Does Thai advertiser with UK media biz need to pay withholding tax

Question

UK media receiving advertising payment from Thai hotels via an international bank transfer to HSBC. Do the advertising hotels need to pay withholding tax in Thailand? If yes, what percentage of withholding tax?

Answer

Provided that the UK company has no “Permanent Establishment ” in Thailand (meaning an employee or go-between etc) then the Thai payor should not deduct withholding tax.

If it has a PE then the withholding tax rate is 15%. But then the UK payee can claim a tax credit for the deduction against its UK tax bill, subject to the UK double tax treaty with Thailand. A tax grossing up clause is permissible provided both parties agree (but that means the Thai payor is actually paying more).

Answer

Provided that the UK company has no “Permanent Establishment ” in Thailand (meaning an employee or go-between etc) then the Thai payor should not deduct withholding tax.

If it has a PE then the withholding tax rate is 15%. But then the UK payee can claim a tax credit for the deduction against its UK tax bill, subject to the UK double tax treaty with Thailand. A tax grossing up clause is permissible provided both parties agree (but that means the Thai payor is actually paying more).

Answer

Provided that the UK company has no “Permanent Establishment ” in Thailand (meaning an employee or go-between etc) then the Thai payor should not deduct withholding tax.

If it has a PE then the withholding tax rate is 15%. But then the UK payee can claim a tax credit for the deduction against its UK tax bill, subject to the UK double tax treaty with Thailand. A tax grossing up clause is permissible provided both parties agree (but that means the Thai payor is actually paying more).

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