Reader question: Tax bill that I can't pay
Dear readers,
I have been living in Thailand for 10 years now. Every year I filled in my income statement for tax purposes and used the Right of Choice. This allowed me to make healthcare costs deductible (medications, doctor's costs, transport costs). As a result, my aggregate income was a lot lower, so that I even received a small amount back. Unfortunately, due to my age, 80+, I cannot take out insurance.
A month ago I received a tax assessment of 1.454 euros. Now I also know that Right of Choice no longer exists, only that this is called "qualification" and is only for residents within the ECG. In the meantime I have requested a deferment of payment and also a remission. It is impossible for me to pay the assessment, especially since due to my age I have more visits to the hospital than before, resulting in higher costs.
It is unclear to me what this assessment is for, tax is paid for my AOW (small amount). I also have a WBP (Extraordinary Pension Act) where the tax amount is much higher.
What is your advice to prevent further attacks?
It is the tax authorities that advised me to make use of the Right of Choice, medicines after a heart attack will last your life.
Another problem is that you only have 10 days to file an appeal after the date of the letter, an impossible thing if you live in Thailand.
Yours faithfully,
Joseph
Joseph, if I read correctly, you have state pension as well as a pension under the Extraordinary Pension Act and I assume that the latter qualifies as a state pension that is taxed in the Netherlands under the treaty with Thailand. The AOW is also taxed in the Netherlands.
Those two incomes are added up and then it may happen that you jump up a bracket over the top of your income because the brackets are not equally 'expensive'. I think, off the cuff, that you can't do anything about that if you've checked the attack and if it's correct.
You can, however, request a provisional assessment for the current year so that part of that 'additional payment' has already been paid when the final assessment comes. You can't do anything about the aggregation of incomes.
That ten-day deadline surprises me; I think you have received a reminder or reminder requesting payment. The period for filing an objection or appeal in tax matters is longer than ten days. If your mail arrives very late, a fiscal postal address in the Netherlands is the best way to avoid losing any rights; I have engaged a family member for this, a tax advisor can also be a postal address.
You can make a proposal to the service to pay the assessment in installments. You are also free to request remission, but then they will want to know your total financial position and then there must be extraordinary circumstances at stake.
Annoying, this situation! I wish you luck.
Erik, Joseph writes that only a small amount of tax is withheld from his AOW and a higher amount of tax from his WBP benefit. It is therefore likely that a payroll tax credit will be applied to his state pension. He could choose to stop this payroll tax credit. The advantage of this is that the wage tax withheld will be more in harmony with the annual assessment. I do not know how Joseph arranged his annual residence status in Thailand, but if that is based on his monthly income, then stopping the payroll tax credit could be a possible disadvantage because the net income is not sufficient. In that case, Joseph could follow your advice to request a provisional assessment. There is sometimes confusion among readers of Thailand Blog whether the stated income for the renewal of the annual visa should be gross or net, but I understand that the embassy, which issues the income statement, assumes a net amount. Perhaps more people in Thailand can therefore benefit from a higher net income by applying the payroll tax credit to several benefits. Subsequent payment of an assessment can therefore be avoided by applying for a provisional assessment. Do you agree Eric? m.f.gr.
It is very likely that the SVB still applies the tax credits.
Submitting a request for a provisional assessment for 2018 will then have little or no effect, as the Tax and Customs Administration assumes a correct withholding of tax by the SVB (i.e. without applying the tax credits) in the calculation of this provisional assessment.
It is better to ask the SVB to refrain from applying the tax credits.
I think we are talking about 2015 or 2016, in which the SVB still applied the payroll tax credit unless you took action yourself. Joseph has not written anything about this except that 'a small amount' has been withheld, but the 8 to 9 percent owed in 2015 and 2016 on the AOW is also a small amount.
The advice to change if it still takes place is good advice and the web links are indicated. For the rest, Joseph can best take measures to prevent another attack by following the advice given.
I read the standards for forgiveness and they don't give Joseph much hope, unfortunately. So proposing a payment arrangement is the best step now.
As for the income for the extension, as Leo Th writes, it also depends on the type of stamp: retirement or due to marriage. Furthermore, in case of a lower income and retirement, Joseph can go on the combination scheme of 800.000 thb income + bank money.
The idea of having a tax credit applied and requesting a provisional assessment can then offer solace, although I would point out that asking for a tax credit if you are not entitled to it is incorrect. Moreover, at the paying institutions the light will sometimes come on - if it hasn't already been lit - that you simply are not entitled to a tax credit when you live in Thailand.
Excellent explanation, both from you and Lammert, which Joseph can handle. I myself had ignored the fact that as a resident of Thailand you are in principle no longer entitled to tax credits. I don't know if there is indeed a light on that at a benefit agency. Perhaps the computer program is not yet set up for this and if the benefit is still transferred to a Dutch bank account, Joseph does not mention, it is probably less noticeable whether or not payroll tax credits are allowed. Incidentally, respect for Joseph, who, despite his age, 80+, can express himself well in writing. Nevertheless, it might still be advisable for him to take advantage of Lammert's very generous offer by contacting him. What Thailand Blog is already not good for!
Whether lights come on at (in this case) the SVB, that is indeed the case. But the wrong light. Instead of “red”, the light changes to “green” (“There is always something to do at the SVB” – after Herman Finkers).
The SVB did not apply the tax credits to some of my clients in Thailand and the Philippines …………….. until they spontaneously received a letter from the SVB in the course of 2017 stating that they are entitled to tax credits. The net AOW benefits immediately went up with another supplementary payment due to “too much” wage tax withheld during the previous months!
In line with the slogan of the Tax and Customs Administration, people at the SVB must have thought:
“We can't make it more beautiful.”
The Tax and Customs Administration itself, however, has a completely different idea about this and so it becomes tax payable on assessment due to the incorrect application by the SVB of payroll taxes. And that will cost you more than a month of state pension (excl. tax interest).
THANKS TO THE SVB.
Leo Th, you say a true word! Not to put a feather in Lammert…. but both Lammert and I are from the old guard (and that's still true….) who provide service and are not always bound by office hours.
In the 16 years here I have handled about 80 files from Dutch people in tax problems and because of my age and the unfortunately associated 'aches and discomforts' I have stopped, although I will keep the Thai side of my profession as long as possible. I am in this country. And that will really stop in 2018 or 2019. I'm going back to the EU, although I don't know where yet.
Fortunately, this appreciated blog gives space to discuss problems and problems; I - and not only me - appreciate that very much. Elsewhere you often run into reproaches and roaring big beaks, but fortunately the leadership here ensures that the discussion remains business-like.
As for Joseph, he now has a way to raise his problem with Lammert in complete confidence. And that is worth a lot. If Joseph lives in the Nongkhai region, I can also help if desired.
Very nice response and great attitude! Good luck in your new country of residence and wish you strength with your 'aches'. Over the years I have learned a lot from both you and Lammert's comments on tax issues on Thailand Blog. Yes, it is nice that many readers get answers to their questions through this blog. And therefore indeed also praise for the moderators, who, by the way, are probably quite right sometimes not posting a comment from me.
Dear moderation. I have briefly focused on the consequences of two sources of income.
Dear Joseph,
The amount of the assessment strongly indicates that the SVB is still applying the tax credits, but to which you are no longer entitled from the 2015 tax year. I see this frequently in my consulting practice.
In addition, in your case there is the effect of (what I always refer to as) “accumulation of income”: two sources of income push your taxable income through to the 2nd or even 3rd bracket. The various benefit agencies cannot take this effect into account.
You can check the incorrect application of the tax credits on your benefit specification and the annual statement from the SVB.
Counting from the date of an assessment notice, a taxpayer has the time to lodge an objection within 6 weeks. However, filing a notice of objection against the assessment, which assessment is the result of the incorrect application of the tax credits, is pointless.
The response time of 10 days you mentioned indicates that the deadline for submitting a notice of objection has long passed.
To avoid such unpleasant surprises in the future, you can request the SVB to no longer apply the tax credits from 1 January 2018. You can arrange this online via the following web link:
https://digid.nl/inloggen
Given your AOW benefit plus another WBP pension, you are not eligible for remission.
For the exemption standards, see the website of the Tax and Customs Administration:
https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/prive/inkomstenbelasting/belasting_betalen_terugvragen/betalen_aan_de_belastingdienst/niet_of_te_laat_betalen/kwijtschelding/pb_betalingscapaciteit/normbedragen_bestaanskosten
Not infrequently, the Tax and Customs Administration also applies a discount to these standard amounts when living abroad.
I understand that you cannot meet your payment obligations on time. Then it is important to submit a request as soon as possible to make a personal payment arrangement.
You can download the form to be used for this purpose via the following web link:
https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/themaoverstijgend/programmas_en_formulieren/verzoek_betalingsregeling_of_kwijtschelding_voor_particulieren
You can complete this form on your computer. For this you need Adobe Reader version 9.0 or higher. Then you need to print, sign and send the form to:
Belastingdienst/National Collection Centre
P.O. Box 100
6400 AC Heerlen
The Netherlands
If you are unable to find a solution, please feel free to contact me at:
[email protected].
Thanks everyone for writing
Much is unclear to me
In the meantime I have contacted Lammert
Right of choice…. I recently learned that this has changed
only possible within EU
only hospital costs and medicines remain there for everyone
And for the elderly no option for insurance
Erik: I used to come to Nongkhai, immigration
but now also Mahasarakham has his immigration . lucky me 10 min from where i live
Kind Regards Joseph