Office Information No.: 40

Taxation of Expatriates in Thailand considering the German-Thai Double Taxation Agreement and benefits of an International Headquarters

 

March 2022

 

 

1. Introduction 4  
2. Expatriate Tax Obligation under Revenue Code 4  
  2.1 Source Rule (Sec. 41 (1) RC) 4  
  2.2 Residence Rule (Sec. 41 (2),(3) RC) 6  
  2.3 Assessable income under Sec. 40 (1) and Sec. 40 (2) RC 6  
  2.4 Withholding tax obligation and compliance requirement 7  
  2.5 Personal income tax rate 7  
3. Tax Aspects of Employee Benefits in Thailand 7  
  3.1 Per diem or transport expenses 7  
  3.2 Transportation 8  
  3.3 Medical treatment 8  
  3.4 Securities 8  
  3.5 Severance payment 8  
4. 183 days rule – Art. 14 of the Thai-German DTA 9  
  4.1 General remark 9  
  4.2 Conditions of the “183 days rule” 9  
       4.2.1 Individual as a resident of one Contracting State 9  
       4.2.2 Tie-breaker rules 10  
       4.2.3 Definition of the term “Remuneration” 11  
       4.2.4 “183 days in the fiscal year concerned” 11  
       4.2.5 “Remuneration is not paid by or on behalf of a person being a resident of the other state” 12  
       4.2.6 “Income is not borne by the Thai PE of German employer” 12  
       4.2.7 Employment on board a ship or aircraft 13  
       4.2.8 Non-appliance of Art. 14 DTA by law 13  
5. International Headquarters (IHQ) to reduce PIT burden 13  
  5.1 General requirements for the establishment of an IHQ 13  
  5.2 Tax privileges for the IHQ 14  
  5.3 Personal income tax benefits for employees of an IHQ 15  
6. Case Studies and Practical Problems of Expatriate Taxation 16  
  6.1 International Hiring-out of labour 16  
  6.2 Splitting of salary 17  
7. Conclusion 18  
       
       
       
       
       
       
       

 

 

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