Expat Salary In Home Country - Also Have To Pay Thai Tax?

[welovesundaysatspace]

Assume an expat is employed by the HQ in his home country and receives his salary there. Thus, he pays income tax back home. However, he is in charge of the Thai branch, thus living and working here. Does he also have to pay income tax in Thailand, thus paying it twice? How is income tax handled here; are there good documents about it for self-information?

[OriginalPoster]

What matters is where you work, not where you're paid. Work & live in Thailand and get paid in the US and you can claim the Foreign Earned Income Exclusion against your US taxes; but work & live in Thailand and you're also liable for Thai income taxes regardless of whether you you are paid in Thailand or elsewhere. That of course assumes that you don't hide the offshore income from the Thais, and that your company is one that plays by the book and would have gotten you a work permit and be reporting your income to the Thais. It only gets murky in cases where you are working in multiple countries, as only the money you earn for work performed in Thailand is taxed by the Thais. Typically in a case such as yours, your company would get you a work permit in Thailand and lend some sort of assistance in handling the taxes.

Edited July 30, 2011 by OriginalPoster

[welovesundaysatspace]

I was expecting something like that. I still wonder though how it is calculated and declared. Ie. how do they know what I earn, is calculated based upon my net or gross salary, etc.

Example:

My gross salary is 50.000 EUR/year. That's 4.166 EUR/month. Net salary, however, as my employer keeps a certain amount for income tax, secial security tax, etc. at home, will be only about 2.500 EUR/month. So what's the income tax I have to pay here? I read something about 50% or more, which would mean I had only or less than 1.250 EUR/month for a living, paying tax twice.

Also, I can receive a bonus every quarter as far as I reach my objectives, so how are bonuses handled?

[JimGant]

Does he also have to pay income tax in Thailand, thus paying it twice?

Not if your country has a tax treaty with Thailand. If so, you're not subject to double taxation.

Now, treaties differ, so you'd have to read the fine print on yours, but I suspect your home country taxes would trump having to pay Thai taxes.

If you did have to file in both countries -- and to avoid "double taxation," -- you'd get full credit for the taxes paid in one country against the other.

The treaty -- and the tax rules of your home country -- will together provide the basis of your taxation situation.

[welovesundaysatspace]

Yes, afaik there is a tax treaty with Thailand. Now I just wonder whether I can claim back the money at the end of the year with my tax declaration (thus living on a shoestring during the year while having a lot to spend at the end of the year) or if I just don't have to pay income tax at home. But I guess I have to research that with the officials back home

[OriginalPoster]

I was expecting something like that. I still wonder though how it is calculated and declared. Ie. how do they know what I earn, is calculated based upon my net or gross salary, etc.

Example:

My gross salary is 50.000 EUR/year. That's 4.166 EUR/month. Net salary, however, as my employer keeps a certain amount for income tax, secial security tax, etc. at home, will be only about 2.500 EUR/month. So what's the income tax I have to pay here? I read something about 50% or more, which would mean I had only or less than 1.250 EUR/month for a living, paying tax twice.

Also, I can receive a bonus every quarter as far as I reach my objectives, so how are bonuses handled?

Is your company large enough that it would have a HR department experienced in expat compensation? it seems that whoever will be handling your payroll ought to be able to tell you what income they would be reporting to the Thais.

It might be possible to prevent the Thais from finding out about your bonus income but not all companies will cooperate in doing that type of thing.

[Microwave]

I've been an expat in Thailand for a number of years and had my salary wired from the corporate HQ into my account in Thailand. I paid my home country taxes but no Thai taxes.

[OriginalPoster]

I've been an expat in Thailand for a number of years and had my salary wired from the corporate HQ into my account in Thailand. I paid my home country taxes but no Thai taxes.

Is your company paying the Thai taxes for you perhaps? If not, then I'm surprised that you have been able to get a work permit.

[Soutpeel]

I've been an expat in Thailand for a number of years and had my salary wired from the corporate HQ into my account in Thailand. I paid my home country taxes but no Thai taxes.

Is your company paying the Thai taxes for you perhaps? If not, then I'm surprised that you have been able to get a work permit.

My thought as well, if you are not paying Thai taxes, then in theroy at least you should not be able to get a WP.

In all likelyhood there is a "double contract" type deal going on, where "Microwave" will be "receiving" a minimal salary in Thailand (just enough for an extension of stay) and paying tax on this in Thailand.

And before somebody pipes up and says you can get a WP for being a volunteer and therefore not receiving a salary, yes we know...but its not the same thing

To answer the OP's question.....if there is a reciprocal tax agreement between your country and Thailand then, you would not be liable for taxation on the same amount of money, however if there is a difference between the applicable tax rates in the different countries you could be charged the difference between two, certainly if you home country charges the higher rate and you are paying the lower rate

Edited August 1, 2011 by Soutpeel

[OriginalPoster]

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Edited August 1, 2011 by OriginalPoster

[RedNIvar]

We have a couple of cases in our company where the arrangement was for the basic salary to be paid in the home country and all allowances to be paid here (housing, transportation, hardship, cost of living, etc). So you pay the taxes for your basic salary in your home country and the taxes for your allowances here in Thailand.