Withholding Tax in Thailand

Question posted by Julie Chapman, on behalf of Twintec Ltd in DN15

We have quoted for some construction work in Thailand which involved shipping materials first and then sending labour & plant to carry out construction activities (casting of a concrete floor slab).

The main contractor has asked us if our quote includes for Withholding Tax.

Can someone please explain what a Withholding Tax is.

Thank you.

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James O'Sullivan, on behalf of UK Exporters Ltd in BS6.

Check here - http://www.mazars.co.th/Home/News/Doing-Business-in-Thailand/Tax/Withholding-Tax-in-Thailand.
You could also approach The British Chamber of Commerce Thailand (BCCT) - www.bccthai.com email greg@bccthai.com.
The British Chamber of Commerce Thailand (BCCT) has joined forces with UK Trade & Investment (UKTI) to give UK SMEs a headstart in Thailand. Headstart offers practical in-market support for SMEs, including access to office space and locally established UK expertise

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John Lawrence, on behalf of Uniglobe Double S Travel in LU2.

Julie - we can help you save money on your travels to Thailand...which you can use to pay any sort of tax due....

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Julie, my Company is a logistics provider. I have asked our Agent in Bangkok about Witholding Tax and they have advice is copied below:

Dear Nigel,

Your client question may be caused by No. 4 below. the contractor may deduct the money 3% of the payable amount to him and the contractor will submit the deducted money to Revenue Officer. Normally your client (payee or the tax payer) can credit as the full expense.

The contractor has asked because your client will receive 3% less what they propose.

Hope it is clear.

Any inquiry, please feel free to contact us.

4. Withholding Tax

For certain categories of income, the payer of income has to withhold tax upon the remittance of such income, file tax return Form P.N.D. 1, 2 or 3 as the case may be, and submit the amount of tax withheld to the District Revenue Office. The taxpayer (the payee) can credit the withheld amount again this total tax amount at the time of filing PIT return. The following are the withholding tax rates on some categories of income.

Types of income
Withholding tax rate

1. Employment income 5 - 37 %
2. Rents and prizes 5 %
3. Ship rental charges 1 %
4. Service and professional fees 3 %
5. Public entertainer remuneration

- Thai resident 5%

- non-resident 5-37 %

6. Advertising fees 2 %

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Below is the information on withholding tax in Thailand for corporate income. In your case, I believe it to be 5% unders category 5 as your company have no branch in Thailand.

Corporate Income Withholding Tax
Certain types of income paid to companies are subject to withholding tax at source. The withholding tax rates depend on the types of income and the tax status of the recipient. The payer of income is required to file the return (Form CIT 53) and submit the amount of tax withheld to the District Revenue Offices within seven days of the following month in which the payment is made. The tax withheld will be credited against final tax liability of the taxpayer. The following are the withholding tax rates on some important types of income.

Type of Income Withholding Tax Rates
1. Dividends 10%
2. Interest 10% if paid to associations or foundations
1% in other case
3. Royalties 10% if paid to associations or foundations
3% in other case
4. Advertising Fees 2%
5. Service and professional fees 3 % if paid to Thai company or foreign company having permanent branch in Thailand, 5% if paid to foreign company not having permanent branch in Thailand

I hope this helps.

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