How can an Umbrella Company Help with Contracting in Thailand?
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Thailand. Even better, most are experts in Thailand and expat tax law, meaning they’ll also help you optimise your earnings in Thailand.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Can I Organise My Taxes and Work Permit Myself?
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Thailand.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in Thailand, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Thailand and your home country can seem like full-time work in itself.
A Contractor’s Guide to Taxes in Thailand
One of the most consistently challenging aspects of contracting in Thailand is complying with the country’s tax system. As well as paying tax in Thailand, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Thailand
If you’re working in Thailand under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Thailand for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Thailand, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Thailand through PAYE is left with the prospect of doing everything themselves.
Do you know much about Thai Tax Law? Does Thailand have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Thailand can range from 0 to 35 percent, and you need to be sure you are placed in the correct tax brackets.
Tax Filing as a Contractor in Thailand
|When Do You Need to Lodge Your Tax Return?||Tax year ends on 31 December. A tax return may be lodged after the end of the tax year.|
|Tax Filing Deadline||31 March for paper based return. 8 April for electronic return.|
|Can you file it online?||Yes, https://rdserver.rd.go.th/publish/index.php|
How to File Taxes in Thailand as a Contractor
Anyone who has taxable income must register for a Tax ID number (before earning the income) at the Revenue Office by presenting their passport or ID card. The process for filing your tax return involves:
Step 1: Determine the relevant form to submit. The forms may be found here(link is external).
PND90: For taxpayer with income not only from employment.
PND91: For taxpayer who received income from employment only.
Step 2: Collect the required documents. This usually includes:
Your 13 digit taxpayer ID (and your spouse’s taxpayer ID if you are filing jointly).
Spouse’s passport number.
Withholding tax certificates.
Documents regarding government retirement allowance and payments from any government pension funds.
Documents relating to mortgage or any debts.
Documents relating to rental income or expenses.
Documents specifying any dividends earned.
Documents regarding the sale of property.
Documents regarding the sale of any units in a mutual fund or equity fund.
Step 3: Fill in all fields on the form. This may be done digitally.
Step 4: The forms may be filed as a hard-copy at any Revenue Department Area Office or submitted online(link is external).
If filing at a Revenue Department Office, any additional tax due must be paid at the time of filing by cash or cheque. Any tax refunds will be mailed as a cheque and this must be deposited within 6 months from the date of issue.
If filing online, any tax due must be paid electronically and any tax refunds will be mailed to you as a cheque.
Tax Figures in Thailand
|Currency||Thailand Baht (THB)|
|Tax-free Threshold in Thailand||150,000 THB|
|Income Tax Rates|
Personal income tax is levied on an individual’s gross income at the above progressive rates.
Tax Residency in Thailand
When do you become a tax resident in Thailand
You become a tax resident in Thailand when:
A person is classified as a tax resident if they are present in Thailand for an aggregate of 180 days or more in any given tax year. Immigration status and nationality is not relevant.
Does the 183 day rule apply in Thailand
180 day rule applies. Individuals are regarded as a tax resident if they live in Thailand for 180 days or more in the calendar year.
Am I taxed on my global income in Thailand
Yes, only if you are a Thai resident whose income from abroad has been remitted to Thailand in the year which it is received.
Can you set up your own Limited Company in Thailand?
|How long does it take to set up||5 days|
|How much does it cost||Approximately 11,750 THB. May be higher or lower depending on the size of the initial capital.|
|Is it easy?||Starting a Business Rank: 36. This ranking is relatively high meaning that starting a business is fairly simple in Thailand.|
Tax Calculator in Thailand
If you are a contractor and want a calculation on your tax and net retention in Thailand, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in Thailand
Contractors in Thailand are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Thai umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in Thai taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Thai tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in Thailand
We work with numerous umbrella companies in Thailand, many of whom are experts in tax and immigration laws. If you have any questions about tax in Thailand, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Thai work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Thailand but without the overhead of directly dealing with the Thai tax authorities. Get in touch with us today for some reliable advice on tax in Thailand!
A Contractor’s Guide to Work Permits in Thailand
Immigration is one of the primary concerns for any contractor hoping to start working in Thailand. Permanent employees will find it easy to get their Thai work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
The Thai Work Permit, is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Thailand is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.
How Does an Umbrella Company Work?
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Thailand (which means avoiding fees, fines, or even worse penalties).
How Can We Help You?
There’s a huge variety of Umbrella Companies with different specialities and advantages in Thailand. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Thailand and match contractors with the right company for them. If you’ve already secured a contract in Thailand, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).