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.

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.