Thai tax: The Thai Revenue Department rules

The Thai Revenue Department recently ruled that salary paid by a Japanese parent company and subsequently recharged to its Thai subsidiary Company B is deemed to be paid by Company B. Under the facts of the case, Company B was an R&D company. The Japanese parent seconded its own staff to work with Company B in Thailand for one to five years. The staff on assignment in Thailand received salary from both the Japanese parent company and Company B. The Japanese parent company did not charge any expenses incurred in Japan back to Company B. However, according to a new global policy, the Japanese parent will be required to do so and Company B requested a ruling on the Thai payroll withholding tax obligations. The Revenue Department ruled that Company B is required to report the income, withhold and remit tax to the tax authorities.