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Will my UK pension be taxed at 30% in Thailand during the retirement visa renewal process?
Aug 16, 2024
2 years ago
Clive *********
ORIGINAL POSTERI’m about to start my retirement renewal process next month after the first year. I have a pension income of 65,000+ baht going into my Bangkok bank months also the required bond in the bank for last 2 months so I have the option of both methods. What I’m worried about now if I use the pension proof ? Will it be taxed at 30% because it could be deemed an income. Most of this amount was tax exempt in UK due to tax threshold
TLDR : Answer Summary
The discussion centers around an expatriate's concern about whether their UK pension income, which exceeds 65,000 baht, will be subject to a 30% tax in Thailand when renewing their retirement visa. Community members provide insights into the implications of bringing pension income into Thailand, referencing the Double Tax Agreement (DTA) between Thailand and the UK, and clarifying that while pensions can be taxable in Thailand, tax credits may apply for taxes already paid in the UK. Overall, there is uncertainty regarding tax assessments and their potential impact on retirees living in Thailand.
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Stephen ********
Thailand new law had been formulated so that foreign residents living in Thailand are no longer subject to tax on foreign income.
Bradley *********
This tax system that everyone’s worried about is going to collapse before it ever comes to fruition. The infrastructure to monitor, investigate and enforce it just isn’t there.
Jeff *******
@Bradley ********
they only have to tie it to extension renewals and all your suppositions fade away. They can wait for you to come to them, no flash systems required.Bradley *********
@Jeff ******
never gonna happenJeff *******
@Bradley ********
Of course it isn't Bradley, I'm guessing they published it in the Royal Gazette for a giggle - good luck.Bradley *********
@Jeff ******
after being here 25 years I’ve seen a lot of schemes collapse under their own weight. Most before they even get started.Jeff *******
@Bradley ********
Good to be prepared though ehReply to
Jeff *******
Reply
Frederick *********
One problem for us from the UK is that we don’t get our P60 (confirmation of earnings less tax paid) until April. How are we expected to submit our details before the end of March.
Jeff *******
@Frederick ********
you can’t, you will have to pay the tax and then claim it back when you have the proof. Good luck with that 😳Frederick *********
@Jeff ******
is this just your opinion, or do you know for a fact that’s how the Thai tax office will treat this.Jeff *******
@Frederick ********
If you can't prove you've paid the tax, as you've rightly pointed out, do you think the thai tax office will say never mind just let us know when you can? If they tie it to extension approval which is my GUESS they will, then you won't get the extension if you haven't got a tax receipt. I can't see any other way they can do it. It's already stipulated on the marriage visa form, No 6 I believe.Frederick *********
@Jeff ******
ILike everyone else I have no idea how the Thai tax office will treat this situation. Like you say it’s your GUESS they will link it to to our extension approval. Many will disagree with your GUESS. We will just have to wait and see how things pan out and act accordingly. I don’t see any mileage in GUESSING what the outcome may be, it just causes unnecessary confusion and anxiety.
Jeff *******
@Frederick ********
No anxiety for me, I've seen the tax bands, I've seen the allowances so have a rough idea of what it would mean for me and can afford it with no issues. Always good to be prepared and if it doesn't happen, I think there's a less than 1% chance they will drop it as it's aimed at rich thais rather than expats, then thats a bonus. But I'm set for it to happen, anyone not taking that approach will just have to deal with the fallout if/when it does.Frederick *********
@Jeff ******
as I said, no point guessing how things will turn out, it just causes unnecessary confusion and anxiety for many ex pats. As you say, you have a ROUGH idea of what it would mean to you, but obviously not 100% sure. I think we’ve all got some idea on how it will impact us as individuals, we’re just waiting for confirmation of the finer details to enable us to plan for future tax liabilities if any. I for one don’t want to have a ROUGH idea how it will effect me, I want to be 100% sure of my tax liabilities if any. As per my original comment, one of my biggest concerns at the moment is how the Thai tax office will treat us UK citizens who don’t receive their P60s until April. Your Guess as to how they will implement this is just that, a GUESS. For me there are far too many people making GUESSES as how the new system will or will not be implemented.Jeff *******
@Frederick ********
jesus!!Frederick *********
@Jeff ******
he won’t help you.Reply to
Frederick *********
Reply
Deby **************
@Frederick ********
I'm not sure how that's going to work out. We may have to submit our numbers as an estimate and revise the following tax return if needed?Frederick *********
@Deby *************
well they need to find a solution sooner rather than later to potential problems like this.Reply to
Frederick *********
Reply
John ********
For all those who say it will never happen. Why did they not exempt foreign pensioners when bringing in the law? Moreover, the LTR visa for wealthy pensioners specifically has a tax exemption benefit. Why, if it is not to tax others? It may well be quite some time before they start cracking down but it is more likely than not that they will at some point. Not hard to get immigration to ask for last years tax return when renewing your retirement visa every year...No one knows for sure but it is such an easy target and governments tax, it is what they do
Deby **************
@John *******
Exactly. I don't understand why so many people think it won't apply to them.Jeff *******
@Deby *************
denial, they’re living on their bones and know this could finish them!Reply to
Jeff *******
Reply
Nick ************
You can choose to have your UK state pension paid directly to a Thai bank account. You are then not taxed on it in the UK but would be in Thailand. I dont know how that works out financially but it might be a lot simpler. If course your UK pension would be frozen.
Terary **********
Nobody knows... The previous PM said... but nobody did anything and so far nobody has done anything, so nobody knows anything. Many people speculate but that is another story.
Keith *********
If using the income method make you
*****
baht is an International transfer. I used to use Bangkok bank for the transfers but it was no longer classified International so I had to open a Kasikorn account for this purpose.Jeff *******
@Keith ********
it’s classified as international if you mark it as such, if that doesn’t appear it’s user error not bank errorClive *********
ORIGINAL POSTER@Keith ********
thank you for that Keith, was the process at kasikorn straightforward??Keith *********
You can use an agent but I don't like to pay money out unnecessarily.
Keith *********
@Clive ********
Well you have to open a Kasikorn account and I did that with the help of my Thai wife. Then I just used Wise to transfer at least *****
baht a month.Apart from problem caused by applying for my extension in Chiang Mai and account been in Sukhothai.
But if you have a Chiang Mai account and you apply for your visa in Chiang Mai then it should not be a problem.
Reply to
Keith *********
Reply
Brian *******
They're not gonna tax anything like this for retiree extensions. Stop the BS. I may be wrong, but I doubt it.
Graham *******
Pensions are taxed in general depends on where you are from and what type of pension. I see you are uk citizen, your state pension and other pensions are taxable. Youi might find these vids from Carl helpfull.
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Kool *******
Pensions aren't taxed.
Clive *********
ORIGINAL POSTER@Kool ******
where aren’t they taxed Kool ? Uk pensions are taxed after first £12,500. Now the lot might be taxed at 30%. Should I be worried ???Clive *********
ORIGINAL POSTERIf that’s true Kool, I will be extremely happy. I’ll await my fete 🙏
John **********
@Clive ********
don't be misled. If you bring income including pensions into Thailand while a tax resident it's all assessable for Thai tax and you are required to complete a Thai tax return. Under the DTA you can claim a tax credit for any tax paid on that income in the UK but most pensions including the state pension are taxable in Thailand. Pensions classed as government pensions are not taxable in Thailand, government pensions are defined here************************************************************************
*****
0Reply to
John **********
Reply
Kool *******
@Clive ********
Thailand doesn't care about legitimate pensions. What Thailand will be concerned about are those people here on retirement extensions, but too young to receive pensions in their passport country. Thailand will want to know about the money they are using to live here, as working is restricted on a retirement extension. This is what Thailand cares about tax wise, not legitimate pensions.Reply to
Kool *******
Reply
John **********
@Kool ******
they might not be for you but if folk are from the UK they areTerry **********
@John *********
not if it's a military pensionJohn **********
@Terry *********
true. Also most civil service pensions.************************************************************************
*****
0Reply to
John **********
Reply
Clive *********
ORIGINAL POSTERThank you Tim
Tim *********
Clive, I recommend you read the DTC with the UK and Thailand. You can find it here
For others reading this thread, I'll post screen prints of 2 relevant paragraphs in the Treaty with the UK, here and in the linked comment. Article 6 says, in effect, UK income is not taxable in Thailand but any income moved to Thailand is subject to Thai tax assessment.
Article 19 (2) is complicated. See the next screen print
****************************************************************
For others reading this thread, I'll post screen prints of 2 relevant paragraphs in the Treaty with the UK, here and in the linked comment. Article 6 says, in effect, UK income is not taxable in Thailand but any income moved to Thailand is subject to Thai tax assessment.
Article 19 (2) is complicated. See the next screen print
John **********
@Tim ********
that's pretty straight forward. It's basically saying that income brought into Thailand is taxable in Thailand but you get relief for any tax already paid on that incomeReply to
John **********
Reply
John **********
You transfer income into Thailand therefore you are required to complete a Thai tax return if you spend 180 days or more inside Thailand in a tax (calendar) year. What you do with the money is irrelevant, it's the fact you brought it in to the country. The UK being true to itself has one of the worst Dual Tax Agreements with regards pensions, the only relief is for some pensions earned while working for the government. Nothing for the state pension.
Deby **************
Basically yes, all of the money from pensions income brought into Thailand is taxable if you are in the UK. Then you can deduct the amount of tax you paid in the UK. However because the UK has the generous tax free allowance, we don't pay much tax so there is little to offset. It will impact UK pensioners a lot. Not only the tax, but the costs of getting tax advice and for someone to submit the return and interpret the reply. Going to suddenly get very expensive here.
Deby **************
I'll have to do some accurate numbers now we have some more info, but my back of an envelope figure came out at almost 30% of funds transferred having to be paid in taxes for our situation. I see a spreadsheet coming!
Clive *********
ORIGINAL POSTER@Deby *************
yes I think a mass exodus could be on the cards especially for UK expatsDeby **************
Many will stick their heads in the sand and think it doesn't apply to them, and do nothing - a bit like people did with Brexit. But its good to plan for the worst and hope for the best. Comes as a bit of a shock to suddenly make everything 30% more expensive. Food etc, ok, not so bad, but rent is now 30% more, bringing in money to buy a car? Now 30% more...etc Add in the complication of the tax year ends not lining up and its going to get messy.
John **********
@Deby *************
I don't know where this 30% comes from. Thailand has a progressive tax regime and you only pay tax of 30% on income between 2 and 5 million baht and that's after allowances which could easily be 3-400k baht. Plus you get a credit for any tax already paid on the income you bring in if paid in a country with a DTA. It's really nowhere as bad as you implyReply to
John **********
Reply
Tim *********
@John *********
That's my reading too, John. Thanks for confirming. On the other hand we will very likely have already paid some tax in the UK, which will be off-set against Thai tax liabilityReply to
Tim *********
Reply
Tim *********
You will have paid some tax in the UK on a pension that allows you to bring in 65k every month. That's about £17,300 and the Personal Allowance is £12,570. Maybe you have other income in the UK, and your tax code was adjusted to collect tax due on your pension from there? Thailand also has tax-free allowances and then a rising scale. Quite likely there will be no additional tax to pay in Thailand when you show them P60.
Clive *********
ORIGINAL POSTERThank you for all your replies. It looks like my stay in Thailand might not be as long as I thought. Very sad
Tim *********
@Clive ********
I just did the maths. Based on the minimum of 65k per month (780,000 per year) required to renew a retirement extension: Thai tax payable on that income would be 70,500 Baht. That's about £1,500 at today's rates. If you paid tax in the UK and it was your only income, you'd have paid £1,060. If you have other income in the UK you could say you paid 20% on the whole amount, which would be £3,455, so your UK tax more than off-sets Thai tax. Of course, if you bring in more than 65k Baht per month your Thai tax bill goes up. But the top rate of tax in Thailand is 35% for more than 5M. The top rate in UK is 45% over £125k (about 5.6M Baht)So a general rule for UK citizens resident in Thailand is that it could cost us each £440 in Thai income tax. That's £37 a month. Given that Thailand has no Council Tax, we are still quids in. If you think that's too much to live in the Land of Smiles, cry me a river 🤪
Tim *********
@Clive ********
It would be worth talking to an expert, Clive in both UK and Thai tax. Your savings were accumulated from taxed income or taxed capital gains (or were nefarious!) over whatever period. It's probably a finely balanced and detailed calculation to decide what money you draw, from what pot, whether it is assessable when you bring it to Thailand and whether tax already paid in the UK off-sets tax payable on Thailand.Reply to
Tim *********
Reply
Clive *********
ORIGINAL POSTER@Tim ********
mine is in draw down and so far I’m living in the tax free element. How will this affect me do you know ?Clive *********
ORIGINAL POSTERMy pension is in draw down status. I don’t have to take any of it and can bring money into Thailand from my savings instead. I can take from my pension pot what I like and when I like, it is not an annuity
Tim *********
@Cl***
what do you mean by 'draw down'? And are you referring to payments from a private or occupational pension, or the UK state pension?Tim *********
@Clive ********
This para suggests that UK government or local authority pensions will only be taxed in the UK. But it does not say the same about regular state pension, or pensions from non-public sector jobs. Suggests to me you can escape tax assessment in Thailand on any pension coming from a public sector job, but all other pensions are simply 'income' and is assessable if you bring it to Thailand.Tim *********
@Clive ********
Clive, I recommend you read the DTC with the UK and Thailand. You can find it here****************************************************************
For others reading this thread, I'll post screen prints of 2 relevant paragraphs in the Treaty with the UK, here and in the linked comment. Article 6 says, in effect, UK income is not taxable in Thailand but any income moved to Thailand is then subject to Thai tax assessment.
Article 19 (2) is complicated. See the next screen print
Reply to
Tim *********
Reply
Andy ************
Depends on the DTA whether this would be "tax assessable" and a completely different story if Thai Revenue decide to go after retirees, which is very unlikely
John **********
@Andy ***********
he's from the UK so almost all pensions, other than civil service type pensions, are taxable in Thailand. On your DTA point ALL income brought into Thailand is tax assessable and so you have to complete a Thai tax return, it's in that tax return that you claim credit for tax paid on the income in another country and any exemptions provided by the DTAAndy ************
@John *********
I've never had to do that previously so very unlikely it's going to happen. Thai Revenue is not targetting pensioners, it's targetting wealthy Thai people hiding money overseas. Unlikely they will create extra mountains of paperwork which will bring in virtually zero income. We'll see what happens, but I'm confident the whole thing is a fear campaign being fuelled by "tax advisors" who have joined the visa agent scams operating in Thailand. This is just one example of their shady advertising. I certainly won't be completing any tax returns until I'm requested to do soDeby **************
@Andy ***********
so you just plan to ignore/break the rule and hope not to get caught? That's a bit of a risk.Andy ************
@Deby *************
Life's risky, but I'm still here! If they want to audit me, I'm fine with that. Nothing to hideRobert ****
@Andy ***********
I agree 100%. This is a nothing burger for most Western expat retirees living in Thailand transferring in their monthly pensions.John **********
@Andy ***********
they won't request you to file a tax return. The onus is on you to file one if you meet the criteria. The first your likely to hear from the tax man it will be to audit you by which time it's too lateAndy ************
@John *********
Yeah, they're going to walk past the billionaires and audit a pensioner! That's ok. In my case I'll produce my old bank statements with a flourish, they will smile, nod their heads and be on their wayReply to
Andy ************
Reply
Bernd ***********
@Andy ***********
what about the point tax resident if you stay more than 183 days in Thailand?Andy ************
@Bernd **********
It's actually 180 days, but most countries have a clause in the DTA which exclude pensions. You need to check your own DTA. But again, it's highly unlikely that retirees will be targeted. There's bigger fish to fryBernd ***********
@Andy ***********
your word in God's ear.😉Reply to
Bernd ***********
Reply
Brandon ************
The taxation would be at the point of transfer, so that's a concern for your bank. Immigration is not involved in that. You are already having the money sent to Thailand, so use it for your extension. Not using it won't change things regarding taxes.
Clive *********
ORIGINAL POSTERAs I understand it , money generated before Jan 2024 is tax exempt, after this date it is taxable at 30% for farang if already taxed in UK at 20% Thai government take the 10% balance. They treat savings as non taxable but you may have to prove it
Michael *******
@Clive ********
that’s correct, I also plan to bring the 65k in using Uk income which includes state pension , this transfer will be visible to tax authorities. When I spoke to them (as I am already tax registered) they explained that when I submit my return, provided I can show evidence of tax paid in UK then this will be offset against any potential liability here. What was not clear is that UK allowances currently cover most of UK pension , so how will they treat that as UK tax paid may be lower than Thai tax due - they told me not to worry - standard Thai response 🤔😊Brandon ************
@Clive ********
that has nothing to do with your question about which method you should use to get your extension though. You ALREADY transferred the money for the monthly payment method. Getting your extension based on that will have nothing to do with your taxes.Peter *********
@Brandon ***********
correct mate to many people now scaremongering about taxes when nothing been decided yetReply to
Peter *********
Reply
Don *********
@Brandon ***********
banks collect taxes on incoming funds ?Bob **********
@Don ********
no but they might have to report them no one knows now a new prime minister who knowsPeter *********
@Don ********
correctBrandon ************
@Don ********
the banks are the ones who would report the transfers into Thailand, not immigration. The transfers have already happened so there's no reason to not use them for the extension.Reply to
Brandon ************
Reply
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