Could my US employer be viewed as having a Permanent Establishment in Thailand while I work on a DTV?

@Mike *********

Once you work from a location, over 6 months, the potential for that location to be deemed a place of business of the employer is real, even a rented room can be 'a place of management' if the employee makes decisions (work!!) there.

The legal language is often vague and broad, and it often becomes a political choice which I doubt Thailand would pursue, but thats a corporate risk an employer doesnt have any need to accept.

Factors would be do they answer phone calls, do they agree (or even review) contracts, does what the employee do in any way influence or determine the actions the head office does that apply in the country where they are working.

I lost millions of euros over having a fax number as the owner of a non resident corporation.

@Sefton *******

wouldn't one of the biggest distinctions here be your "influence actions that apply in the country they are working"? an individual on DTV in Thailand is unlikely to be setting policy for the company interacting in the local Thai economy, and for 99.99% of cases that isn't be done period. I assume your situation was fairly different.

@Mike *********

So just as a simple example the person is coding, they contribute code, that code gets globally rolled out. Then 'their actions are applied in the country they are working from' so yes.. See how grey it gets really fast ?? This is why companies often have 6 month limits (and where tax residence overlaps with this problem) for employees.

Enforcement becomes very much a political choice.. If the claim is made it then becomes a huge headache to legally defend against even if it is not proven. Corp lawyers at this level are not cheap !!

Does the head office want that potential problem ? Whats the upside for them ?

Anonymous participant the more your role is internal (like HR) the less connection it may have.. Taking an independent contractor route 99% cuts any claim also..

Its really not a real world thing, except to lawyers who need to be concerned about every possible risk.

@Toni ******

legally yes. Remote work opens a whole can of legal worms for the employing corporation.

A Permanent Establishment can potentially drag the employer into all of those legal issues and require the setup of a branch office structure.

@Toni ******

I suspect the companies you mention already have Thai entities and pay tax in Thailand. Not really the question

@John *********

for example, if the company i work for have business in Finland and Thailand, i work remotely to the one in Finland. I come here to work remotely, the company and I pay taxes in Finland. Its very simple like I said

@Toni ******

but that's irrelevant. The question was if someone working remotely for a foreign company created a de facto thai entity. It doesn't. The companies you refer to already have a Thai entity

Anonymous participant I don't think you need to do that, particularly if the company you work for has no presence in Thailand. Just apply as a remote worker with permission to work remotely from Thailand doesn't impinge on the company in the slightest

Anonymous participant there is such a rule but usually it requires that you either interact with Thai entities or clients inside Thailand. The DTV expressly says you can do neither of those things. For more information check the DTA between your country and Thailand

@John *********

can be as low a bar as answering a Thai mobile number over a 6 month period.

Domestic phone number over 6 months, is claimable as a PE under OECD in some tax treaty's.

@Sefton *******

having personal local SIM has what to do with the employer?

@Toni ******

If your talking work calls on it.. That one thing (local fax line) cost me high 6-7 digits euros.

Even if the claim ultimately get defended, the kind of lawyer who work on this are many 100s per hour.. It would be a 10k retainer to look into it. Its obvious why am employer would say 'where the upside for us here' ??

@Sefton *******

yeah, like remote workers cant use local internet? Sounds pretty off dontcha think 😆

@Toni ******

This is the problem with permanent establishment rules, the rules are often very wide open and subject to a lot interpretation by each party. Then application of those rules becomes a political choice.

Even if you can successfully defend against it, the costs of doing so are a huge potential risk to the employer with near zero upside. So this accusation is made and the company needs to spend 10k plus to properly defend against it, thats risk for what ??

Theres also all kinds of different layers of PE risk (mine was related to construction risk which has different duration issues) Dependant agent, service (especially applicable for Thailand and remote). etc.

For Service

"Service PE

Some countries (especially in Asia, Africa, and the Middle East) have a Service PE clause.

A Service PE arises if:

Employees of a foreign company provide services in the country

For more than X days (often 90 or 183 days in 12 months)

And the services are of certain types (consulting, technical, management)

Even one remote employee providing continuous services can trigger this.

Service PE applies even without a physical office."

@John *********

what matters is where you get paid from, taxes apply there (and so does every other cost for having the employee too)

@John *********

yes but their employees in other countries, might get the dtv anyway that was my point and what i understood from the post? Even if they come here with dtv, they still work remotely for company abroad aight?

@Toni ******

I said it was a red flag, I didn't say it was a total negative