Tax payment when emigrating to Thailand?
Dear readers,
Many contributions have already been published on Thailand blog about tax payment at emigration to Thailand. Everyone apparently has their own truth, but it is also a complicated matter. I would now very much like to know from someone who will be in exactly the same situation as me, how that person handled it or what tips that person has to arrive at the most advantageous possible tax burden.
I am going to emigrate to Thailand in January 2020. I am single and will be staying in Thailand 12 months of the year. I will then be 67 years old and entitled to state pension. I will receive state pension and a (company) pension. I know that, after emigration, I will not have to pay Anw and Wlz tax on my AOW and pension. That is clear. But can someone, who will be in the same situation as me, tell me whether he or she pays wage tax on the AOW and pension? If so. Why do they pay payroll tax? And if not, what exact steps did people have to take to avoid having to pay payroll tax and as a final question, do people now pay tax on the state pension and pension in Thailand? Perhaps the AOW and the pension each require a separate tax payment?
I hope there is someone who is in a similar situation and can inform me how he or she has arranged it.
Thanks in advance.
Regards,
Peter
I have been paying taxes in Thailand for several years now. I receive a very small state pension from England, 80% AOW and a company pension from the Netherlands. According to the tax authorities then I remain obliged to pay tax in the Netherlands on my state pension and to pay tax in England on my English pension. However, with my company pension I can decide for myself in which country I pay tax. The first year I simply sent a letter to the tax authorities stating that I was a tax resident in Thailand. They have accepted this for one year. For the second and subsequent years (when the time changes in the law) they have asked for proof that I actually pay taxes in Thailand. This proof must come from the Thai tax authorities. The first step is to request a “Tax number” from your local tax office in Thailand. You need a few documents for this (more info on the Thai Tax website. After you have received a tax number you can fill in a declaration. This must be done once a year and is about the previous calendar year. This must take place sometime in March. The tax office is very helpful and will probably complete the form for you.Although the Thai tax scales are not much different than in the Netherlands there are still many things that can be deducted here (large amount for over 65, life insurance premiums, wife, children , mother & father wife, etc.) To compare with the Netherlands I pay as much tax here in a year as I should pay per month in the Netherlands You do not have to declare interest received on money in a bank or shares because banks deduct tax before interest is paid and the IRS has no interest in which bank account it comes from.
Dear Peter. Many thanks for your response.
I now understand that the AOW can (unfortunately) only be taxed in the Netherlands.
What remains is the pension (…and possibly other income). Thank you for your information on this. So I have to apply for a Tax-Number and I have to fill in a few documents, which I can download from the website of the Thai Tax Office. Okay.
Good news to hear that you don't have to pay taxes on your bank balance.
Will the Dutch tax authorities be satisfied with that? Because every year you have to send proof to the Dutch tax authorities that you have paid tax in Thailand and then people in the Netherlands will see that you have not paid any tax on your bank balance (either savings or assets)?
In your response you mention a tax office. Do you mean an office of the Thai tax authorities or a tax office that you have hired yourself (a tax consultant)?
Last question. Should the pension be paid directly from the Netherlands into a Thai bank account and should it not first be paid into a Dutch bank account?
Thanks again for your help and response. Peter
Dear Peter.
Again a response from me to you and that concerns a message from Teun, who told me the following on the Thailand blog yesterday:
teun says on March 27, 2019 at 14:31 PM
If you look at the various exemptions in the Thai tax system, your supplementary pension should soon be > TBH 500.000 per year before you pay tax on it here. If that is not the case, you cannot get an exemption from Heerlen on your supplementary pension (after all, no tax is due in Thailand).
By the way: your state pension also counts as income. So you pay in Thailand and in NL. In NL you can reclaim part of the tax paid on AOW via a declaration (prevention of double taxation).
My question to you Peter: Is the AOW share indeed also taxed in Thailand and should I try to get that double tax back in the Netherlands later?
Peter,
I'm not a tax expert, but can you describe my situation?
Married to my Thai beauty, receive state pension and a pension through ABP
Both taxed in the Netherlands.
AOW is always taxed in the Netherlands and you pay 9% tax on this.
Pension through ABP also about 9%
Do not pay national insurance contributions and, since 1 January 2019, you no longer have a tax credit.
I have lived in Thailand for over 10 years and have never heard, received or paid anything from the Thai tax authorities.
Am a happy man, and can live well with it.
Thank you Tooske for your response.
Why should you hear from the Thai tax authorities in your case? After all, you pay tax in the Netherlands.
I myself thought about using my company pension (which is apparently different from an ABP pension) to have it taxed in Thailand. An invoice tells me that I then pay 70% less tax on my pension. (Considering the Elderly exemption, the Personal Allowance and that the tax rate in Thailand only starts at 150.000 Bath).
Every euro has been taken into account for me, because I have a small pension and the Health Insurance will cost me € 67 per month from the age of 500 and the following years until the age of 80 € 900 per month. And believe me, I've been in touch with all the Health Insurance Companies.
One more question for you Tooske. Does the Dutch tax authorities ask you with your tax return whether you have money in a foreign bank? Do you have to declare this and are you taxed on it in the Netherlands via the capital gains tax?
Thank you for any response. Peter
If you live in Thailand and no longer in the Netherlands, the tax authorities in the Netherlands do not ask for a statement of assets and therefore do not levy any income tax there.
For consideration, With such an amount of monthly healthcare premium € 500 becomes € 900, you could start thinking about the premiums for home care, savings and being a self-insurer. For the sake of safety, it would be nice if you had some power, so that you can also sleep peacefully during the first few years. I did it that way and it worked fine. Greeting.
Sjaakie
Jackie, thank you for your comment.
But since I do pay wage tax on my state pension and there is a little money in my Dutch bank account, I will just have to fill in a tax return on the part for which I am taxable in the Netherlands? Then that tax form also states: Do you have savings in a foreign bank account? How does that work then? What do I enter then?
Let's talk a little bit about the health insurance premium itself. That is still possible now. But from 1-1-2020 or no later than 1-1-2021, when applying for an annual extension of the visa, you are obliged to submit proof that you are insured with a Health Insurance Company for both Inpatient Coverage and Outpatient Coverage. You must then be compulsorily insured.
Dear Peter Spurs.
You also do not have to declare the money that is in your Dutch bank in the Netherlands, you will not come across that question.
If you live in Thailand, you become a Non-Qualifying Foreign Taxpayer for the Dutch tax authorities.
Completely new sound!
But where did you get the information from that from 1-1-2020 or 1-1-2021 at the latest you would be obliged to provide proof of health insurance?
I'm very curious about your source for that fact.
Sjaakie
That's not right, dear Peter. You make that up on the spot or you get it from someone with a big thumb. Thailand does not have a compulsory health insurance system. In any case, it is not even possible to take out health insurance in Thailand if you are older than 70, or your current insurance will end on your 70th birthday. So what about all those pensioners who only stay in Thailand with a state pension and some money in the bank? Will they all suddenly no longer receive an extension of stay? Don't be fooled. Check your family history. If parents, uncle, brothers and other close relatives do not have serious illnesses and/or ailments, you might as well put EUR 500-900 in your own piggy bank.
After 2 years you have enough to cover the first unexpected costs. If not needed, you use that money to meet the immigration income requirement. If you die, a possible partner will have a good “pension” provision.
If there are serious heart problems, for example, or if there is a lot of cancer in the hetero history, then it may be better not to emigrate, or, for example, on the basis of 8 months there/4 months back. If you spend up to EUR 900 p.m. If you can save money, it should work, I think.
Note: the older you get, the less you need. I would also think about enjoying yourself, instead of worrying about how things should be with taxes.
Thank you Ruud for your response.
That someone with a big thumb would have to be the Thai Immigration Service, The Bangkok Post, The Nation, the Thai Examiner and many others. That's where I get my information from. If I'm lying then it's in committee. According to those sources, the bill (this specific amendment to the Immigration Act) is going to pass 95% and it's just a hammer piece.
I have been in contact with all Insurance Companies and with the larger companies you can indeed remain insured until your death ( Cigna or Luma or even larger companies).
You pay about € 600 per month from the age of seventy, increasing to much higher monthly amounts when you are 75 or 80. (and then you have to take a decent deductible, otherwise you will lose even more money).
Below are several texts from the publications about the mandatory Health Insurance:
Thailand to make health insurance mandatory for expats
Foreigners with one-year Non-Immigrant Visa “OA” (Long Stay) will have to compulsorily arrange health insurance, according to new proposals of a key committee.
The criterion under the Immigration Act 1979 was approved by the Medical Hub Committee, Dr Kittisak Klapdee, adviser to the Minister of Public Health, said on Sunday. Kittisak was assigned by Public Health Minister Dr Piyasakol Sakolsatayadorn to join Tourism and Sport vice minister Ittipol Khunplome at the Medical Hub Committee's second annual meeting, which approved in principle the amendment of the criteria for one-year long-stay visas. Once it comes into effect, foreigners having the visa will be required to have Thai insurance policies covering their entire stay in Thailand with minimum Bt40,000 out-patient medical bill coverage and minimum Bt400,000 in-patient medical bill coverage.
Expats living in Thailand will have to compulsorily arrange health insurance, according to new proposals from the government.
Once it comes into effect, foreigners with the one-year Non-immigrant Visa “OA” (Long Stay) will be required to have Thai insurance policies covering their entire stay in Thailand with minimum Bt40,000 out-patient medical bill coverage and minimum Bt400,000 in-patient medical bill coverage.
Next year will be the fortieth anniversary that the Immigration Act 1979 was ratified in Thailand. In it, it listed a set of key factors that were required for foreigners to be approved for the one-year Non-Immigrant “OA” visa—also known as the “Long Stay Visa”.
Now the Medical Hub Committee—a key organization in the overseeing of immigration policy in Thailand—has approved to amend the criterion through which foreigners can apply for this Long Stay Visa.
If passed, Long-Stay Visa applications will require insurance.
Medical Hub Committee representative dr. Kittisak Klapdee—who was hand picked by the Public Health Minister of Thailand—and Tourism and Sport Vice Minister Ittipol Khunplome has spearheaded the initiative to change the requirements for a one-year, Long Stay Visa.
If this amendment to the Immigration Act 1979 takes affect, all foreigners wishing to apply for this visa will require Thai insurance policies covering the entire duration of their one-year stay. This policy will require a minimum of a 40,000 THB out-patient medical bill coverage, as well as a minimum 400,000 THB in-patient medical bill coverage.
THE NEXT STEP FOR THE AMENDMENT'S RATIFICATION:
All guidelines further detailing the specifics of the amendment are being formulated by a joint council composed of representatives from the Interior Ministry, the Foreign Ministry, the Public Health Ministry, the Immigration Bureau, the Office of Insurance Commission, the Thai Life Assurance Association, and the Thai General Insurance Association. Once the amendment criterion is formally articulated, it must then be approved by the Cabinet before it is deemed as formal policy.
This amendment to the criterion for the one-year Long Stay Visa is aiming to ensure the health and well-being of elderly foreigners, as well as benefiting the nation by aiding Thailand's public and private hospitals.
Dear Peter, one more time and then I'll stop: you worry too much, or you inform yourself into the woods so that you no longer see the trees, or you ask questions that you will only receive answers in Thailand itself.
Please note: a difference is made between expats and those who, for example, stay in Thailand on a “non-immigrant, among others” visa. Renewable every year. An expat like chris (see his response from March 29th at 04:01) is someone who works in Thailand, he/she receives income from Thailand and pays taxes in Thailand. A non-immigrant resides in Thailand (for one year) eg due to retirement/retirement, continuously extends his stay, receives income from his home country and pays taxes to that home country.
You can try to pay tax in Thailand as a pensioner. That's allowed. Whether you get along much with it depends on your income situation. Check this out at a Thai tax office, have a test calculation made, receive your Thai tax number, pay (the small calculated amount of) the Thai assessment if necessary, and forward the entire trade to Heerlen. In the first year of Thailand you will receive an M form to fill in, in the second year you can fully discuss with Heerlen because of that M form and your Thai tax number and assessment, in the third year your situation will become clear. From the fourth year, you may or may not benefit from your tax benefit. If you have paid too much tax in Nedrrtland, you will get it back.
The other issue: in Thailand, an expat will/is linked to health insurance. That expat has this, for example, through his/her company for which he/she has been posted, or through a Thai employer. (Chris has that, for example, being employed as a lecturer at a BKK university.) So your text here does not shed any new light on this fact. By the way: you are not an expat, but you are staying in Thailand as a pensioner.
A pensioner with annual renewals of his stay is expected to guarantee THB 40K outpatient and THB 400K inpatient. Then you can take out a (foreign) health insurance policy, eg Bupa, Cigna. Nothing wrong with that. But that doesn't cost EUR 500-900. Plus it's not required, plus the income requirements of immigration far exceed these amounts: THB 65K per month, or THB 800K bank account and a combination up to THB 800K, etc.
In other words: don't count yourself poor, take a critical look at your family history to see whether you need long-term expensive health insurance, and pay a monthly amount into your own health insurance fund. In the long run, you have a greater risk amount together than the Thai government mentions in the text sent along.
If you have an unfavorable family history, a full annual stay is not recommended if you have insufficient income. In that case, those few tens of euros in tax exemption will not help either.
Same here. Been here approx. 42 years and never heard from the Thai IRS. Tried to report me once but was sent away with the message that I was considered a tourist and therefore not subject to tax in Thailand. Another thing, pensions in Thailand are not taxed. Be it local or international pensions.
You pay tax on AOW in the Netherlands. After deregistration from the Netherlands, you can apply for tax exemption on your company pension at BelastingDienst Heerlen. For this, the tax authorities want to see form RO 22 from the Thai tax authorities (proof that you are a tax resident in Thailand and pay tax here).
You pay tax on pension income that you send to Thailand from the Netherlands.
The exemptions are quite substantial: 60.000 personal allowance, 100.000 cost allowance (don't ask me why!) and 190.000 exemption if you are over 65. After that, the 1st 150.000 is tax free, so in fact you will only pay tax if you exceed 500.000 baht transfer to Thailand!
Hope this is of some use to you!
Thank you for your response.
I also heard something that in addition to an RO22 form (certificate of recidence), you should also submit a RO24 form (certificate of status of taxable person) to Heerlen. Does that form mean anything to you?
I also receive some money every month from a bank savings account (severance pay). So I could probably also have that taxed by Thailand?
Important question. Can I then send that RO22 form digitally from Thailand to Heerlen and/or are there any issues at all related to this subject, for which I would have to fly all the way from Thailand to the Netherlands? As far as you know, can everything be arranged with the tax authorities via email?
I don't have the money to fly back and forth to the Netherlands (..and have to rent a hotel room), because I have nothing left in the Netherlands.
Thank you very much for any response. Peter
Dear Peter, it only concerns the amounts you transfer to Thailand, so you can simply have your company pension transferred to a Dutch account (including the severance payment) and then transfer only the part you need to Thailand. You file a declaration about this and in my case the tax office here in Phuket takes care of all the paperwork, you pay your tax due in cash and then you get form RO 21 from the head office of the region with the amount of the declaration and how much tax you have paid and you absolutely do not have to send it to the Netherlands! the other form RO22 is proof that you are tax resident in Thailand, together with your address and that you have paid tax. You only need this form RO 22 when applying for your tax exemption at the tax authorities in Heerlen, and after some time when extending it. For the application of your exemption, it is best to hire an accountant who has some experience has!
Thank you Mr JA Bekkering.
Well, I will have all my money (AOW, pension and severance pay) transferred to Thailand, because I will have to live on that. Surely everyone will do that? (unless you have plenty of money).
Many responses to my question indicate that I must prove to the Dutch tax authorities that I have paid tax on my income to the Thai tax authorities.
In this way I can check the tax authorities in Heerlen whether I have not evaded my Thai tax obligation. How do you see that?
I also received the following response from Teun yesterday:
teun says on March 27, 2019 at 14:31 PM
If you look at the various exemptions in the Thai tax system, your supplementary pension should soon be > TBH 500.000 per year before you pay tax on it here. If that is not the case, you cannot get an exemption from Heerlen on your supplementary pension (after all, no tax is due in Thailand.
By the way: your state pension also counts as income. So you pay in Thailand and in NL. In NL you can reclaim part of the tax paid on AOW via a declaration (prevention of double taxation).
Do you also have that experience? That the state pension is by definition taxed twice (1 x in the Netherlands and 1 x in Thailand) and that you have to try to get the money back afterwards? Or are you not yet entitled to state pension?
Dear Peter, what I do know is that you pay almost no taxes. However, what I am curious about. How you insured your own care. I'd like to hear that.
The first answer on this blog (Peter says on March 27, 2019 at 11:39 AM) is a very correct answer with the right data and the right steps. I have been exempt from payroll tax in this way since I emigrated at the beginning of April 2015. I did receive an exemption a little later, but I was able to get the overpaid Dutch payroll tax back via a tax return later.
Addition: For the time being I only have 2 company pensions and I will only receive AOW later (so you will not get an exemption !!!
Cees,
I will spend about € 500 per month on health insurance and from the age of 80 this will increase to € 900 per month.
That is a lot of money, which is why I want to save as much money as possible where possible.
I now understand that I am obliged to pay wage tax on my state pension in the Netherlands. Unfortunately, there is nothing to gain there. But I could have my pension taxed in Thailand. I hope I can also have my money that the Thai bank is taxed in Thailand.
If you look at the various exemptions in the Thai tax system, your supplementary pension should soon be > TBH 500.000 per year before you pay tax on it here. If that is not the case, you cannot get an exemption from Heerlen on your supplementary pension (after all, no tax is due in Thailand.
By the way: your state pension also counts as income. So you pay in Thailand and in NL. In NL you can reclaim part of the tax paid on AOW via a declaration (prevention of double taxation).
Oh, I hadn't heard that one yet.
That is a setback.
But if they tax the AOW again and also the pension, then your total income will always be above TBH 900.000 per year. After all, your AOW is already TBH 500.000 Bath per year.
Or are all income components (AOW – Pension – annuity, etc.) all viewed separately and
calculated separately? I can't imagine that, but you're probably right.
I also receive 180.000 Bath a year in annuity. So I wouldn't be able to have that taxed in Thailand either, because I don't get the 500.000 Bath for that piece of income.
Bad news. But thank you for letting me know. Peter
I am not convinced that your reasoning is correct.
You do file a tax return on that pension.
The fact that you do not arrive at a taxable amount does not change that.
An assessment of 0 Euro is still an assessment.
I stumbled over it the other way around in the Netherlands after my emigration.
Then I wanted to average the income of 3 years with the tax return.
I looked it up nicely.
You can average for 3 years, regardless of whether your income is positive, negative, or exactly zero.
Only, in one of those years I had NO taxable income in the Netherlands.
That turned out to be something completely different from an income of zero Euro.
The averaging failed.
I would say: go to the Thai tax authorities and ask them – if your taxable income is too low – to also issue a RO 21 and/or RO 22 statement.
And if they do and indicate that you pay TBH 0,00 in tax here in Thailand, please let us know what Heerlen's reaction is. I think that people there have problems with the fact that you AND pay zero tax in Thailand and – via exemption – ALSO pay zero tax in the Netherlands.
Nice test case I think.
I won't be able to do that, because I DO pay tax in Thailand.
Not a very large amount, but more than zero.
Incidentally, the proof of payment of my first tax return, of which I had only received a pension for part of the year, and which was 0 Euro, was accepted by Heerlen at the time.
Later I received RO 21 and RO 22 from the Thai tax authorities, but until now the Dutch tax authorities have not asked for it.
Maybe that's when I have to apply for an exemption again.
What if one does not file a return at all with the Thai tax? Has anyone ever had problems with this? Made another attempt this week, but couldn't help me and was referred to another office, where they might be able to help me. Maybe I'll take a look there later, because I don't need proof for the Dutch tax authorities yet.
I assume that at this point not many people have had problems with the tax authorities in Thailand, unless a stick was sought to beat the dog.
However, that is no guarantee that you will not be able to get it in the future.
If Thai law considers you a taxable person, and you break that law, it could always come and bite you sometime in the future.
It's not that hard to check for Thailand.
They just need to instruct immigration to check that you have filed a tax return when you come for the extension of your stay.
Health insurance in Thailand from Euro 500 to 900 per month?
I am also 67 years old, and pay a very large international insurance company at Cigna, Euro 220.- per month, insured up to Baht 7.5 million per year, deductible Euro 275.-
Maybe contact AA Insurance Hua hin, also in Pattaya and Phuket, also speak Dutch
Well. Of course, it starts with deregistering you from the population register in your municipality. You make a copy of this deregistration and submit a request to the tax authorities for an exemption from paying various amounts requested by the government, except for the AOW. (that is, after all, deferred wages from the past). Since it concerns emigration to Thailand in this case, you must also request an exemption for, for example, 10 years. After all, you do NOT want to go back. A tax consultant can do this for you. If these exemptions are granted, you will receive a refund of the overpaid amount after the declaration in the 1st year. I have been living here with an exemption for 7 years now (out of my 10) and have tried several times to file a Thai declaration, but that just doesn't work for the many reasons already mentioned above. Provided you maintain a postal address in the Netherlands, with family or friend, you can have your benefits, including AOW, transferred to a Dutch bank and bring what you need to Thailand. There is enough written about transferring money in this blog. Advice: in addition to a Baht account, also open a EURO account at, for example, the Bangkok bank, then you will remain in control of the exchange rates. See the visa file how to deal with a visa. My advice just get a 30 day visa extend it by 30 days and start the procedure in Thailand for an annual visa. If you come to live in Pattaya I can help you with that. ([email protected]) Obtain a residence letter from the owner of the building. Then do your 90-day notification like every expat, extend your obtained year visa in time. For this you must have your income tested, so keep your annual statements from your payers carefully. In Pattaya you can go to the Austrian consul living elsewhere, you have to go to the embassy. More questions, just ask.
It should be clear to everyone by now that Thailand does not simply register farang as a taxpayer. It only becomes interesting for the Thai tax authorities if there is indeed something to be gained. If you come by just because of a ThaiTaxNumber to avoid Dutch taxes, you may not even be helped at the counter. People now know their pappenheimers well. Sometimes a test calculation is made: if, according to the official in question, it is too low, he will also look at you with pity.
Please note: Dutch tax practice is increasingly that the Decree on the prevention of double taxation 2001 stipulates that the Netherlands grants tax relief up to a maximum of the tax due in Thailand. In other words: if you would have to pay EUR 3000 in the Netherlands, for example, and you manage to get away with EUR 1500 in THB in Thailand, you will still receive an assessment from Heerlen on the remaining amount.
Thank you Ruud for your response.
With your response, my plan suddenly collapses completely.
So, according to you, it serves no purpose at all to apply for an exemption from payroll tax from the Dutch tax authorities on a company pension with the aim of paying less tax via a Thai tax assessment. In the end I still have to pay the amount that I should have paid according to the Dutch tax assessment. Then why put in all that effort? And several responders to my question in Thailandblog have taken the trouble by applying for RO2 and RO24 certificates.
Ruud, do you think it is also the case that I then simply have to pay capital gains tax (Box 3) on my savings balance in a Thai bank? Please say it's not true.
Peter Spoor, double taxation only occurs if the same component of income is levied in two countries. The state pension is not mentioned in the treaty, so both countries can levy it. Company pension is mentioned in the treaty (art 18) and the Netherlands is not allowed to levy taxes on it.
After emigration, bank balances no longer belong to box 3 in the Netherlands.
At the moment what RuudB says does not apply.
I have an exemption for my pension in the Netherlands, and only pay tax on it in Thailand.
Having the money paid out by the insurance company in Thailand was a condition of the exemption.
What the future brings is always looking at coffee grounds.
I do not pay capital gains tax.
Not about my money in Thailand and not about my money in the Netherlands,
But again, what the future brings is looking koffidik.
Ruud, about the condition of paying directly to a bank in Thailand, see here: https://www.thailandblog.nl/expats-en-pensionado/opleggen-remittance-base-belastingdienst-baan/
I have been working here for 12 years now and pay income tax on my income from the Thai university. I never asked for registration, but that was arranged by my employer. So you have had a tax number for 12 years. I now also have an exemption from payroll tax on my private pension.
Hold on for another 3 years and you will also receive a monthly Thai pension instead of a lump sum payment. Not that you can pay the rent, but still.
And speaking of income tax; It sounds nice, but with all the deductions, it doesn't mean a thing and I like that.
It quickly saves 1/3 with NL at equal pay, so that means fewer days of work alone for tax payments.