Thailand to where?

[JackAlabama]

it’s active, google and search for visa agents in Indonesia and chat with them, it’s up and running as many told me (the 4 years visa).

thats sweet. Makes sense tho since they copied the Thai DTV visa.

 

[JackieTsan]

thats sweet. Makes sense tho since they copied the Thai DTV visa.

I think this is way earlier than DTV, and this one is tax free, DTV is not (over 180 days), unless there is something I don’t know

 

[Meta]

Hello to all and Merry Christmas,
I know that this is a topic that have discussed several times, but I'd like to take a decision especially now that the year is changing.

Concept:
Thai tax resident, having one (or more) offshore companies (Seychelles, BVI, UAE all totally independend between them) servicing EU customers (IT - software - licenses etc - no hardware). Most companies have local directors, others have directors & shareholders). Income goes from company offshore account to offshore account of owner as dividends (100% shareholder, or director and shareholder).
No remitance inside Thailand at all, no cards to remit etc. Nothing gets in Thailand. NO crypto etc, all are clear business IT.
The companies are not related between them (maybe have same customers, and same real owner). Not doing any job between them etc.
As far as I am informed from several info, accountants etc, there is no any obligation to pay any Thai tax as no income ever came to Thailand, no relation at all with Thailand (besides the thai tax resident owner), no customers in Thailand, no remitances, no employees etc.
Some others say that can create risks for tax.
I want to be 100% safe & legal on this, that there is no tax obligation and/any risk.

Questions / concerns:

1) Is that safe? Any gap here? anything to worry about?
2) I see many advisors suggest HK structure (i.e. BVI owns HK and HK pays the owner) - I understand this is for remitance cases which I don't care at all (I don't need / want / will NOT want to remit any amount in Thailand).
3) Suggestions?

Thank you all!

Hi. Your offshore companies may be deemed to have Permanent Establishment / "carrying on business" in Thailand. Then they become liable to submit reports and pay taxes in Thailand. I don't know details of the rules (they are not obviously clear). Just a random article to show that the rules are in place indeed:
https://www.lorenz-partners.com/newsletter-no-70/
Also PWC:
https://taxsummaries.pwc.com/thailand/corporate/corporate-residence

I'm pretty sure that nobody cares and these rules are not enforced.

Cheers.

 

[JackieTsan]

Hi. Your offshore companies may be deemed to have Permanent Establishment / "carrying on business" in Thailand. Then they become liable to submit reports and pay taxes in Thailand. I don't know details of the rules (they are not obviously clear). Just a random article to show that the rules are in place indeed:
https://www.lorenz-partners.com/newsletter-no-70/
Also PWC:
https://taxsummaries.pwc.com/thailand/corporate/corporate-residence

I'm pretty sure that nobody cares and these rules are not enforced.

Cheers.

Thank you so much @Meta .
From which point you can say this? I studied all the links you provided, there are not any works done between any Thai company or Thai customers, or any work for Thailand, not any employees at all (or signing any contract for the foreign company). No contracts even signed from any Thai tax resident.
Where could be the issue that I can’t see? Just because Thai resident could be the owner? Or what else?
Many thanks!

 

[daniels27]

Thank you so much @Meta .
From which point you can say this? I studied all the links you provided, there are not any works done between any Thai company or Thai customers, or any work for Thailand, not any employees at all (or signing any contract for the foreign company). No contracts even signed from any Thai tax resident.
Where could be the issue that I can’t see? Just because Thai resident could be the owner? Or what else?
Many thanks!

Are you managing the company from Thailand? Then this one from PWC: "A company incorporated abroad is subject to CIT in Thailand if it is considered to be carrying on business in Thailand." You would be the representative in this case.

 

[aniglo22]

it’s active, google and search for visa agents in Indonesia and chat with them, it’s up and running as many told me (the 4 years visa).

Can you provide some sources/screenshots of conversation with the agent ?
Information in regards to visas and taxation is often quickly outdated .

There was a proposal by Nia Niscaya (Deputy for Strategic Policy at the Ministry of Tourism and Creative Economy) for a 4-5 year tax-free visa. However, this is just a proposal and he has not in the position to approve proposal .
If you stay in Indonesia for more than 183 days, you will be considered a tax resident.

Under Minister of Finance Regulation No. 18/PMK.03/2021, new tax residents can claim an exemption on foreign-sourced income for up to 4 years.
However, this exemption only applies if the income is invested to Indonesia .

 

[JackieTsan]

Are you managing the company from Thailand? Then this one from PWC: "A company incorporated abroad is subject to CIT in Thailand if it is considered to be carrying on business in Thailand." You would be the representative in this case.

“Carrying on business in Thailand” is when doing business in Thailand. But the company has not any business in Thailand. No customers, etc, no contracts signed in Thailand, no customers etc, no meetings, no business.
Am I correct?
Thank you @daniels27

 

[JackieTsan]

Under Minister of Finance Regulation No. 18/PMK.03/2021, new tax residents can claim an exemption on foreign-sourced income for up to 4 years.
However, this exemption only applies if the income is not remitted to Indonesia; any remitted income will be subject to Indonesian taxation

Yes this one!

 

[aniglo22]

Yes this one!

Yeah but you are forced to invest your foreign income into Indonesia .

The investment must be held for a minimum of three years from when the dividend or offshore income is received. The taxpayer must also invest he dividend or offshore income in the qualifying investments by the end of the third or fourth month after the end of the fiscal year. Finally, the investment cannot be transferred except to another qualifying investment.

If the reinvestment requirement provides a 30 percent threshold, the taxpayer can enjoy the full exemption if this threshold is fulfilled.
However, if the reinvestment is less than the 30 percent threshold, the taxpayer must pay income tax on the spread between the investment amount and the 30 percent threshold to enjoy the exemption.

 

[JackieTsan]

Yeah but you are forced to invest your foreign income into Indonesia .

View attachment 8490

After a call with a guy that is offering those services, he told me that this is in the case too remit it. I am very confused too, so that needs some research. Please let me know if you find any information. I think it’s better to talk to experts, it seems that there are a few in Indonesia, rather than googling.

 

[aniglo22]

After a call with a guy that is offering those services, he told me that this is in the case too remit it. I am very confused too, so that needs some research. Please let me know if you find any information. I think it’s better to talk to experts, it seems that there are a few in Indonesia, rather than googling.

E33G visa , doesn't require to file for a NPWP apparently​

 

[Meta]

Thank you so much @Meta .
From which point you can say this? I studied all the links you provided, there are not any works done between any Thai company or Thai customers, or any work for Thailand, not any employees at all (or signing any contract for the foreign company). No contracts even signed from any Thai tax resident.
Where could be the issue that I can’t see? Just because Thai resident could be the owner? Or what else?
Many thanks!

I thought that you are actively managing the companies / doing some work while having nominee directors. Maybe I misunderstood...
1) If you are passive owner who just receives dividends once a year, you are 100% fine.
2) If you are working "behind the scenes", such as negotiating sales with customers and then letting nominee directors to sign the contract... Or doing regular Zoom meetings with staff... Or having access to companies' bank accounts... Then in my opinion you may be considered to be an employee/director (even though you don't have any formal position) which entails questions of PE/carrying on business in Thailand. Once again, it is not something that Thai tax authorities usually do.

 

[JackieTsan]

I thought that you are actively managing the companies / doing some work while having nominee directors. Maybe I misunderstood...
1) If you are passive owner who just receives dividends once a year, you are 100% fine.
2) If you are working "behind the scenes", such as negotiating sales with customers and then letting nominee directors to sign the contract... Or doing regular Zoom meetings with staff... Or having access to companies' bank accounts... Then in my opinion you may be considered to be an employee/director (even though you don't have any formal position) which entails questions of PE/carrying on business in Thailand. Once again, it is not something that Thai tax authorities usually do.

Understood! It happens some times to take dividends often, when there are earnings. Never remitted into Thailand. There are others that working in other country and the directors are active.
But the question here is 1) who can know what anyone is really doing, and how? I mean if one owns a company with nominees etc and indeed managing from any country who and how can know it - they should see the structure, and 2) the most important (where I want to get to) : even if the structure is proper, the directors are real (as they are), the works are happening from other places, how one can be sure that any atuhority will not conclude anything they want or think, creating PE issues finally? (happens often I assume).
Thank you @Meta

 

[Meta]

This I don't know. Maybe somebody would chime in. I believe your setup is very safe:
1) Thai tax authorities likely don't even know/interested about your existence, "under radar"
2) If they pay attention, they don't usually enforce this PE rules
3) If they start audit, you have this credible structures with directors and employees out of Thailand

I'm getting this LTR visa that provides you exemption from foreign-sourced income taxation. Maybe worth taking a look to future-proof your setup (in case they start to tax your worldwide income even if not remitted).

Cheers.

 

[daniels27]

“Carrying on business in Thailand” is when doing business in Thailand. But the company has not any business in Thailand. No customers, etc, no contracts signed in Thailand, no customers etc, no meetings, no business.
Am I correct?
Thank you @daniels27

Technically, you are carrying business in a country if you manage a company from that country. The terminology is quite clear globally, also in Thailand. If you operate a US LLC from Hong Kong by being a resident and working from your bed, you need to register the company in Hong Kong and pay taxes there. I am taking Hong Kong here, but of course this also applies to all European countries. Of course, many people don't do it as governments normally are quite lenient if you are new in the country and probably won't stay long. Same for Thailand.

https://www.thaiembassy.com/thailand/thailand-digital-nomad-visa-and-work-permit

A foreigner sits in his apartment and teaches Chinese students online via Skype.
Answer: Officially, it is work, however, it is not the main concern right now, so the authorities allow the foreigner to do this without a work permit. In this case, it will be a matter of the scale of the work and the environment.

Hence @Meta is right here:

I'm pretty sure that nobody cares and these rules are not enforced.