News & Update

Thailand, like the other developing countries in the world, has their own taxation laws. It has an extensive withholding tax system applicable to both domestic and international payments. In this system, a payer of income is mandated by law to deduct tax from the types of payments described under the system and remit the amount of tax deducted to the Thailand Revenue Department within seven days of the end of the month of payment.

Thailand has many categories of payments which are subjected to withholding taxes. Non-payment of withholding tax to the Revenue Department can be very costly as the payer is responsible for such payment. Failing to collect the withholding tax when you make payment to a supplier will end up with you absorbing the withholding tax which was supposed to be deducted from the payment made to the supplier.

Some of the 20 main categories of income which are subject to withholding tax with rates varying between 0.75% and 10% for the withholding tax applied on dividends, are:

• Services invoices are subject to 3% withholding tax. PND53 withholding tax returns form will be used for this category.
• Rental invoice where the payee is a juristic person is subject to 5% withholding tax. PND3 withholding tax returns form will be used for this category.
• Rental invoice where the payee is a taxable foundation is subject to 10% withholding tax. PND3 withholding tax returns form will be used for this category.

All withholding tax deducted from payments for above income type will be remitted to the Revenue Department on specific schedule and such amount will become a credit against the corporate income tax of the payment recipient.

The company that withholds tax on the payment of salaries will use the PND1 withholding tax returns form. The PND1 kor is the annual withholding tax return for individuals containing the summary of tax withheld on employee’s salary income for the year. PND1 kor will have to be filed before end of February of the following year.

Withholding Tax on Domestic Payments

The following types of payments under the domestic payment category are subject to corresponding withholding tax (WHT):

A recipient or receiver of income under the domestic payment will receive a withholding tax deduction certificate from the payer of income.

Withholding Tax on International Payments

The following types of payments under the international payment category are subject to corresponding withholding tax (WHT):

The prescribed withholding tax rates under the Thai tax law are subject to reduction or exemption pursuant to provisions in a Double Tax Treaty with Thailand. Further tax planning and advisory from professionals is needed to be sure that the correct tax amount  is withheld to every individual. Trusted local firms who have expertise in the field can be consulted to avoid inconvenience.