WITHHOLDING TAX IN THAILAND
Withholding Tax (commonly written “WHT”) consists of deducting a tax from payments done to service suppliers. This Tax is also applicable to the payment of dividends and interests. When making a payment, a withholding tax certificate must be provided to the recipient 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, represents 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 a long-term agreement links you to the service provider. Withholding Tax, therefore, applies when you pay the telephone or internet bills of your company.
Deadlines
Payment must be made on the 7th following the month during which the payment has been made.
Fines and penalties for the 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 of less than 1,8 million baht excepted if a visa or work permit is 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 specific categories of agricultural products;
✓ Statutory Audit services;
✓ Renting of immovable properties.
✓ Certain cultural services.
TYPE OF INCOME
WHT RATES
Services
Non-life insurance
Software
Royalties in Thailand
Royalties out of Thailand
Office or Equipment rental
Advertising
Dividends
Prizes
Water and electricity
Public transportation / air tickets
Life insurance
3%
1%
3%
3%
15%
5%
2%
10%
5%
N/A
N/A
N/A
When calculating the amount to pay, the WHT deduction is calculated net of VAT.
For example:
Service
Net
VAT Rate
VAT
Gross
WHT Rates
Total WHT
Pay to Supplier
Rent
125,000
7%
8,750
133,750
5%
6,250
127,500
Air Ticket
67,000
0%
-
67,000
0%
-
67,000
Audit
300,000
0%
-
300,000
3%
9,000
291,000
15,250
485,500
Submission to the Revenue Department
The WHT deducted is paid to the Revenue Department (“RD”) within the 7th day of the following month in which the payment was made. E.g., a payment made on 28th August 2017 to a supplier will require the WHT deducted to be paid to the RD by the 7th September 2017.
The Revenue Department has announced that companies registered for e-filing with have an extra eight days to file all tax returns. This incentive will run until 31st January 2019.
Late submission
The fine for late submission is:
- 100 baht within the first 7 days
- 200 baht after 7 days
An additional penalty of 1.5% of the outstanding amount calculated monthly.
Further sources of information
Please visit the Revenue Department website.
