New tax document rules will delay some long-term visa extensions

6 Jul 15

THAILAND

IMPACT – MEDIUM 

What is the change? Under a new rule, foreign employees applying for long-term visa extensions through the One Stop Service Center must submit proof of payment of personal income taxes.

What does the change mean? New work permit applicants will no longer be able to file a long-term visa extension application concurrently because they must wait for their first month’s salary withholding tax to be paid.

  • Implementation time frame: July 6.
  • Visas/permits affected: Long-term visa extensions.
  • Who is affected: Foreign nationals holding a valid work permit who are filing a new or renewal application for long-term visa extensions.
  • Impact on processing times: The rule may cause significant delay because new applicants must wait for their monthly salary withholding tax to be paid by the employer.
  • Business impact: Employers may incur additional expenses if a nonimmigrant B visa extension is needed, depending on the period of stay granted to the foreign employee and how quickly the long-term visa extension application is submitted and processed by authorities.

Background: Previously, first-year foreign nationals filing at the One Stop Service Center could file for a new work permit and a long-term visa extension application at the same time.

This will no longer be possible. Applicants will have to wait for their employers’ monthly tax declaration to be certified following the applicants’ first salary payment in Thailand before being able to lodge the long-term visa extension application. The same requirement also applies to foreign nationals who are filing for renewal applications of their long-term visa extensions.

In addition to the visa applicant’s monthly salary withholding tax, employers will have to submit proof of monthly salary withholding tax for all foreign employees sponsored by the company, regardless of whether they hold a long-term work permit, short-term assignment work permit or project work permit.

Proof of tax payment must be made using one of the following official forms, based on whether the employee is on a local payroll:

  • Official certified copy of the form and tax receipt for monthly salary withholding tax (PND1 form) for the latest month if the employee is on the local payroll in Thailand.
  • Official certified copy of the form and tax receipt for self-paid income tax on the declared salary (PND 93 form) if the employee receives income outside of Thailand. The tax payment must be calculated from Jan. 1, 2015 to the month in which the visa renewal application is lodged, plus another six months in advance.

The director of the company must also sign a form confirming the number of foreign national employees in the company. This form is available at the One Stop Service Center and must be submitted every time an employee lodges a renewal application.

BAL Analysis: The change in procedure will cause delays in obtaining long-term visa extensions and completing the formalities for new foreign employees in particular. Thai authorities anticipate that the new requirements will help prevent fraudulent filings by companies at the Service Centers and reduce incidents of foreign workers failing to pay Thai income taxes.

This alert has been provided by the BAL Global Practice group and our network provider located in Thailand. For additional information, please contact your BAL attorney.

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