Tax-How To Pay Less?

[Maestro]

...

For 2013 tax rates see: http://www.kpmg.com/TH/en/IssuesAndInsights/ArticlesPublications/TaxNews/Documents/Tax%20Alert%20-%20Dec20.pdf

Thank you for the link to the new personal income tax rates. I have now added a link to that web page in this list of useful links in the pinned topic Important Visa Information

[KhunMoo]

I SO MUCH wish I could say something more diplomatically than: 'You are such a Whiner!'

However I have to admit that was my immediate reaction, when I read your call for help on reducing your taxes. Not that I in principle cannot appreciate your quest to reduce the amount to be paid - but the focus you give the percentage is what bothers me. 'Tax evasion' is a national sport in my country, next to soccer - however it also has to be seen in light of the general tax levels.

I am a Dane. In Denmark, taxes are high. A tax level of 30% would be 'PARADISE' here. Even people who receive social benefits or pensions have to pay taxes that are way above the 30% you mention.

So therefore, I cannot help thinking that your point of view is almost like the one of a spoiled child... I would love to get DOWN to a tax level of 30%, if that was possible. The total average tax burden here is 49.1%; in Romania it is the lowest in the EU with a 28.6% level. The average EU citizen pays 39.9%.

You might claim that since we are talking about Thailand, tax paying in Denmark is out of relevance. On the contrary! Compared to Denmark, the purchasing power of our money is 3-5 times higher if spent in Thailand. And I am sure this goes for people of US, UK and other nationalities as well! And if a person lives in Thailand, pays the taxes there, spends money for the daily life there - there will be more surplus to save or spend at home in the countries we - each and everyone - come from. Right?

So why be whining about 30% tax?

I simply cannot understand you.

This is BS!

I am a fellow countryman - and i payed 62%.....SIXTY-TWO PERCENT in just my personal income tax. As my salary was quite high, and around 2.000.000 DKK/year, the Fucxxxx Danish government STOLE almost 1,3 million DKK from me every year!

That was, with the exchange-rate, at that time approximately, almost 7 million baht! In PERSONAL taxes, a year...do you really think that is fair?....How the hell can one person, be a burden of 7 million baht on a society? - oh yeah, i remember, i created a company that employed more than 100 people, that also payed taxes, and produced services, that we sold to companies, outside crap-communist-Denmark......Which again was a benefit, to that communist-crap-country.

Oh yes, what a burden to society I was...shame on me.

The only thing that completely insane behavior facilitated, was that i moved everything i could here, to Asia, sold/closed the rest and FIRED everyone in Denmark - so they are now unemployed, collecting just under 100.000 baht a month in unemployment support, instead of paying taxes - it is so stupid, and destructive, that i simply can't understand why Danes and their politicians, can't see that it's economical suicide...

Here the i get the 55.000 baht/month that is required for my nationality to uphold my work permit - the rest is transferred directly, and untaxed to HSBC (HK) in USD. Must people i talk to, do the exactly same thing...

Edited May 5, 2013 by KhunMoo

[AhFarangJa]

Become A politician

[yourauntbob]

I SO MUCH wish I could say something more diplomatically than: 'You are such a Whiner!'

However I have to admit that was my immediate reaction, when I read your call for help on reducing your taxes. Not that I in principle cannot appreciate your quest to reduce the amount to be paid - but the focus you give the percentage is what bothers me. 'Tax evasion' is a national sport in my country, next to soccer - however it also has to be seen in light of the general tax levels.

I am a Dane. In Denmark, taxes are high. A tax level of 30% would be 'PARADISE' here. Even people who receive social benefits or pensions have to pay taxes that are way above the 30% you mention.

So therefore, I cannot help thinking that your point of view is almost like the one of a spoiled child... I would love to get DOWN to a tax level of 30%, if that was possible. The total average tax burden here is 49.1%; in Romania it is the lowest in the EU with a 28.6% level. The average EU citizen pays 39.9%.

You might claim that since we are talking about Thailand, tax paying in Denmark is out of relevance. On the contrary! Compared to Denmark, the purchasing power of our money is 3-5 times higher if spent in Thailand. And I am sure this goes for people of US, UK and other nationalities as well! And if a person lives in Thailand, pays the taxes there, spends money for the daily life there - there will be more surplus to save or spend at home in the countries we - each and everyone - come from. Right?

So why be whining about 30% tax?

I simply cannot understand you.

Sounds like you have a problem with your countries tax code and not this poster.

[Naroge]

you are responsible to file your own income tax declaration the following year,

not strictly true, my company does all the filing etc for me...all I get every year is a letter from the taxman saying I am "clear" for that year...in 12 years here never had anything back from them and never had to pay in addtional.

Strictly legally speaking, you and only you are responsible for your tax filing. In practice though, many companies handle this for the farangs. If the income during the year is fairly constant it is possible to use the last withholding tax in December to balance out the yearly tax withheld so that nothing will be paid or received after final tax filing the following year.

I dont pay withholding tax..I pay income tax, not quite the same thing..I have a tax number...withholding tax is something else

I haven't said that "you" pay WHT (Withholding Tax). The "payer" (the company in this case) pays WHT according to Thai Tax law, which later on is off-set to the Income Tax that the Payee has to pay.

Just to clarify.

[Joe Mamma]

Best to arrive here in retirement mode, only earning less is going to lower your taxes. See a pro.

[mortenaa]

30% tax over Bt 1 m was last year's rate. For 2013 all personal tax rates are reduced and Bt 1-2 is 25%. Of course that is a marginal rate and only applies to income over Bt 1 m. Thai personal income tax rates have been lowered a lot over the years and are now pretty reasonable with many personal deductions you can opt for like life insurance, long-term equity and retirement funds that make a huge difference. When I first came here there was a top marginal rate of tax of around 57% over Bt 1m, vs today's top rate of 35% over Bt 4m. Of course, foreign companies paid a lot expats offshore to avoid the iniquitous top rate of tax in the bad old days but that's another story. Otherwise few top earners would have agreed to work in Thailand and have much less take home pay than elsewhere and the companies would have had to tax equalise them like American companies do or did which is very expensive for the company and made it not worth hiring an expat at all. Very few dare companies now and no real need to do it any more. So the Thai RD makes more from expats by charging less. The same would apply, if they reduced the taxes on wine!

For 2013 tax rates see: http://www.kpmg.com/TH/en/IssuesAndInsights/ArticlesPublications/TaxNews/Documents/Tax%20Alert%20-%20Dec20.pdf

These rates are still not effective. Let's see if they ever will be...

[utalkin2me]

30% tax over Bt 1 m was last year's rate. For 2013 all personal tax rates are reduced and Bt 1-2 is 25%. Of course that is a marginal rate and only applies to income over Bt 1 m. Thai personal income tax rates have been lowered a lot over the years and are now pretty reasonable with many personal deductions you can opt for like life insurance, long-term equity and retirement funds that make a huge difference. When I first came here there was a top marginal rate of tax of around 57% over Bt 1m, vs today's top rate of 35% over Bt 4m. Of course, foreign companies paid a lot expats offshore to avoid the iniquitous top rate of tax in the bad old days but that's another story. Otherwise few top earners would have agreed to work in Thailand and have much less take home pay than elsewhere and the companies would have had to tax equalise them like American companies do or did which is very expensive for the company and made it not worth hiring an expat at all. Very few dare companies now and no real need to do it any more. So the Thai RD makes more from expats by charging less. The same would apply, if they reduced the taxes on wine!

For 2013 tax rates see: http://www.kpmg.com/TH/en/IssuesAndInsights/ArticlesPublications/TaxNews/Documents/Tax%20Alert%20-%20Dec20.pdf

These rates are still not effective. Let's see if they ever will be...

It says "effective January 1, 2013". Are they in fact no in effect yet?

[coffeeman]

is it legal for my company to pay me a minimum here in thailand

and then wire the rest overseas to my bank back home?

what are the legal ramifications of this?

if it was possible would I be taxed twice?

obviously my boss doesn't want to do anything illegal to jeopodize his business here.

so he asked me to look into it and see if there are ways to do it legally and he has no problems with it.

why can't he just pay me the minimum for my visa here, and the rest he can just wire to my account broad?

[Naroge]

is it legal for my company to pay me a minimum here in thailand

and then wire the rest overseas to my bank back home?

what are the legal ramifications of this?

if it was possible would I be taxed twice?

obviously my boss doesn't want to do anything illegal to jeopodize his business here.

so he asked me to look into it and see if there are ways to do it legally and he has no problems with it.

why can't he just pay me the minimum for my visa here, and the rest he can just wire to my account broad?

Anything the Thai company pays you, assuming you have done the work in Thailand, is taxable in Thailand. Asking them to pay it out in different places doesn't change that.

[coffeeman]

is it legal for my company to pay me a minimum here in thailand

and then wire the rest overseas to my bank back home?

what are the legal ramifications of this?

if it was possible would I be taxed twice?

obviously my boss doesn't want to do anything illegal to jeopodize his business here.

so he asked me to look into it and see if there are ways to do it legally and he has no problems with it.

why can't he just pay me the minimum for my visa here, and the rest he can just wire to my account broad?

Anything the Thai company pays you, assuming you have done the work in Thailand, is taxable in Thailand. Asking them to pay it out in different places doesn't change that.

yes, but if the job is done for X amount of dollars as my visa and tax rate applies, how is that illegal?

I mean the thai government knows my salary is now this amount, so why would they care if I am being paid my company overseas of other money which they have no idea is? as I am declaring the amount which they have agreed on.

also how much do I need to declare for a thai visa?

where can I find out what my countries required amounts are. I hold dual nationalities.

Edited May 6, 2013 by coffeeman

[mortenaa]

30% tax over Bt 1 m was last year's rate. For 2013 all personal tax rates are reduced and Bt 1-2 is 25%. Of course that is a marginal rate and only applies to income over Bt 1 m. Thai personal income tax rates have been lowered a lot over the years and are now pretty reasonable with many personal deductions you can opt for like life insurance, long-term equity and retirement funds that make a huge difference. When I first came here there was a top marginal rate of tax of around 57% over Bt 1m, vs today's top rate of 35% over Bt 4m. Of course, foreign companies paid a lot expats offshore to avoid the iniquitous top rate of tax in the bad old days but that's another story. Otherwise few top earners would have agreed to work in Thailand and have much less take home pay than elsewhere and the companies would have had to tax equalise them like American companies do or did which is very expensive for the company and made it not worth hiring an expat at all. Very few dare companies now and no real need to do it any more. So the Thai RD makes more from expats by charging less. The same would apply, if they reduced the taxes on wine!

For 2013 tax rates see: http://www.kpmg.com/TH/en/IssuesAndInsights/ArticlesPublications/TaxNews/Documents/Tax%20Alert%20-%20Dec20.pdf

These rates are still not effective. Let's see if they ever will be...

It says "effective January 1, 2013". Are they in fact no in effect yet?

According to my account, no. I asked about this three times so far this year. I'm still paying the "old" rates.

[Naroge]

is it legal for my company to pay me a minimum here in thailand

and then wire the rest overseas to my bank back home?

what are the legal ramifications of this?

if it was possible would I be taxed twice?

obviously my boss doesn't want to do anything illegal to jeopodize his business here.

so he asked me to look into it and see if there are ways to do it legally and he has no problems with it.

why can't he just pay me the minimum for my visa here, and the rest he can just wire to my account broad?

Anything the Thai company pays you, assuming you have done the work in Thailand, is taxable in Thailand. Asking them to pay it out in different places doesn't change that.

yes, but if the job is done for X amount of dollars as my visa and tax rate applies, how is that illegal?

I mean the thai government knows my salary is now this amount, so why would they care if I am being paid my company overseas of other money which they have no idea is? as I am declaring the amount which they have agreed on.

also how much do I need to declare for a thai visa?

where can I find out what my countries required amounts are. I hold dual nationalities.

I'm not sure if I understand your "illegal" question correctly, but it is obvious that everything the Thai company pays you, wherever that might be payed out, they are legally obliged to report to relevant Thai authority. And unless they are cooking the books, the auditor will easily find out what they have paid you. This is the same for most if not all countries. But as you mentioned that your boss wants to follow the law I assume he will not cook the books.

Regarding minimum salaries there are guidelines around somewhere, but these are not issued by any Thai authority so would not hold in court should a case end up there.

[Soutpeel]

is it legal for my company to pay me a minimum here in thailand

and then wire the rest overseas to my bank back home?

what are the legal ramifications of this?

if it was possible would I be taxed twice?

obviously my boss doesn't want to do anything illegal to jeopodize his business here.

so he asked me to look into it and see if there are ways to do it legally and he has no problems with it.

why can't he just pay me the minimum for my visa here, and the rest he can just wire to my account broad?

Anything the Thai company pays you, assuming you have done the work in Thailand, is taxable in Thailand. Asking them to pay it out in different places doesn't change that.

oh yes it does..

[Soutpeel]

is it legal for my company to pay me a minimum here in thailand

and then wire the rest overseas to my bank back home?

what are the legal ramifications of this?

if it was possible would I be taxed twice?

obviously my boss doesn't want to do anything illegal to jeopodize his business here.

so he asked me to look into it and see if there are ways to do it legally and he has no problems with it.

why can't he just pay me the minimum for my visa here, and the rest he can just wire to my account broad?

Anything the Thai company pays you, assuming you have done the work in Thailand, is taxable in Thailand. Asking them to pay it out in different places doesn't change that.

yes, but if the job is done for X amount of dollars as my visa and tax rate applies, how is that illegal?

I mean the thai government knows my salary is now this amount, so why would they care if I am being paid my company overseas of other money which they have no idea is? as I am declaring the amount which they have agreed on.

also how much do I need to declare for a thai visa?

where can I find out what my countries required amounts are. I hold dual nationalities.

I'm not sure if I understand your "illegal" question correctly, but it is obvious that everything the Thai company pays you, wherever that might be payed out, they are legally obliged to report to relevant Thai authority. And unless they are cooking the books, the auditor will easily find out what they have paid you. This is the same for most if not all countries. But as you mentioned that your boss wants to follow the law I assume he will not cook the books.

Regarding minimum salaries there are guidelines around somewhere, but these are not issued by any Thai authority so would not hold in court should a case end up there.

and you have answered your own statement..the key phrase is "the thai company"

and technically speakings the "illegal" question is actually a gray area in Thai tax law, provided the company sets its up properly BTW they are not cooking the books, Thai books are perfectly straight...

Edited May 6, 2013 by Soutpeel

[Soutpeel]

is it legal for my company to pay me a minimum here in thailand

and then wire the rest overseas to my bank back home?

what are the legal ramifications of this?

if it was possible would I be taxed twice?

obviously my boss doesn't want to do anything illegal to jeopodize his business here.

so he asked me to look into it and see if there are ways to do it legally and he has no problems with it.

why can't he just pay me the minimum for my visa here, and the rest he can just wire to my account broad?

Anything the Thai company pays you, assuming you have done the work in Thailand, is taxable in Thailand. Asking them to pay it out in different places doesn't change that.

yes, but if the job is done for X amount of dollars as my visa and tax rate applies, how is that illegal?

I mean the thai government knows my salary is now this amount, so why would they care if I am being paid my company overseas of other money which they have no idea is? as I am declaring the amount which they have agreed on.

also how much do I need to declare for a thai visa?

where can I find out what my countries required amounts are. I hold dual nationalities.

To answer the first part of your question..ask your company about "double contracts" they will know what you are talking about, they will either entertain it or they will not..they will tell you...

Howver the part of your comment about the company wiring the money from the Thai company to an offshore account and not paying the income tax could be interpreted as being illegal...

Edited May 6, 2013 by Soutpeel

[Soutpeel]

Regarding minimum salaries there are guidelines around somewhere, but these are not issued by any Thai authority so would not hold in court should a case end up there.

Minimum salaries are mandated by Thai immigration per nationality, this doesn mean this is the minimum a company must pay you, this is to do with minimum salaries at which an extension of stay will be granted by immigration..ie you dont leave the country every 3 months..you report your address to immgration every 90 days and if you choose to never have to leave the country..

[coffeeman]

is it legal for my company to pay me a minimum here in thailand

and then wire the rest overseas to my bank back home?

what are the legal ramifications of this?

if it was possible would I be taxed twice?

obviously my boss doesn't want to do anything illegal to jeopodize his business here.

so he asked me to look into it and see if there are ways to do it legally and he has no problems with it.

why can't he just pay me the minimum for my visa here, and the rest he can just wire to my account broad?

Anything the Thai company pays you, assuming you have done the work in Thailand, is taxable in Thailand. Asking them to pay it out in different places doesn't change that.

yes, but if the job is done for X amount of dollars as my visa and tax rate applies, how is that illegal?

I mean the thai government knows my salary is now this amount, so why would they care if I am being paid my company overseas of other money which they have no idea is? as I am declaring the amount which they have agreed on.

also how much do I need to declare for a thai visa?

where can I find out what my countries required amounts are. I hold dual nationalities.

I'm not sure if I understand your "illegal" question correctly, but it is obvious that everything the Thai company pays you, wherever that might be payed out, they are legally obliged to report to relevant Thai authority. And unless they are cooking the books, the auditor will easily find out what they have paid you. This is the same for most if not all countries. But as you mentioned that your boss wants to follow the law I assume he will not cook the books.

Regarding minimum salaries there are guidelines around somewhere, but these are not issued by any Thai authority so would not hold in court should a case end up there.

oh, my company is a multi national company, s

so there are offices here and in other countries

so I meant pay me the minimum here, then pay me the rest out of one of our other offices which has a lower tax rate

possible? or do we have to declare that money abroad too so I will be tax here and there ?

[utalkin2me]

30% tax over Bt 1 m was last year's rate. For 2013 all personal tax rates are reduced and Bt 1-2 is 25%. Of course that is a marginal rate and only applies to income over Bt 1 m. Thai personal income tax rates have been lowered a lot over the years and are now pretty reasonable with many personal deductions you can opt for like life insurance, long-term equity and retirement funds that make a huge difference. When I first came here there was a top marginal rate of tax of around 57% over Bt 1m, vs today's top rate of 35% over Bt 4m. Of course, foreign companies paid a lot expats offshore to avoid the iniquitous top rate of tax in the bad old days but that's another story. Otherwise few top earners would have agreed to work in Thailand and have much less take home pay than elsewhere and the companies would have had to tax equalise them like American companies do or did which is very expensive for the company and made it not worth hiring an expat at all. Very few dare companies now and no real need to do it any more. So the Thai RD makes more from expats by charging less. The same would apply, if they reduced the taxes on wine!

For 2013 tax rates see: http://www.kpmg.com/TH/en/IssuesAndInsights/ArticlesPublications/TaxNews/Documents/Tax%20Alert%20-%20Dec20.pdf

These rates are still not effective. Let's see if they ever will be...

It says "effective January 1, 2013". Are they in fact no in effect yet?

According to my account, no. I asked about this three times so far this year. I'm still paying the "old" rates.

But the numbers are actually calculated at the end of the year. Anyway, I guess we'll all find out for sure next tax season.

[Naroge]

Anything the Thai company pays you, assuming you have done the work in Thailand, is taxable in Thailand. Asking them to pay it out in different places doesn't change that.

I mean the thai government knows my salary is now this amount, so why would they care if I am being paid my company overseas of other money which they have no idea is? as I am declaring the amount which they have agreed on.

also how much do I need to declare for a thai visa?

where can I find out what my countries required amounts are. I hold dual nationalities.

I'm not sure if I understand your "illegal" question correctly, but it is obvious that everything the Thai company pays you, wherever that might be payed out, they are legally obliged to report to relevant Thai authority. And unless they are cooking the books, the auditor will easily find out what they have paid you. This is the same for most if not all countries. But as you mentioned that your boss wants to follow the law I assume he will not cook the books.

Regarding minimum salaries there are guidelines around somewhere, but these are not issued by any Thai authority so would not hold in court should a case end up there.

oh, my company is a multi national company, s

so there are offices here and in other countries

so I meant pay me the minimum here, then pay me the rest out of one of our other offices which has a lower tax rate

possible? or do we have to declare that money abroad too so I will be tax here and there ?

Well, if you work for a multi national company they certainly have the expertise to handle this matter either internally or externally, much better than can be handled here. They also know the details of your work and employment etc which could effect the options available for you.

Wishing yo all the best, and happy working in Thailand.

[coffeeman]

so if my boss paid me in thailand the minimum for my visa through our thai office and into my thai bank and registered it with the local tax department here,.

then my company could wire the money into my account abroad and pay my company which is registered in another country as a consultant?

[Cheapcharly]

poor khun moo. the guy from Denmark...

this is why europe is collapsing. nobody want work for peanuts or work for guys who do nothing. (like me:p)

yes i understand his pain...

even me i try to avoid to pay tax in the usa. i want make minimum money. in fact I live better thinking I don't need to stress anymore. I can just live in Thailand when I want with 5000$ a year and not pay tax in usa. i can go to usa make some money and come back...

i can just enjoy life and not pay dumb taxes to do a dumb job to pay dumb politicians with their dumb laws....

com on guys... in life you don't need big cars, big boat, big house...

if you understand that, you will live much better...

[NeverSure]

I SO MUCH wish I could say something more diplomatically than: 'You are such a Whiner!'

However I have to admit that was my immediate reaction, when I read your call for help on reducing your taxes. Not that I in principle cannot appreciate your quest to reduce the amount to be paid - but the focus you give the percentage is what bothers me. 'Tax evasion' is a national sport in my country, next to soccer - however it also has to be seen in light of the general tax levels.

I am a Dane. In Denmark, taxes are high. A tax level of 30% would be 'PARADISE' here. Even people who receive social benefits or pensions have to pay taxes that are way above the 30% you mention.

So therefore, I cannot help thinking that your point of view is almost like the one of a spoiled child... I would love to get DOWN to a tax level of 30%, if that was possible. The total average tax burden here is 49.1%; in Romania it is the lowest in the EU with a 28.6% level. The average EU citizen pays 39.9%.

You might claim that since we are talking about Thailand, tax paying in Denmark is out of relevance. On the contrary! Compared to Denmark, the purchasing power of our money is 3-5 times higher if spent in Thailand. And I am sure this goes for people of US, UK and other nationalities as well! And if a person lives in Thailand, pays the taxes there, spends money for the daily life there - there will be more surplus to save or spend at home in the countries we - each and everyone - come from. Right?

So why be whining about 30% tax?

I simply cannot understand you.

Yeah, but out of that you get "free" health care.

In the US if single, you'd have to make US$183,000 to get to 30% if a single person. If married, you'd have to hit $223,000, and that's only on the amount over those figures. For the amount under those figures, it would range from 10% on a sliding scale known as the "marginal" tax rates.

I'd be whining.