Pattaya Condo

Friday, 26 October 2012 16:40

Taxes & Tax Clearances Featured


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This is one of Thailand's most confusing subjects, especially for the new visitor/resident.  It is further muddied because certain regulations are unenforced. These are always to the advantage of the foreigner, but there is always a certain nervousness because there is no way of knowing when enforcement might resume. Here is Joe Lizzerd’s overview about taxes for our friends and customers.

The easiest to understand are these two basic rules, always enforced.

(1) Any foreigner who spends more than 89 consecutive days in Thailand must obtain a tax clearance before he can leave.

(2) Any foreigner who spends more than 179 days in Thailand in any calendar year must obtain a tax clearance. Note that Thai citizens do NOT require tax clearances of any type to leave the country.  Foreign children under 15 on day of departure are also exempt from all tax clearance laws.

Many foreigners believe that they require tax clearances only if they have worked in Thailand.  On the contrary, foreigners who work in Thailand require a tax clearance after a stay of any length, including overnight.  Tourists, students, spouses -- they all require tax clearances after 89 (or a cumulative 179-plus) days in the country.  Reasons for being in Thailand and actions performed are of no consequence.

A tax clearance is generally available at one of two places:

1.  In Bangkok, at the central tax office, and,
2.  In the provinces, from provincial or district tax offices.

Tax clearances are not legally issued by the Bangkok Metropolitan Authority (the equivalent of a provincial office) or by any of the district offices in the capital.

Tax clearances must be issued by the central tax office in Bangkok for all foreigners, except those able to show that they spend most of their time in another part of the country.  Most district offices in Thailand will refuse to grant a tax clearance to tourists.  The exceptions to this rule are districts in popular tourist spots such as Phuket, Banglamung (Pattaya) and Chiang Mai.

(Many foreign residents are able to obtain tax clearances from provincial or district tax offices, and they might be able to introduce visiting friends to this service.)

Taxable Income is a subject that confuses many.  Thai law, like the law of most countries, defines taxable income as any money received from any source for any purpose.  In Thailand, this includes money carried by, or sent to, a visitor.

In general, it is necessary to pay income tax in order to receive a tax clearance.  "Income" is defined as the amount of money spent in Thailand.  The tax officers hear foreigners' complaints about this daily, and are unimpressed.

This document will not advise anyone on how to obey any law in Thailand.  However, it is hereby noted that those who pay the least income tax in Thailand are those who are best able to convince the tax officers how cheaply they can live.

In the end, the amount of income tax is at the sole discretion of the tax officer.  So, it should be stressed, is the decision of whether to issue a tax clearance quickly, or require several days and extensive "documentation" because he/she is displeased at the attitude of the applicant.  Such cases are rare in the Thai civil service, but not unheard of.

Nationals of a fortunate but tiny handful of countries, including Britain and Canada, may not require a tax clearance. These countries have bilateral tax treaties with Thailand.  (The United States does not.)  If you are in doubt, check your embassy.

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