Plan contractor hiring in Thailand

A Thailand-resident contractor can be engaged directly as a natural person under a result-based hire-of-work agreement. The Civil and Commercial Code frames hire of work around completion of a specified result for a fee, which makes the statement of work, acceptance test, and responsibility for delivery central to the arrangement. Thai personal income tax remains the contractor's responsibility: income from work or business carried on in Thailand can be Thai-source income even when the foreign customer pays from abroad. Confirm the contractor's identity, tax status, and any VAT registration before the first invoice, then keep the commercial relationship aligned with the written result-based terms.

Sources: Office of the Council of State, Civil and Commercial Code, current Thai consolidated text, Thailand Revenue Department, Personal Income Tax, Thailand Revenue Department, Revenue Code sections 40 and 41

If the line is crossed

If the facts amount to employment, Thai employee protections and compulsory social-security rules may replace the parties' contractor allocation. Labour protection follows the statutory employee and employer relationship even where the agreement uses another name. Under the Social Security Act, an employee aged 15 to 60 falls within compulsory insured status, and the employer must register eligible employees and handle contributions under the statutory process. Those domestic registration provisions do not specify territorial reach or a registration route for a foreign customer with no Thai entity or permanent establishment. Before creating employee-style control, obtain Thai employment and social-security advice on territorial reach, registration, contribution handling, and any remediation for the past period.

Sources: Thailand Ministry of Labour, Labour Protection Act B.E. 2541, Thailand Ministry of Labour, Social Security Act B.E. 2533, Thailand Ministry of Labour, Social Security Act amendment No. 4 B.E. 2558, Social Security Office notification prescribing registration forms B.E. 2562

ภ.พ.20

Por.Por.20 VAT registration certificate

Por.Por.20 is the document to request when a contractor says that they are registered for Thai VAT. It identifies the registered operator and shows the effective date of VAT registration, which allows the customer to distinguish a VAT registrant from a small supplier operating under the turnover exemption. Keep a current copy with the onboarding record and match the name and address against the contract and tax invoice. The certificate supports registration status; it does not decide whether a particular service is taxed at the standard rate or qualifies for zero rating.

Issued by: The Thailand Revenue Department issues Por.Por.20 after it accepts a complete Por.Por.01 VAT registration application.

Timing: Registration becomes effective on the date stated on Por.Por.20; a person crossing the statutory threshold must apply within 30 days.

Sources: Thailand Revenue Department, VAT registration certificate, Thailand Revenue Department, Value Added Tax, Thailand Revenue Department, Revenue Code sections 85 and 86

Invoice tax treatment turns first on the contractor's VAT status and then on where the service result is actually used. A service performed in Thailand is treated as supplied in Thailand. A VAT-registered contractor may apply the zero rate when the service is supplied to a recipient abroad and used abroad, while any portion used in Thailand stays outside that zero-rated portion. Revenue Department guidance frames the test around the service result being sent and used entirely abroad, and a Department ruling applies the standard rate when that condition fails. A foreign billing address therefore cannot establish zero rating on its own; describe the deliverable, recipient, and place of actual use clearly.

Sources: Thailand Revenue Department, Revenue Code sections 77 to 79, Thailand Revenue Department, Revenue Code sections 80 to 82, Thailand Revenue Department, Director-General Notification on VAT No. 105, Thailand Revenue Department, Departmental Order Por. 104/2544, Thailand Revenue Department ruling Kor.Khor. 0706/1804

What an invoice has to show

• คำว่า ใบกำกับภาษี, the words Tax Invoice, plus the supplier and customer identities

  A VAT-registered contractor's invoice must be clearly marked as a tax invoice and identify the issuer by name, address, and tax identification number, plus the customer's name and address. The same Thai tax-invoice record carries a serial number, service description and value, VAT amount shown separately, and issue date. Match those particulars to the agreement and Por.Por.20 rather than relying on a shortened trading label. The contractor issues the document when VAT liability arises, so its date follows the statutory tax point rather than only the customer's internal billing cycle.

  Sources: Thailand Revenue Department, Revenue Code sections 85 and 86

• Thai-language particulars and Thai-currency amounts unless the Revenue Department approves otherwise

  Statutory tax-invoice particulars must be written in Thai and the amounts must be shown in Thai currency. Foreign-language particulars or foreign-currency amounts require permission from the Director-General and must follow the approval conditions. Under the ordinary rule, the VAT-registered contractor must retain tax invoices and supporting VAT records for at least five years from the tax-return filing or report-making date, as applicable. That statutory duty belongs to the contractor; no Thai VAT retention duty is asserted for the no-presence foreign customer. The customer should keep its own commercial copy with the agreement and acceptance record.

  Sources: Thailand Revenue Department, Revenue Code sections 85 and 86, Thailand Revenue Department, Revenue Code section 87/3

Payment should follow an accepted result or an expressly priced part of the work. Where Thai law governs and the contract has not set another trigger, Civil and Commercial Code section 602 makes the fee payable when the completed work is taken delivery of; a separately priced part becomes payable as each part is accepted. Turn that default into a usable operating process by defining each deliverable, the person who accepts it, the review period, correction rights, and the invoice trigger. A recurring monthly payment can still fit a genuine project where it maps to accepted milestones; a continuing wage for availability points toward hire of services instead.

Sources: Office of the Council of State, Civil and Commercial Code, current Thai consolidated text

When invoices are settled

Use a calendar due date or a clearly calculated period after acceptance because the Civil and Commercial Code supplies different default mechanics when timing is vague. Where Thai law governs, if no performance time is fixed or inferable, the creditor may demand performance immediately and the debtor may perform immediately. Under the same governing-law condition, missing a calendar date puts the debtor in default without a further warning. The 2021 amendment set the ordinary statutory default-interest rate at 5% a year, replacing the older 7.5% rate. State any agreed consequence clearly and check whether a special rule changes the rate for this obligation.

Sources: Office of the Council of State, Civil and Commercial Code, current Thai consolidated text, Royal Gazette, Emergency Decree amending the Civil and Commercial Code B.E. 2564

The currency on the invoice

The commercial obligation may be denominated in a foreign currency, while a Thai statutory tax invoice ordinarily shows its required amounts in baht. Where Thai law governs the commercial obligation, Civil and Commercial Code section 196 gives the debtor an option to pay a foreign-currency debt in Thai currency using the exchange rate at the place and time of payment. Revenue Code section 86/4 separately requires Thai-currency tax-invoice particulars unless the Director-General approves another currency. State the contract currency, conversion source and date, who bears conversion costs, and how the contractor will reconcile the commercial amount with the baht tax document. If foreign-currency-only performance is commercially required, obtain Thai-law advice before relying on that restriction.

Sources: Office of the Council of State, Civil and Commercial Code, current Thai consolidated text, Thailand Revenue Department, Revenue Code sections 85 and 86

Local currency rules

The Thai resident contractor and the receiving bank carry the operative foreign-exchange steps. Thailand places no limit on foreign-currency or baht inflows, and service income may be retained in a resident foreign-currency deposit. When proceeds from abroad are at least USD 1 million, the resident must bring them into Thailand within 360 days of the underlying transaction and sell or deposit them with an authorised bank within 360 days of receipt. For a transaction of at least USD 200,000, the bank ordinarily requests supporting documents unless it has completed the relevant customer due diligence. Give the contractor a consistent agreement, invoice, purpose, and acceptance record before settlement.

Sources: Bank of Thailand, Exchange Control Regulation

Confusing overseas billing with Thailand's actual-use test

A foreign address is only one fact in the zero-rate analysis. The decisive operational question is where the service result is used. If the result is used partly in Thailand, only the foreign-use portion can receive the zero rate under the Revenue Department notification; if the result fails the entirely-abroad test in the Department's ruling, the standard rate applies. Put the intended place of use into the statement of work, separate any Thai-use component, and retain the invoice, delivery, acceptance, and payment evidence that supports the contractor's chosen treatment.

Sources: Thailand Revenue Department, Director-General Notification on VAT No. 105, Thailand Revenue Department ruling Kor.Khor. 0706/1804

Running a deliverables contract as a managed job

Daily instructions, fixed attendance, continuing wages, and placement inside the customer's reporting structure can make the facts resemble hire of services even when the signature page says contractor. Thai law compares work under an employer for wages with responsibility for completing specified work for a fee. Remote location offers no safe harbour because Thai labour legislation expressly recognises employment performed away from the workplace. Manage acceptance against defined outputs, leave the contractor responsible for method and correction, and seek Thai advice before the customer begins controlling hours, leave, or day-to-day performance.

Sources: Office of the Council of State, Civil and Commercial Code, current Thai consolidated text, Thailand Ministry of Labour, Labour Protection Act B.E. 2541, Royal Gazette, Labour Protection Act amendment No. 8 B.E. 2566

Sending a large payment before the bank file is ready

A clean commercial approval can still meet a bank-document hold. For transactions of at least USD 200,000, the Bank of Thailand says the bank requests supporting documents unless the customer has already completed the specified due-diligence process. At USD 1 million or more, the Thai resident also has a 360-day repatriation and sale-or-deposit obligation tied to the underlying transaction and later receipt. Ask the contractor what the receiving bank needs, then provide matching names, purpose, contract, invoice, and acceptance details before the due date. These steps serve the contractor and bank; they do not create a Thai filing role for the foreign customer.

Sources: Bank of Thailand, Exchange Control Regulation