Can anyone explain how the 3% withholding for building a new home actually works.

[Longwood50]

I am building a new home.  I have been told by both my attorney and my accountant that by law I am supposed to withhold 3% and pay withholding for the labor. 

I understand the law I am questioning from a practical standpoint how that actually works in the real world.  I am supposed to pay the government 3% for the labor and file with the ID's of the persons I am paying the withholding for.   

So hypothetically if I get an invoice from my builder and it says 100,000 baht for labor am I really supposed to get the ID cards from every worker and file with the government.  Also, I have used companies such as SCG to perform certain tasks like the roof and truss.  Do you really withhold and get ID's from their workers also. 

From a legal standpoint I understand the law.  However from a practical standpoint can someone say how it works in reality.  I just can't imagine how actually doing so would be feasible.  

[Dante99]

Wow it is really simple.  You hire SCG or a contractor and just pay them.  They are the ones hiring the workers and so they are responsible for the related issues.

[Crossy]

This ^^^.

 

You think too mutt I'm afraid (and both your attorney and accountant are rubbing their hands waiting to receive their $$$ fees).

 

Unless of course you are directly hiring the labour (here be dragons!) who won't be filing tax returns anyway.

 

When we built our place, I simply transferred the $$$ to our contractor for each stage payment. QED.

[Longwood50]

On 6/5/2024 at 8:34 AM, Dante99 said:

Wow it is really simple.  You hire SCG or a contractor and just pay them.  They are the ones hiring the workers and so they are responsible for the related issues.

I would normally agree that is the way it should work.  I am told however since I am building the home in a company name I am supposedly responsible for the wage withholding.  My accountant said, that my contractor is required to withhold 3% from all of his sub contractors and pay it.  I in turn am supposed to withhold 3% from him.   I commented that is impossible.  I can't obtain their names and ID's.  I would also have no idea what he paid them.  If I withhold 3% of what I pay my contractor, he is shortchanged since he would be charging me more than what he is paying his subs. 

 

[Dante99]

19 hours ago, Longwood50 said:

I in turn am supposed to withhold 3% from him.   I commented that is impossible.  I can't obtain their names and ID's.  I would also have no idea what he paid them.  

19 hours ago, Longwood50 said:

If I withhold 3% of what I pay my contractor, he is shortchanged since he would be charging me more than what he is paying his subs. 

What?  Not at all clear.

You are supposed to withhold 3% from your contractor, from what you owe him.  You do not need details or to withhold from people he pays.  Seems you have this a bit confused.

[Bill97]

Longwood you are just imagining problems for your self .  Can’t you understand the difference between you hiring a contractor and you hiring a bunch of workers with hammers and shovels?  

[Njoku]

On 6/14/2024 at 10:52 AM, Longwood50 said:

I would normally agree that is the way it should work.  I am told however since I am building the home in a company name I am supposedly responsible for the wage withholding.  My accountant said, that my contractor is required to withhold 3% from all of his sub contractors and pay it.  I in turn am supposed to withhold 3% from him.   I commented that is impossible.  I can't obtain their names and ID's.  I would also have no idea what he paid them.  If I withhold 3% of what I pay my contractor, he is shortchanged since he would be charging me more than what he is paying his subs. 

 

Same as GST with held in Australia, but its 10% there, your builder/head contractor will be on a rate at least in AU its adjusted each year on turnover and profit, may be not here, never mind, he can file a tax return end of the financial year, You are a business and obviously registered for Vat the house build is being treated as a business transaction, make sure your builder is aware of that 3% deduction as you know here paying tax is something like getting cancer, tell him to invoice you showing the 3% to be withheld, if at all a half decent biz it shouldn't be a problem.