Income Tax Deductions And Refunds ?

[BruceMangosteen]

Welcome to 2014 and life in Thailand.

A couple important issues, any intelligent replies much appreciated!

1. When a teacher is in limbo, the school not sure if they are going to keep her, him not sure if he's going to stay, how do you professionally ask that the income tax deduction cease for the first two months of 2014? Please don't reply that it's the "law" some deduction be made because that dog has long been put out and down. Many schools don't deduct anything, others deduct and don't give the money to the Government, and yes a few try and act professionally and confer with the foreigner about the issue. I've not met or been at one of these few but am told they exist?

2. If you are terminated aka your contract not renewed, how do you go about getting a refund of these deductions? Obviously? you have to wait until 2015, request the school give you a statement of income etc., but is there any way to get the refund without these obvious normal waiting time and hassle?

3. Two Filipinos have told me that you can get a full refund of your taxes for the years you worked in Thailand, if you move back to the Philippines. I find it difficult to believe, but twos a charm, must be true diba? Any chance a westerner could get his money back due to leaving the Kingdom?

4. Another Filipino advised you can claim dependant children and spouse(s) despite the fact they aren't Thai nationals, therefore reducing your tax liability. Any truth to this claim?

Where is H. & R. Block when you need them the most?

[zeichen]

I am quite confused by your post.

In 2014 by the end of April, you will need to file your taxes for all wages you earned in 2013. The schools that you worked for deducted your taxes (most likely) every month that you worked.

I forget the exact numbers but believe it is around 100k baht a year is not taxed. If you only worked 5 months at 20k baht a month and the school paid into taxes every month, then you will most likely get a refund. You need to go to the finance department of your school and get the tax form from them and then file yourself. If you are married, or have children, you get more deductions.

I don't know of any country that has a tax exemption with Thailand, but they might.

[BruceMangosteen]

I am quite confused by your post.

In 2014 by the end of April, you will need to file your taxes for all wages you earned in 2013. The schools that you worked for deducted your taxes (most likely) every month that you worked.

Sorry for any confusion. Your reply isn't on point.

I'm referring to income for the year 2014, the year we are in. If a teacher knows she isn't going to be kept(renewed) or is leaving Thailand, why would he/she want taxes withheld in Jan. and Feb.? I was asking for advice on how to approch the Thai staff with this. Assume for the sake of discussion, all contact with admin goes through the English department and once again be reminded that often if not always, action is dictated by whom they like, not common sense or decency or professional conduct in said business setting. Put another way, if you aren't being renewed they don't give a hoot about you and your "complaint" albiet not a complaint, a simple request. So again, work two months, have taxes deducted based on an annual estimate of liability and wait a year to file and then wait for a refund, or, cause a "problem" and ask them not to make any deductions which might involve a phone call disrupting someones day?

[zeichen]

Your response is no less confusing. 3 to 4 commas in a sentence has my head spinning. Let me try again

If you are leaving the country after Feb, then you are out of luck.

Schools have to deduct your salary. You cannot get an exemption. There is no way to ask them not to deduct taxes from your salary. They are required by law to deduct the predetermined amount based on your annual income. All workers must pay taxes. Getting a refund is the optional part. Just like any country that I have worked in.

When you leave the job, get the tax paper from them. Next year in 2015 if you are in Thailand, you can file and get that money back. You could also have a friend or family member do it for you and get the check mailed to you and cashed.

But it couldn't be more than a few thousand baht a month. So doesn't seem worth it to go through so much hassle.

[BruceMangosteen]

Your response is no less confusing. 3 to 4 commas in a sentence has my head spinning. Let me try again

If you are leaving the country after Feb, then you are out of luck.

Schools have to deduct your salary. You cannot get an exemption. There is no way to ask them not to deduct taxes from your salary. They are required by law to deduct the predetermined amount based on your annual income. All workers must pay taxes. Getting a refund is the optional part. Just like any country that I have worked in.

When you leave the job, get the tax paper from them. Next year in 2015 if you are in Thailand, you can file and get that money back. You could also have a friend or family member do it for you and get the check mailed to you and cashed.

But it couldn't be more than a few thousand baht a month. So doesn't seem worth it to go through so much hassle.

You are reading what I am thinking, not what I am writing. That is the cause of the confusion. It's my fault because I can think and type what I'm thinking. Sometimes that helps, other times it may confuse.

Suffice to say they aren't in tune with nor following the "law" regarding deductions. With that in mind, do you know or have experience with dealing with such an issue? It's not worth a lot of hassle over an attempted refund, but it may be worth an effort to get said deductions ceased. Truth is, you the teacher won't owe any taxes so should be an easy thing. If she is hired the deductions would then start again. It isn't balanced nor as you suggest, dictated by laws enforced at said institution. Check mailed to you? Oh well.

[wayned]

I fully understand your question!

When I was teaching the school wanted to deduct taxes from my salary as if I was single. With the deductions that I had with children in school and supporting my wife's family my tax bill at the end of the year would be zero. So I Showed the head of the English department a filled out income tax form showing the deductions and estimated tax liability for the year. She understood and we both went to the school's admin department, explained the situation, and they didn't deduct any monthly taxes from my salary.

If the school knows that she is leaving and going home at the end of February, I would do the same showing only 2 months salary for the entire year and no tax liability. If they don't know that she is leaving she should tell them. It will be up to the admin officer of the school whether they will stop deducting the taxes. They will not terminate the social security payments.

[puchooay]

Your response is no less confusing. 3 to 4 commas in a sentence has my head spinning. Let me try again

If you are leaving the country after Feb, then you are out of luck.

Schools have to deduct your salary. You cannot get an exemption. There is no way to ask them not to deduct taxes from your salary. They are required by law to deduct the predetermined amount based on your annual income. All workers must pay taxes. Getting a refund is the optional part. Just like any country that I have worked in.

When you leave the job, get the tax paper from them. Next year in 2015 if you are in Thailand, you can file and get that money back. You could also have a friend or family member do it for you and get the check mailed to you and cashed.

But it couldn't be more than a few thousand baht a month. So doesn't seem worth it to go through so much hassle.

There ia no such law stating that schools "have to" deduct monthly payments.

There ia a law that all teachers must file a tax return for monies earned between 1st Jan and 31st Dec each year. They have until 31st March the following year to do this. Late filing leads to a fine. Filing must take place even if you are below the threshold.

There is a rule that Immigration want it for extentions of stay, but I have never been asked for it. There is also a rule that border immigration want to see it upon leaving the country, agian I have never seen this.

I go to the admin department and we fill out the forms together, usually about February. I use to go to the tax office myself but no the admin department file online.

Back to the OP. I would ask the admin department to stop your payments. Explain the situation and say you will file yourself at year end.

[zeichen]

"There ia no such law stating that schools "have to" deduct monthly payments."

Tell that to my tax attorney that does the taxes for our family businesses.

Schools are required by law to submit taxes for their employees. You cannot get an exempt status, unless they want to get into trouble. The school will be held responsible for any taxes not paid if the teacher/ employee doesn't file properly.

You may convince your school that you will pay your own taxes, but as I said if you make a certain amount of money and leave the country, the school will be fined for the taxes not paid. I doubt they will do that for you.

[BruceMangosteen]

"There ia no such law stating that schools "have to" deduct monthly payments."

Tell that to my tax attorney that does the taxes for our family businesses.

Schools are required by law to submit taxes for their employees. You cannot get an exempt status, unless they want to get into trouble. The school will be held responsible for any taxes not paid if the teacher/ employee doesn't file properly.

You may convince your school that you will pay your own taxes, but as I said if you make a certain amount of money and leave the country, the school will be fined for the taxes not paid. I doubt they will do that for you.

Good morning. I'm sure if you have a good and honest attorney who knows tax law, he/she is telling you as you outline. However, in reality and practice, schools aren't getting invoiced/fined for foreign teachers tax liabilities. It simply isn't going on in Government schools, I doubt in private ones either. Perhaps in some large business's but even then corruption is going to rule the day. It is not a matter of being dishonest either in the case I described. There won't be any liability as we refer to two months wages. The schools don't have time and resources and/or interest in pursuing tax questions in regards to the foreigners. It's a school, not a large factory. Mai Pen Rai (however you spell don't care and don't worry in Thai)

[BruceMangosteen]

Back to the OP. I would ask the admin department to stop your payments. Explain the situation and say you will file yourself at year end.

Thanks for your kind reply. As mentioned, any such move to Admin is regarded as a complaint and back dooring the department. In addition, it would force the hand of the department and Director as to weather they plan to renew the teacher's contract. The easiest path is to simply accept the loss of the tax deduction as it certainly won't be paid back in a case of termination. It's a difficult set of circumstances over such a small amount of money but I though I'd post it to see if anyone has faced such a columbo with good results. Time will tell us.

[BruceMangosteen]

I fully understand your question!

Thanks. I was beginning to wonder....Still, I think the people issues are a bigger hurdle. The suggestion I prepare a pro-forma tax return is a good idea. It takes the mystery out of it all. We still must remember that the school may want to control the situation and consider it a complaint. Such is life here. I

[aidenai]

"There ia no such law stating that schools "have to" deduct monthly payments."

Tell that to my tax attorney that does the taxes for our family businesses.

Schools are required by law to submit taxes for their employees. You cannot get an exempt status, unless they want to get into trouble. The school will be held responsible for any taxes not paid if the teacher/ employee doesn't file properly.

You may convince your school that you will pay your own taxes, but as I said if you make a certain amount of money and leave the country, the school will be fined for the taxes not paid. I doubt they will do that for you.

Yes.

For certain categories of income, the payer of income has to withhold tax at source, file tax return (Form PIT 1, 2 or 3 as the case may be) and submit the amount of tax withheld to the District Revenue Office. The tax withheld shall then be credited against tax liability of a taxpayer at the time of filing PIT return.

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

[isawasnake]

Here is my take on this, as I am currently in a similar boat.

Many schools deduct taxes. They don't need to do this, and should not in my opinion. The taxes are your responsibility, and it is also your responsibility to go into the tax office and take care of it before each annual March deadline.

Why does the school hold onto your tax money for the entire year (and earn interest off of it of course)? I guess this whole situation may have evolved when schools thought foreigners would not be able to take care of their taxes on their own? But, it is really quite easy to do so. I think the reason many schools collect taxes is a total scam; it is not their responsibility, they don't need to do it, so why do they? When people start to "help you out" in Thailand, somebody is probably making money. I'm sure there are some honest companies out there which collect the taxes in good faith of course.

I have asked that no tax be deducted from my wages. Again, why would it be? I will just take care of it all myself come March, and earn the interest myself, thank you very much. Anyway, my request was not obliged. No big surprise to me. Kinda like the political situation now, it does not really matter what is right or wrong here, just what certain Thai men feel like doing is always right.

So, I think the answer is, as stated, go (calmly) talk to the proper people at your school, explain to them the situation and that you will pay your own taxes.... and they will probably tell you some BS about how they have to deduct it, which they don't (it would just be an inconvenience in for them to change all this, and the men at the top have told them not to allow this is the truth).

Anyway, nice topic. I look forward to more informative replies.

Edited January 5, 2014 by isawasnake

[arthurwait]

Tax starts at 250k/year I believe.

[wayned]

You are taxed on anything over 150k/year after deductions.

Stabdard allowance = 40% of total graos or 60k whichevr is less.

Additional deductions:

[wayned]

You are taxed on anything over 150k/year after deductions.

Standard allowance = 40% of total gross or 60k whichever is less.

Additional deductions:

self = 30k

wife = 30k

each child under 25 years in school = 17k each

If supporting your wife's mother, father, or both

Social security contribution 9k (750 x 12 = 9k), usually 750/month. The total is 1500/month usually split half and half with employer.

Therefore if you are married with one child 30k each and are supporting your wife's mother and father you would get an additional 137k deduction after the 60k standard allowance (30 + 30 + 17 + 30 +30 + 9 = 146)

Withe the standard allowance and the additional 146k deduction you would be taxed on all income over 356k (60k,standard allowance +137k, additional deductions + 150k, minimum taxable income, 9k, 1/2 social security = 356k). The tax rate starts at 10% and increases as the taxable income becomes greater.

[puchooay]

The whole point of filing your own taxes annually, which is perfectly legal, is that everyone pays a different amount. It is amazing what one can claim credit for. I worked at one place and I was getting deducted the same as another teacher who was single. I am married with a child, have life and health insurance and pay social security (all of which are tax deductable).

Did I get a rebate at the end????? NO.

So do your own. It is soooooo simple.

[remobb]

You don't mention whether you have a work permit or not. If you have then you are liable to pay tax and as such you should have a tax number, in turn you should be able to request a refund. If not then you are working illegally and should not be paying tax, but if you are how can you expect to obtain a refund for working illegally? Either way, if it's just a couple of months is the amount you are paying worth the bother?

[rct99q]

I fully understand your question!

Thanks. I was beginning to wonder....Still, I think the people issues are a bigger hurdle. The suggestion I prepare a pro-forma tax return is a good idea. It takes the mystery out of it all. We still must remember that the school may want to control the situation and consider it a complaint. Such is life here. I

Actually I think most people understood the question. The issue is you have given a very specific situation and looking for an answer that isn't available! The answer is......go to admin and ask them to withhold the tax deductions as per the following reason (ie..leaving in two months).....however you answered this yourself by saying this was not possible as the school would take offense.

So, there you go. There is no other solution as you can not get the school to stop deducting the taxes without their knowledge.

[BruceMangosteen]

Actually I think most people understood the question. The issue is you have given a very specific situation and looking for an answer that isn't available! The answer is......go to admin and ask them to withhold the tax deductions as per the following reason (ie..leaving in two months).....however you answered this yourself by saying this was not possible as the school would take offense.

So, there you go. There is no other solution as you can not get the school to stop deducting the taxes without their knowledge.

I'm looking for suggestions and experiences. As mentioned several times, you are dealing with emotional people and conflicts in style as well as culture. Since the teacher has no guaranty of a renewal, she obviously doesn't want to pay taxes(via them being withheld) for the two months. Even it it's only a couple hundred baht. Why? In addition, the teacher may decline a renewal offer and leave the country permanatly. To broach the subject will force a hand to be played and knowing the answers in advance is always a good idea. Reactions are complaints and result in a loss of not only face but status. So, the answer isn't simply "go to admin and ask them to (cease) the deductions". You must be prepared for all possibilities including as was wrongly stated here, the claim they are legally required to deduct a certain amount etc.. This is reality and it's small money but why just walk away from any money that is yours?

Edited January 5, 2014 by BruceMangosteen

[BruceMangosteen]

You don't mention whether you have a work permit or not. If you have then you are liable to pay tax and as such you should have a tax number, in turn you should be able to request a refund. If not then you are working illegally and should not be paying tax, but if you are how can you expect to obtain a refund for working illegally? Either way, if it's just a couple of months is the amount you are paying worth the bother?

Your point again being, if it is the teacher's fault she's in the situation, just take it and move along. However, as you must have read, it isn't the teacher's fault, he is being told renewal not guaranteed and may want to leave on her own accord. So of course she has a work permit and tax ID number. Do you think someone working off the books getting paid under the table is going to allow tax deductions in the first place/month? Of course not. Back to again, the people aspects of this quagmire. Thank you and good night. I have early class and need dinner then rest.

[isawasnake]

A clearer question, no offense to op, is probably simply:

Why in the world do schools take money out of my paycheck for taxes? If a person chooses to file their taxes on their own, that option should ALWAYS be there imo. There is no reason in the world the school should be giving me anything other than my full salary, if I request that I would like to do my own taxes, for my own personal reasons. The tax is essentially "our business", meaning the school should really have no part of it. That is the way it is set up. To be clear, I understand that some may WANT to have the school handle their taxes, to some extent. But, if you don't want that, the option to compel them to keep their grubby hands of my salary should always be there. Having said that, I welcome answers to that bolded question though

[nithisa78]

I am quite confused by your post.

In 2014 by the end of April, you will need to file your taxes for all wages you earned in 2013. The schools that you worked for deducted your taxes (most likely) every month that you worked.

Sorry for any confusion. Your reply isn't on point.

I'm referring to income for the year 2014, the year we are in. If a teacher knows she isn't going to be kept(renewed) or is leaving Thailand, why would he/she want taxes withheld in Jan. and Feb.? I was asking for advice on how to approch the Thai staff with this. Assume for the sake of discussion, all contact with admin goes through the English department and once again be reminded that often if not always, action is dictated by whom they like, not common sense or decency or professional conduct in said business setting. Put another way, if you aren't being renewed they don't give a hoot about you and your "complaint" albiet not a complaint, a simple request. So again, work two months, have taxes deducted based on an annual estimate of liability and wait a year to file and then wait for a refund, or, cause a "problem" and ask them not to make any deductions which might involve a phone call disrupting someones day?

I would cut my losses and move on. Sounds like too much something over nothing. Is that on point? rhetorical

[BruceMangosteen]

I would cut my losses and move on. Sounds like too much something over nothing. Is that on point? rhetorical

There is no point in getting personal about the matter. It isn't "nothing", it's our money. We teachers generally only have one chance at such issues. This is why asking here for experiences. You don't go ask for the deductions to cease without your ducks in order. You are not going to go back the next day with another "story" aka in Thailand as a "complaint". One chance, we simply want to be prepared! I'd rather give the money to a Filipino charity than leave it for the tax folks to distribute.

On another note and adding to this, there was the first shot across the bow about the Thai retirement system being in trouble. This in English, must have come out in the Thai news as well. I'm not exactly sure all the civil servants near retirement are going to be in the best of moods today. The fact remains for those unknowing, you are not dealing with mere business decisions. These items are in fact related to how much a person likes or dislikes you and their mood at the time. Presentation and the time are part of it all, a large part.

[BruceMangosteen]

A clearer question, no offense to op, is probably simply:

Why in the world do schools take money out of my paycheck for taxes? If a person chooses to file their taxes on their own, that option should ALWAYS be there imo. There is no reason in the world the school should be giving me anything other than my full salary, if I request that I would like to do my own taxes, for my own personal reasons. The tax is essentially "our business", meaning the school should really have no part of it. That is the way it is set up. To be clear, I understand that some may WANT to have the school handle their taxes, to some extent. But, if you don't want that, the option to compel them to keep their grubby hands of my salary should always be there. Having said that, I welcome answers to that bolded question though

Hello. Nice to read your post in between classes! Schools take money out because it is in fact a law on the books and they are required to do it. As we all know, these rules and laws are not always ahered to and followed. They take the deductions and make contributions to the tax coffers, they don't steal the money from the teachers(at least not where I teach). But in reality again, it isn't required and they don't care . Laws of this type are geared toward major employers, not Government schools. The option isn't simply to claim you will file your own. It remains as I wrote above, more of a people and tactfully approaching it depending on the circumstances and personalties, not legal requirements. Have a nice lunch at the canteen! Nothings beats room temp meals.

[meand]

A clearer question, no offense to op, is probably simply:

Why in the world do schools take money out of my paycheck for taxes? If a person chooses to file their taxes on their own, that option should ALWAYS be there imo. There is no reason in the world the school should be giving me anything other than my full salary, if I request that I would like to do my own taxes, for my own personal reasons. The tax is essentially "our business", meaning the school should really have no part of it. That is the way it is set up. To be clear, I understand that some may WANT to have the school handle their taxes, to some extent. But, if you don't want that, the option to compel them to keep their grubby hands of my salary should always be there. Having said that, I welcome answers to that bolded question though

Hello. Nice to read your post in between classes! Schools take money out because it is in fact a law on the books and they are required to do it. As we all know, these rules and laws are not always ahered to and followed. They take the deductions and make contributions to the tax coffers, they don't steal the money from the teachers(at least not where I teach). But in reality again, it isn't required and they don't care . Laws of this type are geared toward major employers, not Government schools. The option isn't simply to claim you will file your own. It remains as I wrote above, more of a people and tactfully approaching it depending on the circumstances and personalties, not legal requirements. Have a nice lunch at the canteen! Nothings beats room temp meals.

If they are required to take it, I suppose there is no way around it then. You'd just have to file after the end of that tax year and reclaim the funds.

[bundoi]

In my experience of taxation for teachers here it's very similar to UK PAYE (pay as you earn); tax is deducted by the employer on a monthly basis, based on a tax code which reflects the deductions the employee may be entitled to. At the end of the tax year the employee files a tax return which is the basis for the final adjustment plus or minus.

NES teachers with contracts here are not freelancers (chortle chortle) or self-employed contractors whose monthly income fluctuates and who therefore do not have a fixed monthly tax liability, and who therefore pay tax once at the end of the year.

Perhaps in some circumstances where a high level of trust exists between the employer and the employee the employer may be in a position to help the employee; but that level of trust does not seem to exist in this case.

[BruceMangosteen]

In the for what's worth department.....I asked the department head to help me speak with the admin. We were in the office together by chance. She said something in Thai, and there was a reply. I was told "we have to ask the Director and he's terribly busy" meaning of course, they aren't going to do diddely squat and don't care. More for what's worth...I saw the Director standing at the gate joking around with other Thai teachers. I watched this go on for at least ten min., which is about 9 1/2 longer than it would take him to say "do what the dumb farang wants" or "*&^% him and his tax issues".

[bundoi]

In the for what's worth department.....I asked the department head to help me speak with the admin. We were in the office together by chance. She said something in Thai, and there was a reply. I was told "we have to ask the Director and he's terribly busy" meaning of course, they aren't going to do diddely squat and don't care. More for what's worth...I saw the Director standing at the gate joking around with other Thai teachers. I watched this go on for at least ten min., which is about 9 1/2 longer than it would take him to say "do what the dumb farang wants" or "*&^% him and his tax issues".

It might look that simple Bruce, but....well let's start at the beginning,

have you provided them with a tax code?

have you provided them with enough information for them to obtain the correct tax code for you?

do you know whether they even have a tax code for you or are they applying the default zero-allowances code?

if they haven't got a code it will take a a bit longer than 10 minutes divided by 9.5 sorry to say.

Edited January 8, 2014 by bundoi

[puchooay]

In the for what's worth department.....I asked the department head to help me speak with the admin. We were in the office together by chance. She said something in Thai, and there was a reply. I was told "we have to ask the Director and he's terribly busy" meaning of course, they aren't going to do diddely squat and don't care. More for what's worth...I saw the Director standing at the gate joking around with other Thai teachers. I watched this go on for at least ten min., which is about 9 1/2 longer than it would take him to say "do what the dumb farang wants" or "*&^% him and his tax issues".

It might look that simple Bruce, but....well let's start at the beginning,

have you provided them with a tax code?

have you provided them with enough information for them to obtain the correct tax code for you?

do you know whether they even have a tax code for you or are they applying the default zero-allowances code?

if they haven't got a code it will take a a bit longer than 10 minutes divided by 9.5 sorry to say.

The OP is asking about tax with regards to, at least, his second year of teaching. He is requesting that no monies be deducted for the first two months of 2014, as if he only works 2 months then he is way below the tax threshold.

The tax code should already be in place as he has been having dedcutions taken for the tax year ended 31st December 2013.

I don't see why the Director needs a code to give permission for deductions to be stopped.