Lawyer homes in on expat tax concerns, same sex marriage

[reader]

From Pattaya Mail

Following a survey which specified the legal concerns of many longstay foreigners, Pattaya Mail invited experienced attorney at law Peerasan Wongsri (Victor) with offices on Thepprasit Road to comment on some of the issues.

Personal income tax. Peerasan pointed out that no new law had been introduced last January. Income brought into Thailand from abroad by Thai nationals or by foreign tax residents had always been subject to tax, but only if it arrived here in the year it was earned or received. The clarification now is that the cash is subject to Thai income tax, no matter if brought here in a different year. The Revenue Department is looking for untaxed income on businesses abroad, offshore accounts, property profits and the like. As regards retirees who live here on already-taxed income, such as pensions, Peerasan believed they had nothing to fear.

He stressed that even those who had untaxed foreign income to declare should pay it retrospectively in the first three months of 2025. TIN, or a tax identification number, as well as forms are available from the Revenue, but he advised foreign tax residents (residing here more than 180 days in a full calendar year) who live on already-taxed income to await further clarification. He also noted that it was very difficult for the Revenue to know which foreigners are in residence here more than 180 days unless they voluntarily declare.

Divorce proceedings. The lawyer said that Thai law was very fair to both parties when a contested divorce is before the youth and family courts. The judges will ask if there was a pre-nuptial agreement and Peerasan recommended that route prior to the marriage. Any property bought during the marriage had to be divided equally, but prior assets are a different matter. For example, a Thai wife could ask the court to give her compensation or a living fund. But the foreign husband can contest this if he has evidence of abusive behaviour or if he feels that the wife has taken unfair advantage. He quoted a recent case in which the foreign husband did not have to provide any supplementary financial support because of feckless behaviour by the wife during the period of the marriage.

 

Peerasan pointed out that it is expected that a new law will allow same sex marriage – the precise term in Thai is lifelong relationship – but the settlement rules in law for a divorce will be discharged as in a heterosexual marriage. Same sex couples are expected to have the same rights and responsibilities as in a traditional marriage, for example adoption and pensions. But he advised foreigners intending to marry a Thai partner, of either sex, to take legal advice prior to making the formal bond – just in case it doesn’t work out. Thailand will be the third country in Asia, after Nepal and Taiwan, to recognize single sex unions in the legislative process.

Peerasan Wongsri (Victor) – Victor Law Pattaya – Tel: 062 879 5414
Email: victorlawpattaya@gmail.com

[Moses]

7 hours ago, reader said:

Personal income tax. [...] As regards retirees who live here on already-taxed income, such as pensions, Peerasan believed they had nothing to fear.

That is wrong clarification.

First of all, the case depends on the type of expat’s pension: whether it is a pension paid by the state of which the expat is a citizen or accumulated in a pension fund. State pensions assigned and paid by foreign states to their citizens, according to the convention, should not be subject to income taxes, while pensions accumulated in pension funds are, as a general rule, subject to taxation (also see paragraph 4 below).

If the pension is a composite pension, in which part of the amount is a payment from the state, and part is from the pension fund, then only the part added by the pension fund may be taxed.

Secondly, such taxation depends on the nationality of the expatriate: for non-Thai citizens who are residents of Thailand (residing in Thailand for more than 180 days in a year), in relation to the taxation of their income received outside Thailand and not being government pensions paid by the country of nationality of the expatriate, determining there will be a double tax treaty between Thailand and the country of which the resident expat is a citizen.

If such an agreement exists, the Thai Tax Administration is required to take into account the provisions of such agreement. For example, an expat's pension in his home country is taxed at 10%, while a Thai resident's overseas income must be taxed at 30%. If there is a double taxation treaty, the Thai Tax Administration cannot impose a tax on foreign income higher than 20% (30 - 10 = 20), otherwise it would be a violation of the international treaty.

If there is no agreement on the avoidance of double taxation between the state and the expat’s country of residence, then the tax department has completely free hands - any tax can be assigned.

It must be remembered that a double tax treaty between the expatriate’s country of citizenship and his country of residence may contain provisions that pensions in the country of residence are not subject to taxation at all. Taking into account the fact that international treaties take precedence over local legislation, one should always begin to study this issue with the existence of such an agreement and its content in relation to pensions.