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andy

What too do? It's not an easy decision to make. I know different nationalities have their country's own rules on retirement overseas.

Some country's are easier to retire and some are not, also this is not made very clear by your own government's. Even if they are asked outright, Its possible you won't get the answer you expect. So what is needed first. You have a pension. I myself had a private pension just matured. Allowed to take 25% of it tax free. The rest is subject to tax. At what rate of tax? This again my depend on where you retire. In my case I paid 25% on the remainder, that tax amount as yet to be assessed and finalised.

The retirement status also depends on where you are a resident. "of and if what" country. Here I mean that you can be a resident of a specific country like Cambodia, or your own country. If your own, you have little or no penalties, effect on pension taxation. This does effect even a few I know, whom come and go, keeping their own residency. Some nationality's would suffer large money losses.  

What are the tax complications for retirement in Cambodia? Firstly here as no tax treaties agreement, with my country, most other countries do, and many also in Asia.  Also its not clear on tax for foreigners, especially on pensions (if any). But Cambodia laws always state "salary" of foreigners "in or from earning outside". But still not specific on what the outside is. I read, like if for you work in Cambodia, but still get paid for the work by a outside country. But then also pay tax on the earnings because you have done the work in Cambodia, where you are now a resident. So do they word "salary", incomes of payments, such has pensions?

Private and the State pension, two different considerations too. For with the state pension, if I retired in Australia the pension would be frozen, meaning it would not rise with my countries inflation. Although in the Philippines it would, and they have a tax agreement, so no double taxation.

This is a part, from my government -

Expat tax affairs can be complicated. We've created this comprehensive guide to help you understand your tax requirements as a British expat.
A common mistake of British expats when they first consider moving abroad is that when they move they are instantly exempt from UK tax.
Should a non-resident reside in a country with which the UK has concluded a double tax treaty, the treaty normally restricts the UK's taxing rights to certain income i.e. income from property will always remains taxable in the UK and government pensions remain taxable here.
The UK does have an extensive network of double taxation agreements and providing they are considered carefully they should reduce the risk of a taxpayer being doubly taxed.

 

This also about freezing State pensions -

While all British Pensioners are entitled to receive their State Pension, regardless of where they live, the British Government "freezes" the state pension for pensioners who live in certain overseas countries. This means that depending on where you live, payments may be fixed at the level of your first pension payment.
Not all countries are included in this "frozen" list. What may come as a surprise is that most Commonwealth countries are included in the frozen list (including Canada, Australia and New Zealand).
Typically if you live in the EEC, including Switzerland, your pension will match the level of pension payment with the UK.

 

So what if you decide to have your private pension transferred overseas -

What is an international pension transfer?

Since April 2006, British expats can move their pensions abroad with HMRC’s approval. The receiving scheme has to be a qualifying recognised overseas pension scheme (QROPS).

This means it has to be regulated as a pension scheme in the country in which it is established, and recognised for tax purposes in that country.

Theoretically a QROPS can comply with these requirements and be tax efficient. If the QROPS is in a country that taxes pensions at a minimal or even a zero rate, a pension transfer can potentially have tax benefits.
A transfer can benefit some people, but:
commission payments come from your pension;
if you or your adviser get a transfer wrong, you will be charged a 55% tax penalty by HMRC.

Also the last part I will add. And still it does not make all clear for retirement in Cambodia.

Cambodian Tax Law -

A Cambodian resident taxpayer's worldwide salary will be subject to Cambodian Tax on Salary. For non-residents, only the Cambodian sourced salary will be subject to Tax on Salary. The place of salary payment is not relevant in determining source.

Residency: A Cambodian resident taxpayer includes any physical person who:

- has residence in Cambodia, or
- has a principal place of abode in Cambodia, or
- is physically present in Cambodia for more than 182 days in any 12 month period ending in the current tax year.

 

 

It all seems a complicated affair! Any comments or sensible answer's most welcome.

 

 


 

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Oz Jon

The scheme I have in mind is to spend a day or 2 over 6 months in Oz (summer) and a day or 2 less than 6 months in SE Asia (Oz winter) ... I don't like cold!

 

That way I would retain my Oz taxpayer status with all it's age benefits and avoid any complications/costs of being a taxpayer in a SE Asian nation.

I suspect that scheme would work for a few other countries' ex-pats too?

 

Probably makes the visa situation simpler too?

Edited by Oz Jon
afterthought added
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syzmic

So, Cambodia is willing to give us a retirement extension (ER) so we can spend our money here, AND they want to tax our income that was already taxed in our home countries?  Did I get that right?  :kidding:
 

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andy
5 hours ago, syzmic said:

So, Cambodia is willing to give us a retirement extension (ER) so we can spend our money here, AND they want to tax our income that was already taxed in our home countries?  Did I get that right?  :kidding:
 

I don't know if they will tax us. Most other countries would and do. That's what I want to know, and more besides.

Hopefully the country retiring in have a tax agreement with your own country, so no double taxation. You would get taxed too in the country you reside in. Fill in a form and get reimbursed the tax in your country. Cambodia and the UK don't seem to have an agreement has of now.

 

2017-18 Worldwide Personal Tax and Immigration Guide

Relief for foreign taxes. A resident person who receives foreign-source salary and who pays taxes according to the foreign tax law receives a tax credit against the ToS if supporting documents are available.

 In 2016, Cambodia entered into a double tax treaty with Singapore, but this treaty has not yet been ratified.

 

When searching found this too. The United States also seem to have no tax agreement with Cambodia.  

The United States has entered into agreements, called Totalization Agreements, with several nations for the purpose of avoiding double taxation.

If the treaty does not cover a particular kind of income, or if there is no treaty between your country and the United States, you must pay tax on the income in the same way and at the same rates shown in the instructions for the applicable U.S. tax return.

Edited by andy

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Parrothead
On 6/1/2018 at 5:26 PM, syzmic said:

So, Cambodia is willing to give us a retirement extension (ER) so we can spend our money here, AND they want to tax our income that was already taxed in our home countries?  Did I get that right?  :kidding:

 

Currently, not our income from outside the country, from what I understand. In fact, I see @andy posted something regarding that, in his o/p of this thread.

 

With that said, the very second they EVER try to tax my personal income, I am out of here - one way.

 

 

Edited by Parrothead
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andy
On ‎6‎/‎1‎/‎2018 at 3:44 PM, Oz Jon said:

That way I would retain my Oz taxpayer status with all it's age benefits and avoid any complications/costs of being a taxpayer in a SE Asian nation.

I suspect that scheme would work for a few other countries' ex-pats too?

 

I like your sensible way of thinking Oz Jon.

That is certainly the way many nationalities see the situation. I am due the state pension in years to come, and would not want to put myself in a position of hardship in my old age, this situation needs careful judgement and positive considerations.

 

On ‎6‎/‎1‎/‎2018 at 3:44 PM, Oz Jon said:

Probably makes the visa situation simpler too?

 

Was this the afterthought? You maybe right about the simplification of visa choice! But which visa, and for what time span?

 

Example - too be classed as a resident, you would stay in the country for 182 days or more, so not to fall in this situation leave before that period.

Any of the two 6 month E visas would be suitable for the duration of stay! That is the EG and ER EOS (none employment). No tax penalties.

 

Obtaining a 6 month EB EOS, is for it's main purpose, business and employment. (there are also exceptions).

The person staying in the country with any E visa for this period (less than 182 days) is classed as a "Non-Resident".

In Obtaining a EB EOS and receiving paid earnings, would then result in the person, being liable to pay tax, but ONLY on their Cambodian earnings.

Tax is also set at the slightly higher rate of 20% for a Non-Resident. 

 

On ‎6‎/‎1‎/‎2018 at 5:26 PM, syzmic said:

So, Cambodia is willing to give us a retirement extension (ER) so we can spend our money here

 

Even before the "new" now available ER EOS for retirees. People (expats) staying on the old favoured EB EOS were still spending their monies here.

Remember and savour, the good old days of the seemingly "indefinite" "EB". The king of kings of visas, easily obtained and renewed "year after year".

Even at that time, work permits were required, but there was to be very little, authoritative interferences and their enforcement in the matter.

 

Now what of todays visas? The E visas EB and ER EOS have their new legal classifications and documentation. "Work permits, medical certificate, proof of age and incomes, bank statements.

In the heat of the day, and of the seemingly endless task of going too and from government departments, in the efforts of collecting the relevant paperwork needed, the barrier of confrontation or understanding, times of frustrations and ignorance to the spoken language, unconventional ways of the conducted business".

 

Visiting the agent for the renewal. Just like the many times before, but now, even the agent could be confused or uninformed, also hoping nothing in the requested recommendations, of legality confusions, haven't changed overnight once again.

Now more then ever before, the said E visas are strictly enforced by Laws. Policed by immigration for the correct purpose of their usage and restrictions, new rules and classification.

 

The new rules, of which seemed quick to the unexpected, even now, some rules are not finalised. But now the expat has choices on their EOS renewal, best type suited for the purpose and their intentions of use.

Would I be right to say this is "progression" the country is developing and advancing forward, granted at a leisurely pace for now.

So as to the saying "out with the old and in with the new". Yes, definitely a big change, but the price hasn't increased too much, and I suppose this is still young ground. "Only in it's infancy" lets wait a little time to see what will come along next?

 

 

On ‎6‎/‎1‎/‎2018 at 5:26 PM, syzmic said:

AND they want to tax our income that was already taxed in our home countries?  Did I get that right?  :kidding:

 

Yes I think you may have got it right. But only if you are here long enough to be classed a "Resident". But read on and come to your own conclusion.  

 

A person staying on a, E visa EOS for (182 days and over) is classed a "Resident".

The tax rate is variable, and possible lower rates, compared to a Non-Resident, that maybe depending on earnings, for that of a "Resident"

But the person, "Resident" is liable to pay tax. To be taxed in Cambodia, on their earnings (if any). Also on any monies of their Cambodian bank account savings.

Monies from outside the country are also liable for tax. Classified term used is "salaries" this could be payments from overseas work related earnings. Or of their own country, payments of Social Security and Pensions.

 

I must say at this time of writing I have not known of anyone being taxed on their own countries paid monies. But in saying this! Also I and many of you didn't foresee or expect changes in the visas.

 

Read some of the following material and decide for yourselves about taxation.

 

The first, Paul will like! Its old news and the first I found dated.  Publication date 02 May 1997

 

Salary tax

 

As reliable as death, taxes are a part of life that most of us are unable to escape. Expatriates, however, often manage to fall between the cracks thus avoiding personal income tax both in their home countries and the countries in which they are living.

The Royal Government's recent efforts to implement a comprehensive labor registration system for expatriate workers as well as local employees will have the practical result of exposing many expatriates who, until now, have not paid personal income tax in Cambodia, to the wrath of the taxation department of the Ministry of Economy and Finance.

 

https://www.phnompenhpost.com/national/salary-tax

 

In the following, it may be of interest, there is a part "what Americans need to know".

 

Taxes in Cambodia

 

Here’s the low-down on Cambodia’s tax limbo, which can be confusing to say the least.

 

One of the major causes of corruption in Cambodia is reputed to be the government’s inability to legally bring in revenue, in part because almost no one in the country pays taxes. That’s not to say there aren’t laws on the books demanding that everyone pay taxes. There are. But in practice a large percentage of Cambodians and expats alike do not pay taxes on their incomes.

For tax purposes, people are considered residents of Cambodia if they have a principal place of abode in Cambodia or are present more than 182 days in the country in any 12-month period ending in the current tax year. Residents are liable for taxes on worldwide income and profits, while non-residents are only taxed on Cambodia-sourced income.

 

http://www.movetocambodia.com/working-in-cambodia/taxes/

 

Welcome to Experts for Expats

 

Experts for Expats is an online resource designed exclusively for expats that is underpinned by a network of independent experts providing impartial advice enabling people to make qualified decisions about their lives abroad.

All the information provided through Experts For Expats is created and provided from our unique network of independent experts from around the world.

 

Some pension providers will only pay money into a UK bank account, so you must speak to your pension provider before you move to ensure you can still receive payments when you relocate.

You are also likely to pay tax on the income received in your country of residence – although that will depend on where you live. There may also be a double taxation treaty between the two countries which means that you should only be taxed once.

 

https://www.expertsforexpats.com/

 

Ministry of Foreign Affairs

 

You will have to search this one. type in tax on the site.

19th, July 2017

Doing Business in Cambodia

 

https://www.mfaic.gov.kh/?s=tax

 

General Department of Taxation, Ministry of Economy and Finance

 

The tax on salary is a monthly tax imposed on salary that has been received within the framework of fulfilling employment activities. A physical person resident in the Kingdom of Cambodia is liable to the tax on salary for Cambodian source salary and foreign source salary. A non-resident physical person is liable to the tax on salary for Cambodian source salary.

 

http://www.tax.gov.kh/en/

 

 

Tax in Cambodia

 

Tax system

The Cambodian tax system distinguishes between foreign residents and non-residents.

You will be considered as a resident when you have been living in the country as an employee, entrepreneur or retiree for more than 182 during a calendar year and you have your primary home there. You will then have to pay tax on all your income, regardless of their source. Nationals of some countries may have to pay income tax both in their home country and in Cambodia due to the absence of a non-double taxation treaty between both countries.

On the other hand, if you are a non-resident, you will have to pay tax only on income from Cambodian origin at a rate of 20%. In general, tax will be deducted at source, even in the case of retirement pensions. Note that your employer has to make necessary arrangements so that your income tax is deducted at source according to your salary and that same is transferred to the tax administration.

 

http://www.expat.com/en/guide/asia/cambodia/13252-tax-in-cambodia.html

 

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Parrothead
1 hour ago, andy said:

The first, Paul will like! Its old news and the first I found dated.  Publication date 02 May 1997

 

Why would I like it? 

 

Regarding taxing MY income, they would first have to know - or at least have an idea as to how much I earn each month. They don't. The Immigration office only knows what I showed them, when applying for my retirement visa. And, considering how reliable bookkeeping is in this country, they probably won't have that file, when - or if, they ever attempted to do so. 

 

Secondly, I would have to be a willing participant in allowing them to steal my money. I wouldn't. I would be on the next plane out, if they ever attempted to do that. 

 

I look at it like this. My money is my money. I earned it long before I ever entered this country. I also spend 100% of my living budget within the borders of Cambodia, each and every month. So, again, I would be on the next plane out, if they decide to do that. 

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andy
8 hours ago, Parrothead said:

Why would I like it? 

 

9 hours ago, andy said:

The first, Paul will like! Its old news and the first I found dated.  Publication date 02 May 1997

 

I thought I had explained! With old news of 1997. You don't like me quoting old news. But I don't know! I seem to have to explain myself on posts I write.

The Posts, somehow you take personally. That again I don't understand. 1997 was the time in stating a tax law.

Reading your post above! You have the right to express yourself. We have decided to live or visit here. "Cambodia" and this "Forum".

I have "Quoted" in the posts all whom have replied or quoted themselves on the subject. "Quoting" is a action on the forum to be used.

 

9 hours ago, Parrothead said:

I look at it like this. My money is my money. I earned it long before I ever entered this country. I also spend 100% of my living budget within the borders of Cambodia, each and every month.

 

Yes! "We" all of us in the same boat. But we are talking about the laws of this country. We have to abide by the laws. In some of our cases we are abiding with Cambodian law (because we live or visit here) and our own countries law. Some members here work in this country, and may or may not pay tax. Also some may pay taxes still in our own countries. (double tax) without tax treaties, if things start to change here. 

Again living here we all spend our monies, like we would do if any of us, resided anywhere in the world. So I don't see this relevant to the subject, only that there maybe some offsets in the tax.

It's like the recent change in visa's or EOS. We thought there would be no change. Laws!

The laws, if we want to stay we have to abide by them, If we don't the authorities will take action against the one's whom does not abide by them.

I think personally tax laws will come into effect at some stage. The country has its newest arrivals, with money to spend, and both its governments co-operating. The country is still developing, to progress it needs money. and laws, (just an opinion).    

 

Anyway all in all. I had just spent a little time doing some research into the subject, mainly for the information. So all members could read.

Then maybe they can find out more information of what concerned them. (that is if anything at all).

 

 

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Parrothead
1 hour ago, andy said:

You don't like me quoting old news.

 

I never said I didn't like it. I merely stated it was dated information. And, as you well know, here in Cambodia, things - especially concerning foreigners, change almost daily. That's all. 

 

2 hours ago, andy said:

I think personally tax laws will come into effect at some stage.

 

If they ever do that, this country will be shooting itself in the foot. Because, when or if that becomes the case, I will pack my bags and move on to other pastures. I imagine a lot of others will do similarly. 

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andy
2 hours ago, Parrothead said:

I never said I didn't like it. I merely stated it was dated information. And, as you well know, here in Cambodia, things - especially concerning foreigners, change almost daily. That's all. 

 

OK. I agree! But for the Solar I thought it may be relevant information for you two talking about the subject.

As for the dated info on the foreigners tax, I think that's when it was made law 1997. And so 21 years ago, we are both on agreement things not only change, but also take time. Cambodia seem to do things when something is "knocking on the door". Like now with the Chinese arriving. Look at all the new laws that have been passed, to do with their intentions. The visas and EOSs were changed due to this, New Revenue for Cambodia.

 

2 hours ago, Parrothead said:

If they ever do that, this country will be shooting itself in the foot. Because, when or if that becomes the case, I will pack my bags and move on to other pastures. I imagine a lot of others will do similarly. 

 

Paul I don't disagree on these issues. But now the big visitor is ploughing in Aid, loans and business like never seen before, we don't fit in their plans.

If they did tax on overseas monies, such has pensions and so on, without treaties, I will have gone long before you :)  

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