Taxation Issues

[Stefan Beck]

To All,,

I have nearly finalized negotiations for employment with a Thai national company. I am the first westerner to be employed by them, and the only "fluffy-one' that they have thrown in, seems to be that I "manage" my personal taxation issues.

Is this a minefield ?

Also, are there any other "indemnity issues" that I should be aware of before signing any contracts.

All advice is warmly received and if necessary, I am not adverse to seeking compensatory legal advice.

Thank you in view of your advice

Kindest Regards

Stefan

[h90]

Not beeing an expert, but here automatic something was deducted from my salary, simillar to Austria. But again I am not an expert.

To All,,

I have nearly finalized negotiations for employment with a Thai national company. I am the first westerner to be employed by them, and the only "fluffy-one' that they have thrown in, seems to be that I "manage" my personal  taxation issues.

Is this a minefield ?

Also, are there any other "indemnity issues" that I should be aware of before signing any contracts.

All advice is warmly received and if necessary, I am not adverse to seeking compensatory legal advice.

Thank you in view of your advice

Kindest Regards

Stefan

<{POST_SNAPBACK}>

[lopburi3]

You are aware you need a work permit and some arrangement is being made to obtain one? Tax should not be too much of a problem as I believe the full rules are available in English (but I am not speaking from experience so other can give you better information on that).

[Stefan Beck]

Hi All,

yes!

They are doing all the work permits, visas, even "social benefits" like sickness, hospital visits (and the like). They have jsut suggested that I "manage" the tax. Strange - I don't know

Has anybody elese ever included "indemnity" clauses in their contracts - would they be of any real use anyway?

Stefan

[Tywais]

Hi All,

yes!

They are doing all the work permits, visas, even "social benefits" like sickness, hospital visits (and the like). They have jsut suggested that I "manage" the tax. Strange - I don't know

Has anybody elese ever included "indemnity" clauses in their contracts - would they be of any real use anyway?

Stefan

Perhaps they are saying you can arrange to get your tax ID card yourself. Since they are arranging everything else they must be deducting taxes from our salary at which case you will have to go to the tax office with tax ID card and file by yourself each year. Again easy enough as long as they supply you with the salary statement and tax deductions.

Edited September 29, 2005 by tywais

[steveromagnino]

I suspect this is just so if you have other income or there is some mistake made or you are not declaring something, that it is your problem.

Same as most companies; they are just spelling out you are responsible for personal tax.

However, if they are deducting correctly, it should be fine; just hire one of the finance dept staff to review and check a couple of times a year should be fine; the CFO will probably check and help you out to make sure; the company just probably wants to not be involved if you start moonlighting etc.

[Stefan Beck]

Thanks guys,

the reasons you have provided sound reasonable. When I spoke to them they made it sound as though the taxation issue was a "nightmare". They sound like they want to pay me the 'gross'. (I still suspect) and then leave it to me to pay (Monthly or yearly).

Maybe the ID card is part of this problem?

The comment regarding moonlighting or jut being responsible sounds reasonable as well. In Australia they MAKE the employer pay (PAYE) the tax - always.

Just a little different than I expected

Thanks for the advice - maybe the ID card is the real issue?

Kindest Stefan

[Tywais]

Thanks for the advice - maybe the ID card is the real issue?

Kindest Stefan

Certainly wouldn't lose any sleep over it. Taxation in Thailand is so incredibly simple compared to back home in the US. The tax office will even fill out the tax forms for you so you don't have to worry about that. The company will supply you with your annual salary statement at the beginning of the year and you have to the end of March to file your tax forms.

[Stefan Beck]

Thanks for the advice - maybe the ID card is the real issue?

Kindest Stefan

<{POST_SNAPBACK}>

Certainly wouldn't lose any sleep over it. Taxation in Thailand is so incredibly simple compared to back home in the US. The tax office will even fill out the tax forms for you so you don't have to worry about that. The company will supply you with your annual salary statement at the beginning of the year and you have to the end of March to file your tax forms.

<{POST_SNAPBACK}>

Again, thanks

any susbstance to "indemnity clauses" not sure they would hold water anyway - just trying to cover most of my basses.

Stefan

[samran]

Personally, like everywhere in the world, you need to take responsibility for your own tax affairs.

You need to get a Tax ID number, this is like a TFN in Australia, a NI number in the UK or a SSN in the US. Ask your accounting department on where the local office is. Get them to write some sort of letter of introduction confirming that you work for them. Take your contract passport and work permit and the office will be able to issue with a laminated card on the spot.

Work should deduct 10% of your salary automatically. Remember, depending on what you earn, you may need to pay more or less tax at the end of the financial year.

Tax scales are available here: http://www.rd.go.th/publish/6000.0.html

At the end of the year, you will receive your summary of earnings and deductions for the year from your firm.

You can then submit your tax return by April I think, where you will either have to cough up the difference between what has been automatically deducted and your true liability, or you get a refund.

[Stefan Beck]

Thank you Samran and all!,

web address and advice all appreciated. Seems easy enough.

Kindest Regards

Stefan

[ProThaiExpat]

Perhaps I am missing something here. Why hasn't the OP asked the party or parties he is negotiating with what they mean by the words in question?

Since none of the posters have suggested this is standard Thai employment contract language and have all more or less guessed at the meaning, is there a cultural issue here, that asking the pregnant question of the future employer, would be considered "challenging", impertinent or disrespectful in Thai business circles?

Surely a humble approach in asking "please detail for me what my duties and responsibilities that I am called upon to perform under this provision" would be productive of further detail. If the provision still leaves questions not fully explained orally, a simple letter from the employer explaining what is required to be performed under this provisooon is called for.

I certainly would not want an executive working for me to agree to the provisions of a contract he didn't understand. "Red herring" provisions in western contracts are not unknown and often used to "test" a prospective employee's abilities.

[Stefan Beck]

Dear ProThaiExpat

"Surely a humble approach in asking "please detail for me what my duties and responsibilities"

I have been employed by Unilever, Pharmacia (Now Pfizer - about 10 years in all) and quite a few other software companies where the job descriptions, roles and responsibilities were intricately itemized - but when correlated with the actual activities of the job, and subsequent "performance appraisals" - a totally different ball game

Where east meets west the reality is that they can terminate at their discretion. Employment contracts are enforceable by those with the most push. In Thailand, it is the employer - in Australia, it is the governments' industrial (employment) relations. They are now trying to change to 'work place agreements/ contracts' to assist employers (usually who employ less than 100 employees because so many aussie bludgers cry wolf at "unfair dismissals" and the employers have to cough up bucket-loads!)

My central issue of "taxation" is appeased (thanks to all). The concept of a standard Thai employment contract whilst notionally sounding useful (and I will still be kindly requesting one, and where possible translated into Englisi) would be virtually unenforceable by myself or by any litigation experts (cost vs benefits).

I take on board your advice and I will seek assistance when the final crunch time comes (next week). if you know of a reasonably priced employment lawyer please advise through my personal mail box because I am still interest in the "indemnity" issues.

Kindest Regards

Stefan

[Digger]

Perhaps I am missing something here but every company I have worked for as an employee in Thailand, has always deducted tax at source as well as social secuirty contributions and along with all other employees, they pay it to the appropriatte revenue depts concerned. Sounds to me that they want you off the books, and thus potentially saving them any need to match your social security contributions. Now if this is the case, I would bet they will also overlook your work permit.

Something sounds very fishy but perhaps I am just being overly cautious.

[samran]

Digger,

It depends how you structure your affairs during the year. In any case, its worth getting a Tax Number and submit a tax return, especially if you are due a refund.