Hello,

I am being made an offer by an American firm to work for them in Bangkok. Looking through the site, it isn't quite clear what I can expect, so I am hoping to get some clarification.

Will I be taxed on my salary and benefits package (car, accommodation, children's education, etc) or just on my salary?

My salary will be around 250,000 baht a month before benefits. This will be subject to 30% tax?

I am just wanting to find out as much detail as I can to make sure in my negotiations with the company I get these issues resolved before I sign a contract.

Kind Regards and thank.

Hello,

I am being made an offer by an American firm to work for them in Bangkok. Looking through the site, it isn't quite clear what I can expect, so I am hoping to get some clarification.

Will I be taxed on my salary and benefits package (car, accommodation, children's education, etc) or just on my salary?

My salary will be around 250,000 baht a month before benefits. This will be subject to 30% tax?

I am just wanting to find out as much detail as I can to make sure in my negotiations with the company I get these issues resolved before I sign a contract.

Kind Regards and thank.

Maybe read through this thread?

http://www.thaivisa.com/forum/index.php?/topic/559652-Taxes From Salary

Of course we are not allowed to mention double contracts are we, when talking about taxes in Thailand...

You will be taxed however their is an 85,000 USD exemption for working overseas , and yes benefits are taxable ...... You tax rate will be much less than 30 pct because it will be your total MINUS the 85,000 USD ...... So you actuall taxable amount will end up being TOTAL - 85,000 - any deductions .... ending up more in the 10 percent or less bracket ....... and that 10 percent on the left over 10,000 or so not 10 percent of the total before the exemption and deductions (I used 0 for benefits because I dont know the amount so it will be more) ... but you get the idea

You can deduct moving expenses and lot of other stuff as well.

You are looking at much less than you probabbly think for US taxes. .... My guess would be somewhere between 1000 and 3000 including the "package" As long as you take all the deductions you are entitled to.

AS far as Thai tax i'm not really up on that ....

As far as Thai taxes go, you will be taxed on whatever the company reports to the Thai government. Most likely, this will include the full amount of the allowances you receive. But you should definitely ask this question. Thailand uses a graduated tax scale that tops out at 37% on income over 4 million baht. You may just barely reach this point. Nearly all of your income will hit the 30% Thai tax bracket. Again, if your benefits are reported to the government, you will be responsible for 30% tax on them.

On the US side, you will receive an approximately $95,000 USD exemption for earned income overseas for 2012. For 2013, this will be adjusted for inflation. After this is reached, you will additionally be taxed at the US marginal tax rate for any income in excess of this. However, you can deduct the Thai taxes you paid on any income over $95,000. Thus, your tax scheme essentially works out to:

Thai taxes on income below $95k.

The higher of Thai taxes or US taxes on income above $95k.

This isn't strictly correct, as each country has slightly different exemptions that distort what each country considers to be your taxable income, but the above is correct to a first order approximation.

Also, from the US perspective, it is irrelevant whether or not your benefits are reported. You must declare them as income anyway. Of course, if you elect not to and your company doesn't tell anyone, there is almost no chance of anyone finding out.

In my experience, most people find their taxes increase moving to Thailand vs. earning the same amount of money in the US. This is because the Thai 30% bracket begins much earlier (at only 1 million baht, or approximately $33,000 USD) than the brackets in the US. (e.g. the 28% bracket in the US doesn't even kick in until $142k).

Note that you are freed from state income tax, so if you are moving from a state in the US that has income taxes, you may find you save a bit here.

You can see the Thai tax schedule at the following link:

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

So if you are considering taking this job for the tax benefits, my advice is don't. There aren't any. With the exchange rates as they are today, it is extremely difficult to pay less taxes in Thailand than in a state like Nevada. You only win in Thailand by avoiding the 7.2% FICA and Medicare tax. But for most people on the higher end of the payscale, they find this is offset by the higher income taxes they pay anyway.

Teachers making 30,000 baht a month may have a slight benefit. But an executive on an expat package doesn't see much of anything at all in the way of savings unless he structures his compensation specifically to avoid it. Hint: cut your salary by half, and sign your wife on the payroll as a ghost employee for the other half. That moves the 30% Thai income bracket to a more reasonable 2 million baht. Still more than the US, but much less eggregious.

But an executive on an expat package doesn't see much of anything at all in the way of savings unless he structures his compensation specifically to avoid it. Hint: cut your salary by half, and sign your wife on the payroll as a ghost employee for the other half. That moves the 30% Thai income bracket to a more reasonable 2 million baht. Still more than the US, but much less eggregious.

Or see if the company will entertain a double contract... and your tax burden in Thailand could be next to nothing if its done right.....

But not sure you would deal with this with your IRS...