Uk Double Taxation Agreement

[prasopes]

Hello all,

Article 16.1 othe the double taxation agreement states:

"Subject to the provisions of Articles 19 and 21, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State."

Clearly unless you're a governmental employee or a teacher, st that Articles 19 and 21 would apply, the crux of the matter is "...may be taxed in the other State.".

Is anybody aware of the interpretation of this Article in Thailand and/or it's application. Example of a precedent you could give?

Situation is simple, resident in UK, employed in the UK, by UK company, just on a secondment to Thai subsidiary (but no cotract with that subsidiary), so 16.1 and not 16.2 applies.

For completness link to the agreement http://www.rd.go.th/publish/7637.0.html

Many thanks,

P.

[astral]

If I were you I would try to get the UK company to pay the salary tax free as you are outside the UK,

Non Resident, Not Ordinarily Resident are the critical phrases.

I doubt the Thai tax man will even notice you, as you say you have no contract with the Thai subsidairy.

As you do not have a contract in Thailand, how will you get a visa and work permit???

Your company HR dept should be taking care of all these matters for you!!

[prasopes]

Thanks, good point and suggestion, unfortunately, unlikely to happen. Yes, they did take care of the WP, somehow we get by (and I guess the size of the company has to do something with it) with using the secondment letter, which was enough to get my WP. I too would doubt that Thai taxman will spot me, unless the company will grass me, which it might very well do

[PhilHarries]

I am in a similar situation here in Malaysia. I am contracted to a UK company but residing and working in Kuala Lumpur. I have a Malaysian work permit and Expat ID card and pay Malaysian taxes on what I am being paid in Malaysia the rest is tax free into my UK bank account (soon to be changed into an offshore acc).

I worked for some ten years in Thailand but there the company, a Thai subsidiary of a UK branch of an American corporation, was "playing the white man" with the Thai authorities and reporting our actual earnings. We then had a Thai tax retention taken out of our salary equal to the tax we would be paying back in the UK and the company stumped up the difference between that and the Thai tax. My contract of employement was with the UK company, actually it was with a Channel Isles shell company but that's another story.

So it depends on how your company is playing it with the Thai tax authorities.

The company Human Relics department took care of the whole shooting match and all we had to do is sign the tax declaration once a year. To say we had suspicions regarding the actualities is as far as I'm going to go with or without legal representation.