sajal Posted April 20, 2006 Share Posted April 20, 2006 hey all... I have some tax issues i need to get clarified. We are a thai registered company belonging to a parent company abroad. Our parent company offers some online IT services related to access to some data and some consultancy. Now we are required to offer such services on behalf of our parent company here in thailand. any ideas on how to invoice the client. What are the taxes involved? in short we would like to collect payment locally on bahalf of a foreign company(not disclosing the foreign companies name to the client) for some comission, doing everything by the book. Would also be consulting an accountant later this week, but would help if anyone here can give their opinions about the tax laws. I suppose there are witholding tax involved, but got not much clue... thanks in advance. cheers. Link to comment Share on other sites More sharing options...
~G~ Posted April 20, 2006 Share Posted April 20, 2006 You need to withhold 15% out of any payment you make to a foreign service provider. Link to comment Share on other sites More sharing options...
sajal Posted April 20, 2006 Author Share Posted April 20, 2006 You need to withhold 15% out of any payment you make to a foreign service provider. Hi G, Thanks for the info,. What i understand is when i pay the foreign service provider i pay 15% witholding tax... But any idea if i need to pay any tax before this? any witholding tax to be paid when the local thai client pays me?VAT? or any other withholding tax? Link to comment Share on other sites More sharing options...
~G~ Posted April 20, 2006 Share Posted April 20, 2006 You need to withhold 15% out of any payment you make to a foreign service provider. Hi G, Thanks for the info,. What i understand is when i pay the foreign service provider i pay 15% witholding tax... But any idea if i need to pay any tax before this? any witholding tax to be paid when the local thai client pays me?VAT? or any other withholding tax? When the local client pays you for services, if this is a company, it has to withold 3% from your invoiced amount. That is your client's responsibility, not yours. If they don't do it it's none of your problem, they will just not be able to use your Invoice as an Expense. (I have clients who don't withold the tax, out of either ignorance, lazyness or just bad accounting practices). Practially, this means he need to pay you 3% less, fill in the w/h tax forms, give you the two top copies, and pay revenue department the 3% at the next month. As for VAT, if your company is VAT registered, you need to charge 7% VAT for every payment you receive (except for rent, for which there is no VAT), and issue a Tax Invoice with the details. Link to comment Share on other sites More sharing options...
~G~ Posted April 20, 2006 Share Posted April 20, 2006 A few other points - w/h tax should be: For rent: 5% Services: 3% Advertisement: 2% Trasnportation: 1% VAT only for services used in Thailand. If you provide service to a foreign company, to be used out of Thailand, no VAT should be collected. For products, VAT only for those sold in Thailand (but you probably know about this one already) Link to comment Share on other sites More sharing options...
sajal Posted April 20, 2006 Author Share Posted April 20, 2006 A few other points - w/h tax should be: For rent: 5% Services: 3% Advertisement: 2% Trasnportation: 1% VAT only for services used in Thailand. If you provide service to a foreign company, to be used out of Thailand, no VAT should be collected. For products, VAT only for those sold in Thailand (but you probably know about this one already) Hi G, Thanks a lot for your help. Lets see what the acount guy has to say abt this... much clearer now... *Thinking* my service might count off as advertisement also... So in short for my work i need to pay...7%vat 3% witholding(client pays but reduces off the invoice)....15% withholding while remiting abroad....incometax on my profits.... grrr seems like im working for the government rathan for myself ;-) Link to comment Share on other sites More sharing options...
~G~ Posted April 21, 2006 Share Posted April 21, 2006 So in short for my work i need to pay...7%vat 3% witholding(client pays but reduces off the invoice)....15% withholding while remiting abroad....incometax on my profits....grrr seems like im working for the government rathan for myself ;-) Exactly. You can feel good because you help finance government expenses, such as more and more elections, which are so important to Thai democracy. Regarding the 3% w/h tax, it will be deducted from the tax you need to pay at the end of the year on company profits. It is like a tax advance you pay. And of course, if you want to withdraw it as a salary there will be another tax... Link to comment Share on other sites More sharing options...
sajal Posted April 21, 2006 Author Share Posted April 21, 2006 And of course, if you want to withdraw it as a salary there will be another tax... maybe thats why there is a section for expense Link to comment Share on other sites More sharing options...
sajal Posted April 26, 2006 Author Share Posted April 26, 2006 A few other points - w/h tax should be: For rent: 5% Services: 3% Advertisement: 2% Trasnportation: 1% VAT only for services used in Thailand. If you provide service to a foreign company, to be used out of Thailand, no VAT should be collected. For products, VAT only for those sold in Thailand (but you probably know about this one already) What you have told me is more or less echoed by the accounting guy... just thinking.... why when i pay me telephone bill i dont have to pay any witholding tax? isint that a service? or it goes under 'Exempted by toxin' category? Link to comment Share on other sites More sharing options...
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