Dear readers,
Can someone explain to me exactly what my situation is regarding taxes in Thailand?
I am a single man of 59 years old and receive a WAO benefit. In order to obtain my annual retirement visa I am required to transfer at least 800.000 baht to my Thai bank account. I live in Thailand all year round, do not own a house and rent privately, like many others here.
I have read that there are deductions, such as the cost of my health insurance and a standard deduction of 60.000 baht and another 140.000 baht. But because I am not yet 65, the standard deduction of 190.000 baht does not apply to me.
Have I understood this correctly? And what does this mean in concrete terms for my personal situation?
What I find strange is that the Thai government forces me to transfer 800.000 baht to my Thai bank account every year to keep my retirement visa, while they also want to tax that amount. To live comfortably here, I really don't need that much money and would normally transfer less.
What can I expect in terms of taxes and what documents do I need to provide?
So far I understand that I need at least:
- a bank statement from 2024,
- my lease,
- my health insurance policy.
But is that all, or do I need to submit more documents?
Thank you in advance for your help.
Regards,
David
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“to transfer 800.000 baht annually to my Thai bank account”? ?
I think you only have THB 800K on your account and explicitly do not transfer it every year. If you live on air, there is nothing wrong. If you use 100K, add 100K.
Dear David, let's get things in order a bit: as far as Immigration is concerned, it is not the intention that you deposit ฿800K annually into a TH account. On the contrary, you deposit it once and the balance may drop to ฿400K a few months after and before the application for retirement extension. But you can also apply for retirement extension with embassy support letters stating that you have at least ฿65K monthly income, or with ฿400K in a TH bank in combination with monthly income, together at least ฿800K annually. Ask RonnyLatYa what is the best option for you.
Then regarding Thai taxes: when you file your tax return, you can count on 2 deductions from your taxable income. ฿100K for costs you have to earn/have earned income, and ฿60K discount 'taxpayer'. Furthermore, you can deduct ฿25K maximum health insurance premium, provided that the insurance was taken out in TH. So you have ฿185K deductions.
The TH declaration is about how much income you transfer to TH net. This can be seen from your TH bank account. So you need a TH bank statement. A WAO benefit always falls entirely under Article 23, paragraph 6, of the TH-NL tax treaty. With just a WAO, you always end up at ฿0,0 in TH. To illustrate, 2 examples. For 2024, I use a rate of 1€/฿38. I charge 2024% for NL wage tax in 9,3.
1- Suppose you transferred €16.000 or ฿600.000 WAO money to TH. Then the ฿185K is deducted from that, plus ฿150K tax-free first bracket. You are left with ฿265K. That gives TH Tax: ฿19.000.
In the Netherlands you would have paid payroll tax: €1.470, which is equal to ฿55.800.
The NL-paid wage tax fully compensates the TH tax. Remains: zero point zero to pay.
2- With a WAO of approximately €21.000K or ฿800.000, you have a payroll tax of €1.960 in the Netherlands, being
฿74.400. In TH you pay a tax of ฿800 on that ฿45.000K. Also now, in accordance with art. 23/6, a 100% reduction. In TH you have to pay ฿45K. In NL you paid: ฿74,4K. Also now: zero point zero.
Take to a larger TH tax office (Erik Kuipers recommends a regionally established one):
your 'retirement' credentials,
rental agreement, yellow address book, or residence certificate
Th-bank statement
UWV-WAO proof
elaborated NL-TH reduction calculation
https://www.thailandblog.nl/dossier/belastingen-advies-reductie-23-lid-6-nr-2/
You don't have to transfer 800.000 annually. You have to
Have a Thai bank account with 800.000 on it 2 months before your visa expires and 3 months after. Also never less than 400.000 during a year.
How much you take with you or withdraw from the Netherlands annually for your living expenses is not relevant.
Download the Thai Taxbooklet Thai Taxbooklet 2024 2025. It contains everything about tax legislation in Thailand in understandable English. Of course, everything depends on the tax treaty that your country of birth, e.g. the Netherlands, has with Thailand.
If you don't give me the link, I will: https://www.pwc.com/th/en/tax/assets/thai-tax/thai-tax-booklet-2024-25.pdf
David, the deduction of 190.000 thb is for '65 and older, and disabled people'. You have WAO and I think you have a certain degree of disability. I have not yet delved into the question when Thailand also considers you disabled. Maybe just include it in your tax return because the Netherlands has awarded you the WAO benefit.
Deduction of health insurance premium; I thought this was max. 23 THB if taken out with a Thai insurer. Your WAO is taxed in the Netherlands anyway, but Thailand may also levy it because it is a benefit from security, as a kind of disability pension. Read the advice on article 6 paragraph XNUMX of the treaty (see the search function at the top left).
The question about 'transferring' or 'money in the bank' has already been answered above.
Strange, in the booklet 24/25, see above, the deduction of 190.000 thb is no longer for '65 and older or disabled'. Only the age is still there. Well, then that right expires until the year in which you turn 65...
In sherrings.com they indicate 190.000 for 65 and older, AND also 190.000 BHT for disabled Taxpayer under 65 years.
Correct. Spot on, William. Thank you for pointing this out to us. Completely overlooked it myself, while I usually have the PIT91 next to me with other information. The deduction of ฿190K for 'disabled under 65 years of age' is for https://sherrings.com/personal-tax-deductions-allowances-thailand.html a separate paragraph, and to be filled in on page 91 at B2 of the PIT4 form: https://www.rd.go.th/fileadmin/download/english_form/030265PIT91.pdf
In David's case, in the illustrations and examples provided by @Jozef, in the first example only ThB 3.500 is levied, and in the second example: ThB 13.500. Not that it matters, his WAO status results in a 100% reduction in both examples, and in all cases results in a Thai tax of ThB 0,0 to be paid. Provided that the WAO is the only income.
According to the same booklet, you may deduct up to ThB 25K for a health insurance policy taken out in TH, and if in combination with a life insurance policy taken out in TH with a term of at least 10 years, the joint premiums are deductible up to ThB 100K.
No mention is made of personal disability, but of that of a family member or a non-family member, each for ThB60K.
Another week, and then this kind of information will be done. It's about time. Nothing was reported about filing online, only asked once, hardly read, even fewer responses. It turns out that no attachments can be included online, and that you get some typing space to provide some information via a fictitious statement of interest. For example, about a calculated 1/23 reduction, but if "they" don't understand it in person, why do they understand it online?