Double Taxation

Double Taxation
Double Taxation

Siam Firm Inter Laws was established by Khun Somsak Chopaka an Attorney at Law with 30 years of working experience in domestic and international law, for individuals both foreign and local, domestic entities and inhouse legal counsel for numerous established international companies. Khun Somsak will be giving legal advice about the ever changing situation in regards to Thai Law and keeping readers up to date with the constant changing business and social environment here in Thailand.

For the past few years there have been many retirees moving from their home countries to live here in Thailand, in particular there are many Scandinavian nationals who retire in their home Kingdom before setting out to stay in the land of smiles. Because they choose to stay in Thailand they are required to pay tax here as well more specifically basic income tax, normally a retiree does not have an income but a pension and that is taxed instead.

Normally a pension is always tax deducted by the Scandinavian tax department before it is paid out to the retiree, but the tax department states that any income in Thailand requires you to pay tax locally. Although to be considered taxable here you must stay in the Kingdom for more than one hundred and eighty-three days.

Payment of taxes can be done at the revenue department where you can obtain a certified letter allowing you to receive a refund of all the tax deducted by your home government back in your country, this is the way to avoid double taxation. Even if the amount you tax that you pay in Thailand is smaller than the amount you would back home it is correct as you should only pay as per the rate of the country you are staying in.

If I myself go to stay in your country for the same period of time I would become taxable over there but would no longer be required to pay taxes in Thailand. This is all possible due to the Double Tax Law Act established in 1961 which is an international double taxation agreement between many countries such as the USA, Cyprus, Germany, India and the European Union who helped write and put the act into place. Basically the act states that if you stay in a country for more than one hundred and eighty days then you have to pay the tax for that country and if we pay tax in our home country we will be refunded the total amount.

If I go to Norway for example where the tax is a flat twenty five percent rate for everyone I will be paying more tax than I would if I stayed here in Thailand, but it is fine as the system works both ways and depends on the tax rates of the chosen country. In Thailand the tax rates are progressive starting from 10% – 20% – 25% depending on your total income, if you have a small income you will pay little but if you have a big income you will end up paying a lot. The main point of the income does not necessarily mean the total amount of your pension also but only the money you transfer to Thailand on that taxable year.

Say if you have a pension of one and a half million baht and transfer in that whole amount, that amount would be the basis for taxable income. The Thai revenue department always calculates the money brought into Thailand to be your taxable income. Lawyer Comment: Almost all the Scandinavian nationals receive that kind of pension with which they come to live here in Thailand. They always approach us and ask us to prepare the tax form to submit to the government but we always try to find the way for them to pay less tax legally. We can assist everyone with their taxes and try to save the most amount of money by using acts such as this, here in Thailand tax for the year is paid for before the 31st of March in the following year, some countries do it differently and pay on the end of the same year.

Whatever way if you have to pay taxes for two different countries you can refund the amount paid from the country you are not staying in. If you have your own case or any questions regarding law in Thailand please feel free to write in to us and we will answer any questions or concerns in this column. By Somsak Chopaka of Siam Firm Inter Laws English Hotline: 081 808 9175, 089 774 6001, 084 979 4714 Pattaya Office: +66 (0) 38 906 721-3 Bangkok Office: + 66 (0) 2 260 3025 – 7 Hua Hin Office: +66 (0) 32 531 508 For more information see