Today, a client whom we helped register a 100% Myanmar owned export company in Thailand asked us if it is necessary for them to be registered in the VAT system. Here is our response:

Normally, a company is required to register into the VAT system if the gross sale has reached 1.8 million Baht in a year or the company hires foreigners and needs to apply for a work permit because the VAT registration certificate is one of the documents requested by the Thai immigration bureau. Anyway, the company may choose to register into the VAT system before that. And once you are registered into the VAT system, you have to submit your monthly VAT returns (PP.30) with or without sale transactions. You can decide to apply for VAT refund from the Revenue Department later but keep in mind that the tax officer will request to see all supporting documents before giving you the refund.

Thai Lawyers can help you register the company into the VAT system. MSNA Group can handle bookkeeping, accounting, tax filing and consultation on Thai taxes. We will ensure that you’re your documents are properly kept in files for easier reference when tax authorities request to see them. We can also assist you in representing your company with the Revenue Department especially when you apply for VAT refund. However, we will not be responsible to speed up the process because it is up to the tax officials when they can finish checking your documents and consider your application to claim VAT. You may find helpful information on what to do once a company is registered in the VAT system, and how withholding taxes in Thailand work.

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:

What is an Income Tax Payment Certificate? When foreigners work in Thailand, they have to pay taxes here. Your Thai employer must get a work permit for you to be able to pay you legally. Every month when they pay you salary, they need to withhold your personal income tax and submit it to the Thai Revenue Department by the 7^th of the following month (or 15^th if they do it online). At the end of the year (or at the time you leave the company during the year), the employer must give you a document called 50 Tawi, or withholding tax certificate. The document has the detail of the total income you earned that year from this company, the total tax and the total social security amounts they withheld from you that year. However, it is not your Income Tax Payment Certificate.

When you prepare your personal income tax return at the beginning of the following year (31 March is the deadline), you will have to fill out the amount of tax withheld that is written in the withholding tax certificate. This tax is your tax credit. It is the tax you paid during the year by the employer’s withholding it from your income. If you did not have other sources of income from anywhere else, most likely you will not have to pay more taxes if your employer’s payroll team calculated your monthly withholding tax correctly. In some cases you will get a tax refund.

When you file your personal income tax return (PND90 or PND91 depending on whether you have income sources other than from work), you will get a receipt issued by the Revenue Department. This receipt is not enough of a proof to the Inland Revenue Service in your home country. You will need to request the Thai Revenue Department to issue an “Income Tax Payment Certificate”, which is in English and it is accepted as the proof that you paid taxes in Thailand.

An “Income Tax Payment Certificate” is not the same as a “Tax Resident Certificate”. The latter is the certificate issued by the Thai Revenue Department to certify that you were a tax resident in Thailand in the year it is issued for. Only when you have stayed in Thailand for 180 days or more in a calendar year can you request for a Tax Resident Certificate.

If you need Thai tax service, or an “Income Tax Payment Certificate” or a “Tax Resident Certificate”, contact MSNA Group for assistance. We are the official accountant of the American Chamber of Commerce in Thailand and have served the international community for over 25 years.

Can tourists buy a condo in Thailand? Yes you can. However, when foreigners buy a condo, they need to send the purchase money from overseas. The Land Department needs the evidence of your foreign money transfer to process the registration of the change in the ownership. However, normally banks will not open a bank account for a foreign tourist. How can tourists by a condo in Thailand if they do not have a bank account here? You need to send your money to Thailand to your bank account because your bank needs to issue a letter to the Land department certifying that you sent the purchase money into Thailand. What to do?

You will have to contact your country’s embassy in Thailand to issue a letter to the bank. The letter should mention that the embassy certifies your passport, that you are a citizen of that country and that they request the bank to open a saving account for you.

Depending on the bank, to open an account for you, they may ask for a residence certificate in addition to the letter from your embassy. A resident certificate is issued by the immigration office in the province where you can provide an address that is not a hotel.

When tourists buy a condo in Thailand, it is prudent that they consult with an expert like ThaiLawyers so they can be sure that the sale and purchase agreement is legal, fair and in line with the normal practice in Thailand. We will help guide you through the process while protecting your interest. If you cannot be at the Land Department to do the title deed transfer, ThaiLawyers can represent you and make sure you become the new legal owner of the condo in Thailand.

Contact MSNA group for your next real estate transaction in Thailand. We may even refer you to the best and most reliable agents who will protect you and not the other side.

Employees who are registered in Thailand Social Security system are entitled to the following compensation when they become unemployed:

1. In case of voluntary resignation, or end of the employment agreement, the insured person will receive a compensation of 30% of wages for 90 days calculated from the monthly salary of not more than THB 15,000.
2. In case of being laid-off, the insured person will receive 50% of wages for 180 days calculated from the monthly salary of not more than THB 15,000.
3. In case of termination due to force majeure (natural disaster), the employees will receive a compensation of 50% of wages for a maximum of 180 days.

Foreigners are entitled to the same benefits as Thai nationals. However, unemployment benefits will be given if the employees meet these conditions:

• Social security contributions must be made for at least 6 months within the 15-month period before the unemployment.
• Termination must not be due to an actual offense
• The applicant must register for unemployment benefits at the Social Security Area Office within 30 days from the unemployment date

The Social Security Office will pay the compensation benefit on monthly basis by crediting to the Thai bank account as stated by the insured person in his/her application for unemployment benefits.

Contact MSNA Group for consultation on Thai labor law or for your visa and work permit.

In the event that a foreigner is required to get a Certificate of Residence in Thailand for whatever legal purposes, it can be obtained from the Immigration Bureau, Royal Thai Police. Examples are when you want to buy a car or a motorcycle and when you want to apply for a driver license, the Department of Land Transportation would ask for your Residence Certificate.

Regulations and conditions (if any) for the application and the consideration.

1) A foreigner must be approved with the resident permit by Immigration Commission

2) A foreigner must hold a non-immigrant visa when collecting the Certificate of

3) In case the foreigner who is applying for resident permit in order to provide patronage of a Thai national spouse, he/she must present the original copy of marriage certificate to the officer and the Thai spouse must sign as the witness in the present of an official.

The service time starts after an officer has checked and confirmed that the required documents are complete.

Note: A foreigner should contact the Immigration Office in the area where he/she resides. If there is no Immigration Office in that area, he has to contact the nearest Immigration Office and inquire if he can submit the application over there.

Foreigners wanting to obtain a certificate of residence can contact and visit the Immigration Office in person or have a Thai person or agent who can help him apply on his behalf. Contact Thai Lawyers if you need assistance in getting a Certificate of Residence or applying for Thailand work permit.

Foreign companies who wish to engage in the business involving selling machinery, tools and equipment in Thailand may have found 100% foreign ownership solutions. Thailand offers BOI promotion for the business of wholesale of machinery. 

Under the category of Trade and Investment Support Office (TISO), the Board of Investment may grant the promotion for business activities related to machinery, tools and equipment including:

• Importing for wholesale
• Training services
• Installation, maintenance and repair
• Calibration

However, this is only applicable if the foreigners have their group companies overseas producing their own machinery, tools and equipment. Importing for wholesale can be allowed if the machinery, tools and equipment belong to the parent company or group companies and the BOI promoted company will wholesale the products to distributors in Thailand, who will then sell them to factories throughout Thailand. Thus, retailing or selling products from other sources are not allowed.

Moreover, once promoted by the BOI, the company has 3 years to comply with the BOI condition for TISO which is to have annual selling and administrative expenses of at least 10 million Baht. Although there is no exemption of corporate income tax and import duties on machinery for TISO, the company shall be granted the following non-tax incentives:

• 100% foreign ownership
• Permit to own land (to be used for operating the promoted business)
• Permit to hire foreign experts and skilled workers to work in the promoted business
• Permit to take out or remit money abroad in foreign currency

When applying for BOI promotion, it is important to hire experts in preparing the application and dealing with the Board of Investment officials. Consult with MSNA Group for your plan of  Thailand BOI company registration.

Investment promotion by Thailand BOI for Senior/dependent care centers includes many incentives. To receive the promotion, the business must meet the following conditions:

1. The facility must be a senior/dependent care center according to the health business establishments Act.

2. The care center must have no less than 50 beds for services.

3. The care center must provide the senior/dependent persons with care and support by allowing them to stay overnight and offering rehabilitation activities.

4. Thai national shareholders must have at least 51% of registered capital.

5. The care center must receive a license to operate a health business establishment prior to applying for Corporate Income Tax (CIT) exemption.

6. Revenue eligible for CIT exemption must come exclusively from accommodation and senior care services, i.e. activities and food services, etc.

Once promoted by the BOI, Senior/dependent care centers shall be granted with the following incentives:

   – Corporate Income Tax exemption for 3 Years.

   – Exemption of import duties on machinery.

   – Exemption of import duties on raw materials used in R&D.

   – Exemption of import duties on raw materials used in production for export.

   – Permit to own land

   – Permit to bring into the Kingdom skilled workers and experts to work in investment promoted activities

   – Permit for foreign nationals to enter the Kingdom for the purpose of studying investment opportunities

   – Permit to take out or remit money abroad in foreign currency

When applying for the BOI promotion, it is important to have an expert’s help, not only in doing the BOI application, but also in coordinating with the BOI officers. Consult with ThaiLawyers to know more about the procedures in getting BOI promotion for your eligible business activity in Thailand.

In one of our previous posts, we talked about personal allowance for parents that is allowed for the computation of Personal Income Tax and filing with the Revenue Department. However, only Thai citizens can use parents allowance for computation of Thai Personal Income Tax.

In this article, we would like to explain that if you and your spouse (who is not working and has no income) support your parents, you may use a parental care allowance of THB 15,000 for each qualified parent given that they meet the following conditions:

1. You/your spouse is a legitimate child (not adopted) of the parent
2. At the end of the year, either of your mother and father is at least 60 years of age and must be under your care and financial support
3. Your qualified parent must not have assessable income exceeding THB 30,000 (including exempted income)

For each qualified parent you are claiming the allowance, you must provide a Parental Care Certificate showing their personal Identification Number and the amount of the allowance. However, if you have a sibling who is also supporting your parents, only one can claim for a parental care allowance.

On the other hand, if you are a non-Thai taxpayer, you can claim for parental care allowance if your qualified parent is a Thai citizen.

Contact MSNA for assistance in filing your personal income tax returns in Thailand.