Thailand Live Friday 11 October 2024

[Briggsy]

Is it necessary for a company to be VAT-registered in order for the company to have a work permit issued by the Labour Dept. to a foreign employee? The company has a turnover below the 1.8 million Baht VAT threshold.

This question is not referring to migrant workers from Laos, Cambodia, Myanmar, etc neither is it referring to VAT-exempt businesses such as banking or newspapers.

[blackcab]

How much salary are you declaring? Even at 50k a month you're up to 600k a year. Four employees at 9k a month is 432k. Social fund is another 25k.

With all the other things you need to run the business (accountancy and auditing, phone, Internet, stationery and consumables, etc you are going to rapidly get close to 1.8m baht anyway.

At least if you are VAT registered you can deduct your input tax.

[Briggsy]

Thanks for the reply. Aha, those are expenses and some of them are "notional" and only declared to comply with regulations required to obtain a work permit and not real. I accept that expenses should theoretically be less than revenue to make a profit.

But anyway, let us say that turnover (i.e. revenue) is definitely in the 500,000 to 1,000,000 Baht per annum range so the company is nowhere near the VAT threshold.

Would the Labour Dept. insist on VAT registration before issuing a work permit?

[innerspace]

Labour department no but does depend on the region, officer and what they had for breakfast that morning.

Immigration expect it more often but have been known to make exceptions for new companies not yet hitting the limits, but again multiple variables at play.

[blackcab]

Immigration in Bangkok wanted it from the company I work for to do my 1 year extension, and the company was brand new with no turnover.

Things differ though - we were asked to produce originals of everything, which was hard work. Your mileage may vary.