Is This Legal?

[Robin]

I have ben offered 'consultancy' work in Thailand. Thsi will mean working for 21 to 28 day periods in Thaialnd and then returning to UK for breaks. I will be employed by a UK company and apid by them in sterling in UK. They will bill the Thail company. How legal is this? will I be hit for tax on leaving the Kingdom? Should I be getting a business visa to get in the country, when it seems easier to arive on a 28 day non-visa entry. Any advice on thsi would be greatly appreciated as I do not want to break the law, byt equally do not want to make a big issue of this and end up paying tax.

Thanks in advance,

Robin.

[KEZMAC]

I have ben offered 'consultancy' work in Thailand.  Thsi will mean working for 21 to 28 day periods in Thaialnd  and then returning to UK for breaks.  I will be employed by a UK company and apid by them in sterling in UK.  They will bill the Thail company.  How legal is this?  will I be hit for tax on leaving the Kingdom?  Should I be getting a business visa to get in the country, when it seems easier to arive on a 28 day non-visa entry.  Any advice on thsi would be greatly appreciated as I do not want to break the law, byt equally do not want to make a big issue of this and end up paying tax.

Thanks in advance,

Robin.

<{POST_SNAPBACK}>

Q.1 In what circumstances would I become non-UK resident if I left the UK?

A. Normally if you leave the UK permanently or for 3 years or more or to work abroad full-time, you will become not resident and not ordinarily resident in the UK if

* your absence from the UK covers a complete tax year (i.e. 6 April to

5 April), and

* you spend less than 183 days in the UK during the tax year, and

* your visits to the UK do not average 91 days or more a tax year over a maximum of 4 years.

(For visits to the UK, days of arrival and departure are not normally counted as days spent in the UK.

Q.3 When I go to live or work abroad, will I continue to pay UK tax?

A. If you remain resident in the UK for UK tax purposes, normally you will be taxable on your income arising in the UK and overseas.

If you become non-resident, you will normally only be taxable on your income arising in the UK.

Q.5 Will I have to pay tax in the country to which I go to live or work?

A. The country to which you go to live or work may tax you on your world-wide income. This will depend on its own laws. You may need to ask the tax authority there for advice. More information on Double Taxation Treaties.

I think this may give you some guidance

Cheers

[Indo-Siam]

Thailand has no real provision for the situation you describe.

What is certain is that if you want to have a work permit to work in Thailand, you MUST have a Thai employer of record - and that Thai employer must have tax and VAT registrations, and be withholding personal income tax on some type of salary paid to you in Thailand.

Realistically, you are simply a "transitting businessman" who will come and go on 30 day "entries on arrival" - as do thousands of other foreign businessmen every day. If you make ten 22-day visits to Thailand per year, with 14 day intervals between them, you will be virtually invisble to Thai government.

If you make twelve 28-day visits to Thailand per year, with three-day intervals between visits, you may be deemed to be defacto "living and working in Thailand."

Your best course of action would probably be to obtain a one-year, multiple-entry Class B Thai visa from a Thai diplomatic post in UK - based on a company employment letter from your UK employer, stating that they will send you to Thailand frequently on business. THere si no guarantee that they will issue you such a visa, but they have dome so on many occasions.

You say nothing - and just smile! If asked, reply "I'm off to England, because that is where I get paid!"

Cheers!

Steve

Indo-Siam

[The Coder]

I think the below may apply to you:

Individuals residing for 180 days or more in Thailand for any calendar year are also subject to income tax on income from foreign sources if that income is brought into Thailand during the same taxable year that they are a resident.

Source: Thailand Board of Investment

[autonomous_unit]

If this UK company has a business relationship w/ the Thai consumer of the services, as suggested in your post, and/or expects to do business in Thailand in the future, they may not really want to do this! It is my impression that a lawyer with knowledge of the Thai legal landscape would advise them not to take such a risk, cautioning about potential fines etc. You also have to consider the risks for yourself being caught working illegally. This is not as simple to hide as a person telecommuting to a western job from their "vacation" spot in Thailand, particularly if this consultancy work involves being onsite with the Thai consumer.

Of course, lots of people here swear by operating under the radar, so you really have to make your own judgement as to your risks and benefits.

[astral]

I have ben offered 'consultancy' work in Thailand.  Thsi will mean working for 21 to 28 day periods in Thaialnd  and then returning to UK for breaks.  I will be employed by a UK company and apid by them in sterling in UK.  They will bill the Thail company.  How legal is this?  will I be hit for tax on leaving the Kingdom?  Should I be getting a business visa to get in the country, when it seems easier to arive on a 28 day non-visa entry.  Any advice on thsi would be greatly appreciated as I do not want to break the law, byt equally do not want to make a big issue of this and end up paying tax.

Thanks in advance,

Robin.

<{POST_SNAPBACK}>

Q.1 In what circumstances would I become non-UK resident if I left the UK?

A. Normally if you leave the UK permanently or for 3 years or more or to work abroad full-time, you will become not resident and not ordinarily resident in the UK if

* your absence from the UK covers a complete tax year (i.e. 6 April to

5 April), and

* you spend less than 183 days in the UK during the tax year, and

* your visits to the UK do not average 91 days or more a tax year over a maximum of 4 years.

(For visits to the UK, days of arrival and departure are not normally counted as days spent in the UK.

Q.3 When I go to live or work abroad, will I continue to pay UK tax?

A. If you remain resident in the UK for UK tax purposes, normally you will be taxable on your income arising in the UK and overseas.

If you become non-resident, you will normally only be taxable on your income arising in the UK.

Q.5 Will I have to pay tax in the country to which I go to live or work?

A. The country to which you go to live or work may tax you on your world-wide income. This will depend on its own laws. You may need to ask the tax authority there for advice. More information on Double Taxation Treaties.

I think this may give you some guidance

Cheers

<{POST_SNAPBACK}>

If you meet the above requirements to become non-resident for tax in the UK

you will be well advised to set up your own company in a tax haven and have all

your consulting payments funnelled through that company.

This will allow you to legally avoid UK tax on payments for the overseas work.

However since you indicate that you are on the payroll of the UK company this

may not be an option.

[Maestro]

Realistically, you are simply a "transitting businessman" who will come and go on 30 day "entries on arrival" - as do thousands of other foreign businessmen every day.  If you make ten 22-day visits to Thailand per year, with 14 day intervals between them, you will be virtually invisble to Thai government.

…unless, of course, somebody in the know, perhaps an employee of the Thai company with a grudge, grasses on Robin, in which case he’d get himself in trouble with the authorities.

I remember the case of a German marketing manager of a European pharmaceutical company who gave two days’ product training to the sales representatives at the offices of the Thai importer/distributor of the products. An employee of the Thai company either did not like the German’s face or had a grudge against his boss and called the labour department or the police (probably the latter) to report it. The company and the German got fined or, more likely, paid off the police.

Edited September 1, 2005 by maestro