Question 1

In Australia, income and capital gains from a Private Superannuation Account Based Pension are tax-free. Typically, payments from this pension are deposited into an Australian bank account and then transferred periodically (e.g., quarterly) to a Thai bank account. According to Article 18.1 of the Australian/Thai Double Taxation Agreement (DTA), pensions and annuities paid to a resident of a contracting state are taxable only in that state. Therefore, if someone permanently lives in Thailand and is no longer a tax resident in Australia, the money transferred from the account-based pension to Thailand could be subject to Thai taxation. However, it's not clear how this income is calculated, particularly regarding potential capital gains that have accrued since the pension began, and earlier gains during the accumulation phase. Is the capital gain calculated only from the time the pension account was started? In this case, each amount transferred to Thailand would consist partly of the original capital and partly of income or growth from the fund. How is the taxable portion determined? If possible, could you provide a detailed example in the upcoming webinar?

Chas Begley · Accepted Answer

Under domestic Thai personal income tax rules for Thai tax residents (180 days or more in Thailand) you are liable to pay income tax on any pensions remitted to Thailand. You can use any tax already paid as a credit, but as you mentioned this doesn’t help with Superannuation pensions.

Anything remitted to Thailand is taxed as assessable income. It is not on the capital gains, it is a pension, therefore the pension amount you transfer to Thailand is assessable income in Thailand. You get your Thai allowances and deductions and can also deduct up to THB100,000 off the pension before using the tax tables.

Question 2

In Australia, income and capital gains from a Private Superannuation Account Based Pension are tax-free. Typically, payments from this pension are deposited into an Australian bank account and then transferred periodically (e.g., quarterly) to a Thai bank account. According to Article 18.1 of the Australian/Thai Double Taxation Agreement (DTA), pensions and annuities paid to a resident of a contracting state are taxable only in that state. Therefore, if someone permanently lives in Thailand and is no longer a tax resident in Australia, the money transferred from the account-based pension to Thailand could be subject to Thai taxation. However, it's not clear how this income is calculated, particularly regarding potential capital gains that have accrued since the pension began, and earlier gains during the accumulation phase. Is the capital gain calculated only from the time the pension account was started? In this case, each amount transferred to Thailand would consist partly of the original capital and partly of income or growth from the fund. How is the taxable portion determined? If possible, could you provide a detailed example in the upcoming webinar?

Chas Begley · Accepted Answer

Under domestic Thai personal income tax rules for Thai tax residents (180 days or more in Thailand) you are liable to pay income tax on any pensions remitted to Thailand. You can use any tax already paid as a credit, but as you mentioned this doesn’t help with Superannuation pensions.

Anything remitted to Thailand is taxed as assessable income. It is not on the capital gains, it is a pension, therefore the pension amount you transfer to Thailand is assessable income in Thailand. You get your Thai allowances and deductions and can also deduct up to THB100,000 off the pension before using the tax tables.

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