Legal Status Of This Situation

[nami]

I am currently working with a WP and paying taxes and all the stuff. I am about to start a paid project outside the company and I just received a first payment of 100k THB via a bank cheque and now I am paranoid about putting the money in the bank.

I have no idea how much control there is on these things over here. I mean, back at home the revenue department would detect this money and then would ask for the source. I have 3 things in mind:

- put a few of it in several accounts

- put in the gf account who is exempted of taxes

- keep it in a sock under the bed

I actually want to pay the taxable amount, I just worry they will question about the origin and then I will get in trouble for working outside outside the company in my WP.

Any thoughts?

[soi41]

You are being way too paranoid! 100k is peanuts in a cashsociety like Thailand. I have deposited much bigger amounts several times, no questions asked by anybody!

[market trader]

100,000 bahts is nothing. My neighbour the bib in a drunken state told me not long ago that he makes that amount every month in "tips"

[scorecard]

1. "put in the gf account who is exempted of taxes.

Are you sure about that?

It's my understanding that tax is removed automatically when the bank adds interest earned.

2. Was Withholding Tax deducted from the 'project payment' before the company gave you the funds? Did they give you copies of the Withholding tax deduction documents?

I can share a case where a farang failed to add project payments to his annual Thai personal income tax return. It appears that when the Revenue Dept., checks each personal tax return they have instant / easy access to withholding tax records. He was fined a substantial amount.

3. Perhaps you should employ an accountant who can advise you on this matter.

Edited May 30, 2013 by scorecard

[nami]

Oh, thanks for the replies guys. I guess I've always been kind of paranoid :-P

scorecard, I will check whether the company withheld tax before the payment or not. Sounds like a good advice taking into account this farang experience you talk about ;-)

Thanks!

[Cloggie]

Don't know what you do but if you work at places and / or jobs NOT described in your work permit and the police check you, you have another bigger problem, so I would be more worried about working 'outside' your work permit than the money.

[DonaldBattles]

I agree, give it to your Thai Girl Friend. Thais pay little or no personal income tax let alone business tax. Give it to her so she can give it to her mother, father and former Thai husband. Bloody friging amazing. You better write this up in you dairy because the Thais are not going to pay farangs for a significant period of time. The Thai gravy train is coming to the end of the line quickly for all farangs. We can do it as good as you now so we don't need you.

[Gsxrnz]

For any future payments make sure you ask for cash and avoid the dilemma.

As for the cheque you have now - give it back to them and ask for cash. It's all the same to them and in Thailand they will understand that for "personal reasons", a cheque is not suitable.

You don't need to explain anything beyond that as Thailand is largely a cash society - specifically for the reasons you have highlighted.

[beano2274]

do not worry about it, just deposit it.

[Arkady]

The RD is not yet efficient enough to comb bank accounts looking for small payments. Transfers and cash withdrawals over B2 million requires a form filled in for anti money laundering purposes but I think not cheques.

If you want to be legal, ask permission from your company to do the second job and apply to have it added to your work permit. If you are paid as a free lancer without deduction of salaries tax, you should file a PND 90 tax return and declare income there. In that case the company should be deducting 3% withholding tax as you do for any payment to a contractor or professional. If the company is legal, it would also have identified you in its accounts as the recipient of this money, which creates a loop for the RD inspectors to track you down. Probably not a high risk, if there are only 2 or 3 payments like this but I wouldn't want to chance it over a period of a year or so. Once the RD gets on to you, it is very unpleasant, as they can threaten prosecution which exposes you to further prosecution for work permit and immigration offences, demand bribes, or impose outrageous assessments that you wouldn't want to appeal because of the illegality.

Another way to do it is to set up an offshore company with a bank account offshore and have the company pay the offshore company after deduction flat rate of tax of 15%. Not strictly legal as the work should be performed offshore too but leaves no open ends in the company's books that are traceable to you. If the company has no objection they could employ your gf on the understanding you do the work. As a Thai, she can work as a sole proprietor under her own name and file for tax with a PND 90. The first Bt 260k a year would be tax free with just basic personal deductions.

Edited May 30, 2013 by Arkady

[kawaiimomo]

Thanks for the helpful replies, except to Donald (if you think every farang here is stupid enough to trust any random gf, you are wrong)

I am doing this software project as a freelancer with a Thai friend and he got the cheque in its name. He cashed it and give me cash.

My dilemma was not about the cheque but depositing the money in the bank, but it looks for those amounts shouldn't be any problem.

Arcady has sensible advice here about PND90, probably the way to go.

[Soutpeel]

Thanks for the helpful replies, except to Donald (if you think every farang here is stupid enough to trust any random gf, you are wrong)

I am doing this software project as a freelancer with a Thai friend and he got the cheque in its name. He cashed it and give me cash.

My dilemma was not about the cheque but depositing the money in the bank, but it looks for those amounts shouldn't be any problem.

Arcady has sensible advice here about PND90, probably the way to go.

For THB 100k cash I wouldnt be worried about putting that in an account, but of course you do know what your doing is illegal as regards the freelance thing if its not on your WP and if your company finds out there could be grounds for automatic termination from your current job as well...so would tread very carefully If I was you

[cocopops]

Thanks for the helpful replies, except to Donald (if you think every farang here is stupid enough to trust any random gf, you are wrong)

I am doing this software project as a freelancer with a Thai friend and he got the cheque in its name. He cashed it and give me cash.

My dilemma was not about the cheque but depositing the money in the bank, but it looks for those amounts shouldn't be any problem.

Arcady has sensible advice here about PND90, probably the way to go.

For THB 100k cash I wouldnt be worried about putting that in an account, but of course you do know what your doing is illegal as regards the freelance thing if its not on your WP and if your company finds out there could be grounds for automatic termination from your current job as well...so would tread very carefully If I was you

I'd be kind of surprised if that kind of cash deposit raised too many eyebrows anywhere in the world really. It's only a few thousand dollars. If one were making such a deposit once a month or more often perhaps one should exercise caution, but for a one-off I'd be surprised if you ever heard any more about it. A friend could have payed you back a personal loan or some such...

However, where I'm from the problems would start if your customer is ever audited. Particularly if it turns out they are cheating on their taxes a little (or a lot), but even if they are not.

Seems like the easiest solution would be a bank account in a third country. Have your customer wire your money directly to Hong Kong (or similar). Then you can pull it out through an ATM here, or even just wire it back. The customers books look like they used a sub-contractor from Hong Kong, and nobody will look twice at you - you will be indistinguishable from the thousands of foreignors here who live off offshore savings or passive income.

Edited June 1, 2013 by cocopops