Thai Company Invoicing Uk Company For Work Done In 3rd Country

[manjara]

My accountants don't seem too sure about how to do this and what the tax implications are, so I thought I would see if any members of TV have ever invoiced UK companies for work done (not in Thailand), from their Thai companies.

I'm sure someone must have done it!

The money is to be paid in GBP, to an account in the UK, and then transferred to Thailand, minus a handling commission (I know, it sounds like one of those dodgy emails from Nigeria!).

What VAT, if any, needs to be added, and where would it be paid?

How have others done it? Set up an offshore company to do the initial invoice? What are annual costs of that approach?

Edited January 30, 2007 by manjara

[gummy]

New to this forum so pls make exception if problems with my dyslexic keyboard.

My friend operates what appears to be in a similar fashion. His company in Thailand invoices a company in the UK for his services. I understand that as his services are performed outside the Kingdom than they are regarded as an export service so hence Thai VAT is levied at 0% as it is an export and is paid into his company's bank in Thailand by the UK company. From what he tells me that invoice is only part of his actual end-client fee so I guess that would equate to your commission aspect being paid into Thailand.

The company in the UK ( I believe the terminology used is an "umbrella company, of which there are apparently many) invoices my friends client. No sometimes he works within the EU and in which case the UK company must then add VAT at the current UK rate of 17 1/2 % or if outside then again it is zero rated as it would be an export.

Hope this helps.EM me if you need anything further.

gummy

[Bredbury Blue]

Could i hijack this topic and simplify it a little (as i also need to know) -

1) if your thai company is doing work in thailand for an overseas company - have to include VAT? Have to deduct WHT?

Example, running a website in thailand and receiving advertising fees from an overseas advertisment on the website, or, assisting an overseas recruitment agent source candidates here for employment (either here or overseas).

2) if your thai company is doing work outside thailand for an overseas company - have to include VAT? Have to deduct WHT?

Example, providing sub-consultant services overseas to another consultant, say in HK to a HK consultant.

Anybody can unravel all that for me?

Edited January 30, 2007 by Bredbury Blue

[lingling]

1) if your thai company is doing work in thailand for an overseas company - have to include VAT? Have to deduct WHT?

In this case. add VAT 7%. Overseas companies will not do any withholding, so I believe the thai co has to do the WHT deduction themselves.

2) if your thai company is doing work outside thailand for an overseas company - have to include VAT? Have to deduct WHT?

Example, providing sub-consultant services overseas to another consultant, say in HK to a HK consultant.

VAT 0%, self-deduction of WHT.

[gummy]

I believe that as I said VAT is 0% and WHT does not apply as in the circimstances described this is not "a foreign company or registered partnership not carrying out business in Thailand receiving the following income from or in Thailand"

re http://www.boi.go.th/english/how/tax_rates..._agreements.asp

From the previous description it states that it is effectively a foreign company (in this case UK) undertaking work for a Thai company (albeit equating to commision only part ), thus falls outside of the requirement ). Hence no WHT can be levied by that UK company's remittance with respect to that Thai's company invoice for services undertaken overseas by a non Thai company.

[manjara]

It seems that VAT will not apply, but that WHT will apply. i.e. I will have to pay the Thai government 15% of the amount of money I invoice, unless I can show a Withholding tax certificate (which obviously I won't get from a UK company)

It might all come out in the wash at the end of the year, but I'd rather up the invoice to the UK company, in case it doesn't.

Seems like I have to invoice gross though, I can't list it as tax??

Can anyone confirm that I will need to submit 15% of the invoiced amount to the Thai government on a monthly basis, when I submit WHT?