Do Thai Employers Know Thai Law?

[MagnumForce]

Hi,

I've a problem and I need advice. Preferably legal. I've researched this and my employer's reaction is amazing, in my opinion. Let me explain.

My employer (teaching agency type company) got me a new Work Permit at the end of April for a contract starting on 17 May. We get paid every two weeks on the 16th and the 1st of the month. The monthly salary is 30,000 baht so our gross salary is 15,000 every forthnight. I got my first payment today for the last two weeks. 820 baht tax was deducted from 15,000. When I queried this I was told that this was the correct amount for a month since the work permit is a month old. Forgive me, but my understanding of tax is that it's a certain % of your pay, not related to when you got your work permit. I wasn't paid from the period 1 May to 16 May, only from 17 May to 31 May.

I tried to make my case but was told I didn't understand about Thai rules. Biting my tongue, I then broached the subject of the Thai tax year running from 1 January to 31 December. By my calculations, this means my total income for 2010 under this employer is 225,000 baht. Less my personal expenditure allowance of 40% but not more than 60,000, less personal allowance 30,000, less spouse allowance 30,000, less 17,000 child allowance leaves me with 88,000 baht net income for 2010 which is below the taxable threshold therefore leaving me with Zero tax liability for 2010 for this employer.

"No, no, no. Thai tax year run to end of February which is end of contract." Even still, there is no way that 820 baht is justifiable either for 2 weeks salary or 1 month. Am I crazy or not?

Then, the icing on the cake. "I check with Tax office. If they say you can do your own tax then ok. If not, we have to talk about whether you continue working here. I no want to do tax for one person." It seems that each month my employer is paying (allegedly) a pre-decided amount and it's too much trouble to take into account each individual's specific tax liability.

So, can I do my own tax and submit it even though I'm employed by a teaching company? I don't want to leave this job just now because I have personal commitments and getting a new visa is messy at the moment. Effectively, the veiled threat of dismissal has been issued which really makes me mad. However, what legal grounds does my employer have to dismiss me over this? I signed a contract (which, when I asked for a copy, I was refused!) but there is nothing in it covering this kind of situation. Surely it doesn't even come close to grounds for dismissal under Thai law?

It seems that even if you go to the trouble of familiarising yourself with the rules of employment in Thailand you get this kind of attitude thrown back at you when you have a valid query. It makes me sick, especially given the amount of cash that I and my colleagues generate for this individual on a monthly basis.

Any help and advice would be most welcome. If anyone has free legal advice, even better. I'm in CM if that makes any difference.

Thanks.

MF

[MagnumForce]

Just discovered something online that states: "A company may choose any twelve-month period as its accounting period."

So I guess that answers my query about the tax year. However, it only yields a very low monthly tax liability of approximately 250 baht per month, by my calculations.

[MagnumForce]

Am I subject to paying Personal Income Tax or is it a Corporate Income Tax issue? In my last job it was PIT. Surely it's the same for this new one?

[Ijustwannateach]

If your employer has paid too much tax on your behalf, you are entitled to have it returned, just like in most of our home countries. When you are getting ready to file, the employer must provide you with paperwork showing what you were paid and what tax was withheld. If there is any dishonesty at THAT point, you can probably bring in a lawyer (if it would really be worth it). I would, if I were you, look into finding other work considering the unhelpful attitude of your employer. To answer the question of your OP, it is quite common for employers to be unaware of many aspects of labour law (quite often their Thai employees will not hold them to account even if they themselves are aware of violations).

[Jimi007]

Just discovered something online that states: "A company may choose any twelve-month period as its accounting period."

So I guess that answers my query about the tax year. However, it only yields a very low monthly tax liability of approximately 250 baht per month, by my calculations.

Welcome to Thailand. I have heard about some scams from companies that get "english" teachers jobs. I never have nor never would try to work in Thailand. Didn't you get a clue when they wouldn't give you a copy of the contract you were signing. Accurate legal advice is not free here. I couldn't believe some of the clauses in my house lease when I read it... Is there some kind of penalty if you leave? I've also heard that if you work at a Thai school and the Thai teachers are making less than you, which in most cases they are, it can be a problem. I know the school year just started, and you just got the job, so I don't know what your recourse is now. But, the old saying here may apply: Thailand is for Thai's...

Good luck, but you may want to seek professional advice. It would be good to have a copy of your contract, you signed.

Jimi

[MagnumForce]

Can I pay my own tax and file my own tax returns even though I'm working for a company? It appears, and I'm open to correction on this, that I can using either a P.N.D. 90 or 91 form after I submit an application form to do this. I'm not quite sure which of these forms is the correct one but they're very similar. Anyone know?

My employer said they would check with the tax office but I'm sure I'll be advised verbally by her that I cannot and when I ask for a letter from the tax office stating same, this will cause more problems.

Edited June 1, 2010 by MagnumForce

[Ijustwannateach]

If your employer is not willing to follow the law and causes problems when you insist on this, you are already in trouble and should probably be searching for another job. Legal help will be expensive and unlikely to earn you more money than it costs unless you have been working a number of years and will be owed severance. Start looking for a new job and get ready to run and transfer the WP as soon as possible. In the worst case, which seems likely, if the previous employer doesn't want to assist in the WP transfer, you will need to start the whole WP quest over again- so have enough funds to make the visa run when that happens (you will only have a few days to leave the country).

[TerryLH]

If a company chooses a tax period that is not 1/ - 31/12, that doesn't mean the employees tax year is also changed.

You can file your own taxes, form 91 is correct. You have until the end of March each year to file. After that, it's late, and there is a small fine.

Your employer is required to give you a statement/form that shows salary, tax deductions and social security deductions.

You would take that to the Revenue (Tax) office and file on your own, using the Form 91 mentioned above.

Do you have a tax Number? If yes, you can check with the tax office and see if your deductions are being credited to you.

If you don't have a Tax Number, where are the deductions going?

If your employer is crediting your account with the deductions, you will be able to get a refund if you payed too much.

[MagnumForce]

Thanks so far guys. Anyone else have any ideas?

TerryLH,

From what you say, am I then correct in saying that Personal Income Tax is from 1 Jan - 31 Dec?

I thought it was possible to file your own taxes. Thanks for clearing that one up. Can I actually pay my own taxes as well? I was thinking about going to the Tax Office directly, giving them my information and letting them calculate exactly what I should be paying. I'm not sure that I could even get a statement/form that shows salary and tax deductions from my employer. Can the Thai Revenue demand this from them? As for social security deductions, there is nothing being deducted to my knowledge. Is this ok?

I don't understand what the problem is. In any organisation that I'm familiar with, tax is calculated for each individual based on their particular set of circumstances. It's not difficult. However, I was refused when I asked to check with the company accountant about this.

For now, I have a tax number and will ask if the deductions are being credited to me.

MF

[TerryLH]

"Personal Income Tax is from 1 Jan - 31 Dec?"

Yes, that's correct.

I'm not sure about paying your own taxes on a biweekly or monthly basis.

Ask the Revenue Office when you check to see if they are getting your deductions.

They can also give you an idea what you should be paying.

If you have a problem getting the form from your employer, they should be able to help you with that.

If you become the squeaky wheel, you might be looking for a new job.

I've always had good experiences with the Revenue Office (in 3 provinces). One thing about all three places I've dealt with, is the lack of English. More noticeable than any other office I've used. If you aren't pretty fluent in Thai, you probably will want to take someone to translate for you.

[aussiebebe]

I think the OP's employer has acted reasonably so far albeit lazily, but that's to be expected. The employer is a company, so it must submit it's own tax form PND1, showing the salary of employees. The OP's question about doing his own tax is yes, he can complete and file the PND91 with the relevant evidence (marriage certificate, birth cert etc) and the tax office will issue a refund in the form of a cheque for any over-paid tax. The employer is clearly not calculating each employees individual tax liability, that's far from unusual.

Personally, I've learnt something from reading this thread; I didn't know PIT year ran from Jan to Dec, I thought it was between Februarys. My school has always just taken a set percentage from each employees salary, and then helped us complete a PND1, the tax refund cheque is then mailed to us. I don't think the OP's company is doing anything wrong. The OP simply needs to discover his tax number and see which local tax office his company is using.

Only two things the OP could be overlooking: are the deductions purely tax, or is the employer paying Social Security contributions? and the spouse allowance only applies if your spouse doesn't work.

[MagnumForce]

Aussiebebe,

Thanks for your contribution. Some responses.

Since my employer refuses to provide me with an actual payslip, I don't know whether the 820 deduction is for tax + social security contributions. It's highly unlikely that social security is being deducted given the casual way this is being handled, but I have a tax number and I will check.

Also, I mentioned the fact that my employer claims to have deducted 820 based on the fact that the work permit is one month old rather than based on the fact that I only got two weeks pay. To my mind, this is bullshit. If you get paid for two weeks, you should pay two weeks worth of tax. If you get paid for one month, you should pay one month worth of tax. My contract started on 17 May but, like I said, I was refused a copy of this contract when I asked for one. The reason given was that it's confidential and they would be afraid that competitors might see it. Absolute crap!

In my case the spouse allowance is applicable, as are the other allowances I referred to.

My employer, like you said, deducts a certain % each month and then helps us reclaim the tax. Since the PIT year is from January-December, I calculate a full tax rebate come next May. The danger is that this will not happen because of the approach being taken. Then, there is the issue of when I will get a refund of my tax contributions for Jan and Feb 2011 should I leave when my present contract expires next March? I'm sure it's a relatively small thing in the grand scheme of things but it's not that difficult to do it properly, in my mind, so there are no mistakes. However, this is Thailand.

What concerns me most is the apparent ignorance of their own country's law regarding employer responsibilities at best, or, the total disregard for them at worst, and also this attitude that you should just be grateful to be working for them and to have the extension of stay based on this work to allow you stay in Thailand and live your life so don't ask any questions or make any suggestions or they'll threaten you with losing your job and then your permission to stay here, while all the time they get fat off your hard work.

I better go now before I do myself an injury.

MF