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What are the tax implications for UK retirees spending over 180 days in Thailand?
Tax ResidencyThailandUK Pension TaxDouble Taxation TreatyRetirement VisaExpat Tax RegulationsThai Bank AccountImmigration and Taxes
Feb 8, 2024
2 years ago
Mark ******
ORIGINAL POSTERHi all.
Another question about tax residency but didn't want to bump the previous post.
I think I'm right in saying that if I spend more than 180 days in a calendar year in Thailand, that I become liable to pay tax there.
As a retired person who pays UK tax via PAYE on my pension, what is the implication of this and how is tax deducted in Thailand?
I have a Thai bank account with 800k baht but no regular payments into the account from my pension.
I want to spend more time in Thailand. Probably 9 months per year.
Thanks in advance.
Another question about tax residency but didn't want to bump the previous post.
I think I'm right in saying that if I spend more than 180 days in a calendar year in Thailand, that I become liable to pay tax there.
As a retired person who pays UK tax via PAYE on my pension, what is the implication of this and how is tax deducted in Thailand?
I have a Thai bank account with 800k baht but no regular payments into the account from my pension.
I want to spend more time in Thailand. Probably 9 months per year.
Thanks in advance.
TLDR : Answer Summary
The discussion addresses the tax implications for UK retirees wishing to spend extensive time in Thailand. It highlights the 180-day rule, which suggests that spending more than half the year may subject individuals to Thai tax obligations. Community members contribute insights regarding the tax treaty between Thailand and the UK, indicating that pensions are typically taxed in the source country, potentially protecting expats from double taxation. However, recent interpretations of tax laws complicate the situation, especially for expats with foreign income. Concerns about new regulations requiring income declaration and the impact on retirement funds are raised, along with the need for clarity on existing loopholes and obligations. Various comments denote cautious strategies regarding fund transfers to avoid possible taxation until more is known about the evolving tax landscape.
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David **********
No one knows what the tax situation is going to be this July or January. My take is nothing will change and we retirees will continue as in years past.
as a precaution, I stopped bringing money from my pension in the US and banking it. I now pay my lease offshore. No children charities or paying girlfriend’s family medical emergencies from my SCB account. Use American 🇺🇸 credit cards a lot more. People bring me money owed. Basically from millions of Baht a year to zero.
as a precaution, I stopped bringing money from my pension in the US and banking it. I now pay my lease offshore. No children charities or paying girlfriend’s family medical emergencies from my SCB account. Use American 🇺🇸 credit cards a lot more. People bring me money owed. Basically from millions of Baht a year to zero.
Graham *******
@David *********
use of a credit card is also taxable if they find out.Keith ************
@David *********
how do you pay your lease offshore?David **********
@Keith ***********
My landlord is not Thai and has accounts in the US. I said at least for awhile I must pay in my home country.Reply to
David **********
Reply
Barry *******
I’m gona submit my tax return cos some random on Facebook said I have to!!
Tim *********
@Barry ******
No. Submit a tax return in 2025 because you're smart enough to find out the rules for yourself and you have plenty of time to do so.Reply to
Tim *********
Reply
Peter *******
Tim -- what is your source? I have not heard of a specific implementation, just rumor which ignore inter-country tax treaties.
Tim *********
@Peter ******
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Reply to
Tim *********
Reply
Tim *********
It's not a new law. It's a new interpretation. Instructions from the top to guide local tax inspectors. The click is ticking, in that foreign residents are now required to fill out income declarations, minus deductibles and allowances. So calendar year 2024 will be assessed in 2025 and tax bills will be issued to those who should pay. There are penalties for not submitting the form.
Radost **************************
@Tim ********
you are really an expert 😁 knowing nothing but hacking the keyboard. There isn't and won't be any tax on foreigners who are not working in Thailand. Because then the foreigners would be allowed to Thai social system and could buy land.Tim *********
@Radost *************************
Duh-uh 🙄Reply to
Tim *********
Reply
Wayne *****
@Tim ********
Another armchair expert peddling crap.Tim *********
@Wayne ****
You're welcome ************************************************************************
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William *******
@Tim ********
Tim, thanks for posting. Many of us will be paying 35% tax !Reply to
William *******
Reply
Barry *******
As it stands, there is no tax law and probably wont be for the foreseeable future in my opinion. Nothing came into effect in January!
Kool *******
@Barry ******
actually a new part of the tax laws did come into effect in January. A person can no longer hold untaxed profits in a foreign bank account for over one year and use a loophole that made those profits untaxable when brought into Thailand after that full year. This ended. That is what this is all about, and of course it became modified, and speculated on in the tumour mill...lolol. People had to be reminded of tax treaties that still treated pensions just like they have been doing. Nothing changes in that respect. This change mostly affects those people that are younger than the retirement age in their home country, but above the retirement age here, and where their money is coming from, and the tax has been paid on it.William *******
@Kool ******
What about other income that we have paid taxes on in our home countries that have tax treaties ?Kool *******
@William ******
as long as taxes have been legally paid, no problem.Reply to
Kool *******
Reply
Pete **********
@Kool ******
so if your income is a government pension from US and its already taxed and you are over 50 in thailand on a Retiree visa and you either have the minimum required 800k thai baht in a bank or show you are bringing in the minimum 65k baht a month into a Thai bank will that be subject to taxes? The US has a tax treaty with thailand also. In hearing multiple opinions about this.Ally ************
@Pete *********
My understanding is that any funds credited to your Thai Bank account from overseas will be aggregated through the tax year and will be deemed to be 'income' for the purposes of assessing liability to taxation in Thailand.. however any tax already paid in your home country and duly evidenced will be off-set from such a liability.. assuming a double taxation agreement exists between said countries.. so in instances where the tax rate is higher in your home country there will be no further tax to pay in Thailand.. if the reverse is true then you could end up paying some tax here.. but this all goes away if you don't bring funds into Thailand but retain your deposits overseas instead.. since you have no visible income within Thailand.. at least that's my understanding of the situation.. and if I'm correct and all the expats stop moving money into Thai banks.. you can bet the Thai authorities will quickly review this tax law.. since it would not serve economic growth.. the real target was never the retired expat community or those of us married to Thai's.. i think it was intended to catch mobile workers who earn their income predominantly outside of Thailand.. people who are technically tax resident here but get paid by an overseas entity into an overseas bank.. they may take advantage of this to avoid paying tax in either country.. and Thailand no longer wants to accommodate them on a tax free basis!Pete **********
@Ally ***********
ok I appreciate that. Was debating on the whole 800k baht in thai Bank or showing the 65k a month. I may just hire an agent to do all the visa and bank shenanigans and run everything out of my US bank and wise account. Thanks for the detailed replyAlly ************
@Pete *********
Consider maintaining the existing balance in your Thai Bank account for your visa extensions.. then minimise any new transfers into Thailand during the current tax year.. at least until we get further clarification or a rule revision.. for expats married to Thai's.. remember they have the option of transferring overseas funds into their spouse's bank account to avoid scrutiny.. just more food for thought!Pete **********
@Ally ***********
thanks Ally. Much appreciated my friend. I'm pretty sure I'll be good to goKool *******
@Pete *********
the Thai government is only concerned about income coming into Thailand, and that all taxes have been paid on those funds. They closed the loophole that was allowing untaxed income to come into Thailand.Pete **********
@Kool ******
ok so if it's a portion of my government pension pretaxed in states and deposited into a Thai bank each month, I don't have to worry about taxes? Should I have my 1099R to show this? Don't want to be blindsided by any additional hits on my income not budgeted for.Kool *******
@Pete *********
they aren't really concerned about those older than the retirement age in their home country, and on retirement visa extensions here. They are concerned about those under the retirement age in their home country, like under 62 in the US, and having a retirement extension here because they are over 50 years old. You can't legally work in Thailand on a retirement extension, and you are too young to be collecting a pension in your home country, so where is the money you are living here on coming from, and has the legal tax been paid on it. That is the concern, because a major loophole was ended that allowed untaxed income to come legally into the country before Jan 1st.Reply to
Kool *******
Reply
Barry *******
@Kool ******
what jurisdiction to Thailand have to check foreign bank accounts?Christopher *************
@Kool ******
its for thai citizensBarry *******
The banks no nothing about this!
Brandon ************
@Barry ******
there's nothing for the banks to know. The guidance hasn't been released by the relevant government department. They know this will affect the tax returns the are filed next year so they don't have to create the new guidelines until the end of this year.Kool *******
@Barry ******
it's not the banks, it is the revenue service, tax man. Banks report all international transactions already. The government just wants to make sure all taxes have been paid on it.Barry *******
@Kool ******
Banks only report transactions over 2million!!Christopher *************
@Barry ******
it's not for expatsReply to
Christopher *************
Reply
Wayne *****
Don't worry, cross that bridge when or if you get to it.
Graham *******
@Wayne ****
the bridge is here now.Wayne *****
@Graham ******
Crap!!!!!!!!!!!!!!!!!!!!!Reply to
Wayne *****
Reply
Sue **********
Nobody knows yet how pensions will be trated with the tax law. I’m afraid you will not get an answer to rely on from anybody
Bart **************
There should be a tax treaty between Thailand and the UK to avoid double taxation. These things usually stipulate that pensions are taxed in the country where the income originally comes from (and then hence not in the other regardless of tax residency), but you'd have to check whether that is indeed the case for you.
Graham *******
Double tax means you cannot pay more than 100% of the tax due anywhere and in total. Having a DTA does not mean you would pay zero TH tax because you paid tax in uk for example. If is not fully clear what is taxable and what is not. In the case of pensions only certain pensions can be paid tax free. Remember there are many "pensions" Government pension, civil service pension, state pension, occupational pension and private pensions. Which of these is tax free is unclear and I think will take years to establish. If an asset is tax in your home country, you can deduct the tax paid against the tax due in Thailand if there is a DTA in place and that DTA specifically referees to that asset.
Bart **************
@Graham ******
Avoiding double tax means exactly what you say it does not: it means that you will NOT pay tax in Thailand over transactions that are taxed in the UK. It has nothing to do with capping anything at 100%. Would be a bit rough anyway to allow to situations where people pay 100%; then the entire transaction is taxed and there would be nothing left.Graham *******
@Bart *************
Not correct, if you have an investment trust and you make a profit, let's say you make 1000 quid profit and you pay 250 quid uk tax and then it's assessed in Thailand and the TH tax is 300 quid in Thailand you will pay 300-250= 50 quid Thai tax. By 100% I mean you pay 100% of the tax due in both countries minus any tax credit due to DTA.Bart **************
@Graham ******
well those treaties are bilateral and hence not identical. It would be possible that the Treaty between your country and Thailand includes that arrangement. As far as I know, the rationale followed in the Dutch-Thai treaty is exclusively based on determining case by case in which of the two jurisdictions transactions are taxed.Another notable bilateral tax treaty with a strange arrangement is the Dutch-US one. It states that people with US citizenship and working in The Netherlands DO owe tax at both places. It achieves exactly the opposite of what such treaties usually aim to prevent. These people are entirely screwed as they lose almost all their income to tax. So indeed there are exceptions.
Graham *******
@Bart *************
The only thing I agree with here is "they are not identical" I have read that there are already legal challenges being considered, if so this is going to be up in the air for years and years and this is the worst cases scenario that could have happened.Reply to
Graham *******
Reply
William *******
@Bart *************
Many of us have pensions but have also saved for our retirement years and have equities and bonds. In the USA we pay at most 23% and change on qualified equity dividends and capital gains….a lot less then what a Thai pays. Do we pay additional taxes to Thailand which is 35% taxation for a comparable income for many of us? No one has cited the Thailand tax code …including accountants…to answer that question.Bart **************
@William ******
these treaties determine in the first place where tax is owed. That's a binary outcome: country A or B. Then that country's rates apply. The treaties do not (never I think) stipulate that tax is owed in the second country for some remainder, after the first country had its cut.Reply to
Bart **************
Reply
Mark ******
ORIGINAL POSTERThanks gents
Stuart ***********
@Bart *************
yes there is a tax treaty between UK and Thailand, so I agree this gentleman has paid tax already and need not worry.Rok ********
@Stuart **********
it is not as simple as that: the thai system will calculate the tax on worldwide income in line with their Income tax system including personal allowance. Then they will credit the amount with income tax paid in UK and the difference if any is due to the Thai Tax authorities. I have undertaken such excercise in another asian country and used my UK tax return as supporting evidence. Interestingly, both systems were quite similar and the net amount due to this asian country’s tax authority was actually only £300. However professional fees can amount to much more and i now make sure i am nowhere more than 180 days in any financial year and just deal with UK tax system (be careful with the dates of financial years in different countries) The world is big enough any way.Ally ************
@Rok *******
You are absolutely correct regarding the assessment of tax and treatment of overseas tax credits by the Thai authorities 👍Reply to
Ally ************
Reply
Charlie ********
@Stuart **********
I had this situation in Spain. I was told to get a certificate from UK tax to prove my pensions were taxed at source. However HMRC said the could not supply a certificate. Spain then sent me a tax bill that I contested . However the Spanish system which is slow to say the least, then said I had ran out of time to challenge and I had not only to pay the tax but the amount also included penalties. So good luck with convincing the Thai system.Reply to
Charlie ********
Reply
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