Thailand new tax impact on overseas companies with resident shareholders/directors? Q

[wellington]

Thailand personal tax changes are simplified.

Resident 180 days +

1. Only taxed on remitted income
2. Only taxed on remitted dividends
3. Only tax on ROI (profit) of investments
4. Only taxed on remitted income from RE.
5. Private Pensions Taxable
6. State Pensions may or may not be Taxable.

etc... thi one is done to death.

Spoke to Revenue Department confirmed that no tax for personal income/dividends unless remitted, regardless of year from 2024.

Still no clarity on one thing though.

Company overseas hold equity in (more than 25% for example) - Company makes a profit, shareholder OR director living in Thailand, where company automated with personnel overseas.

Is this company now taxed in Thailand @20%.

Anyone got any thoughts?

Note
Companies incorporated in Thailand are taxed on worldwide income. A company incorporated abroad (i.e. a company organised under foreign laws or a foreign company) is taxed on its profits arising from or in consequence of the business carried on in Thailand.

The corporate income tax (CIT) rate is 20%.

A foreign company not carrying on business in Thailand is subject to a final withholding tax (WHT) on certain types of assessable income (e.g. interest, dividends, royalties, rentals, and service fees) paid from or in Thailand. The rate of tax is generally 15%, except for dividends, which is 10%, while other rates may apply under the provisions of a double tax treaty (DTT).

https://taxsummaries.pwc.com/thailand/corporate/taxes-on-corporate-income
No mention on when said business has no activities within Thailand.

Last edited: Oct 27, 2023

 

[JackAlabama]

wellington said:
Thailand personal tax changes are simplified.

Resident 180 days +

1. Only taxed on remitted income
2. Only taxed on remitted dividends
3. Only tax on ROI (profit) of investments
4. Only taxed on remitted income from RE.
5. Private Pensions Taxable
6. State Pensions may or may not be Taxable.

etc... thi one is done to death.

Spoke to Revenue Department confirmed that no tax for personal income/dividends unless remitted, regardless of year from 2024.

Still no clarity on one thing though.

Company overseas hold equity in (more than 25% for example) - Company makes a profit, shareholder OR director living in Thailand, where company automated with personnel overseas.

Is this company now taxed in Thailand @20%.

Anyone got any thoughts?
Click to expand...

No, its not a thai company, unless company is specifically targeting thai market, then maybe issues are coming up.
Company also has substance overseas, so easy peasy for a shareholder (except for the divs and eventually income sent in).

wellington said:
Note
Companies incorporated in Thailand are taxed on worldwide income. A company incorporated abroad (i.e. a company organised under foreign laws or a foreign company) is taxed on its profits arising from or in consequence of the business carried on in Thailand.

The corporate income tax (CIT) rate is 20%.

A foreign company not carrying on business in Thailand is subject to a final withholding tax (WHT) on certain types of assessable income (e.g. interest, dividends, royalties, rentals, and service fees) paid from or in Thailand. The rate of tax is generally 15%, except for dividends, which is 10%, while other rates may apply under the provisions of a double tax treaty (DTT).

https://taxsummaries.pwc.com/thailand/corporate/taxes-on-corporate-income
No mention on when said business has no activities within Thailand.
Click to expand...

 

[wellington]

JackAlabama said:
No, its not a thai company, unless company is specifically targeting thai market, then maybe issues are coming up.
Company also has substance overseas, so easy peasy for a shareholder (except for the divs and eventually income sent in).
Click to expand...

Pukka, as it appears BVI is now trying to push the tax element 'overseas'.

Wasn't sure on the Thai view point and trying to find up-to-date information was proving difficult.

--

So for all intense purposes.

A company in a non-reporting zone, and non-public accounting zone would actually be the best approach, little paperwork (data retention) and leave funds overseas, as long as business is carried out overseas, and substance is overseas (staffing etc) then Thailand is the same as before 'except personal'.?

 

[JackAlabama]

wellington said:
Pukka, as it appears BVI is now trying to push the tax element 'overseas'.

Wasn't sure on the Thai view point and trying to find up-to-date information was proving difficult.
Click to expand...

Yup, this is because of the Thai focus internally mostly, so I wouldnt expect sophisticated world wide regulations.

The problem arises as the small and weak shathole islands trying to appease the communists but lack serious manpower to handle sophisticated legislation, but thats what they do.

Might still works if the company is set up like whats commonly known and expected of being a real old style company and it should be good regardless of what the banana host place says. It still looks like for real then.

 

[maritusa]

Is it possible to live in Thailand and be an employee of a foreign company and work remotely from within Thailand?

Let's say you keep 90% of your salary in a foreign bank account and only remit 10% to cover your living expenses. Would you then only have to pay tax on that 10% you remit?

Could something like this work?

 

[JackAlabama]

maritusa said:
Is it possible to live in Thailand and be an employee of a foreign company and work remotely from within Thailand?

Let's say you keep 90% of your salary in a foreign bank account and only remit 10% to cover your living expenses. Would you then only have to pay tax on that 10% you remit?

Could something like this work?
Click to expand...

like for all country in asia equally applies, your visa for doing that would be?

 

[wellington]

maritusa said:
Is it possible to live in Thailand and be an employee of a foreign company and work remotely from within Thailand?

Let's say you keep 90% of your salary in a foreign bank account and only remit 10% to cover your living expenses. Would you then only have to pay tax on that 10% you remit?

Could something like this work?
Click to expand...

The old system was the following.

Domestic Company pay salary upto 125,000 THB onshore.
Consultancy Company (HK) bill overseas company (parent/sub/sister of Domestic company) ~

You'd /or the company would pay the taxes for the domestic income, offshore would be tax free (consultancy) dividends paid annually, but left to mature overseas (HK) for 12 months then remitted tax free if you wanted.

The new system would likely have overseas and domestic taxed due to CRS information being shared.

 

[maritusa]

JackAlabama said:
like for all country in asia equally applies, your visa for doing that would be?
Click to expand...

Marriage or elite visa

wellington said:
The old system was the following.

Domestic Company pay salary upto 125,000 THB onshore.
Consultancy Company (HK) bill overseas company (parent/sub/sister of Domestic company) ~

You'd /or the company would pay the taxes for the domestic income, offshore would be tax free (consultancy) dividends paid annually, but left to mature overseas (HK) for 12 months then remitted tax free if you wanted.

The new system would likely have overseas and domestic taxed due to CRS information being shared.
Click to expand...

Was the reason for the domestic salary to qualify for a work permit?

In this case wouldn't the HK company technically have to pay Thai corporate income tax since all its activities are carried out from Thailand and its single shareholder is living in Thailand? Maybe risky now with CRS like you mentioned.

This might be a stupid question, but is it possible to be employed directly by a foreign company without me having any company? Maybe no employer will agree to this.

 

[wellington]

maritusa said:
Was the reason for the domestic salary to qualify for a work permit?
Click to expand...

In the old days, yes it would provide a work permit, but also evidence of tax paid whilst residing in Thailand.

maritusa said:
In this case wouldn't the HK company technically have to pay Thai corporate income tax since all its activities are carried out from Thailand and its single shareholder is living in Thailand? Maybe risky now with CRS like you mentioned.
Click to expand...

Perhaps, it's how all the big companies structured it...

maritusa said:
This might be a stupid question, but is it possible to be employed directly by a foreign company without me having any company? Maybe no employer will agree to this.
Click to expand...

You'll have questions in the future...

 

[Puzel12]

wellington said:
Thailand personal tax changes are simplified.

Resident 180 days +

1. Only taxed on remitted income
2. Only taxed on remitted dividends
3. Only tax on ROI (profit) of investments
4. Only taxed on remitted income from RE.
5. Private Pensions Taxable
6. State Pensions may or may not be Taxable.

etc... thi one is done to death.

Spoke to Revenue Department confirmed that no tax for personal income/dividends unless remitted, regardless of year from 2024.

Still no clarity on one thing though.

Company overseas hold equity in (more than 25% for example) - Company makes a profit, shareholder OR director living in Thailand, where company automated with personnel overseas.

Is this company now taxed in Thailand @20%.

Anyone got any thoughts?

Note
Companies incorporated in Thailand are taxed on worldwide income. A company incorporated abroad (i.e. a company organised under foreign laws or a foreign company) is taxed on its profits arising from or in consequence of the business carried on in Thailand.

The corporate income tax (CIT) rate is 20%.

A foreign company not carrying on business in Thailand is subject to a final withholding tax (WHT) on certain types of assessable income (e.g. interest, dividends, royalties, rentals, and service fees) paid from or in Thailand. The rate of tax is generally 15%, except for dividends, which is 10%, while other rates may apply under the provisions of a double tax treaty (DTT).

https://taxsummaries.pwc.com/thailand/corporate/taxes-on-corporate-income
No mention on when said business has no activities within Thailand.
Click to expand...

why do you care? Thailand is not part of CFC