Work Permit & Visa relationship

[Ballbearing]

Guys,

A bit of a strange one but thought I would throw it out for your thoughts or advice.

I have a Non-Immigrant O visa based on marriage and it is due to expire mid July.

I have a job in China that will run to about Jan 2017. (I work 4 weeks China with 1 week R&R in Thailand).

As I am being paid by a Thai company I had to obtain a work permit even though I am not working in Thailand.

If my visa expires does that automatically cancel my work permit ?

If I was working in Thailand I realise without a visa I couldn't stay and/or work in Thailand but what is to stop me from just going in and out on the 30 day exemption ?

If I give my passport to immigration on entry they do not know I have a work permit (I presume they don't) and I do not intend to work in Thailand so would there be any problem ?

I am just trying to avoid going and getting a new visa 2 months before the old one expires or alternatively wasting part of my R&R on a trip to Savannakhet

Any advice greatly appreciated,

Cheers,

BB

[ubonjoe]

You visa expiring will not effect you work permit but if you don't have a non immigrant visa entry your work permit becomes invalid for all intents and purposes.

If you do an entry just before the enter date on your visa you would get a new 90 day entry. You could get a re-entry permit to keep it valid for your next entry. That would delay needing to get a new visa.

[thedemon]

If you are not working in Thailand, you don't need a Thai Work Permit. Being paid by a Thai company isn't relevant to that.

[elviajero]

If you are not working in Thailand, you don't need a Thai Work Permit. Being paid by a Thai company isn't relevant to that.

In order for a Thai company to employ a foreigner the foreigner needs a work permit regardless of the job they do or salary paid.

Do you have actual experience of what you are claiming or is it just opinion?

[Ballbearing]

Firstly, (in response to thedemon) I have to have a work permit if I am employed by a Thai company whether I am working in Thailand or on Mars.

My farang boss (who is also my good friend) has tried to find any loophole he can around the tax laws but we are stuck between a rock and a hard place.

UJ,

I was looking at going the tourist route for 6-8 months after my Non O expired and then going to Savannakhet after the project is complete and getting another 1 year visa - not sure what you were meaning about getting an extra 90 days as it will still not cover contract duration,

Cheers,

BB

[ubonjoe]

Firstly, (in response to thedemon) I have to have a work permit if I am employed by a Thai company whether I am working in Thailand or on Mars.

My farang boss (who is also my good friend) has tried to find any loophole he can around the tax laws but we are stuck between a rock and a hard place.

UJ,

I was looking at going the tourist route for 6-8 months after my Non O expired and then going to Savannakhet after the project is complete and getting another 1 year visa - not sure what you were meaning about getting an extra 90 days as it will still not cover contract duration,

Cheers,

BB

The 90 days would delay to get another visa. Dependent upon the timing that would allow you two more trips out and back them if you get the re-entry permit.

[Khun Robert]

Apply for one year Extension of Stay at a local Immigration office on your R&R time in Thailand.

Take a multiple entry and you can come and go for 1 year.

[thedemon]

If you are not working in Thailand, you don't need a Thai Work Permit. Being paid by a Thai company isn't relevant to that.

In order for a Thai company to employ a foreigner the foreigner needs a work permit regardless of the job they do or salary paid.

Do you have actual experience of what you are claiming or is it just opinion?

Yes I do have direct experience of employing foreign sales representatives in foreign countries with their salary paid directly from our Thai Limited company to their foreign bank accounts.

They do not require a work permit. How could they get one anyway if they are not even in the country? And how could they be subject to Thai Labour laws if they are not within Thai legal jurisdiction?

Not that it is relevant to Work Permits but, for the record, they are not subject to Thai income taxes either. There is however a 15% withholding tax deducted at source. The foreign employee (or their POA) is entitled to claim a refund from that.

By the way, do you have any actual experience or just opinion?

[Ballbearing]

thedemon,

This is from the Thai Revenue Code

Taxpayers are classified into resident and non-resident. Resident means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

As I am being paid by a Thai company then I am receiving " income from sources in Thailand ".

Therefore I have to pay tax on this income.

To be able to pay tax I require a work permit.

We have spent quite a bit of money on different lawyers in Bangkok to try and get around this problem and the advice we have received is I require a work permit (and that is what I have got)and I am currently paying tax (15% withholding only at the moment)

Regards,

BB

[thedemon]

thedemon,

This is from the Thai Revenue Code

Taxpayers are classified into resident and non-resident. Resident means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

As I am being paid by a Thai company then I am receiving " income from sources in Thailand ".

Therefore I have to pay tax on this income.

To be able to pay tax I require a work permit.

We have spent quite a bit of money on different lawyers in Bangkok to try and get around this problem and the advice we have received is I require a work permit (and that is what I have got)and I am currently paying tax (15% withholding only at the moment)

Regards,

BB

Yes the 15% tax you are paying now is Withholding tax. But that is not the same as Income tax paid by an employee resident in Thailand. What you can and can't claim back from that withholding tax gets complicated and also depends on what, if any, tax treaties are in place between Thailand and the payee's resident country.

However your presumption that in order to pay tax in Thailand, you must have a Work Permit is not correct. There is simply no connection between the two.

[elviajero]

If you are not working in Thailand, you don't need a Thai Work Permit. Being paid by a Thai company isn't relevant to that.

In order for a Thai company to employ a foreigner the foreigner needs a work permit regardless of the job they do or salary paid.

Do you have actual experience of what you are claiming or is it just opinion?

Yes I do have direct experience of employing foreign sales representatives in foreign countries with their salary paid directly from our Thai Limited company to their foreign bank accounts.

They do not require a work permit. How could they get one anyway if they are not even in the country? And how could they be subject to Thai Labour laws if they are not within Thai legal jurisdiction?

Not that it is relevant to Work Permits but, for the record, they are not subject to Thai income taxes either. There is however a 15% withholding tax deducted at source. The foreign employee (or their POA) is entitled to claim a refund from that.

By the way, do you have any actual experience or just opinion?

I was referring to people like the OP that are employees of a Thai company. A Thai company can employ a foreign company or person to do work for them without them being an employee, however, if the OP is an employee of the Thai company he is working for he needs a work permit.

My company often employs the services of foreigners living in foreign countries. One person was paid a fixed monthly payment for 2 years, but he and no others are employees of the Thai company.

If the OP's employer insists on him being an employee then he needs a work permit.

[thedemon]

If you are not working in Thailand, you don't need a Thai Work Permit. Being paid by a Thai company isn't relevant to that.

In order for a Thai company to employ a foreigner the foreigner needs a work permit regardless of the job they do or salary paid.

Do you have actual experience of what you are claiming or is it just opinion?

Yes I do have direct experience of employing foreign sales representatives in foreign countries with their salary paid directly from our Thai Limited company to their foreign bank accounts.

They do not require a work permit. How could they get one anyway if they are not even in the country? And how could they be subject to Thai Labour laws if they are not within Thai legal jurisdiction?

Not that it is relevant to Work Permits but, for the record, they are not subject to Thai income taxes either. There is however a 15% withholding tax deducted at source. The foreign employee (or their POA) is entitled to claim a refund from that.

By the way, do you have any actual experience or just opinion?

I was referring to people like the OP that are employees of a Thai company. A Thai company can employ a foreign company or person to do work for them without them being an employee, however, if the OP is an employee of the Thai company he is working for he needs a work permit.

My company often employs the services of foreigners living in foreign countries. One person was paid a fixed monthly payment for 2 years, but he and no others are employees of the Thai company.

If the OP's employer insists on him being an employee then he needs a work permit.

Can you tell me under which law this requirement falls please?

[Ballbearing]

thedemon,

If you have spent a long time in Thailand you would realise there are two ways of doing everything.

Following the pedantic (and sometimes crazy) laws which is the legal way or taking a shortcut and ignoring the requirements which is basically illegal.

I started my time in Thailand 9 years ago by working in Thailand for 2 years without a work permit (just a non-immigrant B visa)

I was lucky I wasn't caught as I would probably have been barred from Thailand.

Now I am married with children and Thailand is my permanent home I won't take any chances, I will follow the letter of the law to the best of my ability.

As noted previously my employer is a good friend and he does not want to take any chances with his new Thai company.

If he has approx. 850,000 THB come into his company account each month from an offshore payer and then pays me approx. 800,000 THB for my services there are records all over the place that the Thai authorities can jump on if they decide to audit his company.

If I am not an employee of his company how can he justify paying the money to me ? - to satisfy the Australian government he has to show the money is going to a Thai business and once it goes into a Thai company account then the Thai government want their piece of the action (tax).

If you have any suggestions would greatly appreciate any assistance (we have looked at offshore tax havens but they all seem to be under investigation at the moment)

Cheers,

BB

[thedemon]

OK I think I get what you are saying. The company would prefer to pay you as an employee rather than simply transfer the funds to you as e.g. commissions. The logic being that transferring funds offshore to a random person or entity is likely to raise a red flag to the Revenue Department whereas paying a local employee won't.

It is true that transferring large amounts offshore can raise eyebrows but in the case of a company that is generating offshore income and bringing the funds into Thailand, as long as the 15% withholding tax is being paid, there is no reason that should trigger an audit.

The reason is that whereas a local payment for the same service would incur withholding tax at 3%, an offshore payment incurs 15%. When you take into account that the corporate tax rate in Thailand is now only 20% and obviously that tax applies only to net profit then 15% on gross receipts is actually a high tax rate. The Revenue Department is well aware of that so they are satisfied.

It is primarily because of the withholding tax rule that Thailand is not a good base for transacting completely offshore business. That is why there are so few trading companies located in Thailand. The same business model based in e.g. Hong Kong would pay 0% tax on any income derived entirely offshore.

In the case of a Thai company that is buying locally and exporting from Thailand, it is very common for the Thai company to sell to a HK company with a moderate profit and then the HK company on-sells to the customer so that most of the real profit is generated in HK and not subject to any tax. The HK company is then free to pay commissions, royalties etc to whomever without any deductions. This kind of "transfer invoicing" is a gray area for tax authorities in most countries. However the concept itself is legal.

Anyway I think this subject is getting away from your op which is about the requirement for a foreign employee of a Thai company requiring a Work Permit.

The Revenue Department couldn't care less about a taxpayers immigration status or whether or not they have a WP. They simply want as much of your money as they can get. They are hardly going to say to a taxpayer "sorry we cant accept your tax payment because you don't have a Work Permit".

I don't think there is routine sharing of information between the Revenue Dep and Immigration/Labour. Why would there be? They have completely different agendas.

If you are not physically located in Thailand, then you have no business with Thai Immigration or the Department of Labour. Period.

[Ballbearing]

thedemon,

Thank you for your response.

As per my OP I am physically located in Thailand - I work 4 weeks in China on a roster and then come home to Thailand for my R&R,

Cheers,

BB