Tax In Thailand

[Cornflakes]

Me and my Thai gf have opened a shop together on the island Ko Phangnan and we rent the small shop from a lady who is the owner of a large resort and the shop is part of the resort next to all the bungalows and resteraunt

The shop is in my gf's name as this saved alot of problems because it's too much hassle for a farang to do it

Anyway, we pay our rent of 20,000 baht per month and our electric,water rates etc etc but there has never been mention of any tax, we have had the shop for about 5 months now and it is going very well, but i have been in bkk for a while chatting to someother guys and then they asked me bout tax

So i'm not really too sure about how it works over here, the lady we rent the shop has never mentioned it to me or my gf im just worried we are going to have the thai tax man knocking on our door and i'm sure he won't be a nice friendly face especially as we have had the shop for 5 months alrerady, even though the contract for the shop is in the name of my gf im worried the tax man could come and take it away or something like that

So what is the best way to go about the situation hat im in at th moment?

Should i be worried bout this?..whats the quckest easiest way to figure this one out?

Any help very much appreciated

[penelope]

Me and my Thai gf have opened a shop  together on the island Ko Phangnan and we rent the small shop from a lady who is the owner of a large resort and the shop is part of the resort next to all the bungalows and resteraunt

The shop is in my gf's name as this saved alot of problems because it's too much hassle for a farang to do it

Anyway, we pay our rent of 20,000 baht per month and our electric,water rates etc etc but there has never been mention of any tax, we have had the shop for about 5 months now and it is going very well, but i have been in bkk for a while chatting to someother guys and then they asked me bout tax

So i'm not really too sure about how it works over here, the lady we rent the shop has never mentioned it to me or my gf im just worried we are going to have the thai tax man knocking on our door and i'm sure he won't be a nice friendly face especially as we have had the shop for 5 months alrerady, even though the contract for the shop is in the name of my gf im worried the tax man could come and take it away or something like that

So what is the best way to go about the situation hat im in at th moment?

Should i be worried bout this?..whats the quckest easiest way to figure this one out?

Any help very much appreciated

<{POST_SNAPBACK}>

Yes , the "business" does have to pay tax.

Did you incorporate a company ?

Or is your GF operating as a sole proprietor ?

I take it you are working illegally ? (ie: no work permit)

I would consider it a little unwise to have gone into business without doing your research prior. You should ask the guys at Sunbelt Asia, from reading this forum they seem to know their stuff well.

[Cornflakes]

Like i said before, this shop is NOTHING to do with my name

I have not set up any company this is entirley in my gf's name...she just rents the property from the woman who owns the resort and the shop is on her land and a part of her resort

i just want to know what to tell my gf as she has never run a busniess before and nore have i

how do go about fixing this problem?..we have had NO problems so far and i just want to be sure about things so i can fix the problem before something bad goes wrong

i DO NOT work in the shop..it's a massage parlour..think i might look a bit out of place working in it!

so we got the shop about 5 months ago, payed 50,000 deposit and 40,000 for 2 months in advance..after that my gf has been paying the rent every month to the landlady who is also a friend but she has never mentioned any of this to my gf..my gf is an issaan girl who left school at 15 so she will have no clue about taxes and anything complicated like that..she is the boss of the shop and also works in it..but right now she just pays for the rent every month and water and electricity

WHAT TO DO? i dont want my gf getting into trouble about this!

PLEASE help

[penelope]

Like i said before, this shop is NOTHING to do with my name

<{POST_SNAPBACK}>

Sorry then.I misread the context

...Me and my Thai gf have opened a shop together ....

...we pay our rent ...

...we have had the shop for about 5 months now ....

etc...

Anyway, you do have to pay tax.Simple as that. Whether you do or you don't is entirely up to you.I'm sure that there are more sole proprietors that dont pay tax than those who do ie:noodle vendors etc...

What the penalty is if caught is probably up to the Department of Revenue.

Department of Revenue site (English version)

Follow the Tax Structures link. It has all the info you'll need.And you'll read quite clearly that your GF is liable for tax.

If you decide not to pay tax, up to you.

If you decide to pay tax, then you should address the best business structure for your situation (sole proprietor, LL company). Depending on your budget, enlist an accountant or company formation consultant (like Sunbelt) to help you get the ball rolling. Your GF will need a tax number, and I believe that you can get this from your local Amphoe office.

[~G~]

As far as I know, most businesses of this kind don't bother to pay taxes.

A Thai friend of mine is managing a small guesthouse+massage parlour and they don't pay any taxes. They do get harassed by policemen once in a while who try to get money off them, threatening to report them to the Revenue Department.

That's their choice. They might get away with it for years and they might get into big trouble as well.

As a foreigner here I prefer not to get involved in any business which is not 100% legal. Too much to lose.

[Cornflakes]

As far as I know, most businesses of this kind don't bother to pay taxes.

A Thai friend of mine is managing a small guesthouse+massage parlour and they don't pay any taxes. They do get harassed by policemen once in a while who try to get money off them, threatening to report them to the Revenue Department.

That's their choice. They might get away with it for years and they might get into big trouble as well.

As a foreigner here I prefer not to get involved in any business which is not 100% legal. Too much to lose.

<{POST_SNAPBACK}>

Sorry about he confusion..but yeshe shop ionlin my gf's name

And reading about the police men has also jogged my memory, when my gf gave the payment for the shop to begin with she said that MAYBE there could be police men knocking around sometimes trying to make some easy money out of us once in a while..also i have heard that you can even get the mafia knocking around too but that hasn't happened yet either. But another thing, if the police men do com do we pay them? i'm worried if they get payed once they will be there every week trying to scam me and my gf

so as this is a thai business and only a small one at that, do u think she will be ok just doing things the same way she has been doing?..just paying the rent and water rates,electricity bills blah blah blah?

well thanks for the replies that has lifted at least half the weight off my shoulders

PHHHHHHHHHHHWWWWW

yes penelope you were right i did make it confusing

[penelope]

so as this is a thai business and only a small one at that, do u think she will be ok just  doing things the same way she has been doing?..just paying the rent and water rates,electricity bills blah blah blah?

Personally, I do everything 100% legal in Thailand because it gives me piece of mind and I also find it quite straightforward to proceed by the book. Therefore I would not advocate going "under the table". Someone else in a different situation with a differing set of standards might disagree.

Will she be ok ? If she doesn't get caught right ! If she does get caught, well I am unsure as to what strife she may get in, as I haven't been down that street.

[sajal]

id suggest u consult with your land lady....

since the shop is on her resort if it would be illegal or sumthing even she would have a hand in it...

since your shop is inside a resort and servs mainly tourists, i dont think there should be much problems frm police n mafia or whoever....

i would personally not open a shop in this situation until i am fully sure of what i am doing.

consult your landlady....whats her opinion? ask your gf to consult some local consultant as they know the local situation the best.

maybe you fix up a rate with them for some accounting stuff they can handle the revenue ppl.

best option is go legal and pay taxes....as then u can stop worrying and have a peice of mind...

[NarrLing]

I would recommend your lady visit an accountant. They aren't expensive and a yearly retainer for their services, up country, can be as little as 1-2,000b a year. I don't know the rates where you are.

Have your lady to keep good records as visits from the tax people can happen at anytime. It does happen and at the most unexpected times.

My advice is for your lady to consult an accountant. Keep things legal in her name only.

NL

[~G~]

...They aren't expensive and a yearly retainer for their services, up country, can be as little as 1-2,000b a year. I don't know the rates where you are.

<{POST_SNAPBACK}>

1000-2000 baht a year for an accountant??? That sounds way too low.

Edited March 6, 2005 by ~G~

[NarrLing]

1000-2000 baht a year for an accountant??? That sounds way too cheap.

<{POST_SNAPBACK}>

Trust me, that is the retaining fee being paid. Not everyone lives in tourist areas. The accountant is good and the tax people were happy.

NL

[frequentatore]

Own experience: Mini-mart in a moo bahn; was open for almost a year already.

Two guys from the tax department stopped by and asked my wife to go to the tax department at the district office (building where Thai people usually renew their ID card, etc...). They didn't ask any questions about her name or income... nothing... She went to the office to declare her business and used to go there once a year to pay that tax. A few hundred baht a year, that's all. No accounting, no income tax, nothing else.

The tax might be a little more expensive for people using a business sign or brand name signs (like Mitsubishi, Toshiba, etc, for a guy selling air conditioners.....).

They told her that once a year they go around trying to find new businesses (that's why many small factories operating in shophouses/townhouses close their door...).

Like many small businesses in Thailand, your wife doesn't have to open a company. She could just go to the office and ask for information... nothing to worry about...

[NarrLing]

freguentatore,

Your experience is very similar to the one I was talking about. The tax owing is small. I recall the figure of 1.3 million Baht income being mentioned. I think that's the point where tax owing greatly increases. I'm not 100% sure on that.

NL

[frequentatore]

freguentatore,

Your experience is very similar to the one I was talking about. The tax owing is small. I recall the figure of 1.3 million Baht income being mentioned. I think that's the point where tax owing greatly increases. I'm not 100% sure on that.

NL

<{POST_SNAPBACK}>

Every year at the tax office they asked her how much she was making, her answer was sales of a few hundred baht/day... the tax was under one thousand baht/year.

As Thai people say: I make little money; I have to take care of my parents; pay for my little brother's school tuitions, etc... just be ready to cry...

[Cornflakes]

freguentatore,

Your experience is very similar to the one I was talking about. The tax owing is small. I recall the figure of 1.3 million Baht income being mentioned. I think that's the point where tax owing greatly increases. I'm not 100% sure on that.

NL

<{POST_SNAPBACK}>

Every year at the tax office they asked her how much she was making, her answer was sales of a few hundred baht/day... the tax was under one thousand baht/year.

As Thai people say: I make little money; I have to take care of my parents; pay for my little brother's school tuitions, etc... just be ready to cry...

<{POST_SNAPBACK}>

Well my gf's shop doesn't make all that much money, mybe 40,000 tops per month. sometimes more sometimes less.

So if the shop is in Ko Phangnan anybody know the closest or easyiest place to go and get this sorted out?..would it be in suratthani? or maybe ko samui?..The place where my gf made her ID card was in ubon ratchathani we dont have to go the way up there do we?

So anyway, this isn't going to cost me an arm and a leg to fix then?

thanks guys

[chuchok]

freguentatore,

Your experience is very similar to the one I was talking about. The tax owing is small. I recall the figure of 1.3 million Baht income being mentioned. I think that's the point where tax owing greatly increases. I'm not 100% sure on that.

NL

<{POST_SNAPBACK}>

Every year at the tax office they asked her how much she was making, her answer was sales of a few hundred baht/day... the tax was under one thousand baht/year.

As Thai people say: I make little money; I have to take care of my parents; pay for my little brother's school tuitions, etc... just be ready to cry...

<{POST_SNAPBACK}>

Well my gf's shop doesn't make all that much money, mybe 40,000 tops per month. sometimes more sometimes less.

So if the shop is in Ko Phangnan anybody know the closest or easyiest place to go and get this sorted out?..would it be in suratthani? or maybe ko samui?..The place where my gf made her ID card was in ubon ratchathani we dont have to go the way up there do we?

So anyway, this isn't going to cost me an arm and a leg to fix then?

thanks guys

<{POST_SNAPBACK}>

Mate,

If your wife is anything like 90% of small business owners in this country, then they will only declare a very small amount. Talk to an accountant before you do anything.