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ResourcesCorporate and Tax AdvisoryThailand Tax LawThe Importance of Payroll Filings in a Thai Immigration Context

The Importance of Payroll Filings in a Thai Immigration Context

Transcript of the above video:

As the title of this video suggests we are going to be discussing payroll filings in the context of Thai Immigration

Now at first glance the viewer probably would say “What does one have to do with the other?” ,and seemingly and in any other context they wouldn't have anything to do with one another, and frankly all Thai companies that don't have a foreigner on the payroll or on the Board or it is not a foreign-owned company, don't really have to worry about the detailed new nuances of payroll filing the way the Company has to worry about it if they have a foreigner on their payroll or more commonly, a small business here in Thailand with a foreigner on it with a work permit and a Business Visa

Why is payroll so important? Well with respect to a business visa extension it is crucial. As we did another video on a slightly different topic which was accounting filings, payroll filings and the Social Security filings concomitant therewith, are exceptionally important to, in fact they are integral to the visa extension application; they are one of the component pieces of the application package and I'm here to tell you if they are not filed perfectly and oftentimes filed perfectly the first time, Immigration Officers oftentimes will just reject the filing because they will review it and say "oh you didn't have your requisite four Thai employees, or your foreign employee isn't on as having contributed to Social Security or hasn't paid their income taxes or whatever. Their withholding wasn't done correctly”, all of these things if it is not done letter perfect almost, within the forms and filed with the Social Security Office and the payroll documentation is not readily available and it can be seen that it was done correctly and oftentimes it should have been done correctly the first time, there should be no amendments, then the Immigration Officers will go ahead and accept the filing oftentimes, presuming there is no other problems in the case, and  then go ahead and process the thing through. And I am talking about even the smallest issues with respect to payroll and accounting, which I discussed in another video, can result in a rejection of filing, it can result in the filing being not accepted and later denied; all of these things can happen.

Now in the past, generally speaking, especially like 8-10 years ago, my rule of thumb was once they accepted the filing, generally speaking it could be pretty well assured it was going to go through. That is not the case now. They do accept filings and later come back and say "look we are denying it, deal with it".   OR, another big issue I see a lot of is, we could see in the past we could be a little bit more relaxed about dealing with the initial filings because you could amend it. We went in and,”‘We messed up with the Social Security filing, we went ahead and amended it. Here is the amended document.” Now these days I actually think many of the Immigration Officers and Inspectors find that to be a little bit suspicious and I have also seen cases where they simply wouldn't accept an amended filing. They say "no we will not accept that; come back and file again when you can show that you have correctly filed the stuff the first time". Now why are they so picky with respect to that? I personally think it's almost an anti-fraud fraud issue. I think that their thinking goes something along the lines of “ hey, If they are a real company, they are actually going to file their stuff on time, they are actually going to file their stuff correctly, there is no need to have all these massive number of amendments and once you start stacking up amendments, in both in payroll and accounting filings, it starts looking as though it is just a pile of paper used as a pretext to get a visa which is not what they want to see. They want to see the visa as sort of naturally springing from underlying business activity.

Do I think that it is necessarily representative of the reality of the business situation in these papers? Arguably it is not the most representative but that is what they are using to make their adjudication. So when you are dealing with payroll filings, in my opinion it needs to be done perfectly.  You need to be dealing with a firm that deals with a lot of foreigners that knows how these filings have to be done the first time and done correctly the first time so as to ensure a positive outcome with respect to the ultimate issue of visa extension and application.