Foreign income and work permit question

[JCP108]

What if you are a U.S. citizen in Thailand on a marriage visa (married to a Thai national) and get income from a business owned and located in the U.S.? If you pay Thai taxes would you be dinged for not having a work permit? You can get a work permit on that type of visa. However, the business in this question is an individual/contractor business (doesn't employ 4 Thai people) and so no work permit can be generated with it to allow work in Thailand. Note also that the business is not something that would be seen as competing with Thai employment (that is, the business operates only in the U.S. and provides service that a Thai person could not provide).

[moonseeker]

Why would you need a WP for a business in the USA? Doubt very much TH authorities are interested in your business abroad. Or am I am misunderstanding your post? Have a nice Sunday night. MS>

[JackThompson]

You cannot get a work-permit for a non-Thai job or offshore passive-income.  You do not owe any taxes on income remitted to Thailand which was earned in previous years. 

 

The Thai tax authorities would not complain if you paid taxes w/o a work-permit and, in fact, tax-payments are required if earned income is remitted to Thailand in the year earned - subject to dual-taxation agreements which prevent double-taxation (there is one between the USA and Thailand).

 

I am also married to a Thai, and have considered sending my income here in the year earned, and paying taxes on it, then deducting that from my USA taxes (on worldwide income) - doing this extra paperwork as a way to provide "proof of income" to immigration (as our embassy-letters are gone).  But I am doubtful if that would work, as immigration might demand a work-permit as a condition of accepting a Thai tax-receipt as proof of income.  A work-permit would not be applicable in my case, either (offshore business income). 

Edited April 21, 2019 by JackThompson

[JCP108]

I won't need to use the transferred money to justify my visa as I will have a sufficient bank balance. I can easily maintain a policy of only transferring money earned in previous years. So, that would mean I wouldn't owe Thai taxes, I guess. I was just thinking to be a good alien in Thailand, I would pay Thai taxes and worried that: 1) if I didn't ever pay taxes (because I never transfer money into Thailand earned in the current year) that might get me notice by the Thai version of the IRS, and/or 2) if I do pay taxes that the lack of  work permit would be scrutinized.

 

I guess a lot of people do regular transfers into Thailand without a work permit. In my case, we are not talking about large sums of money (my business income is modest). My expenses in Thailand will be quite low, anyway. So, all of my transactions take place outside of Thailand and in the U.S.

Edited April 21, 2019 by JCP108

[JCP108]

I wish Thailand would figure out how to issue work permits for all the digital nomads working as freelancers up in CM. That would simplify things for people like me who are independent contractors with business outside of Thailand or for all the expats running monetized YouTube channels. (Although I think the freelancers up in CM are probably getting by not paying taxes due to only staying short-ish times in the country...seems like a grey area.) Anyway, in my situation, my transactions all take place in the U.S. and all of my business income lands in U.S. accounts. I also don't need to transfer money to Thailand in the same year I earn it.

Edited April 21, 2019 by JCP108

[Date Masamune]

You cannot get a work-permit for a non-Thai job or offshore passive-income.  You do not owe any taxes on income remitted to Thailand which was earned in previous years. 
 
The Thai tax authorities would not complain if you paid taxes w/o a work-permit and, in fact, tax-payments are required if earned income is remitted to Thailand in the year earned - subject to dual-taxation agreements which prevent double-taxation (there is one between the USA and Thailand).
 
I am also married to a Thai, and have considered sending my income here in the year earned, and paying taxes on it, then deducting that from my USA taxes (on worldwide income) - doing this extra paperwork as a way to provide "proof of income" to immigration (as our embassy-letters are gone).  But I am doubtful if that would work, as immigration might demand a work-permit as a condition of accepting a Thai tax-receipt as proof of income.  A work-permit would not be applicable in my case, either (offshore business income). 

How would you prove Tax authorities the money transferred was from the year earned. Money is fungible. Does the first dollar transferred come from the top of the pot or the bottom?



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[JCP108]

That is part of why I wondered about this and thought a simple approach in such a situation would be to simply account for yearly earnings and pay Thai taxes accordingly. If one owns a (foreign) business which generates income each year, and one's ownership included a non-zero amount of "work" to maintain its existence, then that seems like taxable income while residing in Thailand. Thus, taxes would be owed (even though the clients and work takes place outside of Thailand). So, I'm wondering if said taxes are paid on business income doesn't that provide de facto evidence of "work" and therefore the requirement of a work permit (that one can't get in that situation)? Seems like a Catch 22. If the business isn't maintained, then there is no long-term financial viability of living in Thailand. But, the business can't be maintained without working and that can't be done without a work permit. And, no work permit can be granted to oneself. I am the owner and only employee.

[JackThompson]

7 hours ago, Date Masamune said:

How would you prove Tax authorities the money transferred was from the year earned. Money is fungible. Does the first dollar transferred come from the top of the pot or the bottom?

The question is how to prove it was not from the same year as earned.  I doubt they will complain if you "confess" that it is and pay taxes.

[JackThompson]

6 hours ago, JCP108 said:

That is part of why I wondered about this and thought a simple approach in such a situation would be to simply account for yearly earnings and pay Thai taxes accordingly. If one owns a (foreign) business which generates income each year, and one's ownership included a non-zero amount of "work" to maintain its existence, then that seems like taxable income while residing in Thailand. Thus, taxes would be owed (even though the clients and work takes place outside of Thailand). So, I'm wondering if said taxes are paid on business income doesn't that provide de facto evidence of "work" and therefore the requirement of a work permit (that one can't get in that situation)? Seems like a Catch 22. If the business isn't maintained, then there is no long-term financial viability of living in Thailand. But, the business can't be maintained without working and that can't be done without a work permit. And, no work permit can be granted to oneself. I am the owner and only employee.

That comes down to the definition of "work" - whether you are just doing something no more involved than maintaining investments, or "doing actual work" for the business - and then, whether "doing work" on something that does not exist or operate in Thailand is covered by the need for a work-permit.  This has been debated here forever.

 

11 hours ago, JCP108 said:

I wish Thailand would figure out how to issue work permits for all the digital nomads working as freelancers up in CM. That would simplify things for people like me who are independent contractors with business outside of Thailand or for all the expats running monetized YouTube channels.

If they were smart, they would allow anyone who declares and pays taxes on "X" amount of income, to get a Non-B Visa and work-permit.  What's the harm, right?

 

But some in authority seem to hate our presence so much, that even this income (which could be used for all sorts of good things for Thai people) is not enough to offset the disgust they feel, from us simply "being" here.

 

Just look what a fuss they make over a mere "one year" extension of stay for retirees and those of us married to a Thai - even though these are "non-immigrant" extensions, offering no rights or privileges other than not being arrested for "being" here.  Only "tribute" payments via agents are sufficient for many of them tolerate us.

 

11 hours ago, JCP108 said:

(Although I think the freelancers up in CM are probably getting by not paying taxes due to only staying short-ish times in the country...seems like a grey area.)

Under 180-days in-country per-year, and no need to pay taxes.

 

11 hours ago, JCP108 said:

Anyway, in my situation, my transactions all take place in the U.S. and all of my business income lands in U.S. accounts. I also don't need to transfer money to Thailand in the same year I earn it.

 

[JCP108]

If my activities would be considered "work," it would be easy to demonstrate that it is of a type that in no way competes with "work" that a Thai person in Thailand could engage in. That being sure, my dilemma is this:

 

Pay taxes on my business income and fear that that will trigger in unfavorable inquiry into my activities which could result in my being deemed working without a permit and getting deported or not paying taxes and fearing that I could get deported for not paying taxes. (My income will be taxed in one location or the other and I'm aware of the tax agreement between Thailand and the U.S.)

 

I'm also aware of how arbitrary and capricious application of laws and "rules" can be in Thailand.

 

Money is fungible. I suppose one could set up extra accounts to try to time transactions so that it would seem that money that was transferred into Thailand really was from earlier years.

 

I agree. A lot of this would be solved if one could demonstrate having a source of income located outside of Thailand and just get a work permit (without setting up a Thai company as a shell per the current rules).