The intricacies of taxation for Thai company employees working abroad

The common belief is that if you’re working for a Thai employer, you have to pay Thai personal income tax regardless of the country in which you work. Thai companies also commonly believe they need to withhold tax on salaries paid to employees working in foreign countries. 
But other issues come into play here, namely tax residency and double taxation agreements, making the ball easier to fumble. It’s commonly believed that tax residency kicks in if you’re in a country past the 180-day mark in a calendar year. 
Below that mark, you don’t have to pay tax in that country unless your wages are paid there. However, not all countries apply this condition, so this shouldn’t be the default assumption. For example, some countries consider your property in the country, others your intended length of stay, and so on. In any case, if you qualify as a tax resident, you may incur a double taxation penalty where you’re taxed in both countries. However, the double tax could be eliminated if Thailand has a double taxation agreement (DTA) with your host country.
Let’s explore what the Revenue Department has had to say about this in recent days.
Case 1: A Thai company was considering hiring someone in Vietnam to look for market expansion opportunities in that country. The employee would be working to benefit the Thai company, but would not be living or working in Thailand at all. 
The Revenue Department’s view of this case is that there is no Thai personal income tax obligation for the foreign employee. 
Case 2: A Thai company sends employees on multiple-year assignments to its representative office in Vietnam. The employees’ yearly trips home to Thailand last for no more than 30 days. In this case, the tax authority’s view is that the employees are obligated to pay Thai tax on their salaries, and that, under the Thailand-Vietnam DTA, Vietnam should credit the Thai tax paid against their Vietnam tax obligations. 
This is an important point because the employees could be double taxed. Vietnam could decide not to credit their Thai tax on the basis that they are Vietnam tax residents and are working in Vietnam.
Case 3: A Thai company sends employees to Laos for two to three years for its business purposes, and these employees are in Laos for 200 to 300 days per year. The tax authority’s view of this is that, as the employees are Lao tax residents and pay monthly taxes in Laos, they have no obligation to pay Thai tax by virtue of the Lao-Thai DTA. 
Note that the background for this case doesn’t cover whether the employees work in Thailand for any of the remaining days of the year. 
This begs the question: Did the tax authorities address that possibility in their ruling? And why does the DTA apply here, but not for the representative office arrangement of Case 2? 
Case 4: A Thai company deducts withholding tax on salary payments to an employee who works in Malaysia for part of the year. During the severe flooding incident in Thailand, the employee was moved to Malaysia full time until the flooding was controlled. 
However, during this time, the employee would come back to Thailand to finish administrative work so he could care for his family. The Revenue Department decided that this created both Thailand and Malaysia tax obligations. Under the tie-breaker rules of the Malaysia-Thailand DTA, the employee’s economic and personal ties were stronger to Thailand. As such, as the employee’s resident country, Thailand would allow the Malaysian tax paid as a credit in Thailand. 
How do these cases apply to you?
As you can see, applying personal income tax rules isn’t always a clear shot. All the cases above involve Thai employers, but the Revenue Department took different views of the tax obligations involved. If you’re not completely certain about your situation, secure a firm opinion in writing from the Revenue Department to avoid being sidelined in a tax audit. 

JIRAPORN CHONGKAMANONT, PwC partner, and Natchanond Charoenmechaikul, PwC |senior manager, contributed this article.