Rent Deductible ?

[psdone]

Question,

I will need to rent a small building for a VAT registered export business. For my limited dealing with Thais, I have noticed that they deal mostly in cash and don't pay taxes. I am wondering can I deduct the rent if I only get a handwritten receipt ?

I am looking at this from all standpoints, because I have to get a WP too, and I am wondering if that is going to be a problem too if the Landlord does not want to pay his taxes.

Personally I don't care what other people do with their money, I only want to make sure I don't sign a 3 year lease and find out after that I can't write it off ...

Thanks,

Phil

[Yamantaka]

You will need a tax receipt which is a standardized form which you can buy in tablet form at any number of retail shops.

[richardt1808]

Hi,

You don't need an official Tax receipt to deduct the rent expense. You can submit a copy of your lease agreement, which shows the name and ID numbers of both parties and clearly states the duration of the lease and the monthly amount. As long as the 'rent' amount on your monthly accounting records matches the amount shown on the lease, you are fine. If your landlord does not charge you VAT, you can get around it by making an additional voluntary deduction on your repayment in lieu of the VAT - I think it is an additional 3%. Chat to an accountant or to whoever is going to submit your financial statement for details.

Your landlord has no affect on your work permit application - that is between you and your company and is going to be your biggest headache. You do know that if you want a WP from your own personal company, you need to employ at least 4 Thais and have a registered capital of at least 2M Baht + a load of other requirements....

Cheers

[psdone]

Hi,

You don't need an official Tax receipt to deduct the rent expense. You can submit a copy of your lease agreement, which shows the name and ID numbers of both parties and clearly states the duration of the lease and the monthly amount. As long as the 'rent' amount on your monthly accounting records matches the amount shown on the lease, you are fine. If your landlord does not charge you VAT, you can get around it by making an additional voluntary deduction on your repayment in lieu of the VAT - I think it is an additional 3%. Chat to an accountant or to whoever is going to submit your financial statement for details.

Your landlord has no affect on your work permit application - that is between you and your company and is going to be your biggest headache. You do know that if you want a WP from your own personal company, you need to employ at least 4 Thais and have a registered capital of at least 2M Baht + a load of other requirements....

Cheers

Richard, thanks for the advice,

Personally I don't care about the VAT. I do care about be forced to rent from a legit landlord, because all the cheap (50B a sq. meter) buildings around me are not legit, and I highly doubt I will get a "registered" lease from them. My only other option would be an office park, and the rent starts around 300B a sq. meter in those kind of places.

I will get a lawyer for the work permit, so that will not be a problem, and I will be hiring a lot of Thais even though with my marriage VISA I only need 1 extra Thai because my wife counts as one.

Phil

[DTiger]

...

I will get a lawyer for the work permit, so that will not be a problem, and I will be hiring a lot of Thais even though with my marriage VISA I only need 1 extra Thai because my wife counts as one.

Phil

I read somewhere - because I am in the same kind of "situation" - that shareholders (our wives is that case) can't also be counted as Thai employees.

It need to be checked of course, or may have been true, somewhere, sometime :-)

Edited February 4, 2010 by DTiger

[richardt1808]

Hi Phil,

You can get a copy of a standard house lease in Thai from a stationery shop, or places similar and just need to fix postage stamps to the correct value to legitimise it. My mate was in the same position as you and he had no problem getting his nit-picky landlady to sign it. It protects both parties equally and if you ever come across a landlord who refuses to sign even an 'informal' lease, you'd have to be concerned about whether you will get your deposit back when it is time to move on.

Best of luck

[psdone]

Hi Phil,

You can get a copy of a standard house lease in Thai from a stationery shop, or places similar and just need to fix postage stamps to the correct value to legitimise it. My mate was in the same position as you and he had no problem getting his nit-picky landlady to sign it. It protects both parties equally and if you ever come across a landlord who refuses to sign even an 'informal' lease, you'd have to be concerned about whether you will get your deposit back when it is time to move on.

Best of luck

Richard,

"to be concerned about whether you will get your deposit back" Ha. Ha. Thanks for the good lease advice and the deposit laugh. I am having a bad morning and that really cheered me up. Seriously has anyone ever gotten their deposit back in this country? Even if the Thai wanted to return it, I doubt they would have it to return.

In my own experience getting a Thai to give a farang anything over 20 baht would require legal action. A good rule to live by is to never give more than a month's deposit (you can use that for the last month)

Phil

[raro]

There is no VAT on rent but you have to cut 5% Withholding Tax. If the landlord does not want to cut the WHT, there is something fishy. Ask him whether he pays taxes at all...

[richardt1808]

Richard,

"to be concerned about whether you will get your deposit back" Ha. Ha. Thanks for the good lease advice and the deposit laugh. I am having a bad morning and that really cheered me up. Seriously has anyone ever gotten their deposit back in this country? Even if the Thai wanted to return it, I doubt they would have it to return.

In my own experience getting a Thai to give a farang anything over 20 baht would require legal action. A good rule to live by is to never give more than a month's deposit (you can use that for the last month)

Phil

Phil,

I've been here more than 10 years and changed apartments/houses 4 times. 3 Times I have got my money back without any problem. Only the 4th time did I have to sue the bastard - and he was a Englishman married to a Thai!! Won the court-case and loved every second of watching him count out the cash in court, knowing that the legal fees which he also had to pay were higher than the original deposit.

Now I've just given myself a laugh !

Cheers

[monty]

...

I will get a lawyer for the work permit, so that will not be a problem, and I will be hiring a lot of Thais even though with my marriage VISA I only need 1 extra Thai because my wife counts as one.

Phil

I read somewhere - because I am in the same kind of "situation" - that shareholders (our wives is that case) can't also be counted as Thai employees.

It need to be checked of course, or may have been true, somewhere, sometime :-)

Correct. Shareholders do not count towards the Thai employee quota required for work permit application, regardless of the fact that they get salaries and pay taxes!