Reader question: Entrepreneur tax question (if I move to Thailand)

Dear Jacques,

There is indeed a tax treaty between the Netherlands and Thailand. You can download this Treaty with the following link: http://wetten.overheid.nl/BWBV0003872/1976-06-09

I suspect that you may be working as a self-employed person in the Netherlands. In addition, I read, the Tax and Customs Administration has in any case designated turnover tax as a tax resource. Whether this also applies to income tax is difficult to assess since you also have a job. So the question is whether you qualify for the entrepreneur's allowance. However, if this is the case, be glad that this income is taxed in the Netherlands (as it turns out) as this represents a considerable tax saving. Many self-employed persons can keep their heads above water solely as a result of enjoying the entrepreneur's allowance.

Since you live and work in the Netherlands, you are a resident taxpayer and therefore do not fall under the scope of the Treaty concluded with Thailand. As an independent entrepreneur or provider of other activities, you must keep records. The resulting result is taxed in the Netherlands as entrepreneurial profit or as income from other work. It makes no difference whether you let your customers pay via a Dutch or a Thai bank account. After all, this has no influence on the result achieved.

This will only change when you settle in Thailand and continue your entrepreneurial activities from there or have a permanent establishment there, while that is no longer the case in the Netherlands. Regardless of where your clients live, you fall under the PIT in Thailand if you meet the 'day requirement'.

After your emigration, you will be regarded as a non-resident taxpayer in the Netherlands and you will fall under the treaty protection of the treaty concluded with Thailand.
In that case, articles 7 and 15 of this Agreement apply to you.

“Article 7. Profit from business
1. The profits of an enterprise of one of the States shall be taxable only in that State, unless the enterprise carries on business in the other State through a permanent establishment situated therein. If the enterprise so carries on a business, the profits of the enterprise may be taxed in the other State, but only so much as is attributable to that permanent establishment.”

“Article 15. Personal Labor
1. Subject to the provisions of Articles 16, 18, 19, 20 and 21, remuneration derived by a resident of one of the States in respect of personal employment (including the exercise of professional services) shall be taxable only in that State , unless the work is performed in the other State. If the work is performed there, any remuneration derived therefrom may be taxed in that other State.
2. Notwithstanding the provisions of paragraph XNUMX, remuneration derived by a resident of one of the States in respect of work performed in the other State shall be taxable only in the first-mentioned State if:
(a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the tax year concerned, and
b) the remuneration is paid by or on behalf of a person who is not a resident of the other State, and
(c) the remuneration is not borne by a permanent establishment which the person paying the remuneration has in the other State.”

Good luck with your activities as an entrepreneur in the Netherlands and later perhaps in Thailand.

If you would like further information on purely personal matters, which are not easily dealt with in a public blog or forum, please feel free to contact me at: [email protected] or via the e-mail form on my website: http://www.lammertdehaan.heerenveennet.nl.

Lammert de Haan, tax specialist (specialized in international tax law and social insurance).