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Tax Residence Certificate – Thailand

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:

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Income Tax Payment Certificate for Foreigners in Thailand

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 7th of the following month (or 15th 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.

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Tourists Buy a Condo in Thailand

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.

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Unemployment Benefits from Social Security

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.

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Certificate of Residence

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.

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BOI Promotion for Wholesale of Machinery

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.

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Thailand BOI for Senior/Dependent Care Centers

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.

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Parents’ Allowance for Computation of Thai Personal Income Tax

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.

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Double Tax Agreement

The Double Taxation Agreement or DTA is a tax treaty between 2 countries. Currently Thailand has double taxation treaties with 61 foreign countries which cover taxes on income and capital of individuals and juristic entities.

In order to be considered a Thai tax resident and be entitled to treaty benefits, a tax payer must be one of the following:

  1. An individual who stays in Thailand for a consecutive 180 days or more in a tax year;
  2. A juristic person who is registered under the Civil and Commercial Code of Thailand

A Double Taxation Agreement applies to only income taxes such as personal income tax, corporate income tax and petroleum income tax. Other indirect taxes such as the Value Added Tax (VAT) and Specific Business Tax (SBT) are not covered by the DTA. Although the DTA does not specify any specific amount of income and tax rate in general, it prescribes whether the source or resident country is entitled to tax on certain income. If the source country has taxing rights, the income will be taxable according to the domestic laws of that country.

A Double Taxation Agreement  also stipulates a tax rate level on investment income such as dividends, interests and royalties. Therefore, the source country can tax such income at a rate not exceeding the rate prescribed within the treaty. Normally, the tax rates within the DTA are lower compared to the domestic tax rates in order to decrease tax impediments to cross border trade and investment. However, some articles of the DTA clearly do not accept the source country to exercise taxing rights on income such as income from international air transport and business profits provided that the business is not carried through a permanent entity in the source country.

In general, Thai double taxation treaties place a resident of the foreign country in a more favorable position for Thai tax purposes than under the domestic law, for example, the Thai Revenue Code of the Revenue Department. It provides income tax exemption on business profits (industrial and commercial profits) earned in Thailand by a resident of a foreign country if it does not have a permanent establishment in Thailand. In addition, the withholding taxes on payments of income to foreign juristic entities not carrying on business in Thailand may be reduced or exempted under the double taxation treaties.

Thai taxation has a unique tax structure thus, consulting with Thai tax experts is highly recommended. Consult with MSNA Group, for the best Thai tax advice.

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Thai Personal Income Tax on Dividends

According to the Revenue Department, a taxpayer who resides in Thailand and receives dividends from a juristic company or partnership registered in Thailand is entitled to a tax credit of 3/7 of the amount of dividends received. In computing his assessable income, the taxpayer should gross up his dividends by the amount of the tax credit received. The amount of tax credit is creditable against his personal income tax liability of the same year.

Moreover, a taxpayer who resides in Thailand and receives dividends or shares of profits from a Thai registered company or a mutual fund whose tax has been withheld at source at the rate of 10% may choose to exclude such dividends from his assessable income when calculating his Personal Income Tax. However, in doing so, the taxpayer will be unable to claim any refund or credit as explained in the above paragraph.

Thai personal income tax returns must be filed within 31st March of the year following the year in which the income was received. Contact MSNA for computation and filing of your PIT returns before the due date and further consultation on Thai taxation.

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