Thailand Employment

[Jaybonnaza]

Ok this is the situration..

Ok my company (singapore based but thai registration also) has a contract with a client, the client's owner and financial director have asked many times, what i can only say is a dream for me, they have asked that i become a full time employee. - normally this means absolutely nothing to me, but from a company i personally feel is going somewhere, in a very good market, with a long track record of success.

Now comes the crunch point.

I do not have a clue where to start, when i was employed by IBM in Asia i had my salary paid in to HK.

In Thailand the tax situation is based entirely on bracket incomes when employed compared to being a business, as a business i would charge 250k baht a month, pay tax of around 20%.

As a individual i would expect no less than 150k baht up to 225k baht a month, and as my role expands which it will as the entire side of the company ICT set up was learned as a child as basic skills, then certified qualifications in 2005.

The problem here is they have asked me to choose my own salary, i do not wish to appear greedy but i don't want to not be paid well.

which is the problem as the more you earn in Thailand the higher your income tax is.

Now reading online, i believe i would be better to take a minimum 50k baht onshore and have the remainder paid offshore...

Illegal Y/N?

If not illegal where would be the best place to have the payments ? - SG/HK/Gibraltar

Otherwise if i earn say 250k baht a month i will be paying around 50% to the tax man from my understanding on-shore.

Not good for me, no good for them!!

Company is Thai Registered but majority farang employees in the sector (HQ i will be working from)

They cover all work permits and so on, but does this mean i have to give up my current work permit to work for them.

[Soutpeel]

"Illegal Y/N?"

If not illegal where would be the best place to have the payments ? - SG/HK/Gibraltar

Yes and No..depends how its set up... .....BTW and the amount your declaring in Thailand ie THB 50k is too low, better going for around THB 80-100k on the books in Thailand

Lets put it this way..if Thai companys pays directly into your offshore account from Thailand without declaring the tax on this amount, this would be illegal, so the key is being paid the offshore portion from a company which has no direct connection with Thailand

Ask your company if they understand the concept of a double contract,on face value HK would be your best bet, and would say stay the well away from Gib

[thaicbr]

Also can you not get accommodation allowance as part of the salary. Health insurance etc. I believe these do not get taxed as salary.

Sent from my i-mobile i-STYLE Q6

[Jaybonnaza]

Also can you not get accommodation allowance as part of the salary. Health insurance etc. I believe these do not get taxed as salary.

Sent from my i-mobile i-STYLE Q6

Hi there Health Insurance is inc currently, i have not discussed accommodation allowance, and the company knows my property situation .. is it wise to ask for such as well?

Is there a rebate, or tax break on having such?

[Jaybonnaza]

"Illegal Y/N?"

If not illegal where would be the best place to have the payments ? - SG/HK/Gibraltar

Yes and No..depends how its set up... .....BTW and the amount your declaring in Thailand ie THB 50k is too low, better going for around THB 80-100k on the books in Thailand

Lets put it this way..if Thai companys pays directly into your offshore account from Thailand without declaring the tax on this amount, this would be illegal, so the key is being paid the offshore portion from a company which has no direct connection with Thailand

Ask your company if they understand the concept of a double contract,on face value HK would be your best bet, and would say stay the well away from Gib

double contract, i will approach with them.

Gib i thought off as i do banking there so was thinking of the benefit of using existing channels.

But if it needs to be HK i will be happy with this

[Soutpeel]

"Illegal Y/N?"

If not illegal where would be the best place to have the payments ? - SG/HK/Gibraltar

Yes and No..depends how its set up... .....BTW and the amount your declaring in Thailand ie THB 50k is too low, better going for around THB 80-100k on the books in Thailand

Lets put it this way..if Thai companys pays directly into your offshore account from Thailand without declaring the tax on this amount, this would be illegal, so the key is being paid the offshore portion from a company which has no direct connection with Thailand

Ask your company if they understand the concept of a double contract,on face value HK would be your best bet, and would say stay the well away from Gib

double contract, i will approach with them.

Gib i thought off as i do banking there so was thinking of the benefit of using existing channels.

But if it needs to be HK i will be happy with this

The reason I mentioned Gib...too close to Europe for me... but if your already doing stuff through there and happy with it...then stick with it...

[fletchsmile]

"Illegal Y/N?"

If not illegal where would be the best place to have the payments ? - SG/HK/Gibraltar

Yes and No..depends how its set up... .....BTW and the amount your declaring in Thailand ie THB 50k is too low, better going for around THB 80-100k on the books in Thailand

Lets put it this way..if Thai companys pays directly into your offshore account from Thailand without declaring the tax on this amount, this would be illegal, so the key is being paid the offshore portion from a company which has no direct connection with Thailand

Ask your company if they understand the concept of a double contract,on face value HK would be your best bet, and would say stay the well away from Gib

Work performed in Thailand is taxable in Thailand, regardless of where it is paid, and by whom. That's the legal position.

Paying offshore from a company which has no direct connection with Thailand is still taxable in Thailand if that work is actually performed in Thailand.

The "key" and "double contract" you refer to is simply making sure that the trail is minimised, not that it is legalised. Yes a lot of people do it, as the risk of it being caught with payment offshore by an offshore company is very low.

For what you describe to be actually legal, the offshore payment by an offshore company would have to relate to work offshore/ performed outside Thailand. eg having regional responsibilities you can show you travel outside of Thailand to do.

To OP,

One thing you could do is quote a "net" figure to your employer, and ask they sort out all the tax, and get them to put in your contract you're paid net, with the employer reponsible for the tax.

Cheers

Fletch

[mav000]

I had the same situation, told to let them know how much salary I wanted. We agreed, and I had 10 great years working here, now retired in Chiang Mai.

First, negotiate NET SALARY, AFTER TAX. Meaning, they pay your taxes. This is commonly done here.

Second, negotiate your housing allowance separate from your salary. In the salary range you mentioned, I would think 30,000B per month would be in the ballpark.

After that I am not sure about your job, but if lots of travel/driving involved, you want to include driver, car, gas allowance (5-8000b mo.).

Also, make sure they will handle all expenses involved with work permit, and handling the entire process.

My salary was paid and deposited in local bank here, then I would wire transfer to U.S. bank.

Good luck.

[samran]

One thing that people are forgetting to mention is that if the income earned quite legitimately offshore is transfered into Thailand in the year it is earned, then it is taxable in Thailand. A dollar earned offshore on Dec 31 but transferred to Thailand on 1 Jan however, can't be touched by the RD here.

[Spoonman]

on 250k per month you would be payin around 60k in tax................ where are you getting the 50% figure from ?

[p_brownstone]

As a staring point, any income or benefit received in Thailand is Taxable.

That includes benefits such as Accommodation Allowances, childrens' School Fees, use of a Company Car etc. etc.. Even a situation where you receive a salary "after Tax" gets complicated because the Revenue Department - if they inspect the Company Accounts and want to be difficult - can decide (rightly of course) that the Tax paid by the Company on your behalf is a benefit to you and therefore you should be paying tax on it, and that Tax is also Taxable and so on ad infinitum - ask your Lawyer about "tax-on-tax".

Patrick