One of our clients that is engaged in trading business has recently registered its branch into the VAT system with the Revenue Department. Now, they have 2 VAT registration certificates, one for the main office and another one for its branch. Today, they asked us which one to use and when it should be used.

Our reply:

When you buy things for the head office, you need to tell the supplier to issue their tax invoice to your head office. And when you buy things for your branch, then the supplier should issue their tax invoice for the branch.

The tax invoice issuer should put the word “head office” or “Branch No.1” on the tax invoice for you.

Contact MSNA for accounting and tax filing needs. Thai Lawyers can help you register your company and your branches into the VAT system.

Once promoted by the Thai Board of Investment, the company must follow the conditions as specified in the BOI promotion certificate in order to be granted with tax and non-tax incentives.

For non-tax incentives, the BOI can grant the following:

• Majority or 100% foreign ownership of the company (100% foreign shareholding)
• Right to own the land to operate the promoted business
• Visa and work permit to expat employees
• Exemption of import duty on machinery used for R&D and training services
• Permission for taking out or remitting money overseas in foreign currency
• Permission for foreign nationals to enter Thailand for the purpose of studying investment opportunities

For tax incentives, the Revenue Department provides the following as specified on the BOI promotion certificate:

• Exemption of corporate income tax on the net profit and dividends derived from the promoted activity
• Reduction of personal income tax for expat employees
• Exemption or reduction of import duties on machinery
• Exemption of import duties on materials imported for R&D purposes
• Reduction of import duties for raw or essential materials
• Exemption of import duty on raw or essential materials imported for use in production for export

We at MSNA together with our BOI expert team can guide you to fully understand the BOI incentives that can be granted to your promoted project. We can also assist you in complying with the BOI conditions as specified in your BOI promotion certificate.

Today, one of our payroll clients asked us about the intercompany transfer of employees in Thailand. They have group of companies and would like to transfer of their staff from company Y to company Z. The compensation package is the same but can he/she carry forward the working year to the company Z?

To answer this question, it can be carried forward if the employee agrees to move to company Z. Then company Z must take over all the rights and responsibilities related to the employee. A new employment contract can be made as proof referring to the old contact that was transferred.

However, the employee also has the right to decide whether to accept to move to company Z continuously or not. If he/she does not agree, company Y must pay compensation to the employee. The employee can then choose to move with company Z and start new employment period or find another company to work for.

This is in accordance with Section 13 of the Labour Protection Act B.E. 2541, whereas if there is a change of employer or in case that the employer has registered, changed, transferred or merged with another company and it causes any employee to become an employee of a new employer, therefore, the employer shall get consent of the employee who will be transferred. The new employer shall take over all the rights and responsibilities owed to the transferred employee by the previous employer.

Moreover, under Section 577 of Thailand Civil and Commercial Code, the employer may transfer the right to a third party with the consent of the employee. The employee may have a third person render the services in his place with the consent of the employer. If either party does not agree, the other party may terminate the contract.

At MSNA Group, we provide services such as accounting, tax, payroll and financial services. Contact us now for your business needs.

The Foreign Business Act of 1999 has identified 3 lists of activities in which foreigners may be prohibited or restricted.

Business activities in List 1 are designated as “businesses prohibited to foreigners to operate due to special reasons. Meaning, foreigners or foreign owned companies are completely restricted from engaging in the activities in List 1. Such business activities are as follows:-

1. The Press, radio broadcasting station or radio and television station business
2. Rice farming, plantation or crop growing
3. Livestock farming
4. Forestry and timber processing from a natural forest
5. Fishery, only in respect of the catchment of aquatic animals in Thai waters and specific economic zones of Thailand
6. Extraction of Thai medicinal herbs
7. Trading and auction sale of antique objects of Thailand or objects of historical value of the country
8. Making or casting Buddha images and monk alms-bowls
9. Land trading

Although other activities that are not mentioned above may be permitted to foreigners, Section 6 of the Foreign Business Act states that foreigners may not operate any business within Thailand if he/she has been deported or whose deportation is pending or if he/she is entering and staying in Thailand without permission under the Immigration law or other laws.

Learn more about the Foreign Business Act and the business activities that you may be able to do in Thailand. Contact Thai Lawyers now for an online consultation.

The Thai Social Security Fund is the government-administered fund by the Social Security Office which provides social security coverage to the insured persons with source of fund coming from employers, employees and the government. The SSF covers only non-work-related contingencies with benefits covering medical care, sickness, maternity, invalidity, death, old age, child allowance and unemployment.

Hence, when a company in Thailand starts hiring 1 or more employees, it has to register the employees in the system and submit the social security fund to the Social Security Office within 30 days from the first day of employment. The employer or an authorized person can submit the Registration Forms as follows:

• The Employer/Company Registration Form (SSO 1-01)
• The Employee/Insured Person Registration Form (SSO 1-03)

For the case of Burmese employees, they must obtain the work permit first before the company can register them in the system. However, if a Burmese has been employed by the company as a director or in case he/she holds a different job position but at the same time, he/she is a shareholder of the company, he/she is not required to be in the Social Security Fund system because he/she is considered as an owner of the company.

The company should also note that when an employee resigns or has had his/her employment contract terminated, the company must notify the SSO that the said employee is no longer employed within 15 days of the following month. The form to submit is the Notification Form for the Cessation of Being an Insured Person (SSO 6-09)

Moreover, when an employee changes his/her given name or family name or any other information pertaining to his/her family status, or the number of children of the said employee’s family, the company must notify the SSO these changes within 15 days of the following month using the form for making notifying of Changes of Employee Information (SSO 6-10).

Thai Lawyers can help register the Myanmar companies and its employees into the Social Security Fund system. We also process work permit & visa applications for Burmese employees before we register them with SSO. Contact us now for more information and expert advice.

One of our Myanmar clients has asked us if they are required to register their work rules with the Department of Labor Protection and Welfare, the Ministry of Labour. Currently, they have 10 employees. Here is our response as an employer’s perspective.

In accordance with the Thai Labour Law, if the company has hired ten employees or more, it is required to have work rules in the Thai language. There is no need to register the work rules with the Ministry of Labour but the work rules must be displayed in the company’s office and must contain at least particulars on the following:

• Working days
• Normal working time
• Rest periods
• Holidays
• Rules of taking holidays
• Rules governing overtime and holiday work
• The date and place of payment of wages
• Overtime pay
• Holiday pay
• Holiday overtime pay
• Leave and rules of taking leave
• Discipline and disciplinary measures
• Lodging of grievances
• Termination of employment
• Severance pay and special severance pay

As an employer, you must announce the work rules within fifteen days from the date the employer employs ten or more employees. You should always keep a copy of the work rules at the office, hand out and post the work rules in a noticeable spot in the workplace easily available for employees to know and read.

In case you have to amend or revise the work rules, you must announce that amended work rules within seven days from the date that the amended work rules has been implemented.

Thai Lawyers can assist employers in drafting work rules for employees as well as reviewing their employment contracts to make sure it is in line with the Thai Labour Law. Contact us now for initial consultation.

If you will be doing consulting business, you may be eligible for Thailand BOI promotion under the activity “Trade and Investment Support Offices (TISO)”. The scope of activity covers advisory services on business operations except those engaged in buying and selling securities, foreign currency exchange, accounting, legal, advertising, and architectural and civil engineering businesses.

The main condition for this activity is that the company’s annual selling and administrative expenses must be at least 10 million Baht. Note that the direct costs of your services, for example, the salaries of the consultants who provide the company’s services to clients, are not part of the selling and administrative expenses. Your Thai accountant who knows how to fill out a corporate income tax return should be able to tell what expenses are considered to be in this group. MSNA group, which is a local Thai accounting firm with years of experience in helping foreign businesses obtain a BOI certificate, may be a great help in this area.

Although you cannot get tax exemption under this activity, you can still be granted with non-tax incentives which are as follows:

• more visa and work permits for foreign employees to work in your BOI promoted company
• privilege to own land to be used for operating the BOI promoted activity
• can be allowed to take out or remit money abroad in foreign currency

Contact MSNA group for getting BOI promotion, company registration, visa and work permits.

According to Section 41 of the Revenue Code of the Thai Revenue Department, foreigners have the duty to file their taxes in Thailand as below:

1. Income derived in Thailand

If a foreigner has income from sources within Thailand either by employment, own business or assets located in Thailand, such income is subject to income tax whether such income is paid within or outside Thailand.

• Income derived outside Thailand

If a foreigner has income outside Thailand, such income is subject to Thailand income tax if these two conditions are met:

• Such income has been incurred in any tax year starting from 1 January 2024 onward by a foreigner who stays in Thailand for 180 days or more in a tax year, and;
• Such income earned from 1 January 2024 has been remitted or brought into Thailand (whether wholly or partially) in any tax year from 2024 onward

For instance, a Burmese who lives in Thailand for at least 180 days in 2024 with income from Myanmar or another country brings the money earned before 2024 into Thailand in 2024, then it will not be taxed. If he/she brings the money earned in 2024 into Thailand in 2025, then it will be taxed in 2025. However, if he/she has income earned outside Thailand but he/she is not a tax resident in Thailand and brought or remitted such income into Thailand later, it is not subject to Thai tax because he/she did not stay in Thailand for 180 days or more during the tax year.

Tax Returns to be Filed

If he has income derived from employment in Thailand only, he must submit the personal income tax return P.N.D. 91.

If he has income derived within Thailand and outside Thailand or just from outside Thailand, he must submit the personal income tax return P.N.D. 90.

MSNA Group can not only help Burmese people on how to do business in Thailand, we can also help you with Thailand taxes. If you need assistance in filing your personal income tax returns in Thailand, you come to the right place. Contact us now for more information.

Who wants a Tax Residence Certificate or “Certificate of Residence”? Simply put, the foreigners who want to show it to their home country to prove that they should pay tax to Thailand and not their home country. Tax residence certificate may be issued by the Thai Revenue Department upon request by a foreigner who stayed in the country for 180 days or more in a calendar year. If you were in Thailand for such a period in many years, you need a Tax residence certificate for each year. Not one certificate is good for various years.  By the way, do not confuse it with a Tax Clearance Certificate or an Income Tax Payment Certificate.

A company registered in Thailand may also request a tax residence certificate. However, here we want to talk only about individuals who may want to obtain one. MSNA Group can assist you in getting it issued by the Thai tax authorities. The two most important things are:

1. You need to be able to prove that you were in Thailand (continuously or not) at least 180 days in the year by showing the copy of your passport pages where there are stamps of your entries and exits.
2. You need to have income earned in that year and brought into Thailand the same year, or you were working in Thailand with a work permit. This way, you would file your personal income tax of that year. The Revenue Department needs to see your tax return with its official receipt and your Tax ID card.

Just contact MSNA Group so we can help you obtain your Tax ID card, prepare and file your tax return, get an Income Tax Payment Certificate or a Tax Clearance Certificate  or a Tax Residence Certificate (which the Revenue Department calls “Certificate of Residence”). Essentially, the document looks like this: