I Like To Pay Tax In Thailand

[fatfather]

I’ve got a funny, but serious problem. I cannot get a tax number/ID here in Thailand.

My situation is as follow. I’m a fixed employee of a German company and get my salary every month. The job brings me to anywhere in the world, so that I’m more than 180+ days out of Thailand. I live here since more than six years and I always stay on a “one year multiple entry business visa” which gives me 90days each entry. Because I’m full time working I never stay 90 days in a piece. I quit residence in Germany several years ago and because of that Germany cannot claim tax from me, I have an exemption from German tax authorities. As long as I’m not working in Germany itself I get my salary tax free, but…. Germany and Thailand have a double tax agreement which says, that I have to pay personal income tax in that country in which I reside. This is definitely Thailand. I enjoy my tax free income, but my employer ask for the tax bill, because he do not like to accept that I go away tax free.

I tried to get a tax number/ID from my competent immigration office as well as from the local tax authorities of my amphoe, but they all refuse to give me a tax number/ID. Main argument is that I don’t stay 180+ days in Thailand, or that I don’t make my money in Thailand. The fact that there is a double tax agreement with Germany, and that Thailand has got the right to claim my income tax does not interest anybody. I could live with this situation easily if the authorities would hand over a document to me in which they verify that I don’t have to pay tax, or where is written in “Thailand does not like fatfather’s tax”

Without any document in my hands I fear that Thailand can come back to me at any time to claim tax for all the tax free time. That would be a nightmare.

Has anybody got an idea how to get this tax ID or where to ask for a document that clearly shows that I don’t have to pay tax?

[meom]

I have an exemption from German tax authorities. As long as I’m not working in Germany itself I get my salary tax free, but…. Germany and Thailand have a double tax agreement which says, that I have to pay personal income tax in that country in which I reside.

AFAIK a double tax agreement means that you don't have to pay tax in two countries. You pay only in one country and if that country in this case Germany gives you an exemption than you don't have to pay anywhere.

Regarding tax id I guess you could start a company in Thailand with all the associated hassle and ask your company in Germany to hire your services through your company in Thailand. You would then get paid in Thailand and have to pay tax on your income. You would be throwing away money though if you would do this.

Edited July 23, 2009 by meom

[loverboy44]

I have an exemption from German tax authorities. As long as I'm not working in Germany itself I get my salary tax free, but…. Germany and Thailand have a double tax agreement which says, that I have to pay personal income tax in that country in which I reside.

AFAIK a double tax agreement means that you don't have to pay tax in two countries. You pay only in one country and if that country in this case Germany gives you an exemption than you don't have to pay anywhere.

That is not true. It only means that you don't have to pay tax in both countries on the same amount. For example 15 % tax in Thailand. The rest is 85%. On this amount you would still have to pay the local tax in your country.

[meom]

Maybe you're right. I haven't paid taxes in a long time but was always under the impression that you could choose to pay tax in the country with the lowest rate depending your nationality in some cases. For example Americans are on the hook wherever they go.

Edited July 23, 2009 by meom

[loverboy44]

Don't get me wrong. If you cancelled your residence in your home country, don't stay there longer then half a year minus one day, have no assets or income any more in this country, then you are not tax liable in this country. Maybe this the Thai tax officials mean too.

I only tried to put it the right way concerning double tax agreements.

Maybe if you want to be sure take a tax consultant to get things right for you. He/she could do it anonumously for you to stay safe.

[Nepal4me]

Since 9/11 corporate taxation issues have been viewed more closely. Companies are worried that they may be liable for some wrongdoing if their payments to employees are not taxed appropriately. One possibility is to change your status with your company to a consulting arrangement. This way the onus is off them and transferred directly to you. The downside to this is it may jeopardize your health benefits and retirement benefits. You could then get all your money tax free and not have any obligation to pay taxes anywhere.

You shouldn't worry about Thailand coming after you in the future. You simply do not meet the requirements to pay tax here. You are out of the country more than 180 days and you don't do business here (although you possibly work on your computer at your home here in Thailand).

Opening a company here would allow you to pay tax here but would be a very expensive proposition.

[fatfather]

Since 9/11 corporate taxation issues have been viewed more closely. Companies are worried that they may be liable for some wrongdoing if their payments to employees are not taxed appropriately. One possibility is to change your status with your company to a consulting arrangement. This way the onus is off them and transferred directly to you. The downside to this is it may jeopardize your health benefits and retirement benefits. You could then get all your money tax free and not have any obligation to pay taxes anywhere.

You shouldn't worry about Thailand coming after you in the future. You simply do not meet the requirements to pay tax here. You are out of the country more than 180 days and you don't do business here (although you possibly work on your computer at your home here in Thailand).

Opening a company here would allow you to pay tax here but would be a very expensive proposition.

In Germany I'm out of the social isurances, no health insurance, no unemployment insurance, no retirement insurance etc. I'm completely out of the system, except the fact that my employer is a German company. I now care for all this privately and I like to clear the situation because of my income tax. I love Thailand, I like to live here and same as I was able to pay my tax in Germany I wouldn't mind to pay the tax in Thailand, what does not mean that I do not enjoy the tax free income. How to legalize or verify my current situation, thats my inquiry.

Nevertheless thanks for your proposals

[samran]

quick question: in which country does your salary go into?

[Nepal4me]

In Germany I'm out of the social isurances, no health insurance, no unemployment insurance, no retirement insurance etc. I'm completely out of the system, except the fact that my employer is a German company. I now care for all this privately and I like to clear the situation because of my income tax. I love Thailand, I like to live here and same as I was able to pay my tax in Germany I wouldn't mind to pay the tax in Thailand, what does not mean that I do not enjoy the tax free income. How to legalize or verify my current situation, thats my inquiry.

Nevertheless thanks for your proposals

I think I don't quite understand something about your situation. As you say, you are off all the social benefits of your company. Does that mean you are still an employee or a consultant? The reason I ask about the consultancy arrangement is that any company can pay a consultant cash (direct deposit to their bank) and the onus is on the payee to pay tax. If you are a consultant, your company has no legal needs to worry about your taxes. I say this not as a way to help you avoid taxes (although it's a lovely benefit) but more as a way to help you achieve your goal, i.e. to legally be in accordance with taxation departments with all countries involved.

Again, you can't pay tax here because you don't qualify. You may "live" here by your definition of the word, but you don't by the Thai gov'ts definition.

Which brings us back to your German company dilemma. They want to see that you're paying tax somewhere.

If you're a consultant, it's none of their dam_n business.

If you're an employee and they're concerned about the potential liabilities of paying somebody and not paying the tax man, then you should try to change your status to a consultant.

You should also ask your company, why they want to see this document of taxation somewhere else in the world. I suspect it's the liability issue but you should try to understand that issue.

Sorry I'm not providing you with a specific answer but your situation is a bit unique and a bit more info would be useful.

Good luck

[Naam]

Don't get me wrong. If you cancelled your residence in your home country, don't stay there longer then half a year minus one day, have no assets or income any more in this country, then you are not tax liable in this country. Maybe this the Thai tax officials mean too.

I only tried to put it the right way concerning double tax agreements.

Maybe if you want to be sure take a tax consultant to get things right for you. He/she could do it anonumously for you to stay safe.

it's not that easy if you are a German (i am one). first of all the 183 day rule to which the taxmen of many countries adhere does not apply. you might be years out of Germany and still be liable to pay tax on your worldwide income if a "place" (even the tiniest, a caravan, a shelter made of cardboard boxes under a bridge... and the like) is

quote: "available unrestricted and at any time for living purposes"

alternatively if Herr Steinbrueck (our present Don of the german Tax Mafia) can prove (difficult but possible) your intention to return eventually to Germany and take up residence again.

being paid by a german company for work carried out abroad does not make you liable for german taxes even if the salary is paid into a german bank account. but there Herr Steinbrueck might find the beef he is looking for, namely expenditure which might indicate a planned return to Germany. e.g. mortgage payments for a piece of land, even if the land was bought for investment purposes, would be a killer.

[fatfather]

quick question: in which country does your salary go into?

My salary goes to a German account, but it would be easy to get it transferred to any account in any country. I prefer Germany because I don't trust Thai banks to much. If my Bank in Germany recognize that I'm not longer a resident of Germany they will cancel my account. It is obligate to be a resident to open an account in Germany.

[fatfather]

In Germany I'm out of the social isurances, no health insurance, no unemployment insurance, no retirement insurance etc. I'm completely out of the system, except the fact that my employer is a German company. I now care for all this privately and I like to clear the situation because of my income tax. I love Thailand, I like to live here and same as I was able to pay my tax in Germany I wouldn't mind to pay the tax in Thailand, what does not mean that I do not enjoy the tax free income. How to legalize or verify my current situation, thats my inquiry.

Nevertheless thanks for your proposals

I think I don't quite understand something about your situation. As you say, you are off all the social benefits of your company. Does that mean you are still an employee or a consultant? The reason I ask about the consultancy arrangement is that any company can pay a consultant cash (direct deposit to their bank) and the onus is on the payee to pay tax. If you are a consultant, your company has no legal needs to worry about your taxes. I say this not as a way to help you avoid taxes (although it's a lovely benefit) but more as a way to help you achieve your goal, i.e. to legally be in accordance with taxation departments with all countries involved.

Again, you can't pay tax here because you don't qualify. You may "live" here by your definition of the word, but you don't by the Thai gov'ts definition.

Which brings us back to your German company dilemma. They want to see that you're paying tax somewhere.

If you're a consultant, it's none of their dam_n business.

If you're an employee and they're concerned about the potential liabilities of paying somebody and not paying the tax man, then you should try to change your status to a consultant.

You should also ask your company, why they want to see this document of taxation somewhere else in the world. I suspect it's the liability issue but you should try to understand that issue.

Sorry I'm not providing you with a specific answer but your situation is a bit unique and a bit more info would be useful.

Good luck

I'm an employee and I get my salary each month. I'm working as a Service Specialist for heavy duty machines and I'm in the lucky situation that my company not care to much where I actually live. I do not need to show up in my company in Germany all jobs are given to me per computer or phone and I organize my travels by myself. In practice it is like that: I sit at home and a call comes in that I have to be on site of a customer on "that and that" date to do "this and this" job in that country. Normally I have some days time to prepare my jouney but it also can happen that I leave my home instantly. My company give me a lot of freedom but therefore they expect flexibility. I don't feel like an employee, but I'm one.

[fatfather]

Don't get me wrong. If you cancelled your residence in your home country, don't stay there longer then half a year minus one day, have no assets or income any more in this country, then you are not tax liable in this country. Maybe this the Thai tax officials mean too.

I only tried to put it the right way concerning double tax agreements.

Maybe if you want to be sure take a tax consultant to get things right for you. He/she could do it anonumously for you to stay safe.

it's not that easy if you are a German (i am one). first of all the 183 day rule to which the taxmen of many countries adhere does not apply. you might be years out of Germany and still be liable to pay tax on your worldwide income if a "place" (even the tiniest, a caravan, a shelter made of cardboard boxes under a bridge... and the like) is

quote: "available unrestricted and at any time for living purposes"

alternatively if Herr Steinbrueck (our present Don of the german Tax Mafia) can prove (difficult but possible) your intention to return eventually to Germany and take up residence again.

being paid by a german company for work carried out abroad does not make you liable for german taxes even if the salary is paid into a german bank account. but there Herr Steinbrueck might find the beef he is looking for, namely expenditure which might indicate a planned return to Germany. e.g. mortgage payments for a piece of land, even if the land was bought for investment purposes, would be a killer.

That's correct. I still own a house in Germany and the local tax authorities went there to inspect my house. Because they were not able to enter the house they called me and asked for access. My neighbour handed over the house key and they checked whether it is possible to live there or not. The house was absolute empty so they had to agree that nobody is living there. For the house I pay tax every year and I don't rent it out because of to much problems with tentants and the German protection laws for tentants. An income from renting out the house would also be taxed in Germany. In Germany I'm clear with the tax game, only in Thailand my situation is not defined. A return to Germany and register again as a resident is only possible if I can proof that I payed tax in the last years, so this door is closed already, I just want to be save from Thai tax authorities. I forgot to tell that the German tax authorities sent my file, or a note of my file to Thailand, Germans are very accurate in these things. So it will be a question of time to hear from Thai tax.

[Naam]

quick question: in which country does your salary go into?

My salary goes to a German account, but it would be easy to get it transferred to any account in any country. I prefer Germany because I don't trust Thai banks to much. If my Bank in Germany recognize that I'm not longer a resident of Germany they will cancel my account. It is obligate to be a resident to open an account in Germany.

that's not correct Fatfather. no problem to have any number of accounts in Germany without residing there. i even made new accounts, listing my two foreign residences and addresses, to which the account statements are sent.

[Naam]

"A return to Germany and register again as a resident is only possible if I can proof that I payed tax in the last years, so this door is closed already"

with all due respect Fatfather... aber wer hat dir dergleichen bockmist erzählt?