Taxing Times

[Khutan]

Before this starts I must mention that working for pay of any sort without a Work Permit means you can get arrested, imprisoned at the IDC (not a nice place) then deported, never to return to Thailand.

For anyone with long term ambitions here, paying tax is a prerequisite if you ever want a Residence Permit.

Recently I was looking at a pay-slip and noticing I pay a considerabe amount of Tax. I was thinking about tax-effective investments and the finer points of Tax law. Personally I think its too much.

Whilst I was musing about this, I was having a conversation with an acquaintence, who is an English teacher for a large "English Teaching Business". He then reported to me that he wasn't paying any tax, and there were only 4 people in this "Business" who had a workpermit, therefore paying Tax.

Some inquiries further revealed this seems to be a trend with the large "English Businesses" that you get a start with few qualifications and then you don't have a workpermit, therefore cannot pay tax.

I also spoke to another acquaintence who is also an English teacher, but at a school, he told me that Workpermits were often over-looked and well, it didn't really matter.

I know as a fact the Revenue Department is on a bonus scheme for tax receipts. So maybe they should start looking into some of these schools and Businesses. If you do the mathematics, it becomes quite a large amount of money.

Lets assume there are 2500 (I would guess more) of these people on an average wage of 30,000 a month. That means a wages bill of 75,000,000 Baht a month.

Tax supposedly on that salary is a low 7%. Therefore 5,250,000 Baht a month is being lost in unpaid Tax. Or annually 63,000,000 Baht. I am sure that amount of money would make the Revenue Department get its target, and therefore the employee's bonus.

Now other things are lost for the employee, such as the chance of Residency, is things like Social Security (in its form) Health Care, and getting into so many attractions at the "Thai Price". So sure some people's employers are putting money in their pocket, but who is losing ?

[PeaceBlondie]

I guess you're not a teacher. You're one of those more fortunate expats who makes real money in private industry. Honestly, good for you.

Welcome to what is laughingly referred to as "the education profession in Thailand." No, work permits can be IMPOSSIBLE for a qualified person to get. Yes, at my first school (which refused, up front, to get me a WP) they took out tax, gave me the proper receipts, etc. But I still don't have a tax number! Who pocketed the tax money?

Permanent residency, you say? 90% of the farang teachers in Thailand aren't planning on it. Marrying a Thai citizen is the main thing that might motivate them to do that.

By the way, Mattnich, your original post makes perfect sense. That's why it's almost completely beside the point.

Getting the Thai price, you say? Posters in this general forum say a Thai Drivers License (or a good Thai partner) is all it takes. Besides, many new teachers can't afford the entertainment that charges several hundred extra baht for farang.

Social Security? What, a pension of 2,000 baht per month at age 60?

The medical system, the 30-baht scheme? That's only for Thais. Many farang at half-decent schools get medical insurance that's three steps above the 30-baht scheme.

You know for a FACT that the revenue officers in Thailand are on a bonus system? I retired from the IRS, which has no such bonuses. Please post the source of your fact, keeping mind that two things are very scarce on the ground here: facts and statistics.

Have a good day.

[kenkannif]

Matt that's the top of the iceberg I'm afraid, far more other things going on in the teaching industry (although you can hardly blame the teachers for pretty much most of them!).

[Ijustwannateach]

If you think that we're the biggest missed-tax opportunity for the revenue department, then I've got some property on London Bridge to sell ya...

What's the biggest opportunity? Why gawrsh darn and shucks, it's the THAIS THEMSELVES! Why, there are just so MANY of them in this hyar country! They outstrip us by any standards you want to name- numbers, absolute wealth, and in terms of the richest individuals, and the amount by which those individuals cheat.

Granted, as foreigners without special phone numbers to call to get people assassinated or fired, we're a bit easier target than many of these rich Thais, but still... sweet of you to think of us, and all, being a fellow foreigner- gotta stick with one's own, you know!

I'm sure if it were up to the TEACHER, we'd all be properly licensed, work permitted, and taxed, safely on the way to residency. Sadly, most of the time it is NOT up to us, but up to the bumbling, incompetent, uncaring dunderheads that are our theoretical administrators. And though the risk is relatively light at the moment, you never know when there might be a crackdown- and it's not going to be the school owners in the clink. So your advice (if that's what it is) is well-taken for all teachers considering taking a dodgy position in the World of Toxin, but, well, until it's enforced, it's unenforced!

"Steven"

[Khutan]

I am not trying to launch an attack on Teachers. More the shoddy companies and schools that are "playing off both ends"

I have a great deal of respect for the guys who get up day in day out in hot smelly clasrooms to teach often poorly behaved children, sometimes with little or no support from their employer.

I guess you're not a teacher. 

<{POST_SNAPBACK}>

No I am not, I don't have the patience or the ability.

Getting the Thai price, you say?  Posters in this general forum say a Thai Drivers License (or a good Thai partner) is all it takes.

<{POST_SNAPBACK}>

Not is as many places.

Now to the cream of this....

You know for a FACT that the revenue officers in Thailand are on a bonus system? 

<{POST_SNAPBACK}>

Without a doubt. I was in a revenue office when they were having a rah-rah about the monthly collection targets, and the bonuses.

Have a good day.  Oh, and why do you use a Nissan avatar?

<{POST_SNAPBACK}>

Thank you PeaceBlonde.

I have an Issan Avtar, as a little joke about motoring Marques. Driving my Nissan in Issan or E-sarn.

[kenkannif]

I think 3% tax for us as well!

Now hopefully they'll also give the tax back that teachers have to pay out (even when they're not working) just to have a WP!

As IJWT says it ain't us, it's the management etc.

Also the amount of money schools/companies don't pay in tax for contracts etc. is far more than tax for the individual. I'd look into that more than stitching up some poor teacher on 30K a month. I pay 1,625 a month tax and get back 7K (married with child) so that leaves 12,500 Baht that goes into theur pockets each year!

[kenkannif]

Ooops my apologies as well Matt, I thought you was having a go at teachers as well mate, sorry!

[Khutan]

....Also the amount of money schools/companies don't pay in tax for contracts etc......

<{POST_SNAPBACK}>

Without a question, I just heard about one place that pays the teacher 250B an hour, but clips the customer 750 an hour. Get 10 teachers out there and the company is making 5,000 an hour tax free.

[kenkannif]

^ That's actually a pretty low mark up mate!

As posted in the Mods room:

I'd say well over 50% of teachers here in Thailand (maybe more) don't have a WP which generally means they don't pay tax, although not always.

Of those that do have WPs I know of a fair few that pay more tax than they should (even when they're not working).

A blind eye is generally turned to us, and even when the proverbial poo hits the fan all it takes is a little bit of $$$ to have them leave you alone. Most schools also have very good contacts at Immigration so they're rarely if ever hassled.

The problem is due to either the WP to classroom rule (i.e. outsourcing is not classed as a reason to issue further WPs) or lack of quals (i.e. no TEFL or degree no WP) a lot of teachers can't get legit even if their school wanted them to be (wellish anyway). Or the people in charge of getting said teacher a WP doesn't have a clue as to how.

You'd be very surprised some of the shit that goes on. I'd say a good proportion of teachers (80%) or so with WPs are or have at some time broken the law in regards to work, location and what they should be teaching.

This is common knowledge to most people in the teaching profession!

[Tarragona]

Without a question, I just heard about one place that pays the teacher 250B an hour, but clips the customer 750 an hour. Get 10 teachers out there and the company is making 5,000 an hour tax free.

<{POST_SNAPBACK}>

I once completed an in-company contract for a language school and part of the inducement to get the company to renew was to give them a 100 baht/hour reduction in the cost of the course. The school tried to make good on their share by telling me they would pay me 100 baht/hour less for the next course. No, I didn't take them up on the offer.

I did this as part-time work for a well-known language school chain, about 10 years ago, at a branch outside Bangkok. They only took tax from the full-time work permit holding employees but were suddenly informed by the local revenue department that it was known they employed more teachers who would have to start paying their taxes too. This was of course nothing to do with the Labour Dept and so didn't mean they needed to get work permits.

I believe it is correct that the Revenue Dept has some sort of bonus scheme. I first heard this from a friend who was (illegally) teaching English classes at a provincial Revenue Dept office. Over the years I have known many teachers working in government offices, usually for cheaper language school contracts, almost always working illegally. You can make great contacts this way.

[otherstuff1957]

I've had a WP for over two months now, but my employers haven't been deducting any taxes! They have plenty of Thai employees, so I'm sure they know how to, but they are so used to Farangs working illegally that they just don't even think about deducting my taxes.

Next month I'll have to remind them - although I'll hate to lose a few thousand baht!

[Neeranam]

I've had a WP for over two months now, but my employers haven't been deducting any taxes! They have plenty of Thai employees, so I'm sure they know how to, but they are so used to Farangs working illegally that they just don't even think about deducting my taxes.

Next month I'll have to remind them - although I'll hate to lose a few thousand baht!

I don't think you pay tax on the first year of the WP. I think this is normal. It was for me the couple of times I started on a WP.

I spent years working without paying tax. I was on a tourist visa.

I have one now, but must admit I don't declare my private work. You on earth would?? Would you?

[p_brownstone]

It’s certainly true that the biggest Tax dodgers in Thailand are the Thais themselves.

Many years ago the Revenue Department here launched a programme to publish the names of the top 100 Income Tax Payers in Thailand every year – allegedly as an incentive to get more people to pay the correct taxes.

In the first year something like 98 of the 100 were Farang – no sign of any of the big Thai business names at all.

The scheme was quietly dropped.

Patrick