. Balance sheet, special account, etc. Cooperate and assist the Revenue Department officers and provide additional documents or information when required as well as comply with the summon. Pay tax as assessed by the Revenue Department officers on time. Should a taxpayer fail to pay a complete sum, the assessment officer has the right to seize, attach and sell that asset by auction even without a court decision. Cash raised from the transaction will be used to pay off tax arrears. Non-compliance with tax law. Anyone who does not comply with the law will face civil and criminal action.
This means that I have to apply for a tax number and fill in a tax form. If I don't do this, am I apparently punishable?
Anyone have any idea?
Yours faithfully,
Ruud
On 1 October next, the AOW tax file will be published here. This part is also covered there.
The simple fact that you stay in this country more than 180 days in a calendar year makes you liable to tax as a resident for tax purposes. The status of your stay and the stamp in your passport are not important. This sentence of yours…” This defines me as a holder of a retirement visa, so a taxpayer….” does not correspond to the law. The residence is what counts, not the status of that residence.
This might be something to re-read….
“…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…” What exactly does it say? Act accordingly, as this sentence no longer appears in the proposed amendment to the legislation.
If you do have income on which you have to pay tax in Thailand, you can report it to the tax authorities here.
If you only have income that has been allocated to the Netherlands for taxation in the treaty, you owe nothing in this country.
Income that is not mentioned in the treaty can be taxed in Thailand because the so-called residual article is missing in the treaty between NL and TH. That is a point of attention.
In my case, I stay in Thailand more than 180 days a year on my retirement visa.
So by "in my case" I mean my own situation, because I can't judge anyone else's situation.
The addition of retirement visa indicates that I do not work in Thailand, so I have no income from work.
The only income in Thailand consists of some interest income and 15% tax is already withheld there.
“…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…” What exactly does it say? Act accordingly, as this sentence no longer appears in the proposed amendment to the legislation.
At the moment I have no income from the Netherlands, but I still live on money in my bank account.
Only in 2016 will I receive income, which, as far as I can now judge, will be taxed in the Netherlands (annuity plus early retirement (insurance, no pension fund) and foreign taxpayer)
But I need to investigate that further.
(I still have a moment.)
However, I'm still stuck with:
1. the incorrect information by the embassy in The Hague.
I think that is important for everyone who is misled by the embassy.
I also went by that information, although after I moved to Thailand I did visit the tax authorities to check if I had to do anything.
They didn't want to register me then, because I had no income in Thailand.
2. The refusal of the tax authorities to register me.
This while registration seems mandatory if you stay in Thailand for more than 180 days a year.
It seems to me that as I have now read it, I should ALWAYS register, even without taxable income.
And that this applies to anyone who stays in Thailand for more than 180 days.
I assume I will have to go to the IRS again?
I hope I can find the text about the tax in Thai.
I am probably more impressed with that than with the English one.
I don't know if they can read it.
Will the tax file on the state pension also contain a section about how much and exactly what tax is levied on?
I haven't found a clear story for that yet, other than a percentage of the money you bring into the country.
A percentage of the money you bring in, or a percentage of the income you bring in?
And how much is a percentage, or are these the rates according to the tax brackets?
Complicated matter, also in Thailand. I went to the district tax office in Huahin and sure enough I would have to pay taxes and in advance. The amount was approximately 200.000 Baht!! How it is calculated is a mystery to me and why pay in advance is a mystery at all!
I went to the notary in Huahin again and he came up with the following (got it in black and white from him)
up to 1.000.000 you pay 35000 Baht
from 1.000.000 – 3.000 you pay 000%
from 3.000.000 – 5 you pay 000.000%
from 5.000.000 and more you pay 37%
How did he get there? He got it from the tax office.
Furthermore, the legislation is also unclear: Point 2. Taxbase states what the taxable income categories are (assessable income). I do not extract pension income. If there is a reader who has it
If you can indicate which category it falls under, I would like to hear from you.
Your percentages differ from what is shown here (http://www.rd.go.th/publish/6045.0.html)
Or is it only about money brought into Thailand?
Erik, is it necessary or not to register as a taxable person in Thailand. So I only mean proof of registration. Can the Netherlands ask about this?
Dirk, now you have just come to the most difficult part. I await professional comment from NL and a response from the tax authorities. Article 27 of the treaty is the crux.
Ruud, I'm not registered with the service here either. I do have a PIN in my yellow house book, but that does not mean that the tax service also knows me. I'm going to report back and see what happens. I strictly adhere to the fact that income is brought in at the end of the year and in that case I am actually living off assets.
Experiences of others who have a pension from another country and have reported are of 'they don't see me yet'. And yet there are pensioners registered here, there are those who pay on the NL company pension and one gentleman even pays on his AOW here. Randomness or ignorance? I think that not every tax office knows the rules and calling 'Bangkok' is a loss of face.
I experienced the latter myself at the SSO, where people did not understand anything about proof life. No, we don't call Nonthaburi, come back in 2 days. Yes, they call the boss but I don't get to hear that….
Bring a witness and ask for the name and position of the person who is speaking to you.
The other comments are addressed, or in links, in the dossier.
It is a mystery to me that proof of life is even difficult. I went to the SSO office in Huahin for proof of life and was outside 10 minutes later with a statement (my pension fund's own form) and a beautiful stamp on it and completely FREE.
The simple fact that you reside in this country for more than 180 days in any calendar year makes you a taxable resident for tax purposes.
If you stay here with a Retirement visa you are not a resident, and you are not allowed to work. So no income either. At the time I chose to have 800.000 Bt in an account. Tax is deducted from the interest income.
Tax is deducted at source from my Belgian state pension.
I live off that 800.000 and top it up 3 months before visa extension. This is my proof that it pays for my living expenses. At immigration people once asked where I live.
I now plan to go back to Belgium once every 5 and a half months in the future and stay there for a short time. I think it has advantages.
How do other people see this?
I too am here on that 800.000 baht on a booklet.
The immigration service once said that you must have 800.000 baht on that booklet on the day of renewal.
However, I think I once read that the amount should not fall below 800.000 baht, to prevent you from borrowing that money for a day to meet the visa requirements.
So I just make sure it doesn't get under.
The 800.000 baht must be in your account 3 months BEFORE the expiry/extension of the visa.
This is to prevent you from borrowing it for 1 day and putting it on the bank.
Incidentally, this is regularly tampered with. TIT.
On Koh Samui, a fixed deposit of 3 to 12 months (to get more interest) is accepted. I have heard that this is not the case in Pattaya, for example, and the money on a
"open" account must be.
I was never asked what I live on and the bank withholds tax on the interest I receive.
Furthermore, I have never had anything to do with the tax in Thailand.
No, I do not have a permanent residency.
Looks like I won't be able to get that on this visa either unless I bring in 10.000.000 baht, which means I can't get it.
The income criterion to reduce the amount as with the retirement visa does not seem to apply here.
However, the tax authorities have a different definition for residence.
At least in English.
Thailand does not tax income from past employment.
So read pension funds.
Gross pensions are therefore paid out net.
This if you can prove to the tax authorities in the Netherlands that you live in Thailand.
This is best done through the yellow job booklet and copy of passport.
It is a misunderstanding that one has to prove to the Dutch tax that one pays tax in Thailand.
greetings ton
If one does not have to prove that one pays tax in Thailand, that is a widespread misunderstanding at the tax authorities.
I have a form here, which is called: request for exemption from deduction of wage tax/national insurance contributions.
It says:
You must enclose documents showing that you are regarded as a TAX resident of the country of residence you have specified.
...
...
Evidence of tax residency is shown, for example, by:
. A statement from the tax authorities that you are regarded as a tax resident.
. a recent copy of a tax return or assessment notice.
A REGISTRATION WITH THE MUNICIPAL OR CONSULATE DOES NOT APPEAR THAT YOU ARE A TAX RESIDENT.
Dear Ruud,
You indeed provide the correct link from the Thai Tax Office (TD) (http://www.rd.go.th/publish/6045.0.html). If you are a “resident” in Thailand, you may be liable for tax, depending on your income of course. In any case, you are required to complete a tax return annually before April 1 and, if this entails an obligation to pay tax, to pay that tax immediately. A provisional declaration for the current year can also be filed in the third quarter, but I have done that for the past two years and agreed with the TB Hua Hin not to do that for 2014. So next year I will file a tax return for 2014 in the 1st quarter of 2015. I always speak to the same tax officer and I cannot complain about the cooperation and flexibility in filing the tax return. I must say that I always take my Thai girlfriend and pastries with me when I go to the tax office. The only piece of evidence I take with me is my bank book and based on the amounts transferred from the Netherlands, I pay income tax in Thailand. In my experience, obtaining a Thai tax number is a piece of cake. Take your passport and yellow book to the tax office and one will be created while you wait. Just look further up http://www.rd.go.th/publish/21987.0.html.
I see that there are all kinds of wild stories about not having to pay taxes on pensions (because the TB would only levy on current income) and because if you put this year's Dutch income in the savings account, you can do that next year transfer and therefore live off your assets. I would invite the reader to also refer to the Revenue Code when making these claims http://www.rd.go.th/publish/37693.0.html and especially looking at Chapter 3 Income Tax. Section 40 deals with the different income categories and Category 1 is “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”. Pensions are therefore clearly classified in category 1 and I have not been able to discover a single paragraph in the Tax code that only current income falls in category 1. Money unfortunately has no time stamp so it will be a difficult job to prove that the current income goes to the savings account and is not transferred to Thailand in the current year. Every tax inspector and judge pops this balloon so flat. I hope you appreciate my warning.
You can find the various deductions (Deductions and allowances) on the page with the first link mentioned above. A deduction for “Income derived from employment” of 40% with a maximum of 60.000 baht also applies to pensions. I understand from the TB Hua Hin that for taxpayers aged 65 and older there is an additional deduction of 190.000 baht. I have to say I searched all over the Tax Code and didn't find this post on the English site, but I did find it on the Thai site. Finally, on the first mentioned link (http://www.rd.go.th/publish/6045.0.html) also the table how much tax has to be paid, which is therefore different from what Mr HarryN stated:
Tax rates of the Personal Income Tax
Taxable Income (baht) Tax Rate (%)
0-150,000 Exempt
more than 150,000 but less than 300,000 5
more than 300,000 but less than 500,000 10
more than 500,000 but less than 750,000 15
more than 750,000 but less than 1,000,000 20
more than 1,000,000 but less than 2,000,000 25
more than 2,000,000 but less than 4,000,000 30
Over 4,000,000 35
Thailand levies on pensions.
http://www.samuiforsale.com/law-texts/the-thailand-revenue-code.html#6
Part 2 section 40.
But it is quite new that Thais have retired so it is not widely known. Incidentally, there are exemptions per person and there is a high cost deduction, so you will not soon get around to paying, especially if the zero bracket ever comes through.
The urge to pay taxes when you don't need to pay seems pretty unhealthy to me. A good Dutch proverb says: don't wake sleeping dogs. I think it would be wise to let those dogs sleep peacefully.
I have no objection in principle to paying taxes.
I would like it if the money was handled carefully for once.
Also in view of the obligation to file a declaration, combined with this text:
“Non-compliance with tax law.
Anyone who does not comply with the law will face civil and criminal action”
And the junta's new brooms,
it might not be unwise to visit the tax office again.
Otherwise, a bite could be taken from your calf by a dog you thought was asleep.
I complete the link…
http://www.rd.go.th/publish/37748.0.html
Arend Hart, the 'sleeping dogs' have already been awakened by Norway. It will be a matter of time and other countries will follow suit.
A treaty for the avoidance of double taxation is not a treaty to pay no tax at all. Our company pension is now actually not taxed anywhere. Fine, but that's not the point.
This whole fuss about can I please pay taxes stems from the ladies and gentlemen shouting too much at various events, you don't have to pay taxes here, I have personally lived here for 9 years and no one has ever spoken to me about paying taxes. tax here, I am deregistered in the Netherlands and have a state pension and two other pensions, everything was WELL arranged with the tax authorities in the Netherlands at the time in connection with tax credits, but several people here went to the tax authorities to ask whether they are not liable to pay taxes, if you Just have an address in Thailand and it is known to immigration, then they will find you automatically, and I think Arend Hart's article is appropriate, make sure all your papers are in order and you will have no problems with any agency too, and the OOS are the friendliest ladies in HUA HIN, but you have to fill out the SVB form yourself because somewhere else you have to have it translated into Thai first because they can't read it.
I understand from the above responses that people in Thailand do not have to pay tax on the equity that has been built up in NL. Whether that is 1 million euros or 10.000 euros, what people take to Thailand. Is that right?
All those opinions on Thailand Blog are nice but often make me insecure.
I have a great need for some kind of table that lists positive and negative consequences of all kinds of situations. This especially in terms of taxes (both municipal and national), health insurance, insurance, driver's license, with regard to residence in NL and TH? Mailing address? Married or not? ….etc
That will take years.
Best regards,
Hans G
I agree with Hans G.
A kind of table with facts instead of personal opinions/experiences would be ideal.
I am 65+.
Reading the above doesn't make it any clearer.
Does anyone have experience with a consultancy firm in the Netherlands that can map out the entire procedure of moving to Thailand and carry out the administrative settlement.
I am thinking of matters such as tax, inheritance law, property ownership in Thailand, etc.