Income tax

Are you asking if Belize will tax your U.S. pension?

Hi Sharon, Yes, that and the "kinder,gentler IRS of the US.  There are some publications that I tried to wade through but didn't understand.

Ardee - Per the Belize Tax Code, Chapter 55, Section 16, it appears that foreign pensions and Social Security payments appear to be exempt. Specifically, in Chapter 55, Section 8, the following exemptions are listed:

(r) any pension or annuity paid by any person or
authority outside Belize to a retired person
who is ordinarily resident in Belize and when
such pension or annuity is received in Belize;

(s) payments received under any social security
scheme or fund, whether made by a person
resident in Belize or abroad, provided that
such payments are proved to the satisfaction of
the Commissioner to be social security payments;

Also, if you are a member of the QRP (which is what I assume you mean when you mention being a retired resident), the following applies:

• You will receive permanent exemption from any Belize taxes, including income tax, capital gains tax, and estate tax. 

• If you file as a non-resident in the U.S., you could exempt your first US $87,600 in foreign-earned income, along with a housing allowance of approximately US $12,500, not only from Belize tax, but also from U.S. federal tax.

If you buy a business in Belize, you must pay taxes on that income.

Obviously, I am not a tax attorney or CPA. Also, it's likely that the laws have changed somewhat since the publication of the on-line Laws of Belize (the version I saw was ten years old). You really should consult with a competent U.S. and Belizean tax professional before making any tax decisions.

Hope this was helpful.

Sharon Hiebing

Thank you very much for the info.  It was quite helpful and it appears that I will get most of the US taxes back. You went above and beyond and I am eternally grateful for your help. We will be there Aug. 28 in Corozal for 3 days and hope to get to St. Ignacio while we are there.  Thank you again.

When evaluating whether any type of income is taxable in the U.S., you apply the same tax laws regardless of the country you live in. The IRS taxes Americans on their worldwide income. But if you end up paying tax on the same income, such as your pension, only then do you consider whether a foreign tax credit is available. Moreover, your pension doesn't qualify for the foreign income exclusion since it's not "earned."

Jeff, thanks for this helpful information, but I think you misunderstood the OP's question. He wanted to know if Belize would tax his pension, which the first part of my answer addressed that no, they would not.

The second part of my answer was simply to let him know of the tax benefits he would receive in the QRP - I was in no way suggesting his pension was considered foreign income and would therefore be excluded.

However, some people may wonder about this subject, so that's very good information to have indeed. I appreciate you sharing-you seem quite knowledgeable. Are you a U.S. CPA? Thanks! Sharon