Tax Ruling on Teachers’ Remuneration

Keywords: Mazars, Thailand, Tax, Revenue Department, DTA, Teachers, Personal Income Tax, Exempt

13 August 2014

A university invited a number of foreign teachers from various countries to teach and give lectures at the university.

In respect of the personal income tax that the foreign teachers may or may not be liable to pay on their remuneration, the university inquired to the Revenue Department whether:

1. The foreign teachers' remuneration derived from the university is exempted from personal income tax in Thailand?

2. If the answer is yes, whether the foreign teachers are entitled to claim for the refund of tax withheld by the university?

Ruling

1. According to the Double Tax Agreements (“DTAs”) that Thailand has concluded with Australia, China, UK, and USA, remuneration which professors, teachers or researchers derive from teaching or researching in Thailand will be exempted from personal income tax in Thailand only if the conditions set forth in each DTA are met, as follows:

(a) Remuneration derived by a professor, teacher, or researcher, who is a tax resident of Australia and visits Thailand at the invitation of any university, college, school or other similar educational institution which is situated in Thailand and accredited by the Minister of Finance of Thailand or his authorized delegate for a period not exceeding 2 years shall be exempted from personal income tax under Article 20, paragraph 1, of the DTA between Thailand and Australia.

(b) Remuneration derived by a professor, teacher, or researcher, who is a tax resident of China and visits Thailand at the invitation of any university, college, school or other similar educational institution which is situated in Thailand and accredited by the Minister of Finance of Thailand or his authorized delegate for a period not exceeding 3 years shall be exempted from personal income tax under Article 21, paragraph 1, of the DTA between Thailand and China.

(c) Remuneration derived by a professor or teacher, who visits Thailand for the purpose of teaching or engaging in research at a university, college, or other similar educational institution which is situated and accredited in Thailand for a period not exceeding 2 years from the date he first visits Thailand for teaching or engaging in the research and who was immediately before that visit a tax resident of the United Kingdom, shall be exempted from personal income tax under Article 21, paragraph 1, of the DTA between Thailand and the UK.

(d) Remuneration derived by a teacher, who visits Thailand for the purpose of teaching or engaging in research at a university, college, or other similar educational institution which is situated and accredited in Thailand for a period not exceeding 2 years from the date he first visits Thailand for teaching or engaging in the research and who was immediately before that visit a tax resident of the United States of America, shall be exempted from personal income tax under Article 23, paragraph 1, of the DTA between Thailand and the USA.

In each case, the remuneration derived by a professor or teacher from performing research particularly for personal interest of any person or group of persons shall not be exempted from personal income tax under the Article.

However, if the professor, teacher, or researcher does not leave Thailand when the time period of 2 years for the person who was a tax resident of Australia, UK, or US, or 3 years for the person who was a tax resident of China, is up, they shall not be entitled to the exemption from personal income tax from the first date they visit Thailand.

2. In the case where the foreign teachers who are entitled to the exemption from personal income tax but their remunerations have already been withheld and remitted by the university, have the right to file a request for tax refund within 3 years from the last date of the year in which the tax was deducted, pursuant to Section 63 of the Revenue Code.

Source: (Tax Ruling No. GorKhor 0702/4585, dated 1 August 2008)

Please note that this tax ruling merely addresses the tax implications of remuneration derived by the foreign teachers who have come from the countries that concluded the DTA with Thailand and such DTA must also include the “Teacher Article”. However, for teachers who have come from countries that have a DTA with Thailand but such DTA does not include the “Teacher Article” (e.g. Canada, South Africa, or New Zealand, etc.), the remuneration derived by them will not be exempted from personal income tax in Thailand under the Teacher Article.