Unfortunately this is not how Thai law views this kind of thing. If you're earning money in Thailand then you need all the right permits and paperwork. It doesn't matter if you're not working for a Thai company or doing business in Thailand. They've let this kind of thing slide for a long time but the new junta is cracking down hard on all kinds of visa violations.
Those of us in Vietnam and Cambodia are expecting an influx of Thai expat refugees.
> Unfortunately this is not how Thai law views this kind
> of thing. If you're earning money in Thailand then you
> need all the right permits and paperwork. It doesn't
> matter if you're not working for a Thai company or doing
> business in Thailand.
Certainly Thailand has a history of being much more strict about this kind of thing than its neighbors though.
The solution would for Thailand to create an easy to obtain Tourist+ Visa which would cost more but would allow the tourist to also work on their online businesses while here, as long as it doesn't interfere with local Thai businesses, accept Thai baht, have Thai customers, or take away Thai jobs.
Digital Nomads would happily pay $300+ for a 1 year, multiple entry TR+ visa if it existed.
What does Thailand gains by scaring those people? After all they spend a lot of their wage money there. What's the downside?
On a tourist visa, or "non-working" business visa, it is commonly illegal to do work even if for a foreign company and for a foreign market in many, maybe most, countries.
The visas don't tend to take into consideration the nationality of the company you work for, or the notional audience, because it'd make it trivial to work around (set up a "foreign" company owned by some trust to hire you, set up another foreign company to buy what you build, and have said companies contract with a local company), instead they regulate the type of activity you can engage in.
(e.g. I used to
You can attend meetings, sign contracts, make investments etc.
Non-B visas are also needed if you want to get a work permit. You can't get a work permit whilst on a tourist visa.
Starting your own company in order to get a work permit requires 2,000,000 baht ($62,000) of registered capital and social security payments 4 Thai employees. There is also reasonably sized list of businesses you cannot start. You also can't own your businesses outright unless it's approved by the Board of Investment.
It's very difficult to do business there legally.
The policy is fairly straightforward, but letting people do "digital nomad" work while trying to stop those taking jobs in a country isn't so easy.
A bunch of countries in SE Asia seem to have economic development people in favor of attracting these people to their country. But coordinating with the immigration enforcement authorities isn't very well developed (given the systems in place this isn't an easy problem it will likely be messy for awhile).
And if long term visitors are seen as negative (often for acting out and making asses of themselves) this can lead to crackdowns. A few jerks are very noticeable, so a large community of good visitors can be seen as a negative based on just a few bad actors.
As a short term tourist, you're a valuable resource. As a long term resident, you may very quickly become a net drain if you pay your tax somewhere else.
And for most people, if they live and work in Thailand most of the time, they will either not pay tax in their home country, or will pay tax proportional to the amount of time they live there, on the expectation that someone who is resident outside the country most of the time will not expend much local resources.
Laws have dealt with this kind of scenario for a very long time since it's been an issue in border areas pretty much "forever" that people try all kinds of creative methods to cut their tax costs. There's nothing particularly new here with the internet other than magnitude.
The biggest notable exception that can cause expensive double taxation is the US, since the IRS likes to get their hands on US citizens income regardless where they live, but even in that case it's ameliorated substantially for most countries via double taxation treaties.
The tax argument only holds water if your income is earned in the country you are living in. That money came from a system that is supported by government and shared infrastructure and services. So yes, there is a strong legal and economic argument saying if you earn money from Thailand you should pay taxes in Thailand. The key here being earning money in/from Thailand.
But if you are visiting Thailand, but earning money in the US and paying taxes in the US, it's pretty difficult to say that you are a net drain.
You absolutely are equivalent economically to a tourist as far as your impact on the economy is concerned. As a non-local citizen, you won't have access to state health care (if it's provided) or anything else tax paying citizens have access to. And your absence from the country would be a net negative value since you will be paying $0 into the local economy instead of room and board, internet connectivity, and general consumption, which all can be taxed with a VAT.
Edit: Also, I promise I'm not trying to be an internet jerk :). But I'm not sure what you mean by laws have had to deal with this exact scenario for a long time.
Generally speaking, the common case is for people to evade taxes by leaving where you earn money and claiming to be a citizen of some other country with more lenient tax laws. Which is the total inverse of this scenario.
The U.S. and China both offer an expatriate exemption (first $100k in income for the US) and foreign tax credits against U.S./China taxes for local country income taxes paid.
If you spend $5 a day while earning $5000 a month, it's better to have one person who really loves the country and wants to stay paying income taxes, rather than 100 staying and paying VAT.
The typical government member in my experience tends to think in terms of "people will just pay more" rather than "they will go somewhere else".
Moreover: how should a government discriminate? If you are working for a company in Norway you are probably earning better than someone working for a company in laos.
If both of you are residing in vietnam, should I expect the latter to spend more in VAT than 50% of the vietnamese college graduates ?
That's a pretty stupid viewpoint in this context, considering I've already demonstrated my willingness to leave and go somewhere cheaper (Canada -> Vietnam). You'd think they'd rather have something from me than nothing.
In the Netherlands, for example, >50% of income tax is received from the 10% highest earners. So it's not unreasonable to expect a high earner to contribute accordingly.
EDIT: Heavy downvoting, but this is how things are in most Western democracies, like it or not.
As longer term expats tend to say "TIT" (aka this is Thailand). Don't expect it to be consistent or make sense to a Western mind.
[Email in my profile.]
Not that it hurts to ask your Thai lawyer for a confirmation.
Or EU law. Non-EU people cannot just come to EU countries and work as freelancer.
Let's look at the situation if you had a US-based company and you visited the UK. While you were in the UK you did some work. The UK tax office will interpret that as meaning you are earning money within the UK jurisdiction and therefore you owe money. In this specific case there are set limits of days for when 'work' is deemed to have taken place, and you would handle it through the double taxation between UK-USA. But, to be clear in this simple example you would incur UK tax.
I can't imagine which jurisdictions you're visiting that would not interpret you as "working".
Our laws weren't written for this manner of work, so I wonder how it's going to get resolved.
In practice it will depend on exactly what you do, and where. E.g. I used to travel to US a lot on the visa waiver scheme, and was briefed by an expensive US immigration lawyer on how to answer immigration questions out of concern that if I were to answer the wrong thing I might get turned away even without actually ever doing anything wrong.
In the US the general rule is that if you visit without a business visa, you can not do "productive work". That is, you can go to meetings and take instructions from your employer or a client, answer e-mails (but work you may need to do to be able to answer it may in theory not be allowed), or negotiate a contract, but you can't work on a project. In practice US immigration is pretty flexible as long as you're not taking the piss or give them reasons for concerns, and never overstay. Other countries can vary substantially - some will see you as an income stream for their country, others will see you as a nuisance, and treat you accordingly.
When it comes to taxation, you should assume that yes, you have to pay local taxes unless you specifically know otherwise. In most countries there will be a time threshold and/or a matter of what work you do, and often you won't be able to stay long enough or do work that incurs taxation on the most basic business visas anyway. 3 or 6 months is a common threshold before being considered resident for tax purposes, but tax liabilities can be incurred before you're considered resident some places. In many cases there will be treaties in place that regulates which country you should be taxing to if you're ordinarily resident - or a citizen - somewhere else.
If you're a US citizen, you have the added complication that the IRS considers its jurisdiction over US citizens as global, and so you need to check the situation before you do work abroad, as the absence of a tax treaty regulating income taxes can in the worst case mean you'll get taxed twice.
And yes, our laws were written for this manner of work. People have been travelling across borders to work for centuries. There's an extensive amount of treaties and case law dedicated to handling this, and large numbers of lawyers specialising on giving advice on how to deal with this.
For tax purposes, the type of visa is irrelevant. What matter is whether the country has a tax treaty with the U.S. If you work while you're on vacation or otherwise temporarily in another country with which the US has a tax treaty, you generally shouldn't be subject to local country taxation. At the same time, however, you will remain fully subject to U.S. taxation on that income (assuming you are a U.S. citizen or permanent resident).
If you stay in another country long enough to become subject to income taxation in that country, you will continue to owe taxes to the U.S., though you should generally be able to offset some or all of those local country income taxes paid. The U.S. generally provides a roughly $100k exemption for individuals; there is no exemption for business entities.
If this is really a concern for you, you should probably talk to a lawyer or an accountant.
"Although one of the people detained is extremely worried and does not want her name associated at all with todays events, in the long run, I believe this is a win for location independent entrepreneurs. After checking my passport and seeing that I'm on a valid tourist visa and haven't overstayed, and that I have no blacklist or warrants internationally, I was free to go.
I even hung out at immigration a tiny bit longer and got my 30 day extension while I was there. The owners of PunSpace were also nice enough to give us all another month for free for the trouble."
It does indeed look like Chiang Mai will not enforce laws prohibiting digital nomads from working.
If anyone wants to know more about Thai immigration law in regards to Digital Nomads:
“work” means engaging in work by exerting energy or using knowledge whether or not in consideration of wages or other benefit;
One day the laws will change without notice or they'll come looking for tea-money and all the rich farang workers (on tourist visas) herded together in somewhere like Punspace will be like shooting fish in a barrel for them. It won't matter that the work is being done for foreign companies. The digital-nomad type aren't the priority of Thailands tourist board. They typically spend very little compared to the rich Chinese and Japanese tourist they try to attract.
I'd rather do any work from my hotel room or condo or from somewhere like wawee coffee where you would have plausible deniability than a designated 'co-workers space' - where the only reason you would be there is to work.
Immigration provides Thai consulates with guidelines for how to assess visa applications, but each consulate's process is different. In the case of acquiring a tourist visa from the Thai consulate in Vientiane, Laos (one of the looser ones where a lot of visa runners go), they tend not to ask many questions until you've acquired at least three back-to-back tourist visas. Considering that one tourist visa can be extended to provide around 90 days in the Kingdom, that's a lot of time in Thailand!
For the digital nomad crowd, 9 months in Thailand is still pretty easy to do with a visa run to Laos every 90 days. People are doing it every day and I haven't heard of anyone getting knocked back as long as they have their paperwork in order and pay their visa fees.
In Canada, nobody is allowed to work on a Visitor Permit (Tourist Visa). Here, the definition of work is earning money in any way. In fact, they take it a step further: you can't even volunteer for a job that others get paid for! A Work Permit is required (getting which is a lengthy and tedious process without any guarantees whatsoever).
US too is similar in this regard, although many companies misuse the B1/B2 business visa for work. Though legally speaking, it's not allowed.
AFAIK, having a legal identification document at all times is a legal requirement even for citizens in the EU, or at least in Slovenia.
In fact, I have been at police checkpoints in two countries where they refused to see my passport and specifically requested that I present my driver's license - but these were both when I was driving, of course.
Side note I lived in Thailand for several years and was never asked for an ID.
Nowhere in EU countries there a requirement for their citizens to _carry_ a legal ID. Some may require you to _possess_ at least a valid one (at home maybe) and all of them require that you are _able to be identified_ by police officers (this means you accept to go to a police station to check your identity).
The first hit when I did:
"In 2005 the Dutch government introduced a law to improve public safety stating that everyone must be able to produce valid identification when requested by the police or supervisory officials. Those who fail to produce vailid identification risk being fined. Read on to learn more about valid identification, and to whom the law is applicable."
link (in dutch)
To all the downvoters: please PROVIDE A SOURCE (bill, act, legal review, any language is OK) that states that a citizen of a EU country must _carry_ a legal ID while staying in that country.
Please note I wrote in the original comment and in this comment _carry_, not _provide_.
As I wrote, there are states that require you to _provide_ an ID to police officers. But that doesn't mean that you have to _carry_ it with you all the time, just that you can go back home to take it or go to a police station and be identified there.
The relevant article of the penal procedure code ("Code de procédure pénale"), 78-2, is especially broad: "by any mean" ("par tout moyen").
To my knowledge, the French state does not even require that a French citizen even requests or obtains an identity card or a passport (although having some ID document may be useful in practice).
All anecdotal though and maybe you're right that the letter of the law does not require it. The UK certainly doesn't.
I never had an encounter with the gendarmes in the 5 years I lived there so I never found out first hand.
Edit: looks like you're right. This article does a nice job of breaking it down: http://rue89.nouvelobs.com/2011/12/26/fouilles-controles-did...
(Personally, I always keep my passport with me when travelling abroad.)
In France I always have my ID with me but I know friends who don't (e.g., did not bother replacing a lost ID). Having lived 24 years in France I have never been asked to produce ID by the police or gendarmes. (That said, I am white, not often involved in demonstrations and such, etc.; other people's experiences may vary. :-/)
Update: The last of us volunteered to come to immigration on our own. We drove there unescorted. Turns out they thought we were employees of Punspace which is untrue. We're all still here but good news so far is that they aren't targeting digital nomads.
Update: At Thai immigration near the airport, everyone got interviewed but were treated extremely kindly. It ended up taking a few hours and felt like a big waste of time, but nothing bad actually happened. The owners of PunSpace were even nice enough to bring us lunch. - See more at: http://www.johnnyfd.com/2014/09/live-updates-immigration-cra...
Nomads talking to person1: We work at PunSpace, you should check it out!
person1: Cool! So you guys must have work visas then?
Nomads: No, you don't need a visa to work there :)
person1: Oh really! That's awesome.
Then someone else overheard and thought Nomads are actually working for PunSpace company.
> I'm assuming the wage disparity between digital nomad
> and local thai would be wide and offensive to the
> immigration officers