With New Regulations, Is Work Permit Needed For Telecommuting Work?

[LivinLOS]

You could also add a 4th as yet unproven solution which would be to try and obtain a WP exemption. Wonder what fees it would take Sunbelt to try it and see ??

In my case:

A very small fee for me since I (via Sunbelt) already had the verbal approval via phone call a day earlier from the labor dept, but still have yet to see the actual exemption letter myself. So far Sunbelt has been calling them periodically for the letter. May be they don’t like writing that much.

Without wanting to pry.. What is your work / country setup ??

Your in Thailand..

Working online for non Thai Co as an employee ?? Contractor with home country Co ?? Self employed (no company) ??

Is your work very specialized or more generic (could your company find a replacement) ??

Are there any home country specific certifications that make your job inelligable for a Thai ??

Of course if any of that is personal or too private simply say so.. Just trying to see what kind of applications are acceptable.

I mean looking at this from one angle, I have accounts with brokers and investments, I manage those investments (rarely) online.. Does this make me a stock trader ?? Can that work then be WP exempt and yet get me a B visa and no taxes due in Thailand ?? To me that seems ridiculous but if a WP exemption is granted then for one persons online work then why not ?? Its how I support my lifestyle which is what most people class as their 'work'.

Sorry I see your info and application is whats posted in this thread already in previous page.. I had read it but didnt see the connection between usernames and thought a second person was also trying.

Thinking about this I can see how someone who has a home country industry certification that it is not possible for a thai to obtain would have a much better chance at this being achieved.

[CobraSnakeNecktie]

Just because you dont want to pay taxes here.. Or even because the US taxes you there, doesnt mean your not due to pay income taxes in the country you are in while your working..

Just being American does not mean you dont pay other places.. I have lived and worked all over the world and had to pay taxes to loads of different governments to be and work there..

And while you may think he sounds petty and jealous he is actually spending the money to make himself legal, he then contributes taxes to the country he is in, he fullfills the laws of the land. While you avoid your tax obligations, dont make a legal company, dont bear those costs and burdens and then undercut people who do stick to the rules.. Petty ?? Jealous ??

Its not even like forming and running an Amity company is prohibitively expensive.. Certainly less so that forming and accounting for companies back in the west. You keep saying that you dont need to have a WP or even a visa.. Why ?? Show us the rules that say you can work here without a WP. Just because you want it to be true doesnt make it so.

isn't this determined by the source of the income and that sources legal charter location. If its a US company then income receiver is subject to US taxes if they are a US resident. If an individual has US residency and not Thai residency then how can they avoid US taxes as they would have to declare Thai residency on their tax return. Generally legal residency is not available in Thailand. The IRS is not going to accept your exemption of income without proof of foreign residency. Certainly not if audited.

Until you are granted legal residency then you are just a tourist. The exception is if you abandon your US residency and citizenship.

******* there is a tax treaty between the US and Thailand to prevent double taxation.

http://www.thailawforum.com/database1/double-taxation.html

Thailand could try to double tax foreigners but eventually they are going to run into trouble because tax treaties etc have provided a framework to allow them into valuable export markets. Currently Thailand GDP is nearly 70% exports with USA being its largest trading partner. Do they really want to crap on that relationship?

[LivinLOS]

There is a DTA agreement.. So being double taxed does have a way through the minefield..

However even when double taxation agreements are not in place.. Just because you pay taxes in your home country does not mean you dont ALSO owe them in the country your working in.. Hence the 'double taxation' issue..

Also being resident for tax purposes is not the same thing as PR status for visa classes.. Its entirely possible to be resident for tax purposes yet be on a non imm visa or even on 30 day stamps.

I know in the UK it can get even more confusing where you can be 'resident but not ordinarily resident for tax purposes'..

[kudroz]

in Thailand, an amity company makes no sense for me as all my contracts are US-based and I am paid in US $. nothing crosses over US borders. for all intents and purposes I AM a tourist in Thailand. and I will not live here permanently, build a house, and have a family like you have.

This is where you are incorrect. When you are in Thailand you are performing an activity that generates income. Because of this, it is deemed to be Thai Source Income and this income is subject to taxation in Thailand.

It doesn't matter where the payer is located, it doesn't matter where your income is remitted or in which currency. All that matters is the location of the activities for which the payment is made. If you are telecommuting from Thailand at the present time - it means that this income is subject to Taxes in Thailand.

[Sunny Valentine]

It seems to me that the way through an Amity Company is an (almost) legal way of doing it, although very expensive (apart from the tax thing, I fully agree with Mouse an others that taxes have to be paid according to the rules set up by the home country as well as Thailand, so this issue has to be scrutinized and action should be taken here accordingly.) But let's face the facts please: Someone with a small income derived from working online for a foreign partner won't be paying a lot of taxes. An average income of 1500 to 2000 US$ will provide you with a good income to live in Thailand, and the taxes for this income will be minimal, be it Thai or home country's taxes. The costs of setting up and running a company structure are immense in this case, and in no relation to the income earned. Also, what about non-US citizens? They would have to bend other laws in order to get legal? (Bogus Companies, with Thai Proxies ....) What sense would it make (morally as well as legally) to bend one rule in order to follow another one?

Sunny

Edited January 5, 2007 by Sunny Valentine

[kudroz]

Everyone needs to be careful with 2 very different things.

- Thai Source Income

Income that is connected to source in Thailand (where the activities for which the payment is made is in Thailand)

- Worldwide Source Income

Income that is not Thai source

They are not the same. I've read some post of people relating to being a "tax resident for tax purposes" - which pertains only to Worldwide Source Income. Thai Source Income is always taxable regardless of how many days you have aggregated in Thailand in a given year.

[autonomous_unit]

CobraSnakeNecktie guy, the rules for residency and taxes are not the same as for immigration. The US IRS determines qualification for income exclusion based on "physical presence" or "bona fide residence" tests for all US citizens (and permanent residents, i.e. green-card holders). Neither of these require permanent residency status in a foreign country!

The source of earned income is also defined as where the work is performed and NOT who pays or where they pay. When a US citizen does legal work in Thailand and meets one of the above qualifying tests, they can exclude earned income from US income tax, but they have to pay Thai tax. If they were to travel to the US on business, they could not exclude the "portion" of income earned while present at a work site in the US. Even if all of this is paid via the same transaction, it is treated differently under IRS rules based on where the worker is located at the time work is done. For work performed on travel in the US, one can claim a foreign tax credit to avoid paying double income tax (since Thailand also taxing on that part).

As described earlier, the gray area is that Thailand doesn't seem to have the processes in place for someone to file a tax return and pay their taxes for Thai earnings if they do not have a work permit, even though it seems that taxes would be due (the same conditions under which the US citizen would be excluding the same income from US tax). This leads me to my next comment...

Girlx, you should read the IRS publications for US citizens living abroad. Part of the "tests" used to determine qualification for the foreign earned income exlcusion deal with the issue of whether you are paying taxes to the foreign country where you are spending your time.

I have not studied all the nuances and corner cases that do not apply to me, but I remember having the impression that these rules do not leave a gray area. You either pay US taxes, foreign taxes, or both with some tax-credit ability to avoid double income tax (but not necessarily to avoid double social security tax etc.). Given that the forms to claim the exclusion are your assertion of status, I would be careful about claiming something that doesn't apply and thereby falling afoul of the IRS... I would double and triple-check that the qualifcation rules do not get blocked by the lack of Thai income tax filing.

BTW, you can download all publications and forms from the www.irs.gov website in PDF format. I would suggest reading "i1040.pdf", "i2555.pdf", "p17.pdf", and "p54.pdf" (this is the one I mentioned above: for US citizens living abroad). You may not read them all cover-to-cover but I think it is useful to download and browse them. They usually have descriptive section titles and useful references to other documents for more complex topics. The files beginning with the letter "p" are publications while the ones beginning with "i" are instructions for the form with the same numbering.

[LivinLOS]

It seems to me that the way through an Amity Company is an (almost) legal way of doing it, although very expensive (apart from the tax thing, I fully agree with Mouse an others that taxes have to be paid according to the rules set up by the home country as well as Thailand, so this issue has to be scrutinized and action should be taken here accordingly.) But let's face the facts please: Someone with a small income derived from working online for a foreign partner won't be paying a lot of taxes. An average income of 1500 to 2000 US$ will provide you with a good income to live in Thailand, and the taxes for this income will be minimal, be it Thai or home country's taxes. The costs of setting up and running a company structure are immense in this case, and in no relation to the income earned. Also, what about non-US citizens? They would have to bend other laws in order to get legal? (Bogus Companies, with Thai Proxies ....) What sense would it make (morally as well as legally) to bend one rule in order to follow another one?

Sunny

Yes it does seem an unfairly uneven playing field where Americans get it easy by only needing a treaty of Amity company (and I disagree that the costs of running a simple one man operation under this basis would be huge or disproportionate, less so than home country accounting IMO)..

For non American farangs it gets much more complex and as you point out you run into the sleeping partners legality and issues. However I cant help but point out that such are the costs of legally working here !!

Edited January 5, 2007 by LivinLOS

[ZZZ]

Just because you dont want to pay taxes here.. Or even because the US taxes you there, doesnt mean your not due to pay income taxes in the country you are in while your working..

Just being American does not mean you dont pay other places.. I have lived and worked all over the world and had to pay taxes to loads of different governments to be and work there..

And while you may think he sounds petty and jealous he is actually spending the money to make himself legal, he then contributes taxes to the country he is in, he fullfills the laws of the land. While you avoid your tax obligations, dont make a legal company, dont bear those costs and burdens and then undercut people who do stick to the rules.. Petty ?? Jealous ??

Its not even like forming and running an Amity company is prohibitively expensive.. Certainly less so that forming and accounting for companies back in the west. You keep saying that you dont need to have a WP or even a visa.. Why ?? Show us the rules that say you can work here without a WP. Just because you want it to be true doesnt make it so.

It’s well enough to say that people should pay tax in Thailand for various work done, but why??

If working and paying tax in Europe you get health insurance, social benefits, unemployment benefits, pension, child care, maternal/paternal leave and a host of other benefits paid for by your tax contributions.

If paying tax in Thailand you get FA.

[LivinLOS]

Everyone needs to be careful with 2 very different things.

- Thai Source Income

Income that is connected to source in Thailand (where the activities for which the payment is made is in Thailand)

- Worldwide Source Income

Income that is not Thai source

They are not the same. I've read some post of people relating to being a "tax resident for tax purposes" - which pertains only to Worldwide Source Income. Thai Source Income is always taxable regardless of how many days you have aggregated in Thailand in a given year.

Yes of course.. I was merely pointing out that people living here longer term (whatever visa they are on) would also be taxable on worldwide source income IMO.. They have chosen Thailand as their de facto residency whatever class of visa stamp is in their passport.

Thats a different, but related, topic to money earnt for services performed while working inside Thailand.

If memory serves me correct there are some exceptions (on local sourced income) between DTA agreement countries, certainly its obvious that a long distance lorry driver doesn't pay tax on income earnt in each member state as he drives from Spain to Norway.. There are often exceptions given for flight crew, touring performers, and expert surgeons, etc etc etc but these are all listed within the DTA agreements between any 2 countries.

[Sunny Valentine]

For non American farangs it gets much more complex and as you point out you run into the sleeping partners legality and issues. However I cant help but point out that such are the costs of legally working here !!

Sorry LivinLos, don't you see that you are contradicting yourself here within the same paragraph?

You admit legality issues with sleeping partners (I call it illegal Thai Proxies) and then continue to mention that this is the way to get and stay legal???

The whole thing seems to be impossible to solve in a complete legal way at all. What#s left: Either leave the country (but then please don't even dare to make a phone call to your employer when coming back to Thailand as a genuine non-working completely legal tourist!), or find a way around.

But spending lots of monies to ultimately just shift your legal situation from not fully legal to not fully legal is not a wise move IMHO.

One more word about the costs of going the company and WP way:

Start Up maybe 35000 including WP (Or more)

Monthly Accounting 2500 or more 30000 a Year

Yearly Balance 20000 a Year

4 B Visa runs (East Asia, Single) 48000 a Year

4 WP extensions 12000 a Year

Plus costs for (bogus, as not really needed for your work!) staff, depending on the conditions your Work Permit is granted under.

between maybe 0 and 25000 a Year

Plus Taxes and Social Security (No problem)

You won't get a 1Y extension with this work and income, as you have no chance to fulfill the income requirements at all. A Multi B Visum trip back home will probably cost you the same, rather more, each Year.

By playing the tourist, you could possibly get by with 2 Tourist Visas plus Extensions plus 6 Visa runs.

Costs here 12000 (x2) plus 1900 (x2) plus 2000 (x6) totals 40000 Bt.

More expenses total: 70000 or more yearly. AND YOU'RE STILL NOT LEGAL!!!

Sunny

[LivinLOS]

Just because you dont want to pay taxes here.. Or even because the US taxes you there, doesnt mean your not due to pay income taxes in the country you are in while your working..

Just being American does not mean you dont pay other places.. I have lived and worked all over the world and had to pay taxes to loads of different governments to be and work there..

And while you may think he sounds petty and jealous he is actually spending the money to make himself legal, he then contributes taxes to the country he is in, he fullfills the laws of the land. While you avoid your tax obligations, dont make a legal company, dont bear those costs and burdens and then undercut people who do stick to the rules.. Petty ?? Jealous ??

Its not even like forming and running an Amity company is prohibitively expensive.. Certainly less so that forming and accounting for companies back in the west. You keep saying that you dont need to have a WP or even a visa.. Why ?? Show us the rules that say you can work here without a WP. Just because you want it to be true doesnt make it so.

It’s well enough to say that people should pay tax in Thailand for various work done, but why??

If working and paying tax in Europe you get health insurance, social benefits, unemployment benefits, pension, child care, maternal/paternal leave and a host of other benefits paid for by your tax contributions.

If paying tax in Thailand you get FA.

Obviously you like living here for some reason otherwise presumably you would stop.

So if you like to live here over the admitted benefits that are provided for 'free' to keep you paying taxes in your home country, then you have chosen this place as where you wish to reside. Your choice implies you should then support the country that you chose to live in, especially if working here.

I could also point out that having earnt my money in and around Europe I paid literally millions is taxes (corp and income) and apart from a couple of hospital visits received none of the list you provide ever.. Why did I contribute millions of Euros to governments that were not where I grew up, or where I wished to be ?? Because that was where I was working and doing business and it was the cost of legality.

[kudroz]

in Thailand, an amity company makes no sense for me as all my contracts are US-based and I am paid in US $. nothing crosses over US borders. for all intents and purposes I AM a tourist in Thailand. and I will not live here permanently, build a house, and have a family like you have.

This is where you are incorrect. When you are in Thailand you are performing an activity that generates income. Because of this, it is deemed to be Thai Source Income and this income is subject to taxation in Thailand.

It doesn't matter where the payer is located, it doesn't matter where your income is remitted or in which currency. All that matters is the location of the activities for which the payment is made. If you are telecommuting from Thailand at the present time - it means that this income is subject to Taxes in Thailand.

I'd just like to add something to my post.

Girlx, you're argument is that you shouldn't pay taxes or establish a company here in Thailand because, i quote "for me as all my contracts are US-based and I am paid in US $. nothing crosses over US borders. for all intents and purposes I AM a tourist in Thailand. and I will not live here permanently, build a house, and have a family like you have." end quote.

Following your logic, you're income would be "US Source Income" and therefore subject to taxes in the US regardless if you are a resident of the US or not. You're trying to have the best of both world, claiming to the US that you're income is "foreign" so that you don't have to pay taxes in the US - and also saying to Thailand that you're income is "US" so you shouldn't have to pay taxes in Thailand.

edit typo

Edited January 5, 2007 by kudroz

[LivinLOS]

For non American farangs it gets much more complex and as you point out you run into the sleeping partners legality and issues. However I cant help but point out that such are the costs of legally working here !!

Sorry LivinLos, don't you see that you are contradicting yourself here within the same paragraph?

You admit legality issues with sleeping partners (I call it illegal Thai Proxies) and then continue to mention that this is the way to get and stay legal???

The whole thing seems to be impossible to solve in a complete legal way at all. What#s left: Either leave the country (but then please don't even dare to make a phone call to your employer when coming back to Thailand as a genuine non-working completely legal tourist!), or find a way around.

But spending lots of monies to ultimately just shift your legal situation from not fully legal to not fully legal is not a wise move IMHO.

One more word about the costs of going the company and WP way:

Start Up maybe 35000 including WP (Or more)

Monthly Accounting 2500 or more 30000 a Year

Yearly Balance 20000 a Year

4 B Visa runs (East Asia, Single) 48000 a Year

4 WP extensions 12000 a Year

Plus costs for (bogus, as not really needed for your work!) staff, depending on the conditions your Work Permit is granted under.

between maybe 0 and 25000 a Year

Plus Taxes and Social Security (No problem)

You won't get a 1Y extension with this work and income, as you have no chance to fulfill the income requirements at all. A Multi B Visum trip back home will probably cost you the same, rather more, each Year.

By playing the tourist, you could possibly get by with 2 Tourist Visas plus Extensions plus 6 Visa runs.

Costs here 12000 (x2) plus 1900 (x2) plus 2000 (x6) totals 40000 Bt.

More expenses total: 70000 or more yearly. AND YOU'RE STILL NOT LEGAL!!!

Sunny

And 70k is a lot of money ?? 1000 GBP a year in accounting and clerks fees !!! Sure seems like a steal to me compared with accounting costs and headaches back in the west. I was / am even considering just forming a shell company to simply give me a visa.. 70k per year for the right to stay, OK I am game. I would like to get the extension though as I and when I looked that meant min wage for me and lots of others.. Put the price up above the quoted numbers.

As to you point on legality, until very recently having Thai sleeping partners was not considered breaking the rules, there was no declarations or proof of money input and if I chose to give 51% of my company away to people I see no legal reason to stop me. This situation is currently being under review and open to interpretation, land owning companies are not viable but I dont know about valid trading entities ?? I also dont know if simply paying people to be your partners is illegal ?? Certainly its not 'as' illegal as working flat out illegally, theres many shades of grey to compliance. Declaring worldwide income and return on investments, declaring all income or only what it takes to get a WP, or even less and visa running, etc.

Do Amity companies still need 4 Thai staff etc ?? I thought it was much easier to get your WP.. Get work permit.. Earn min wage.. Pay taxes.. Get extensions.

My tax obligations as en employer back in the west were harsh so I see Thailands requirements pretty ok.. If I could buy only a long stay stay fully extended visa and nothing else at the prices your quoting I would be looking closely at it.

[LivinLOS]

in Thailand, an amity company makes no sense for me as all my contracts are US-based and I am paid in US $. nothing crosses over US borders. for all intents and purposes I AM a tourist in Thailand. and I will not live here permanently, build a house, and have a family like you have.

This is where you are incorrect. When you are in Thailand you are performing an activity that generates income. Because of this, it is deemed to be Thai Source Income and this income is subject to taxation in Thailand.

It doesn't matter where the payer is located, it doesn't matter where your income is remitted or in which currency. All that matters is the location of the activities for which the payment is made. If you are telecommuting from Thailand at the present time - it means that this income is subject to Taxes in Thailand.

I'd just like to add something to my post.

Girlx, you're argument is that you shouldn't pay taxes or establish a company here in Thailand because, i quote "for me as all my contracts are US-based and I am paid in US $. nothing crosses over US borders. for all intents and purposes I AM a tourist in Thailand. and I will not live here permanently, build a house, and have a family like you have." end quote.

Following your logic, you're income would be "US Source Income" and therefore subject to taxes in the US regardless if you are a resident of the US or not. You're trying to have the best of both world, claiming to the US that you're income is "foreign" so that you don't have to pay taxes in the US - and also saying to Thailand that you're income is "US" so you shouldn't have to pay taxes in the US.

I was making the assumption that she is simply paying fully her US obligations incorrectly assuming that solves everything.. Sure seems by her posts she is unaware of working overseas deductions. Otherwise it would be even more questionable.

Really she needs to speak to a well qualified tax specialist versed in DTA law.. Though even a couple of hours of one of those back home starts costing fees that people here seem to think are shocking for running companies for annual commitments.

[Sunny Valentine]

Livinlos, under the (I think 1997) Alien Business Act it is illegal for a Thai to act as a Proxy and thereby allowing an Alien to control more than 50% of a business. The fact that this law is currently not enforced tells us something about Thai laws, not legalities!

I would agree that 70000 (or be it 10000, or whatever the figure is) seems not unreasonable for A LEGAL WAY. I personally disagree on the costs in the west. I was working freelance in Austria with gross incomes around 20000 to 25000 Euros a Year, did the accounting myself (no big deal, maybe 10 bills a month to collect and put into a Spreadsheet) and paid about 150 Euros yearly to my tax advisor doing the final declaration work. So the figure quoted here is 10 times that.

But ok, it depends on your income, and it might still make sense to pay that in order to get legal. But my point is: YOU DON'T ACCOMPLISH ANYTHING IN TERMS OF LEGALITY, just shift from violating WP rules to violating Company and proxy rules.

Giving away over 1 Million Baht to some Thai friend (and let him really control the company!) is certainly a legal way to lose 2 Million Baht capital. In my homecountry this is called Idiots Tax.... (No offense to you, but if you play strict to the rules you have no more control of the company, and your friend is free to close it down, and withdraw the Capital from the Bank account. You might be able to sue himfor your 49% legal share though, thereby keeping your losses lower!)

Sunny

[ZZZ]

Just because you dont want to pay taxes here.. Or even because the US taxes you there, doesnt mean your not due to pay income taxes in the country you are in while your working..

Just being American does not mean you dont pay other places.. I have lived and worked all over the world and had to pay taxes to loads of different governments to be and work there..

And while you may think he sounds petty and jealous he is actually spending the money to make himself legal, he then contributes taxes to the country he is in, he fullfills the laws of the land. While you avoid your tax obligations, dont make a legal company, dont bear those costs and burdens and then undercut people who do stick to the rules.. Petty ?? Jealous ??

Its not even like forming and running an Amity company is prohibitively expensive.. Certainly less so that forming and accounting for companies back in the west. You keep saying that you dont need to have a WP or even a visa.. Why ?? Show us the rules that say you can work here without a WP. Just because you want it to be true doesnt make it so.

It’s well enough to say that people should pay tax in Thailand for various work done, but why??

If working and paying tax in Europe you get health insurance, social benefits, unemployment benefits, pension, child care, maternal/paternal leave and a host of other benefits paid for by your tax contributions.

If paying tax in Thailand you get FA.

Obviously you like living here for some reason otherwise presumably you would stop.

So if you like to live here over the admitted benefits that are provided for 'free' to keep you paying taxes in your home country, then you have chosen this place as where you wish to reside. Your choice implies you should then support the country that you chose to live in, especially if working here.

I could also point out that having earnt my money in and around Europe I paid literally millions is taxes (corp and income) and apart from a couple of hospital visits received none of the list you provide ever.. Why did I contribute millions of Euros to governments that were not where I grew up, or where I wished to be ?? Because that was where I was working and doing business and it was the cost of legality.

Tax is mainly an insurance payment, you should just be lucky you did not have to make any claims against it.

At least in western countries you get this insurance coverage for your tax payments, not so in Thailand.

For what you do get in Thailand I feel that what you contibute in VAT, fees and duties and secondary tax by buying goods and services adequately cover everything.

Edited January 5, 2007 by ZZZ

[LivinLOS]

Livinlos, under the (I think 1997) Alien Business Act it is illegal for a Thai to act as a Proxy and thereby allowing an Alien to control more than 50% of a business. The fact that this law is currently not enforced tells us something about Thai laws, not legalities!

I would agree that 70000 (or be it 10000, or whatever the figure is) seems not unreasonable for A LEGAL WAY. I personally disagree on the costs in the west. I was working freelance in Austria with gross incomes around 20000 to 25000 Euros a Year, did the accounting myself (no big deal, maybe 10 bills a month to collect and put into a Spreadsheet) and paid about 150 Euros yearly to my tax advisor doing the final declaration work. So the figure quoted here is 10 times that.

But ok, it depends on your income, and it might still make sense to pay that in order to get legal. But my point is: YOU DON'T ACCOMPLISH ANYTHING IN TERMS OF LEGALITY, just shift from violating WP rules to violating Company and proxy rules.

Giving away over 1 Million Baht to some Thai friend (and let him really control the company!) is certainly a legal way to lose 2 Million Baht capital. In my homecountry this is called Idiots Tax.... (No offense to you, but if you play strict to the rules you have no more control of the company, and your friend is free to close it down, and withdraw the Capital from the Bank account. You might be able to sue himfor your 49% legal share though, thereby keeping your losses lower!)

Sunny

OK that as may be for us non Americans..

But she does have that legal avenue.. She can make herself 100% legal !! And yet she still doesnt want to..

As to your comments about company legalities here in general I agree.. Though I was under the impression that 2 mil paid up capital didnt have to be all sitting in an account always.. In and out, or using it to pay yourself, buying things etc, could all legally be done could it not ??

[LivinLOS]

Tax is mainly an insurance payment, you should just be lucky you did not have to make any claims against it.

At least in western countries you get this insurance coverage for your tax payments, not so in Thailand.

For what you do get in Thailand I feel that what you contibute in VAT, fees and duties and secondary tax by buying goods and services adequately cover everything.

At the peak I guess I was paying taxes of > 2.5 mil GBP per year through my companies (thats all remitted, income, corp, VAT, the lot) to 3 main governments.

Dont know what kind of insurance 2.5 million GBP a year buys but I think I am covered..

[Sunny Valentine]

At the peak I guess I was paying taxes of > 2.5 mil GBP per year through my companies (thats all remitted, income, corp, VAT, the lot) to 3 main governments.

Yes, for an income as big as this the company route might well make sense. But for a gross income of maybe 25000$ (this is an assumption, and might be totally wrong in the case of GirlX, but I still see lots of similar situations around, with incomes as low as 1000 Dollar, still allowing farangs a decent lifestyle here, and still contributing to the Thai economy, without any damage.)?

These incomes most likely will fall under the taxable minimum at their respective home countries too.

Sunny

[LivinLOS]

Just for arguments sake lets say that 'legality' was doable for 70 - 100k per annum.. Thats give or take about a max of 10% of a 25k USD income.. Surely a bargain by any measure ??

Most people dont like paying taxes.. But simply saying 'I am not due to pay that' does not mean you dont in fact have to.. Working illegally is fine as long as you get away with it, but so many people will complain about illegals or immigrants back home, yet happily ignore any rules that cost them financially to do the same here.

Simply saying the barrier of entry is too much of a burden, so I will not do it, is not fixing the problem.

[LivinLOS]

in Thailand, an amity company makes no sense for me as all my contracts are US-based and I am paid in US $. nothing crosses over US borders. for all intents and purposes I AM a tourist in Thailand. and I will not live here permanently, build a house, and have a family like you have.

This is where you are incorrect. When you are in Thailand you are performing an activity that generates income. Because of this, it is deemed to be Thai Source Income and this income is subject to taxation in Thailand.

It doesn't matter where the payer is located, it doesn't matter where your income is remitted or in which currency. All that matters is the location of the activities for which the payment is made. If you are telecommuting from Thailand at the present time - it means that this income is subject to Taxes in Thailand.

I'd just like to add something to my post.

Girlx, you're argument is that you shouldn't pay taxes or establish a company here in Thailand because, i quote "for me as all my contracts are US-based and I am paid in US $. nothing crosses over US borders. for all intents and purposes I AM a tourist in Thailand. and I will not live here permanently, build a house, and have a family like you have." end quote.

Following your logic, you're income would be "US Source Income" and therefore subject to taxes in the US regardless if you are a resident of the US or not. You're trying to have the best of both world, claiming to the US that you're income is "foreign" so that you don't have to pay taxes in the US - and also saying to Thailand that you're income is "US" so you shouldn't have to pay taxes in the US.

I was making the assumption that she is simply paying fully her US obligations incorrectly assuming that solves everything.. Sure seems by her posts she is unaware of working overseas deductions. Otherwise it would be even more questionable.

Really she needs to speak to a well qualified tax specialist versed in DTA law.. Though even a couple of hours of one of those back home starts costing fees that people here seem to think are shocking for running companies for annual commitments.

Look like I was wrong.. Now shes heard about getting 82 grand tax free allowance in the US shes concluded she 'owes no taxes this year'

http://www.thaivisa.com/forum/index.php?showtopic=99616

[Sunny Valentine]

Just for arguments sake lets say that 'legality' was doable for 70 - 100k per annum.. Thats give or take about a max of 10% of a 25k USD income.. Surely a bargain by any measure ??

I agree here.

I don't agree with your view that any company way will provide full legality. I am not fully aware of the regulations for Amity Companies, but I seem to remember that Sole Propriorship is not possible. You might need to find US proxies.

The work we describe here is a single person's freelance entrepeneur work, which is nowhere covered legally in Thailand for a foreigner. No shares, no company structures, no assets, no employees, no nothing. Just a person, a laptop, an internet connection, a chair and a desk.

Most people dont like paying taxes.. But simply saying 'I am not due to pay that' does not mean you dont in fact have to.. Working illegally is fine as long as you get away with it, but so many people will complain about illegals or immigrants back home, yet happily ignore any rules that cost them financially to do the same here.

Simply saying the barrier of entry is too much of a burden, so I will not do it, is not fixing the problem.

But what if the incomes falls under the taxable minimum, just for the sake of discussion, let's say both in Thailand and in your home country?

Even 2000 or 3000 Dollar a Year income could provide you with:

A - some extra income to increase your lifestyle (assuming you have (taxed!) rental or capital interest income too)

B - keeps you occupied and in touch with your profession, thereby easing the way out in case you can't or don't want to continue your liefe here anymore.

Please don't forget, even unpaid Telecommuting work is illegal under Thai law!

There is no way out. Only bending this or another law is a working solution. Or, as I mentioned before, leaving.

Sunny

[LivinLOS]

I don't agree with your view that any company way will provide full legality. I am not fully aware of the regulations for Amity Companies, but I seem to remember that Sole Propriorship is not possible. You might need to find US proxies.

I readily admit that I also am not familiar with Amity companies.. My buddy just made one and IIRC he has 94% shares and 6 others having 1% shares as there has to be 7 directors..

The work we describe here is a single person's freelance entrepeneur work, which is nowhere covered legally in Thailand for a foreigner. No shares, no company structures, no assets, no employees, no nothing. Just a person, a laptop, an internet connection, a chair and a desk.

OK but that's again asking them to make rules to fit you. If as your stating Thailand says that its not legal to do that here.. then dont do it here !! Or if Thailand says we will accept you do that here but you must do X things, such as employ 4 Thais, have an office, or pay tax at this level.. Then that's what it takes to get legal. Either do it and get legal, or stop doing it (or come to terms with the fact your breaking the law).

You cannot just say, I dont like the requirements to being legal, thats expensive and I dont make enough to pay for those costs of legality so what other offer will you make me. All kinds of businesses have all kinds of associated costs, it would seem that to be legal here those are the costs.

But what if the incomes falls under the taxable minimum, just for the sake of discussion, let's say both in Thailand and in your home country?

Even 2000 or 3000 Dollar a Year income could provide you with:

If you only want to do a little part time work, you may well find that the startups costs associated with that business do not make sense and there it should not be done. Plenty of businesses have costs structures that dont work if you only make a little bit of money.

Please don't forget, even unpaid Telecommuting work is illegal under Thai law!

There is no way out. Only bending this or another law is a working solution. Or, as I mentioned before, leaving.

There is a way out.. Only question is can she still find a suitable profit margin after the costs of being legal in this jurisdiction ?? If not will she stop or go to another jurisdiction more friendly to her business.

Not all businesses make sense in all places in the world. No point complaining that your not taken care of if you choose to come to a country where the company rules dont suit your choice of business or field of expertise.

She is I imagine quite happy to find out she gets an 82k USD tax free allowance.. That little windfall in tax she doesn't need to pay in the US will be able to finance all or part of the legal costs of being here, and paying Thai taxes, getting her work permit, and her non imm visa situation in order.

As it is it sounds like she just got on the plane, got a tourist visa, set up shop and said.. Hey I am legal.. I will pay taxes in the US later. This aint Kansas toto and different laws will apply.

[Sunny Valentine]

Livinlos, I agree with most of what you have said now.

There are still two issues we disagree though: I have lots of doubts that a company solution for a single person is fully legal. We both can't answer this. But as soon as proxies come into play, the legality is gone. Don't know anything about the legality of US proxies though .....

And it is the fact that the definition of work according to Thai law is so broad and all-encompassing, that even driving your own car makes you illegal in the strict sense of the law.

As the Thai authorities are still issuing drivers licenses without requesting a Work Permit first, there is good evidence that they themselves don't see this law as stringent as it is written ..... And once this barrier is broken (and it obviously is, and must be, as otherways there won't be ONE LEGAL FOREIGNER in this land), then I suppose it is allowed to look into how far the accepted bending of the rules go.

Asking at WP department, and getting an answer along the lines "It is ok, we won't have a way to find you, and we are not bothered to prosecute you", and then carrying on is as ok as applying for a drivers license in full knowledge that driving a car is exercising work, which is illegal, be it paid or unpaid, without a WP.

If the Thai authorities want us foreigners to follow their law in all detail, it is their right, no doubt, but at least they are then required to formulate the law in such a way that it is manageable UNDER ALL CIRCUMSTANCES.

A law that declares: You are not allowed to breath, but we won't enforce it, is worthless and has always and everywhere led to all kinds of circumvention, as circumvention is then seen as self-defense.

How far can we go in self-defense? Driving, gardening our own garden, for sure.

Calling our boss and discussing work-related topics while on holiday here? Sure.

Doing a little work, paid outside the Thai economy? I dare say yes.

Making Millions of Dollars this way, and using this argument as an excuse to evade tax? I dare say no.

Sunny

Sunny

[LivinLOS]

In full agreement with what you have said.

What I disagree with mostly is the posting of information that is illegal under law as being a legal avenue.. There are ways (take on a real Thai partner.. Go 50% with them.. Cover thier workload if they are not as good as you.. Train more Thais... Etc) even if they are not desirable or maybe cost prohibitive.

Simply saying I am an American so I don't need to pay taxes here..

Or I am not resident for taxes here because I have a tourist visa..

Or I cant get a WP easily therefore I don't need one (or a letter of exemption)..

Is not accurate or good advise. Of course many are working illegally, but IMO when posting to a visa forum its best to only represent the legal ways of doing things as legal and the illegal ways of doing things as they really are.. People can and will still break the laws but at least no one is being miss informed.

I break laws, I ride without a helmet, I am sure theres a few others.. But I am not hypocritical enough to pretend I am not breaking laws while I do so.

[girlx]

I don't agree with your view that any company way will provide full legality. I am not fully aware of the regulations for Amity Companies, but I seem to remember that Sole Propriorship is not possible. You might need to find US proxies. The work we describe here is a single person's freelance entrepeneur work, which is nowhere covered legally in Thailand for a foreigner. &

If the Thai authorities want us foreigners to follow their law in all detail, it is their right, no doubt, but at least they are then required to formulate the law in such a way that it is manageable UNDER ALL CIRCUMSTANCES.

This was my point as well. There is nothing to say that my specific situation is legal or illegal. It is a gray area. Though you will shoot back at me and say "it's illegal!", my interpretation of the law defining work in Thailand is just as valid as your interpretation. What matters is the Labor Department's interpretation, and thus far they don't seem to feel I am working illegally.

She is I imagine quite happy to find out she gets an 82k USD tax free allowance..

I am not sure I do, in my situation, which is why I am posting questions about it. I have been paying US taxes all along. If I am not required to do that and am required to pay them here instead, I will do that... at this point I am trying to get more info. As you will notice in the other post referenced up there, I did ask for recommendations of tax professionals in LOS.

Edited January 5, 2007 by girlx

[LivinLOS]

Whatever happens in the US you owe taxes for work done here.. No grey area.. No maybe.. Thats why Americans tend to have so many problems of dual taxation.. My green carded cousin was working in Europe paying both Euro taxes and US taxes.. Happens to oil rig guys all the time. Being taxes at source and home country taxation after.

And as yet you do not have the WP exemption letter. When you do then you can claim the Labour Dept say its OK.. Until then your just like any other person breaking laws who hasn't yet been caught or prosecuted. I hope it continues for you and wish you no ill will at all.. But please dont say its legal to do it. The law is clear, your working, you need either a WP or a WP exemption, you need to pay Thai taxes, you have avenues available to you to get a WP.. You simply don't want to face the costs of legalizing yourself and your visa status.

[mouse]

mouse if you are referring to me then i don't know if i am exempt from paying taxes in the US, i am trying to find out what my situation is all around. hence all my posts on the subject. as of now, i pay taxes on my income in the US. in Thailand, an amity company makes no sense for me as all my contracts are US-based and I am paid in US $. nothing crosses over US borders. for all intents and purposes I AM a tourist in Thailand. and I will not live here permanently, build a house, and have a family like you have.

I for one have followed all visa rules, work permit rules and now own a Amity company and am irked by those that think are better than the majority of us and do not need a valid visa, work permit, do their 90 reporting or to pay any taxes anywhere. Thailand will wake up some day and either fine and tax the heck out of those I mention or get rid of them as the are the ones that take no matter where they are and contribute nothing in return.

You might be on the appropriate path for your situation, it doesn't mean it is for everyone. I do not think I am better than you, and I am trying to solidify the legality of what I am doing here, but several of you can't seem to accept that Thailand does not require someone in my situation to have a work permit or non-imm visa because we are ONLY bringing money into the country, just as tourists do. you sound petty and jealous.

Only gone a couple of hours and this thread really took off. Let me respond line by line...............

1.) I refer to all those that break the rules of the community they live in, not anyone specifically.

2.) If nothing crosses over the border I assume that you have never visited an ATM, bought anything or spent any money here with that earned income. Am I correct! I doubt it. You are living in Thailand off your earned income from US based clients.

3.) In my opinion and that of the Thai government, you are a tourist for a period of 30 days and a reasonable amount of extensions. But you have been here at least two years telling by your Avatar, therefore your status as tourist is no longer valid. You are what I call a "GRAY PERSON"

4.) No one feels anyone is better than anyone else ....... let's keep the emotions out of it. A question has been asked, comments have been made and we are having a discussion.

5.) We will see what Sunbelt is able to find out, but, I suspect that you and others in your situation will not be exempted by the Thai government because it is not in their interest.

6.) Petty and Jealous! Hmm! No I am afraid not, for I have the proper plan to attain my goals and will be eligible for the $84,000 IRS Tax exclusion based on operating a U.S. firm abroad, while under the umbrella of the Amity treaty. From everything I have read I now meet all the tests. If I do not meet the goals within 3 years, I will close or sell the company.

IMHO the only way that you will find that the Thai Government will give you a special letter exempting you from the WP, Visa, Company etc. requirement is that you already own a company in the U.S.A., which would force you to register an operating arm of that company in Thailand. This would again allow for the $84,000 exclusionary rule, but, would cause you to be forced to open a company in LOS.

I did a lot of reading and talking to Tax Consultants and Lawyers before going the Amity route with Sunbelt, whom by the way, I found to be best qualified and straight up. I have lived here eight years, as a husband of a Thai citizen and met the financial requisites with my military retirement that I got when only 38 years old. Our three children will have their choices to make when the grow up. The Amity company route was not a cheap route to take, but, it will allow me to look my client in the eye and tell him that "Yes we are a legit firm and we can invoice you for our services". Of course you have to understand that the average client brings me more than $5,000 in pure profit. This is not based on the small other services that I offer on the side. So you have to evaluate for yourself if it is worth getting legit or risk being caught which will happen eventually. I promise, I will tell no one, but in LOS even the walls talk ........ Good luck and hope it works out for you.

[RAZZELL]

Whatever happens in the US you owe taxes for work done here.. No grey area.. No maybe.. Thats why Americans tend to have so many problems of dual taxation.. My green carded cousin was working in Europe paying both Euro taxes and US taxes.. Happens to oil rig guys all the time. Being taxes at source and home country taxation after.

And as yet you do not have the WP exemption letter. When you do then you can claim the Labour Dept say its OK.. Until then your just like any other person breaking laws who hasn't yet been caught or prosecuted. I hope it continues for you and wish you no ill will at all.. But please dont say its legal to do it. The law is clear, your working, you need either a WP or a WP exemption, you need to pay Thai taxes, you have avenues available to you to get a WP.. You simply don't want to face the costs of legalizing yourself and your visa status.

Agreed

There is no grey area...You are physically in Thailand, physically working at a computer...I believe where your income is derived is neither here nor there..

If you were sat in an office in Bangkok working for a multinational doing exactly the same you'd expect to pay tax, have a WP wouldn't you???

The "online world" is no different from the "real world"

You ARE working in Thailand...Just because you don't want to believe it doesn't make it so...