Reader question: Heerlen continues to refuse tax exemption

I also had this and decided to pay taxes in Thailand. There are many deductions in Thailand so tax is much, much less than the Netherlands. Don't forget that tax on AOW and possibly. Civil servant pensions must always be paid in the Netherlands. With private pensions you can choose between NL and Thailand. Atract items in Thailand include standard deductions 90,000, 65+ 190,000, life insurance premium expenses, certain medical expenses, wife and family expenses, large purchase tax refunds, etc. Of what remains, the first 150.000 is taxed at 0%. Well worth finding out and therefore staying "legal".

Erik Wanner finally wants to admit that your way of a long-term battle with Heerlen is not always the right way. There is a simple way and that is a choice. Go to the Thai tax authorities and file a tax return and pay a small amount. And please don't come back with that sour reaction from entire people who cannot make a donation and cannot pay. That is not true. If your provincial office cannot or does not want to help you, you must go to the REGIONAL office and you will certainly be helped. I speak from personal experience and a number of Dutch people in the province of Buriram who followed my advice have the same positive experience. Erik, I don't doubt your knowledge of the treaty for a moment, but perhaps my knowledge about the behavior of Thai officials is slightly greater due to my very long stay in Thailand..

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.
Just a few months ago, Hans Bos posted a very readable article about the new requirements that Office Abroad has set for obtaining an exemption from withholding wage tax. Many comments have been posted on this.

The Foreign Office is not satisfied with a card from the Thai Tax Authorities with your tax number on it. She demands a statement from this service that you are actually registered as a taxable person in Thailand. Without such a statement, the application will not even be processed.

I've also written quite a bit about this in the recent past, but come on, I'll do it again.

First of all this:

1. the exemption form used by the Tax Authorities has lost its legal basis as of January 1, 2003 as a result of an amendment to the Wage Tax Act 1964;
2. It is not the Tax Authorities and not even national law that determine which country may levy what, usually to the exclusion of the other country: this is exhaustively regulated in the Netherlands-Thailand Tax Treaty;
3. The Foreign Office of the Tax Authorities seems to have a patent on the lack of treaty knowledge;
4. This also applies to concepts such as tax liability, reporting obligation, tax debt and subsequently paying tax; These concepts were, figuratively speaking, ingrained in me some 45 years ago.

How do you circumvent the required statement from the Thai tax authorities, if such a statement is not in your possession?
For this you should consult the Tax Treaty Netherlands-Thailand. This Treaty provides exhaustive details of which country you are a tax resident of and which country is therefore allowed to levy taxes on your occupational pension. Collect the necessary evidence, which shows that you are a tax resident of Thailand and therefore not of the Netherlands. You cannot be a tax resident of both the Netherlands and Thailand.

You then add this proof to your application for exemption. Please indicate why you are taking this route. You should not expect any treaty knowledge from the Foreign Office. So you will have to guide them step by step through the Treaty. Too bad, but it's just no different!

You can derive the supporting documents to be submitted from Article 4 of the Convention.

Slightly abbreviated and where relevant, you are deemed to be resident for tax purposes under Section 4 (and also in this order):
a. of the State where you have a permanent home at your disposal; if that is the case in both States, you will be deemed to be a resident of the State with which your personal and economic relations are closer (centre of vital interests);
b. if this cannot be determined then you shall be deemed to be a resident of the State in which you have an habitual abode.

Re a. 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 a tax resident of Thailand: you send the proof of registration with your municipality, the rental contract and proof of rent payments and payments for the supply of water and energy costs. That is the route I usually take with Thai clients 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 and not whether or not you pay tax in Thailand!

You can also think of additional evidence, such as your bills for your telephone and internet connection, receipts and so on. But also whether you live in Thailand together with a partner with or without a child

This not only shows that you have a permanent home at your disposal in Thailand, but also that your economic and personal relations are closest with Thailand, i.e. where the center of your vital interests lies.

Ad b. If you cannot meet a. (which I can hardly imagine) then there is always the possibility to show where you usually reside with your registration, your visa and your passport with the necessary stamps. But in my practice it has not come to that yet.

In addition, I would advise you to have your pension transferred directly by the pension provider to a Thai bank account, in order to prevent the application of Article 27 of the Treaty: the so-called remittance base, whereby the taxing authority does return to the Netherlands.

If the Tax and Customs Administration persists in its refusal to grant an exemption, you should object after the first deduction from your company pension. Even then a rejection will probably follow, because the Tax and Customs Administration is in most cases very consistent in the sense of: GOING WRONG ONCE IS ALWAYS WRONG.

But even then no problem: appeal to the Administrative Court! This will cost you € 46 in court fees, but you can submit the notice of appeal digitally to the court. However, do follow the right path, as indicated on the website of the relevant Court.

In this context, see also the comments already posted by former colleague Erik Kuijpers, in which you can find me in full.

But there may be another way to lure the Tax and Customs Administration, the Foreign Office, out of the tent. That is the way of filing a tax return, in which you state that your company pension is not taxed in the Netherlands and through which you request a refund of the wage tax withheld by means of an assessment.
My experience is that there is little or no monitoring of this. But if the Tax and Customs Administration rejects this now and they do so by means of a provisional assessment, you will have to be patient and wait for the final assessment. No objection can be lodged against a provisional assessment. This is only possible after the definition assessment.

And when I read that the person who asked this question, Hans, emigrated to Thailand only a year ago, I suspect that he has already received an invitation to file a tax return by means of the paper tax return form Model M. That is i.e. a standard procedure. If not, he can order such a form via the Tax Telephone Abroad.

If you still have questions of a more personal nature, please do not hesitate to contact me. You can do this via the e-mail form on my website:
http://www.lammertdehaan.heerenveennet.nl of
via email address [email protected]. This road is preferred.

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