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"Working" without work permit - new regulation?


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1 hour ago, stevenl said:

"There's also no way they could possibly pay tax to Thailand either."

Of course they can. As mentioned, all they need is TIN and submit a return. What you mean is probably they don't want to.

That sounds crazy. So someone on a SETV (a person visiting Thailand as a tourist) would pay tax to Thailand without getting anything in return – no visa, no work permit, not belonging to the country's social security system etc? I guess nobody has ever done this (paying tax to another country as a tourist) but if they have, I wonder what the officials would say when you're actually letting them know that you are working (online to another country) and want to pay tax for it. Doesn't that all go against the whole system that you are not supposed to be working under a SETV? Even if it's possible, sounds like looking for trouble right. 

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4 hours ago, ChomDo said:

There's also no way they could possibly pay tax to Thailand either. What would someone staying here with a SETV (so considered a tourist by Thai immigration laws) be paying for? Of course if they give you a permit/visa to stay in the country and you get all the same rights as normal tax payers then OK I it would make sense. For this to happen there has to be a system in place first. If they change the laws and give DN's a possibility to obtain a long term visa and pay taxes accordingly then of course. Until something changes they'll just have to stay here on SETV's and exempts (and probably stay out of the country for longer periods a few times per year to show that they are not physically working in the country).

As I said; your visa status has nothing to do with your tax liability.

 

Genuine tourists are short term visitors so the tax laws, concerning foreign earned income, do not apply to them. If you stay in the country longer than 180 days in a tax year you are subject to the tax laws as a tax resident. And all you need to pay tax is a TIN.

 

If you are a DN, and have stayed longer than 180 days, it is your responsibility to declare any tax liability under the 'self assessment' system. If a DN is remitting foreign earnings to Thailand in the tax year earned they potentially have a tax liability in Thailand. The tax man is unlikely to come looking for you.

 

The Revenue Department website: http://www.rd.go.th/publish/6045.0.html

 

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2 hours ago, ChomDo said:

That sounds crazy. So someone on a SETV (a person visiting Thailand as a tourist) would pay tax to Thailand without getting anything in return – no visa, no work permit, not belonging to the country's social security system etc? I guess nobody has ever done this (paying tax to another country as a tourist) but if they have, I wonder what the officials would say when you're actually letting them know that you are working (online to another country) and want to pay tax for it. Doesn't that all go against the whole system that you are not supposed to be working under a SETV? Even if it's possible, sounds like looking for trouble right. 

Whether you are working illegally or not is irrelevant and does not affect your tax liability. And someone could be living in Thailand (any visa) and earning an income in a foreign country without working.

 

If you stay longer than 180 days and remit that income to Thailand you potentially have a tax liability. It's that simple.

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On 10/21/2018 at 3:35 PM, Vacuum said:

Any work with a "retirement visa" is prohibited.

Yes a retirement visa means you have retired from working . You can't have a cake and eat it. So you can't retire and at the same time work.

 The Government should make use of retired people if they are English teachers to teach the children English free, and in exchange be given expenses and a free renewal visa. Thailand is the worst country out of the 10 countries to speak English.

Edited by Percy P
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On 10/24/2018 at 4:13 PM, elviajero said:

Whether you are working illegally or not is irrelevant and does not affect your tax liability. And someone could be living in Thailand (any visa) and earning an income in a foreign country without working.

 

If you stay longer than 180 days and remit that income to Thailand you potentially have a tax liability. It's that simple.

and if you are working online that tax liability starts from day 1. 

 

Thailand does not operate a 183 (or 180) day rule for earned income only passive income. 

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4 hours ago, LivinLOS said:

and if you are working online that tax liability starts from day 1. 

That’s not correct. Only income earned and paid in Thailand is potential taxable from day 1.

 

4 hours ago, LivinLOS said:

Thailand does not operate a 183 (or 180) day rule for earned income only passive income. 

A foreigner becomes tax resident after spending more than 180 days in Thailand in a tax year. Foreign income — earned or unearned (“passive”) — is potentially liable to tax in Thailand if it’s remitted to Thailand within the tax year it’s earned.

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On 10/21/2018 at 3:20 AM, pepi2005 said:

I am working as a consultant,

If you're meeting thai clients, it requires a work permit. You can do certain works like exploring business ideas, investors, attending trading shows and meeting, attending seminars (not teaching in work shop) without work permits. 

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3 hours ago, elviajero said:

That’s not correct. Only income earned and paid in Thailand is potential taxable from day 1.

If your working in the kingdom its then 'income' not savings..  

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17 minutes ago, LivinLOS said:

If your working in the kingdom its then 'income' not savings..  

Yes, it is income and it is taxable in the country the income is paid.

 

If you are "working online" in Thailand (e.g. Digital Nomad), but being paid/taxed in a foreign country there is no potential tax liability in Thailand unless; you remit those earnings to Thailand in the same tax year earned, and you've been living in the country for more than 180 days (are tax resident).

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Yes, it is income and it is taxable in the country the income is paid.
 
If you are "working online" in Thailand (e.g. Digital Nomad), but being paid/taxed in a foreign country there is no potential tax liability in Thailand unless; you remit those earnings to Thailand in the same tax year earned, and you've been living in the country for more than 180 days (are tax resident).
That doesn't make much sense? Where you get paid has nothing to do with taxes afaik. It's your tax residency that decides where you are liable for your personal income tax.

But I could be wrong ofc.
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On 10/24/2018 at 1:35 PM, ChomDo said:

That sounds crazy. So someone on a SETV (a person visiting Thailand as a tourist) would pay tax to Thailand without getting anything in return – no visa, no work permit, not belonging to the country's social security system etc? I guess nobody has ever done this (paying tax to another country as a tourist) but if they have, I wonder what the officials would say when you're actually letting them know that you are working (online to another country) and want to pay tax for it. Doesn't that all go against the whole system that you are not supposed to be working under a SETV? Even if it's possible, sounds like looking for trouble right. 

"Working" and "earning income" are not the same thing.  Thailand could rake in a fortune if they gave under-50s an extension option in exchange for paying tax here on a minimum declared overseas-income amount. 

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21 minutes ago, JackThompson said:

"Working" and "earning income" are not the same thing.  Thailand could rake in a fortune if they gave under-50s an extension option in exchange for paying tax here on a minimum declared overseas-income amount. 

 

They already do that.  It's called the Thailand Elite Visa.  I don't think they're raking in much of a windfall.  On a monthly basis, the Elite Visa would cost about the same as paying into the tax rolls on a 65,000 baht per month salary.  Yet, the numbers are only in the hundreds, from what I recall.

 

While it sounds great on a conceptual basis, I think you're over-estimating the willingness of people to part with their money for any visa considerations.  The argument that "they can't pay taxes" usually melts away as a straw man argument- because anyone can pay taxes into Thailand.  It just doesn't get them what they want...

 

On an aside, I think they'd do well with a trial 1 year Elite Visa instead of the full 5 or 20 year commitment.  Even at a higher monthly cost, it would be appealing for a trial stay.

 

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8 hours ago, impulse said:

 

They already do that.  It's called the Thailand Elite Visa.  I don't think they're raking in much of a windfall.  On a monthly basis, the Elite Visa would cost about the same as paying into the tax rolls on a 65,000 baht per month salary.  Yet, the numbers are only in the hundreds, from what I recall

 

 

Hmm, according to tax calculation sites you pay around 44k THB/year on personal taxes with a 65k/month salary. TEV is 100k/year and you are not eligible for permanent residency after 3 years, you are not supposed to work, etc...

Edited by ExpatDraco
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10 hours ago, impulse said:
11 hours ago, JackThompson said:

"Working" and "earning income" are not the same thing.  Thailand could rake in a fortune if they gave under-50s an extension option in exchange for paying tax here on a minimum declared overseas-income amount. 

They already do that.  It's called the Thailand Elite Visa.  I don't think they're raking in much of a windfall.  On a monthly basis, the Elite Visa would cost about the same as paying into the tax rolls on a 65,000 baht per month salary.  Yet, the numbers are only in the hundreds, from what I recall.

500K to 2M Baht "up front" is not remotely the same as a "pay as you go" system, which is how taxes are paid.  The vast majority of under-50s who would happily pay taxes here in exchange for an extension, would not be either filthy-rich and/or foolish enough to buy an Elite visa.  But, they likely spend more than a potential Thai income-tax liability in travel-costs + visas + extensions - so would definitely pay taxes in exchange for a visa/extension option, keeping all that money spent in Thailand.

 

10 hours ago, impulse said:

The argument that "they can't pay taxes" usually melts away as a straw man argument- because anyone can pay taxes into Thailand.  It just doesn't get them what they want...

Correct - anyone "could" pay taxes here, but with no visa/extension on offer, there is no point in it.  So, the choice - given dual-tax treaties and/or spending income from previous years - pay taxes on income in Thailand + passport-country, and fill out special deductions forms for taxes paid in Thailand - OR - pay only in the passport-country, and greatly reduce complications/issues/audits/etc.   They could outlaw us paying taxes in Thailand and get the same result as the current non-offer.

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On 12/17/2018 at 11:58 AM, LivinLOS said:

and if you are working online that tax liability starts from day 1. 

 

Thailand does not operate a 183 (or 180) day rule for earned income only passive income. 

My understanding is the same, i.e. that you are liable for Thai tax on any earned income arising from work in Thailand, regardless of how long you stay. For example, I believe that some one who comes to Thailand to do a short term job for a Thai company for, say one month, with proper work permit would have tax deducted at source but could claim tax back by filing a tax return form.  Anyone who works for a Thai company from offshore will have 15% withholding tax deducted. 

 

Correct me if I am wrong.

 

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3 hours ago, Arkady said:

My understanding is the same, i.e. that you are liable for Thai tax on any earned income arising from work in Thailand, regardless of how long you stay. For example, I believe that some one who comes to Thailand to do a short term job for a Thai company for, say one month, with proper work permit would have tax deducted at source but could claim tax back by filing a tax return form.  Anyone who works for a Thai company from offshore will have 15% withholding tax deducted. 

 

Correct me if I am wrong.

Of course someone working for a Thai employer is liable for tax from day 1. But we are talking about a foreigner working online (illegally).

 

A foreigner working online, but not receiving any income in Thailand does not have any tax liability, and only has a potential tax liability once they become tax resident after 180 days.

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19 hours ago, ExpatDraco said:

That doesn't make much sense? Where you get paid has nothing to do with taxes afaik. It's your tax residency that decides where you are liable for your personal income tax.

But I could be wrong ofc.

Exactly, its called the physical presence test. 

Where you physically are at the time you perform the action that is being considered as work. 

I run a multi national labour supply company, my entire business is about dual taxation agreements, employment law and jurisdiction. This topic is my exact field of lifetime expertise. 

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52 minutes ago, elviajero said:

Of course someone working for a Thai employer is liable for tax from day 1. But we are talking about a foreigner working online (illegally).

 

A foreigner working online, but not receiving any income in Thailand does not have any tax liability, and only has a potential tax liability once they become tax resident after 180 days.

As you say.. illegally.. 

 

For them to become legal, all the processes of control engage, and it starts on day 1 not day 180. 

 

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On 12/17/2018 at 8:35 PM, elviajero said:

Yes, it is income and it is taxable in the country the income is paid.

 

It is income and it is taxable in the country where you earned the income, not where the income is paid.  Just because the income is paid in another country does not make it "foreign sourced income."  It is actually Thai sourced income because it was earned by someone living in Thailand.  If you are not yet a tax resident in Thailand, income tax may be withheld from day 1, but this is not a final tax and you can claim it back.  If you are a tax resident (180 days from RD website) then tax is due on the earned income.  The "only taxable if you remit it to Thailand in the year it was earned" applies to passive income such as dividends or interest only, not to earned income.  Thailand gets first crack at collecting tax on the income, not the country where the income was collected. You may be able to use the Thai tax paid as a credit against tax in another country, however.

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9 hours ago, Misty said:

It is income and it is taxable in the country where you earned the income, not where the income is paid.  Just because the income is paid in another country does not make it "foreign sourced income."  It is actually Thai sourced income because it was earned by someone living in Thailand.  If you are not yet a tax resident in Thailand, income tax may be withheld from day 1, but this is not a final tax and you can claim it back.  If you are a tax resident (180 days from RD website) then tax is due on the earned income.  The "only taxable if you remit it to Thailand in the year it was earned" applies to passive income such as dividends or interest only, not to earned income.  Thailand gets first crack at collecting tax on the income, not the country where the income was collected. You may be able to use the Thai tax paid as a credit against tax in another country, however.

None of my comments refer to anyone generating income paid in Thailand. I am referring to online work by so-called "Digital Nomads" that are "non-resident".

  • If a foreigner on holiday/living in Thailand -- less than 180 days ("non-resident") -- is working online and generates an income that is paid in another country Thailand has no claim on any potential tax on that income.
  • Should that/a foreigner stay in Thailand longer than 180 days ("resident") there is only a potential tax liability on income remitted to Thailand. 

 

The Revenue Department: http://www.rd.go.th/publish/6045.0.html

Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand. 

 

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41 minutes ago, elviajero said:

None of my comments refer to anyone generating income paid in Thailand. I am referring to online work by so-called "Digital Nomads" that are "non-resident".

  • If a foreigner on holiday/living in Thailand -- less than 180 days ("non-resident") -- is working online and generates an income that is paid in another country Thailand has no claim on any potential tax on that income.
  • Should that/a foreigner stay in Thailand longer than 180 days ("resident") there is only a potential tax liability on income remitted to Thailand. 

 

The Revenue Department: http://www.rd.go.th/publish/6045.0.html

Taxpayers are classified into “resident” and “non-resident”. “Resident” means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand. 

 

The second bullet point is not correct.  You're misunderstanding the term "foreign sources".  Someone working in Thailand is earning Thai sourced income, no matter where that income is paid.  Foreign sourced income would be dividends or interest from investments in another country, not salary paid on work done while in Thailand.

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1 hour ago, Misty said:

Someone working in Thailand is earning Thai sourced income, no matter where that income is paid.

But somebody working online (business / clients / money abroad) isn't considered to be working in Thailand, so just because this person is physically in Thailand while doing his work doesn't mean he is working in Thailand when looking at it from a legal perspective. So the income of this work is "foreign income" and in case he brings this income to Thailand in the year it's earned there would be a tax liability.

Edited by jackdd
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The second bullet point is not correct.  You're misunderstanding the term "foreign sources".  Someone working in Thailand is earning Thai sourced income, no matter where that income is paid.  Foreign sourced income would be dividends or interest from investments in another country, not salary paid on work done while in Thailand.
Do you have legal proof/definition about what foreign sourced income really means for Thai law?
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1 minute ago, jackdd said:

But somebody working online (business / clients / money abroad) isn't considered to be working in Thailand, so just because this person is physically in Thailand while doing his work doesn't mean he is working in Thailand when looking at it from a legal perspective. So the income of this is "foreign income" and in case he brings this income to Thailand in the year it's earned there would be a tax liability.

Income:

"Remittance of income in the year earned" combined with "if in the country more than X-time"  is actually a pretty fair standard, in terms of personal taxes due, relative to a person's physical location.  Whether the income is active or passive is not important, except to the extent that tax-laws differentiate different types of income.

 

Work / applicability to "work permits": 

Remote "work" done via Internet/Phone is done in the brain of the individual.  The "typing" on a keyboard or talk on a phone is not "the work" itself - it is just data-transmission from a brain to a machine or other person somewhere. 

 

The location where actual physical activity and/or buying/selling takes place is where the business is situated - where mental effort is translated into something offered for sale.  The location of the mental inspiration is irrelevant.

 

By contrast, if a country / "persons in a country" were the "subject" and "interactive" in an effort - such as making a documentary / vblogging, etc - then the Location Where the actor is carrying-out an activity is pertinent, and a claim of "work" could be made based on the fact that their presence in that specific country was necessary to carry out said work.  This involves physically interacting With That Country and/or Citizens - similar to the manufacturing of a physical product.

 

Therefore, if a person's "work" amounts to mental-effort which could occur regardless of their physical location - a claim as "was work in country X" can not be made.  Only where that work is "realized," can such a claim be legitimate.

 

Edge-Case - Remote "Hourly" Work:

If a person is required to be "on call" for specific hours on specified days, this more closely resembles traditional "work" - and some might claim it is subject to work-permit applicability.  An example would be a "call center" type of operation - but where the employees answering calls may be spread out across the planet.   These employees answer questions about a product/service based on their knowledge/expertise.  Working for a "language tutoring company" overseas could also meet this standard.

 

I would argue this is still not "work in country of physical presence" - provided all connections (customers, billing, etc) are outside that country, and the company does not directly arrange the individual's housing, internet, etc - because the person could drive across a border, check into a hotel, and continue without any change to their ability to carry out their tasks. 

 

The point of being able to re-locate the individual is key - because it differentiates itself from activity which "competes with locals in a labor-market" - which is what a govt is needs to regulate - ideally to maximize the availability/benefits of those opportunities to their own citizens.

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On 12/21/2018 at 6:20 PM, Misty said:

The second bullet point is not correct.  You're misunderstanding the term "foreign sources".  Someone working in Thailand is earning Thai sourced income, no matter where that income is paid.  Foreign sourced income would be dividends or interest from investments in another country, not salary paid on work done while in Thailand.

The first bullet is not correct either. It is actually double wrong: working without work permit is forbidden. And as soon as you have a workpermit, you obviously have to pay taxes. How the taxes are filed in the end, especially under double taxation treaties is up to figure (e.g. it varies greatly between countries, e.g. USA versus Germany).

 

You can not even do voluntary work (un paid work) without work permit. (Yes. I'm aware of this: https://www.tilleke.com/resources/relaxation-work-permit-requirements-thailand - but this is not law yet!)

 

Regarding the 180d rule: regardless what you do in Thailand, being retired, tourist or working, you are supposed to file your income tax declaration, stating all your world wide income, regardless if offshore income is finally taxed or not, regardless if you get a tax refund or not.

 

Can't be so hard to understand those simple rules:

 

* online work without work perit is illegal, regardless where the money comes from and where it goes to.

* as soon as you have a work permit and work online: you pay taxes, regardless where the income is generated or where it goes to. The only thing you can juggle around is: control somehow in which country you pay the taxes, home country, resident country or "the place the work is billed", or have your own company somewhere which keeps most of the money in the bank.

 

Taxes are so super low in Thailand, why one risks working illegal is beyond me.

Edited by Enki
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On 12/18/2018 at 5:42 PM, LivinLOS said:

Exactly, its called the physical presence test. 

Where you physically are at the time you perform the action that is being considered as work. 

I run a multi national labour supply company, my entire business is about dual taxation agreements, employment law and jurisdiction. This topic is my exact field of lifetime expertise. 

Then I wonder why your statement is wrong. If I live 200 days in Germany and work 160 days in Switzerland: then I get my tax deduced from my wages/income in Switzerland. But as I'm a tax resident in Germany, I have to file my income tax in Germany. As Germany ind Switzerland have a double taxation agreement, I get al the income tax back that I already have payed in Switzerland, and pay my income tax in Germany. The physical presence of where you work has in most jurisdictions absolutely nothing to do with the question where you pay your taxes.

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35 minutes ago, Enki said:

Can't be so hard to understand those simple rules:

 

* online work without work perit is illegal, regardless where the money comes from and where it goes to.

Maybe so hard to understand because what you say is wrong

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47 minutes ago, jackdd said:

Maybe so hard to understand because what you say is wrong

Rofl, on which law? Hu?

http://www.mfa.go.th/main/en/services/4908/15388-Non-Immigrant-Visa-"B"-(for-Business-and.html 

 

Again:  online work (for foreigners) without work permit is illegal (in Thailand), regardless where the money comes from and where it goes to.

If you are of different oppinon show the relevant law.

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36 minutes ago, Enki said:

Rofl, on which law? Hu?

http://www.mfa.go.th/main/en/services/4908/15388-Non-Immigrant-Visa-"B"-(for-Business-and.html 

 

Again:  online work (for foreigners) without work permit is illegal (in Thailand), regardless where the money comes from and where it goes to.

If you are of different oppinon show the relevant law.

There is no specific law regarding this matter so it's a grey area, but in general working online (business, clients, money abroad) is not considered working in Thailand by Thai authorities, even if you are physically in Thailand.

We have never seen even one prosecution of somebody who was "working online", even when caught in an immigration police raid. There are a few news of such raids, and the people who were "caught" working online on a tourist visa were not charged / prosecuted for it.

If it were considered illegal we would probably see raids on coworking spaces in the news now and then, followed by arrests, because people working online on tourist visas are easy to be found there.

So even if there is no law which specifically allows it, the actions of Thai authorities make it quite clear that currently it's considered legal.

 

Other than that when i called the Department of Employment and asked them regarding this matter they also told me that i don't need a work permit and can do it on a tourist visa.

Edited by jackdd
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1 hour ago, jackdd said:

Other than that when i called the Department of Employment and asked them regarding this matter they also told me that i don't need a work permit and can do it on a tourist visa.

the problem these days is the continuous TV

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