Taxes on my Pension? Resident vs Non-Resident

You have two questions regarding two revenue streams. If you work for profit in Vietnam and stay out of the US 330 of the 365 days you will be exempt on your foreign earned income in the US up to $124,000 or so. You will pay tax on that salary of any anount in Vietnam.

Since your pension is taxed as income in the USyou may not get double taxed, depending on the amount of tax paid. You will get credit for the tax paid in the US in VN. If that tax is higher than VN tax rate you are fine. If it is taxed at a lower rate in the US than in VN they can request the difference. The same applies the other way. The US taxes worldwide income. The only exemption is in the first paragraph. The top tax rate in Vietnam is 35% and the threshold is prety low by US standards to hit that. That said, I don't know if VN would ever even know you are drawing a pension, especially if you are working. *wink

There are many great articles concerning this subject if you just Google.

WINK…. He is the answer to the previous winks:

The US and Vietnamese governments share taxpayer info, and Vietnamese banks pass on US account holders’ account info to the IRS, so it’s not worth not filing or omitting anything on your return. The penalties for incorrect or incomplete filing for expats are steep to say the least.

Your worldwide income will be taxed but not double taxed by which country depends on your residency. Consult an expert in Vietnam.

Thank you for your sharing your knowledge with me SteinNebraska and Pogiwayne. When it comes to receiving a pension and working in Vietnam, it was a lot harder for me to find that kind of information and when I did find some sense of relevancy to my question, it was vague. lol So I do appreciate to hear this from Expats living in Vietnam.

What is wrong with receiving the pension by direct deposit to a US bank?  Schwab would be a good choice.  (See other threads.).  If is effectively received in the US I don't think Vietnam can tax it or perhaps more accurately they won't know about it. Transfer only what you need, if you need it.  Remember it's a lot easier to bring money into Vietnam than it is to take it out.  You should be able to live quite comfortably on your teaching salary and just use the pension for big ticket items or travel around Asia.

USA and Vietnam tax worldwide income and exchange information.

USA and Vietnam tax worldwide income and exchange information.
-@pogiwayne

by which country depends on your residency.

-@pogiwayne

But think about the OP's projected situation.  He will in all likelihood maintain residency in the US.  In that case, a direct deposit to a US bank will not be income in Vietnam.

Worldwide income is taxable. Any income he makes in Vietnam and his pension. He will need to research which one is better for him to file. Also the length of time he is out of his country will actually decide where he needs to file.

So many people try to beat the tax system,  countries know this and exchange information. If he is working for a legal company in Vietnam who reports his income the VN government will know he is American and is obligated by agreements to report this to the IRS.

This is interesting...

Researching this a bit and found this article.  Under non-taxable income it lists, among other things,

Overseas remittance, retirement pension, and scholarship

But in my case it does not specifically state 401k or IRA distributions, only retirement pension, unless they use the terms interchangeably.  And what is Overseas remittance? If it is just money that you "have" and transfer?  Would they even know the source of these funds?  It makes it appear that they don't.

So it appears that if you are drawing a pension it may not be taxable.  Of course you should contact your tax professional for advice.

Link to article https://bbcincorp.com/vn/articles/perso … in-vietnam

Hello! First time posting on here. I am an Educator down in Houston who is about 4 years from Full-Retirement and I will be receiving a Pension. Right after my retirement, I plan to fulfill my dream of teaching in Vietnam since I started teaching here back in 96' (long story why it was delayed, lol).
Anyways, I am trying to understand the taxes in Vietnam. When I begin teaching in Vietnam, I know I will be taxed for working/teaching in Vietnam which I don't mind at all.

My question is, will my US Pension be taxed in Vietnam too?

If so, it would be a double whammy as the US will tax me for my Pension as well. So, If I will be working as a teacher, would that would make me a Resident and therefore be subject to being taxed from my Pension?

Any insight would be appreciated. Thank you in advance.

Jon
-@Stillwater71

Your pension will be taxed in USA for sure. There is a taxing agreement between USA and Vietnam so that a person is not double taxed.

Consult a tax professional for real answers.

USA and Vietnam tax worldwide income and exchange information.
-@pogiwayne

Hmm. My Vietnamese wife works and her employment taxes are simply removed from her paycheck. She never files any tax form in Vietnam.

You infer it is different for Americans who work here, that they fill out Vietnamese tax forms and are supposed to include overseas (eg American) income?

I understand that banking info exceeding a limit (FATCA) should be self reported.

You are saying Vietnamese banks also report bank account balances to IRS?  Possible.

You think Vietnamese employment income is also reported?

Like, do teachers supply their US social security number to schools? Then schools report to IRS, or Vietnam govt?

And you think the IRS knows who is living in Vietnam, and is reporting US income to Vietnamese tax people?

Skeptical.

Correct me.

And you think the IRS knows who is living in Vietnam, and is reporting US income to Vietnamese tax people?
Skeptical.
Correct me.
-@gobot

Agreed.  Conversely, my VN friend got US citizensip in 2001, immediately moved back to VN to run his late father's company.  Hasn't filed a single US tax return in 20 years.  Wife lives in US.  Comes back and forth frequently.  Never an issue in 20 years.