New tax on pensions Thailand asks emigrated Swiss pensioners to pay up

Life in paradise is becoming more expensive for expatriate pensioners: pensions and annuities must now also be taxed in Thailand. The tax rates are often higher than in Switzerland.

Retired Swiss citizens have to tighten their belts, AHV calculation errors or not. At least in Thailand, which has no longer been a tax haven for pensioners since the beginning of the year. On the contrary: income from AHV and other pensions is now subject to the tax law. In other words, the government in Bangkok is asking pensioners to pay.

Yet the paradisiacal country in Southeast Asia has become increasingly popular with older people in recent years, as the Neue Zürcher Zeitung reports, citing figures from the Federal Statistical Office (FSO). Between 2017 and 2023, the number of retired Swiss abroad in Thailand rose from 2834 to 4269.

Pensions are now also highly taxed

Many were also attracted by the low cost of living. A comparatively low pension by Swiss standards enables a financially carefree life in luxurious retirement residences in Thailand. Medical care, at least in tourist regions, is as good as in Switzerland.

However, because the government has fundamentally reformed the tax system, tax must now be paid on all income transferred to Thailand. Previously, pensions and annuities were exempt. Anyone who spends 180 days or more at their place of residence in Thailand is liable to pay tax.

High taxes on pensions

In some cases, the tax rate is significantly higher than in Switzerland. According to an example calculation by the NZZ, 25 percent income tax is due on an income of CHF 25,000 - i.e. CHF 6250. In the city of Zurich, you would pay CHF 1400 tax on the same income.

But even with taxes, Nicole Töpperwien from the Genossenschaft für Schweizer explains in the NZZ that Swiss nationals with a full AHV pension are among the high earners in Thailand. The average monthly salary there is the equivalent of 500 francs.