Tax time. Running business via wifes personal name not limited company

[ghworker2010]

3rd quarter last year we started our business. Back then the accountant told us not to form a company as its more cost effective to just pay tax via her personal name. She said we can always go down the company route if our earnings exceed 2m baht I think. 

 

We discussed our turnover / income with her and she also asked for Jan and Feb this yr. Back at home now Im wondering why she wants info for jan/ feb this year. I thought the tax year was Jan 1st to end of dec. Am I missing something here?

 

She said that we had to pay tax 2 times a year. Is this correct? Do we let her pay the liability to the office or pay it ourselves. We heard from friends in another province, with the similar business to ours, who paid the tax liability to the accountant but this was not actually sent to the tax office. It was very screwed up. 

 

Also, Ive heard that the deadline is to get the return in by the end of March. If we leave it to near the end of march when every tom, dick and harry is doing the same will it allow our return to get approved easier? ie they will be so busy..... 

 

Finally, she asked if we had payments from a visa machine. She said we should get rid of it. If we exceed 400 transactions (payments) then it apparently triggers some tax issue. I now understand why some business charge 5%. Its to deter customers from using the thing. Cash is king if you get my drift. 

thanks

[FritsSikkink]

How can you run a business in your wife's name?

[ghworker2010]

16 hours ago, FritsSikkink said:

How can you run a business in your wife's name?

by simply declaring all income via her personal tax return- instead of forming a company. One only has to form a company if earnings exceed 2million

[blackcab]

Off topic posts have been removed. This topic is about tax, not about work permits. Please do not derail this topic again.

[natway09]

Pretty well all you say is true. Get an accountant to prepare her tax return & go pay the tax herself or someone reliable.

[ThomasThBKK]

It doesn't trigger tax issues abive 400 transactions, it might get your account reported to the BOT as suspicious. Nothing special but newly in thailand. 

Only an issue for people who scam taxes. 

 

Same for the 2 mio thb rule, transactions under 2 mio thb do not get reported automatically ... Once again nothing special. 

 

Your tax accountant is a crook. You should run away and get one in bangkok asap. 

Every info she gave you is hilariously incorrect. 

 

Also never ever run a business in a personal name, that's just nonsense and u have all the liabilities... 

There's a partnership in thailand but it also sucks. 

 

Setup a simple limited ay least. 

[ghworker2010]

17 hours ago, ThomasThBKK said:

It doesn't trigger tax issues abive 400 transactions, it might get your account reported to the BOT as suspicious. Nothing special but newly in thailand. 

Only an issue for people who scam taxes. 

 

Same for the 2 mio thb rule, transactions under 2 mio thb do not get reported automatically ... Once again nothing special. 

 

Your tax accountant is a crook. You should run away and get one in bangkok asap. 

Every info she gave you is hilariously incorrect. 

 

Also never ever run a business in a personal name, that's just nonsense and u have all the liabilities... 

There's a partnership in thailand but it also sucks. 

 

Setup a simple limited ay least. 

Care to elaborate or is this bar stool talk 'Every info she gave you is hilariously incorrect'

[ThomasThBKK]

I am just trying  to help you, no need to throw the bar stool attitude at me ????

 

Just check the official government sources: http://www.rd.go.th/publish/6045.0.html

 

All income above 150k thb has to be taxed with at least 5 percent, the higher you go the more taxes you pay it's a progressive tax sheme. 

 

Do u really think you can legally esrn 2 mio thb tax free here?? 

That's over 50k usd, far more than any country would allow you to earn taxfree. The limit in germany for example is 8k euro in profits. 

 

 

Do you want to know why she told you the 2 mio thb limit and the 400 transaction limit? 

 

Because of this new law: https://www.bangkokpost.com/news/security/1587610/new-tax-law-prompts-suspicions-of-snooping

 

This law basically means that banks will report you to the aml and tax authorities if you are over the limit. 

 

 

Do you want to know what she basically is trying to do? 

 

She's telling you not to pay any taxes and break the law and to not get caught you should stay under the radar by not doing any more transactions as mentioned above. 

 

Of course that's also why she told you not to incorporate a company, because then the tax authorities already know you are running a business. 

 

You, well your wife, will be liable for all this and thr crooked account doesn't give a damn if they ever audit you. 

 

So that's why the tax accountant wants you to pay him instead of paying the tax authority. 

 

He/she is basically stealing your money for telling you how to break the law. 

 

Don't believe me or the thai government? Ok but maybe you believe KPMG: https://home.kpmg.com/content/dam/kpmg/xx/pdf/2018/09/thailand-2018.pdf&ved=2ahUKEwjk1oDyrr_gAhWLMI8KHRu1Dz0QFjANegQIChAB&usg=AOvVaw1MdxWsS2EOVNBLxS8DkWf3

 

There's income tax guidance guides from all big 4 companies and lawyers like tillele and gibbins available on google. Just Google for thailand income tax guidance. 

[ghworker2010]

6 hours ago, ThomasThBKK said:

I am just trying  to help you, no need to throw the bar stool attitude at me ????

 

Just check the official government sources: http://www.rd.go.th/publish/6045.0.html

 

All income above 150k thb has to be taxed with at least 5 percent, the higher you go the more taxes you pay it's a progressive tax sheme. 

 

Do u really think you can legally esrn 2 mio thb tax free here?? 

That's over 50k usd, far more than any country would allow you to earn taxfree. The limit in germany for example is 8k euro in profits. 

 

 

Do you want to know why she told you the 2 mio thb limit and the 400 transaction limit? 

 

Because of this new law: https://www.bangkokpost.com/news/security/1587610/new-tax-law-prompts-suspicions-of-snooping

 

This law basically means that banks will report you to the aml and tax authorities if you are over the limit. 

 

 

Do you want to know what she basically is trying to do? 

 

She's telling you not to pay any taxes and break the law and to not get caught you should stay under the radar by not doing any more transactions as mentioned above. 

 

Of course that's also why she told you not to incorporate a company, because then the tax authorities already know you are running a business. 

 

You, well your wife, will be liable for all this and thr crooked account doesn't give a damn if they ever audit you. 

 

So that's why the tax accountant wants you to pay him instead of paying the tax authority. 

 

He/she is basically stealing your money for telling you how to break the law. 

 

Don't believe me or the thai government? Ok but maybe you believe KPMG: https://home.kpmg.com/content/dam/kpmg/xx/pdf/2018/09/thailand-2018.pdf&ved=2ahUKEwjk1oDyrr_gAhWLMI8KHRu1Dz0QFjANegQIChAB&usg=AOvVaw1MdxWsS2EOVNBLxS8DkWf3

 

There's income tax guidance guides from all big 4 companies and lawyers like tillele and gibbins available on google. Just Google for thailand income tax guidance. 

Thanks for the info. Your reply this time was more helpful and less contentious. 

 

When it comes to things like taxation I think its a case of 'each to their own'. Some people will form companies and pay heaps of taxes and fees at KPMG- similar to living in a nanny state (western country). But this is Thailand of course.... ALL of my wifes friends in the same profession don't have companies. They all do it via their personal name and pay what's necessary using savvy local accountants. Its a strong word for a farang to call a thai accountant crooked when in fact they have lived here longer that you and know the thai way better than you. 

 

In our situation we intend to pay our taxes and declare all income. But it will not be in the realm of what we would be paying if we had formed a company. In years to come this country will catch up and its tax dept will be strict. This is when we will form a company IMHO

 

many thanks

[ThomasThBKK]

The thais do a lot of stuff. 

 

There are dozens of good thai accountancts and tax professionals who will tell you the same i did. 

They will even use the same wording. 

You wanted to hear the facts. You got them. 

 

Companies are way more tax efficient, you can better deduct ur expenses and the profit tax is also max 20 percent. Also you get rid of most liabilities which is especially helpful if you are ever near bankruptcy. 

 

If you intend to pay taxes how the law wants it, a company is more tax efficient than personal income declared taxes. 

 

Like the thais say, up to you, up to you 

 

I just don't know why you even ask if you aren't interested in the truth. 

You are paying someone to give you wrong advice, you might as well just keep the money to yourself. 

 

[ghworker2010]

On 2/16/2019 at 6:12 PM, ThomasThBKK said:

The thais do a lot of stuff. 

 

There are dozens of good thai accountancts and tax professionals who will tell you the same i did. 

They will even use the same wording. 

You wanted to hear the facts. You got them. 

 

Companies are way more tax efficient, you can better deduct ur expenses and the profit tax is also max 20 percent. Also you get rid of most liabilities which is especially helpful if you are ever near bankruptcy. 

 

If you intend to pay taxes how the law wants it, a company is more tax efficient than personal income declared taxes. 

 

Like the thais say, up to you, up to you 

 

I just don't know why you even ask if you aren't interested in the truth. 

You are paying someone to give you wrong advice, you might as well just keep the money to yourself. 

 

Thanks again for your comment. 

 

Ive done a lot more investigating into all this and might form a company this year. 

 

I read on a thai website:

 

Withholding Tax Returns

Certain incomes paid to the company are subject to withholding tax at source. The type of incomes and the tax status of the recipient define the withholding tax rates. Companies collecting withholding tax should file returns and submit revenues collected within the permitted time period.

Value Added Tax Returns

All companies requiring foreign national work permits and companies with an annual turnover exceeding 1.8 million baht, need to register for value added tax and file monthly returns. VAT registered companies must file returns to the tax office within the permitted time period after each months business activities. Note certain businesses that are excluded from VAT may be subject to specific business tax. 

__________________

 

I think our accountant mentioned last year that if we do the company formation we would have to register for VAT. 

 

IMHO its not so good for our business if we are charging our customers VAT on top of the price. We know that our competitors don't charge VAT. It will price our business out of the market. This is a major deterrent for proceeding with a company in my opinion. Would you agree the only way around it is to form the company in the wifes name and then I dont proceed with a WP. I dont really work in our business anyways as I can't speak thai. Thanks for your opinion on this

[ThomasThBKK]

If you official turnover is less than 1.8 mio thb then u can register it as a small business with the dbd in your wifes name:
https://www.dbd.go.th/dbdweb_en/ewt_news.php?nid=3974

And then you are VAT exempt as long as you dont "officially" go over that amount (this is turnover tho, not profit).

That's all you need to do in this case afaik.

I am not sure about withholding tax i think u need to pay half of the expected annual taxes every 8th month in the year.


Work permit would need a limited company with at least 4 thai employes for every foreigners, that's prolly not worth it


Sent from my LYA-L29 using Tapatalk

[blackcab]

Withholding tax: You withhold the tax where necessary, at the applicable rate, and prepare two withholding tax forms.

 

You give one copy of the form to the person or company you witheld from. The second copy you submit monthly to the Revenue Department by the 7th day of the following month, along with the tax you witheld.