Work Permit ,Company Says They Are Exempt From Me Paying Tax

[Colabamumbai]

A Company here, that will employ me says that they can get me a work permit but I will not have to pay tax, I forget their actual explanation, is this a load of bull? Actually they said the tax is 1.9% of income. This guy has told me so many stories I'm not sure what to believe he is a foreigner with a number of business interests here including a school that he says is waiting for the Ministry of Education to stamp papers to the new owner also a foreigner before he can legally advertise the school and the courses.

Mario, Lopburi any advise or experience here?

[surayu]

"This guy has told me so many stories I'm not sure what to believe...."

.....just another story then

[TerryLH]

"...he says is waiting for the Ministry of Education to stamp papers to the new owner also a foreigner before he can legally advertise the school and the courses."

That might be true.

I have my doubts about not paying taxes, unless the amount earned is low enough so you just don't owe anything. Starting this late in the tax year, you might have enough deductions to offset the salary. Have they said this is for this year, or every year?

[Motoon]

"...he says is waiting for the Ministry of Education to stamp papers to the new owner also a foreigner before he can legally advertise the school and the courses."

That might be true.

I have my doubts about not paying taxes, unless the amount earned is low enough so you just don't owe anything. Starting this late in the tax year, you might have enough deductions to offset the salary. Have they said this is for this year, or every year?

The deductions are calculated pro-rata same as the salary itself. The tax code is very clear about taxation and the answer to the OP's post is: That's a whole lot of bull...

[monty]

Firstly, you will always pay social security contributions. Currently your employer pays 3% and you will pay 3% of your salary, but with a cap of 1500 Baht/month (i.e. 750 Baht each).

Income tax depends on your salary. The first 150,000 Baht is tax free, add to that a maximum of 40,000 Baht deduction and 30,000 allowance, making for a total of 240,000 Baht of tax free salary (20,000 Baht/month).

There's some additional smaller allowances if you are married and have children etc, but if you are single and you get paid more then 20,000 Baht/month, then you'll pay tax as well.

On the part between 150,000 and 500,000 Baht (after deductions and allowances) you will pay 10% tax, so if you'd earn 40,000 Baht/month, you'll have to pay 2000 Baht/month income tax (works out to 5%)

[QED]

"...he says is waiting for the Ministry of Education to stamp papers to the new owner also a foreigner before he can legally advertise the school and the courses."

That might be true.

I have my doubts about not paying taxes, unless the amount earned is low enough so you just don't owe anything. Starting this late in the tax year, you might have enough deductions to offset the salary. Have they said this is for this year, or every year?

The deductions are calculated pro-rata same as the salary itself. The tax code is very clear about taxation and the answer to the OP's post is: That's a whole lot of bull...

Completely wrong, why bother posting?

[monty]

"...he says is waiting for the Ministry of Education to stamp papers to the new owner also a foreigner before he can legally advertise the school and the courses."

That might be true.

I have my doubts about not paying taxes, unless the amount earned is low enough so you just don't owe anything. Starting this late in the tax year, you might have enough deductions to offset the salary. Have they said this is for this year, or every year?

The deductions are calculated pro-rata same as the salary itself. The tax code is very clear about taxation and the answer to the OP's post is: That's a whole lot of bull...

Completely wrong, why bother posting?

Indeed, your income from the 1st of January till the end of December is used to calculate your tax, and you have to file your final tax return before the end of March of the following year.

If you would only work a few months in one tax year you will likely remain within the tax free income bracket.

If the accountant (or HR department) knows their jobs and you properly informed them of your family situation etc, they will have withheld roughly the proper amount every month so you should end up paying or getting back a small amount after filing your return.

[TerryLH]

"Currently your employer pays 3% and you will pay 3% of your salary, but with a cap of 1500 Baht/month (i.e. 750 Baht each)."

The total is correct. 750 x 2 = 1500 max.

I think it's actually 5%, though.

Maybe the 3% comes from the recent lower amount owed during the 'help the (poor) people' program. I know I paid less for about a year.

Terry

[Colabamumbai]

Firstly, you will always pay social security contributions. Currently your employer pays 3% and you will pay 3% of your salary, but with a cap of 1500 Baht/month (i.e. 750 Baht each).

Income tax depends on your salary. The first 150,000 Baht is tax free, add to that a maximum of 40,000 Baht deduction and 30,000 allowance, making for a total of 240,000 Baht of tax free salary (20,000 Baht/month).

There's some additional smaller allowances if you are married and have children etc, but if you are single and you get paid more then 20,000 Baht/month, then you'll pay tax as well.

On the part between 150,000 and 500,000 Baht (after deductions and allowances) you will pay 10% tax, so if you'd earn 40,000 Baht/month, you'll have to pay 2000 Baht/month income tax (works out to 5%)

Thank you for your informative and intelligent reply. I appreciate your breakdown of the tax regulations.

They have tried to tell me that they way the are set up here that employees do not have to pay tax. Again last night I heard the boss tell a prospective employee that she would not pay tax but in her case he was only offering $15,000 bhat a month salary.

[Mario2008]

Note that for an extension of stay based on employment, you will need to show tax papers.

[Colabamumbai]

Note that for an extension of stay based on employment, you will need to show tax papers.

Thanks Mario I do understand that part of it. I just could not figure how a company here could not be paying taxes and telling employees that they would not have to also.

Edited June 24, 2010 by Colabamumbai

[monty]

"Currently your employer pays 3% and you will pay 3% of your salary, but with a cap of 1500 Baht/month (i.e. 750 Baht each)."

The total is correct. 750 x 2 = 1500 max.

I think it's actually 5%, though.

Maybe the 3% comes from the recent lower amount owed during the 'help the (poor) people' program. I know I paid less for about a year.

Terry

The 3% was introduced with the economic stimulus package, but I am not sure it has ended or not, if so it will indeed be 5% but with the same cap, so at expat salaries (even the low ones) it would not make any difference!

[NHJ]

since 2008, new work permit get maxixum a year of free tax(if you start in january 2010 you'll pay tax only in january 2011, if you start in october 2010 you'll have to start pay tax in january 2011).

you don't have to be registered to social security.

regarding the tax form at the end of the year, the paper will just show 0 baht paid and it won't be a problem to get an extension of stay or renew the work permit(i did it myself in january 2010 at the labour office in koh samui).

[TerryLH]

"I am not sure it has ended or not..."

I'm back to paying my regular 432 ฿ per month, so am pretty sure it's ended.

Nice while it lasted, but hard to find fault with 432 baht.

"you don't have to be registered to social security."

In many cases you are supposed to in the system. If you are in one of those situations, and aren't, your employer is bending the rules/law.

Why would someone not want to be in social security? For the price, you get good health coverage, and more.

[opalhort]

Social Security has been 5% of salary for employee and 5% for employer since Jan this year. This is what our Co. pays these days.

opalhort

[monty]

since 2008, new work permit get maxixum a year of free tax(if you start in january 2010 you'll pay tax only in january 2011, if you start in october 2010 you'll have to start pay tax in january 2011).

I have heard this before, but have never been able to find anything in writing about this, and my local revenue office sure hasn't heard of it either!

you don't have to be registered to social security.

Yes you need, with certain exceptions. Directors in their own company, teachers and headmasters in private schools and a few more do not have to be registered. All other employers with one or more employees have to register their staff with the social security office.

[NHJ]

since 2008, new work permit get maxixum a year of free tax(if you start in january 2010 you'll pay tax only in january 2011, if you start in october 2010 you'll have to start pay tax in january 2011).

I have heard this before, but have never been able to find anything in writing about this, and my local revenue office sure hasn't heard of it either!

you don't have to be registered to social security.

Yes you need, with certain exceptions. Directors in their own company, teachers and headmasters in private schools and a few more do not have to be registered. All other employers with one or more employees have to register their staff with the social security office.

maybe my tax return will show you it's true? i did two companies for friends in koh samui and same thing apply, no tax the current year of the work permit application.

[Tywais]

Note that for an extension of stay based on employment, you will need to show tax papers.

Curious as to what the specifics of that are as immigration stopped requesting my tax (PND91 copy + receipt) a few years ago, this is Chiang Mai.

[HakimKlunker]

Where is the point of not paying taxes? Firstly it is affordable, secondly Thailand is quite moderate in the amounts, thirdly everyone does (emm is meant to, at least)

I think that you met one of these 'Cowboys in Thailand'; check out the company thoroughly: chamber of commerce? Reputation by customers? Reputation by partners?

It is sometimes better not to get a job, than to loose it after half a year or so.

(I collected this wisdom by joining ***** in ***** (why do we never tell names?)

[QED]

Where is the point of not paying taxes? Firstly it is affordable, secondly Thailand is quite moderate in the amounts, thirdly everyone does (emm is meant to, at least)

I think that you met one of these 'Cowboys in Thailand'; check out the company thoroughly: chamber of commerce? Reputation by customers? Reputation by partners?

It is sometimes better not to get a job, than to loose it after half a year or so.

(I collected this wisdom by joining ***** in ***** (why do we never tell names?)

This is a bit of a myth, I don't find it moderate particularly, with a top rate of 37% my tax take is not much different to the UK. I do however save a small fortune on National Insurance (750 THB p/m vs 1,500++ GBP)

Sure for teachers and other low earners they may pay zero or very little due to the tax free allowance and sliding scale, but this is also the case for low earners in the UK (they are talking about making the first 10,000 GBP tax free now, double the amount here).

[bf2002]

<br>Firstly, you will always pay social security contributions. Currently your employer pays 3% and you will pay 3% of your salary, but with a cap of 1500 Baht/month (i.e. 750 Baht each).<br><br>Income tax depends on your salary. The first 150,000 Baht is tax free, add to that a maximum of 40,000 Baht deduction and 30,000 allowance, making for a total of 240,000 Baht of tax free salary (20,000 Baht/month).<br><br>There's some additional smaller allowances if you are married and have children etc, but if you are single and you get paid more then 20,000 Baht/month, then you'll pay tax as well.<br><br>On the part between 150,000 and 500,000 Baht (after deductions and allowances) you will pay 10% tax, so if you'd earn 40,000 Baht/month, you'll have to pay 2000 Baht/month income tax (works out to 5%)<br>

<br><br><br><br>What's the tax structure for income from 500,000 Baht to 3.2 million Baht in annual salary?<br>I have an employer that requires me to have a work permit wherever I happen to work from, but I get to work from anywhere in the world, and am thinking of relocating to Thailand.<br>

[HakimKlunker]

...with a top rate of 37% ...

Top rate means top income. I doubt that there is not enough left for a decent living.

If you want to avoid taxing, my advise is: go unemployed

[HakimKlunker]

...with a top rate of 37% ...

Top rate means top income. I doubt that there is not enough left for a decent living.

If you want to avoid taxing, my advise is: go unemployed

By the way: a little off topic?

[tombkk]

since 2008, new work permit get maxixum a year of free tax(if you start in january 2010 you'll pay tax only in january 2011, if you start in october 2010 you'll have to start pay tax in january 2011).

Do you have a link for that? Couldn't find this on the website of the Revenue Department.

Edited June 27, 2010 by tombkk

[stingray]

To have a Work Permit you must have at least a minimum salary of 50'000 Baht (30'k for asian foreigner) I think i pay 3000 per month, ao this would be 6%. Every foreigners have to pay tax on his income. There is no exeption. And if you have a 20'000 Baht salary you would not qualify gfor a WP.

Be careful! You didn't explain for what purposes you want apply for a WP.

If you get hired by some company, you have to let them to do it for you.

If you have your own company, do it by your self (It isn't that difficult).

If you set up company must have 2 million capital registered (1 million not enought).

If you buy a set up business, i.s a existing company or what ever, than is another situation again. Make sure the company is depbt free and the tax clearance is up to date. Make sure paperwork of company is complete and do WP by your self again. Make sure the company qualify for a WP. Must be a 2 Million company 2 milion fro mthe begin of foundation, not a upgrated 1 Million to 2 million, this wold not qualify for a WP.

[tombkk]

Firstly, you will always pay social security contributions. Currently your employer pays 3% and you will pay 3% of your salary, but with a cap of 1500 Baht/month (i.e. 750 Baht each). Income tax depends on your salary. The first 150,000 Baht is tax free, add to that a maximum of 40,000 Baht deduction and 30,000 allowance, making for a total of 240,000 Baht of tax free salary (20,000 Baht/month). There's some additional smaller allowances if you are married and have children etc, but if you are single and you get paid more then 20,000 Baht/month, then you'll pay tax as well.

On the part between 150,000 and 500,000 Baht (after deductions and allowances) you will pay 10% tax, so if you'd earn 40,000 Baht/month, you'll have to pay 2000 Baht/month income tax (works out to 5%)

What's the tax structure for income from 500,000 Baht to 3.2 million Baht in annual salary?

This should help:

http://www.rd.go.th/publish/6045.0.html

[lopburi3]

Salary required for work permit is not the same as salary required for extension of stay from Immigration (much less in most cases) and in the case of some occupations that requirement is not even needed (teachers for one). Below is the Immigration requirement for those making application for extension of stay and not exempt:

ATTACHMENT TO ROYAL THAI POLICE HEADQUARTERS ORDER NO. 777/2551 dated November 25, 2008 Income Table Referred to Clause 2.1 (2)

Nationality

Minimum Income

1. European countries (except Russia), Australia continent, Canada, Japan, and U.S.A.

Baht 50,000/month

2. South Korea, Singapore, Taiwan and Hong Kong

Baht 45,000/month

3. Asian countries (except Japan, South Korea, Singapore, Taiwan, Hong Kong, Cambodia, Myanmar, Laos and Vietnam), South America continent, Countries in Eastern Europe, Countries in Central America, Mexico, Turkey, Russia and South Africa

Baht 35,000/month

4. African countries (except South Africa), Cambodia, Myanmar, Laos and Vietnam

Baht 25,000/month

[julemanden]

<br>

<br>Firstly, you will always pay social security contributions. Currently your employer pays 3% and you will pay 3% of your salary, but with a cap of 1500 Baht/month (i.e. 750 Baht each).<br><br>Income tax depends on your salary. The first 150,000 Baht is tax free, add to that a maximum of 40,000 Baht deduction and 30,000 allowance, making for a total of 240,000 Baht of tax free salary (20,000 Baht/month).<br><br>There's some additional smaller allowances if you are married and have children etc, but if you are single and you get paid more then 20,000 Baht/month, then you'll pay tax as well.<br><br>On the part between 150,000 and 500,000 Baht (after deductions and allowances) you will pay 10% tax, so if you'd earn 40,000 Baht/month, you'll have to pay 2000 Baht/month income tax (works out to 5%)<br>

<br><br>Thank you for your informative and intelligent reply. I appreciate your breakdown of the tax regulations.<br> They have tried to tell me that they way the are set up here that employees do not have to pay tax. Again last night I heard the boss tell a prospective employee that she would not pay tax but in her case he was only offering $15,000 bhat a month salary.<br>

<br><br><div><br></div><div>I only hear that minimum salary for a Farang is 50.000 a month, no matter what..... Is that true or ?</div><div><img src="http://static.thaivisa.com/forum/public/style_emoticons/default/annoyed.gif" alt="" class="bbc_emoticon"></div><div><br><br>

</div>

[Mario2008]

If for an extension of stay based on employment, it is indeed normally 50,000 baht for a Westerner. But not in all circumstances.

First of all, it is an immigration requirement. Not a requiremetn to get a work permit, only to get a one year extension of stay based on employment. if you have 40,000 a month and are marreid to a Thai antional or have a Thai child you can get an extension of stay based on that.

Secondly, it applies to extensions of stay based on 2.1 of the police order, not for extensions of stay for people employed as teachers, performers or members of the media.

If you can't meet the income requirement, you would need a muliptle entry non-immigrant visa and leave and re-enter the country every 90 days.

[Arkady]

Some companies like to hire staff as independent contractors, as they have no responsibility for them, and in that case they only need to deduct 3% (I think) specific business tax from the fees paid to them. That doesn't mean the independent contractors don't have to pay income tax. They are obliged to file their own tax returns as sole proprietors of a business. This route is only open to Americans who are allowed to work as sole proprietors under the Thai US Treaty of Amity and Economic Cooperation but the business must be registered with the Commerce Ministry and the Revenue Dept. Other foreigners are not permitted to be self-employed. They must work for an entity that deducts income tax at source and the rate is not 1.9%. See Revenue Dept's website for details http://www.rd.go.th/publish/6045.0.html . There is no income tax deduction for workers earning less than the minimum amount but this works out at only about B15,000 a month which is not enough to get a work permit and therefore impossible. Social security tax must be paid by all workers who are not directors, partners or sole proprietors of their businesses.