Withholding Tax in Thailand

Withholding Tax (commonly written “WHT”) consists in deducting a tax from payments done to service suppliers. This tax is also applicable to the payment of dividends and interests. When doing a payment, a withholding tax certificate must be provided to the recipient in order to justify the deduction. On the recipient point of view (the service provider), the deduction of the withholding tax constitutes a prepayment of its Corporate Income Tax. Each amount of Withholding Tax deducted therefore constitutes a tax credit of the Corporate Income tax payable the following year. Thus, if you are a service provider, consider that your clients will pay your Corporate Income Tax on your behalf.

How to calculate Withholding Tax?

Withholding Tax does not apply to amounts less than THB 1000. However, you are required to deduct this Thai tax whatever the amount if you are linked by a long-term agreement to the service provider. Withholding tax therefore applies when you pay phone or internet bills of your company.

Deadlines

Payment must be done on the 7th following the month during which the payment has been done.

Fines and penalties for last submission:

✓ Fines: 1.5 % of the payable amount per month
✓ Penalties: 100 THB before seven days / 200 THB after seven days.

Exemptions:

  • ✓ Companies with a turnover less than 1,8 million baht excepted if a visa or work permit are delivered to foreign employees or directors;
  • ✓ Import of magazine, newspapers or books;
  • ✓ Medical Services;
  • ✓ Service billed by Thai governmental organization;
  • ✓ Transportation;
  • ✓ Educational services;
  • ✓ Imports of certain categories of agricultural products;
  • ✓ Statutory Audit services;
  • ✓ Renting of immovable properties.
  • ✓ Certain cultural services.
Type of income Withholding Tax Rate (1)
Services 3%
Non-life insurance 1%
Software 3%
Royalties in Thailand 3%
Royalties out of Thailand 15%
Office or Equipment rental 5%
Advertising 2%
Dividends 10%

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