Quick tax question

[2530Ubon]

As a freelancer for foriegn tech companies, would it be correct to place me in the digital services tax bracket? The reason I ask is that Immigration were questioning me about my tax status and I have been working on this assumption that i fall under this tax bracket. - 7% on all income if I earn more thatn 58,000 USD (1.8 million THB) per annum.

 

Thank you

[DrJack54]

Why would immigration be questioning you about online work. How would they know.

I can't imagine that at some stage you mentioned that you do online work to them.

[2530Ubon]

1 minute ago, DrJack54 said:

Why would immigration be questioning you about online work. How would they know.

I can't imagine that at some stage you mentioned that you do online work to them.

They've known for quite some time. At my last COVID extension they were questioning the legalities of my work and tax situation - because I foolishly questioned them about something.

 

Immigration confirmed that my work situation is not illegal, and that I do not require a work permit, but they said that I need to pay tax as I'm resident in Thailand (over 180 days). Is the digital services bracket the correct bracket?

[FritsSikkink]

1 minute ago, 2530Ubon said:

They've known for quite some time. At my last COVID extension they were questioning the legalities of my work and tax situation - because I foolishly questioned them about something.

 

Immigration confirmed that my work situation is not illegal, and that I do not require a work permit, but they said that I need to pay tax as I'm resident in Thailand (over 180 days). Is the digital services bracket the correct bracket?

Your work situation is illegal. The labor department decides that not somebody from immigration.

[2530Ubon]

1 minute ago, FritsSikkink said:

Your work situation is illegal. The labor department decides that not somebody from immigration.

That wasn't my question, if you wish to argue with immigrations opinion, then please find another thread.

I am attempting to pay taxes and find the correct tax bracket to avoid any visa issues.

[ubonjoe]

3 minutes ago, 2530Ubon said:

I am attempting to pay taxes and find the correct tax bracket to avoid any visa issues.

Have you looked at the revenue departments website for info. http://www.rd.go.th/publish/6045.0.html

You are are only liable for income brought into the country in the year it is earned.

[userabcd]

Taxes should normally be discussed with the revenue department.  Can't think why you are discussing taxes with immigration department.

 

Suggest you visit your local tax office (with a translator if possible) and discuss taxes with them. For work permits that is the labour department.

 

Take a look at the Thai revenue department website, a lot of basic info there on personal taxes.

[2530Ubon]

24 minutes ago, ubonjoe said:

Have you looked at the revenue departments website for info. http://www.rd.go.th/publish/6045.0.html

You are are only liable for income brought into the country in the year it is earned.

Thanks Ubonjoe. Yes, I looked at that, but the problem is that technically I am self employed.

 

I am an independent contractor/freelancer and my contracts actually state that I am not an employee and have no employee benefits. My earnings are brought into the country a week or so after landing in my American & UK accounts, and i don't have a stable income level - different projects/hours get different amounts each time.

As a 'one man band', working with foreign digital service providers on digital platforms - should I use this one, or does it not matter and I should use the employee tax that you sent me?

[jackdd]

You want to pay tax in two countries (first in US/UK, then bring it to Thailand and pay tax again) or what is your plan?

[2530Ubon]

1 minute ago, jackdd said:

You want to pay tax in two countries (first in US/UK, then bring it to Thailand and pay tax again) or what is your plan?

I'm pretty clueless to be honest - as a Brit, and employed, tax was always automatically deducted. I only started working for myself for the last two years so I have no idea really.

[userabcd]

15 minutes ago, 2530Ubon said:

Thanks Ubonjoe. Yes, I looked at that, but the problem is that technically I am self employed.

 

I am an independent contractor/freelancer and my contracts actually state that I am not an employee and have no employee benefits. My earnings are brought into the country a week or so after landing in my American & UK accounts, and i don't have a stable income level - different projects/hours get different amounts each time.

As a 'one man band', working with foreign digital service providers on digital platforms - should I use this one, or does it not matter and I should use the employee tax that you sent me?

How is this income being taxed where it is generated (in the US or in UK?) and what does your contracts say about taxes, it should be in the contract.

[DrJack54]

OP, I just don't understand your thread. 

If I was doing exactly the same as you, I would have done nothing in regards to Thailand and I would certainly never had mentioned what I was doing here online. I asked you in post #1 how were immigration even aware of your online work. You replied that 'they have known for some time'.

I assume you are still doing your income tax returns in your own country. End of.

[2530Ubon]

1 minute ago, userabcd said:

How is this income being taxed where it is generated (in the US or in UK?) and what does your contract state about taxes.

My contracts state that I am a freelancer/independent contractor/consultant (multiple contracts) and states the following:

 

The consultant will be responsible for all income tax liabilities and National Insurance or similar contributions relating to the Payment and the Consultant will indemnify the Company in respect of any such payments required to be made by the Company

[2530Ubon]

2 minutes ago, DrJack54 said:

OP, I just don't understand your thread. 

If I was doing exactly the same as you, I would have done nothing in regards to Thailand and I would certainly never had mentioned what I was doing here online. I asked you in post #1 how were immigration even aware of your online work. You replied that 'they have known for some time'.

I assume you are still doing your income tax returns in your own country. End of.

Immigration asked - when applying for the COVID extension they wanted to know how I was funding my stay here.

I am not liable for tax in the UK because I don't fall under one of these three categories:

• been UK resident in one or more previous tax years
• three UK ties for the tax year or
• been present in the UK for 30+ days without being present at the end of each day.

 

[Jeffrey346]

2 minutes ago, 2530Ubon said:

My contracts state that I am a freelancer/independent contractor/consultant (multiple contracts) and states the following:

 

The consultant will be responsible for all income tax liabilities and National Insurance or similar contributions relating to the Payment and the Consultant will indemnify the Company in respect of any such payments required to be made by the Company

Thailand has an agree with over 100 countries, the UK and US included. If you pay your taxes to one of these countries, you are not obligated to pay tax to Thailand. 

You may want to look at where your tax rate is lower. Your home country or Thailand. Keep in mind that your home country usually has more tax deductions available than Thailand.

[userabcd]

Take a look at this related to UK non residence and earning income from self employment in the UK. Suggest you should seek an accountants advice as to where taxes should be paid.

 

Non-resident tax return requirements: do non-residents have to file a tax return?
Just because you no longer live in the UK, you may still be required to complete a tax return.

If you are deemed to be a non-UK resident, it may still be necessary to complete a tax return if you have UK source income even if you owe no tax.

Typical scenarios that may require a tax return for non residents to be completed include:

If you are a director of a UK company
If you receive profits from a UK partnership
If you earn an income in the UK through self-employment
If you do not live in the UK, but you do some or all of your work in the UK
If you are in receipt of UK rental income
If you make capital gains from the sale or disposal of assets in the UK
Income received from investments (eg. interest and dividends) might still need to be declared even if they are your UK only income. This area can be complex, so it is always worth getting advice before making a decision on whether to declare the income or not.

If you work in the UK, unless tax has already been deducted by your employer through pay as your earn scheme, any work you do will be taxable and you will therefore be required to complete a tax return.

It is also important to remember that you may have to be taxed on your income in your country of residence, if it is not in the UK. The UK does, however, have doubt taxation treaties with some countries which will mean that tax is only payable in one country.

 

[jackdd]

24 minutes ago, Jeffrey346 said:

Thailand has an agree with over 100 countries, the UK and US included. If you pay your taxes to one of these countries, you are not obligated to pay tax to Thailand. 

You may want to look at where your tax rate is lower. Your home country or Thailand. Keep in mind that your home country usually has more tax deductions available than Thailand.

Working online isn't considered illegal by Thailand because you are considered as having your "base" (company, business, whatever) in another country, and just work for this entity from Thailand.

If you now move your base to Thailand by cutting out your home country (or whatever country your current business might be registered in, or where you are paying your taxes) then that's a completely different situation.

You would not only be required to pay taxes here, but also to register a company and consecutively get a work permit, failing to do this would mean you are working illegally.

[2530Ubon]

9 minutes ago, userabcd said:

Take a look at this related to UK non residence and earning income from self employment in the UK. Suggest you should seek an accountants advice as to where taxes should be paid.

 

Non-resident tax return requirements: do non-residents have to file a tax return?
Just because you no longer live in the UK, you may still be required to complete a tax return.

If you are deemed to be a non-UK resident, it may still be necessary to complete a tax return if you have UK source income even if you owe no tax.

Typical scenarios that may require a tax return for non residents to be completed include:

If you are a director of a UK company
If you receive profits from a UK partnership
If you earn an income in the UK through self-employment
If you do not live in the UK, but you do some or all of your work in the UK
If you are in receipt of UK rental income
If you make capital gains from the sale or disposal of assets in the UK
Income received from investments (eg. interest and dividends) might still need to be declared even if they are your UK only income. This area can be complex, so it is always worth getting advice before making a decision on whether to declare the income or not.

If you work in the UK, unless tax has already been deducted by your employer through pay as your earn scheme, any work you do will be taxable and you will therefore be required to complete a tax return.

It is also important to remember that you may have to be taxed on your income in your country of residence, if it is not in the UK. The UK does, however, have doubt taxation treaties with some countries which will mean that tax is only payable in one country.

 

Thanks, I actually don't earn any money from the UK or Thailand - I'm paid from the US and China . China pays to my UK account, and I have a US account online to receive US payments. I have no company set up, just on my own invoicing clients / receiving payments for completed projects at a predermined rate in the contract. I then send all of the payments to my Thai account. Perhaps I should find an accountant. Hopefully not terribly expensive, I'm only earning around 1.5-1.8 million Baht per annum and I don't have a massive amount of cash on hand right now as it's a slow period for business.

[ChouDoufu]

Just now, 2530Ubon said:

Thanks, I actually don't earn any money from the UK or Thailand - I'm paid from the US and China . China pays to my UK account, and I have a US account online to receive US payments. I have no company set up, just on my own invoicing clients / receiving payments for completed projects at a predermined rate in the contract. Perhaps i should find an accountant. Hopefully not terribly expensive, I'm only earning around 1.5-1.8 million Baht per annum and I don't have a massive amount of cash on hand right now as it's a slow period for business.

 

pick whichever country, uk or thailand, is best for you to pay your taxes.

if paid in uk, you owe no taxes to thailand.

in that case, don't bring earnings into thailand the year earned.

you put it in the bank, y'see, and bring it the following year.

thailand doesn't have forensic accountants to track the flow.

[AlexRich]

My understanding was that, for income sourced overseas, you would only be liable to tax on income that you brought into Thailand during the same tax year.

 

If your earnings are paid into a bank in the UK then you are liable for UK tax. For example, I could live in Thailand but rent a number of houses in the UK. That UK sourced rent would still be subject to UK tax. 
 

I’m wondering if you set up a bank account in a foreign jurisdiction that doesn’t apply tax, and hold the funds until the next tax year, you might be able to legally avoid Thai tax? 

[topt]

5 minutes ago, AlexRich said:

My understanding was that, for income sourced overseas, you would only be liable to tax on income that you brought into Thailand during the same tax year.

Theoretically (and currently in practice) confirmed - but as @ChouDoufu says above currently Thai revenue won't track it anyway - unless you tell them..........

 

7 minutes ago, AlexRich said:

f your earnings are paid into a bank in the UK then you are liable for UK tax. For example, I could live in Thailand but rent a number of houses in the UK. That UK sourced rent would still be subject to UK tax. 

I don't think that is correct for earnings paid from a foreign company when you are non resident for UK tax. Property income however is chargeable irrespective if resident or non resident.

 

The OP should have been legally able to avoid tax now until he was overly honest with Immigration and may still be able to. 

 

As an observation to others who may be in a similar situation just say you are living off investment income/savings/property rental whatever.....

[2530Ubon]

11 minutes ago, topt said:

Theoretically (and currently in practice) confirmed - but as @ChouDoufu says above currently Thai revenue won't track it anyway - unless you tell them..........

 

I don't think that is correct for earnings paid from a foreign company when you are non resident for UK tax. Property income however is chargeable irrespective if resident or non resident.

 

The OP should have been legally able to avoid tax now until he was overly honest with Immigration and may still be able to. 

 

As an observation to others who may be in a similar situation just say you are living off investment income/savings/property rental whatever.....

So if I said that I wait 12 months to withdraw the money from my foreign accounts on a monthly basis specifically to avoid paying tax, that would be perfectly legal? I think It would be believable as I used to work in Thailand and pay taxes for a number of years. I think I could say that these online earnings were deliberately withheld for the purposes of not paying tax on that income, and I stopped working in Thailand once enough time had passed to send the money tax free. Interesting option.

[userabcd]

11 minutes ago, 2530Ubon said:

So if I said that I wait 12 months to withdraw the money from my foreign accounts on a monthly basis specifically to avoid paying tax, that would be perfectly legal? It would be perfectly believable as I used to work in Thailand and pay taxes for a number of years. I think I could say that these online earnings were deliberately withheld for the purposes of not paying tax on that income, and I stopped working in Thailand once enough time had passed to send the money tax free. Interesting option.

The accountants rule is if one does not bring earnings into Thailand in the year they were earned/generated then they are not liable to tax in Thailand if one is resident in Thailand.

 

But of I read correctly it was stated that you earned income abroad from foreign companies and that income was paid into foreign bank accounts and then within a few weeks was transferred to Thailand.

 

Theoretically according to tax residence (180 days or more) and remitting income to Thailand in the same year it was earned the earnings remitted should be declared for tax.

[ChouDoufu]

8 minutes ago, 2530Ubon said:

So if I said that I wait 12 months to withdraw the money from my foreign accounts on a monthly basis specifically to avoid paying tax, that would be perfectly legal? I think It would be believable as I used to work in Thailand and pay taxes for a number of years. I think I could say that these online earnings were deliberately withheld for the purposes of not paying tax on that income, and I stopped working in Thailand once enough time had passed to send the money tax free. Interesting option.

 

why over-complicate things?

 

you put your salary in the bank, or perhaps you invest it.

doesn't really matter.

 

you are only bringing your savings into thailand.

 

[userabcd]

1 minute ago, ChouDoufu said:

 

why over-complicate things?

 

you put your salary in the bank, or perhaps you invest it.

doesn't really matter.

 

you are only bringing your savings into thailand.

 

This is what should have been said to immigration, living off savings.

[topt]

9 minutes ago, 2530Ubon said:

So if I said that I wait 12 months to withdraw the money from my foreign accounts on a monthly basis specifically to avoid paying tax, that would be perfectly legal?

Currently yes. And as mentioned Thai revenue would be hard pressed to track whether savings or income although the eventual implementation of CRS may help them there. There are probably thousands of pensioners remitting their monthly payments to Thailand currently and I have yet to hear of any of them being chased to pay income tax.

 

As mentioned in the 2 previous posts - just call it Savings not income.

[ExpatDraco]

There is one big misunderstanding about remote work and it comes up every time. If you do remote work from within Thailand that income is sourced as local, not from overseas or wherever. Where you do your work physically is important, not from who or where you are getting paid from.

 

But, chances getting caught or getting into trouble are almost 0 as long as you don't get paid from within Thailand or have Thai customers.

[Neeranam]

3 hours ago, Jeffrey346 said:

Thailand has an agree with over 100 countries, the UK and US included. If you pay your taxes to one of these countries, you are not obligated to pay tax to Thailand. 

You may want to look at where your tax rate is lower. Your home country or Thailand. Keep in mind that your home country usually has more tax deductions available than Thailand.

I know Thailand has a tax treaty with the US, but I thought there wasn't one with the UK. 

[Neeranam]

3 hours ago, ChouDoufu said:

 

pick whichever country, uk or thailand, is best for you to pay your taxes.

if paid in uk, you owe no taxes to thailand.

in that case, don't bring earnings into thailand the year earned.

you put it in the bank, y'see, and bring it the following year.

thailand doesn't have forensic accountants to track the flow.

Better still, buy digital currencies. 

I have a crypto credit card so never have to transfer money. 

[ubonjoe]

18 minutes ago, Neeranam said:

I know Thailand has a tax treaty with the US, but I thought there wasn't one with the UK. 

It is number 20 on this list. http://www.rd.go.th/publish/766.0.html