Do short-term foreign business travellers have immigration, tax obligations?
MANY foreigners think that if they hold a non-immigrant business visa they can live and work in Thailand. They may also believe that if they stay fewer than 183 days in one year, they don’t have to pay Thai tax. These assumptions are only partially tr
Foreigners must have a work permit, regardless of the type of visa they have.
If you come to Thailand for a meeting, seminar, training, exhibition or trade fair, you may not need a work permit.
But if you intend to work in Thailand – for even one day – you must have one.
You can apply for one underone of the following conditions:
Your employer is a Thai entity
Your foreign employer has a |customer contract with a Thai |entity
You’re a freelancer or self-employed consultant
The last condition is rarely viable because you’d need to obtain a foreign business licence.
The restrictions for getting this are very tight, and approval is granted in very few cases.
Also, regulations have changed, so now you wouldn’t be able to extend your non-B visa beyond 90 days because this requires that you’re an employee of a Thai entity.
DO FOREIGNERS WHO WORK ONLY FOR A SHORT TIME NEED TO PAY THAI TAX?
The only situation for which you’re not subject to Thai tax is if you’re a resident of a country that has a double taxation agreement with Thailand, you meet all the conditions of the DTA and you pay tax in that country.
You wouldn’t be eligible for the exemption if the country you’re living in doesn’t consider you a resident, or if you’re not paying tax there.
Another situation that invalidates the DTA exemption is if your foreign employer has a permanent establishment in Thailand.
If a foreign company regularly does business through a representative or agent in Thailand, the tax authority will consider this a permanent establishment and assess tax through the permanent establishment.
This essentially makes the permanent establishment responsible for the foreign company’s Thai tax. If you come into Thailand relatively frequently on business, this could be you.
If you’re not covered by a DTA, you’re liable to pay Thai tax from| the first day you enter the country.
Even if you obtain a work permit after you arrive, your tax obligation starts from your arrival date.
Both the Revenue Code and |the Alien Working Act have separately enforceable penalties for noncompliance, which can even be jail time.
HOW DO SHORT-TERM BUSINESS
TRAVELLERS PAY TAX IN THAILAND?
Before making any work plans for a new country, get the right advice about immigration and taxation.
In Thailand, personal income tax is calculated on a self-assessment basis, and individuals can file their own tax returns even without an employer in Thailand.
The right guidance can prevent non-compliance consequences and deportation from Thailand.
If you’d like advice, contact Hatairat Topiboonpong and Natchanond Charoenmechaikul at PwC International Assignment Services.
Contributed by Natchanond Charoenmechaikul and Hatairat Topiboonpong, senior manager of PwC Thailand.
