Withholding Tax (WHT) in Thailand

Bill Views: 109 2025-01-22 14:43:07 Comments: 0

About TMA Group
TMA Group is a professional company focusing on local recruitment and corporate consulting in Thailand, dedicated to providing one-stop services including recruitment, financial management, tax disposal, legal consulting, personnel management, etc. for enterprises and individuals. If you need more advice on investment in Thailand, please feel free to contact us.

Withholding Tax (WHT) in Thailand

Withholding Tax (WHT) is a system where a portion of payments made to individuals or entities is withheld by the payer and remitted to the Revenue Department of Thailand on behalf of the recipient. This tax is applied to various types of income and is governed by the Revenue Code of Thailand.

1. Key Features of Withholding Tax

Purpose: WHT ensures tax collection at the source of income and helps reduce non-compliance by the recipient.
Scope: Applicable to both domestic and cross-border payments.

2. Domestic Withholding Tax Rates

The WHT rates vary depending on the nature of the payment and the recipient. Below are common WHT rates for domestic payments:

Type of Payment	Rate	Details
Employment income (salary)	5%-35%	Progressive rates based on individual income levels.
Dividends	10%	Withheld when dividends are paid to shareholders.
Interest	1%	Applies to interest paid to companies.
Royalties	3%	Withheld on payments for intellectual property usage.
Professional services	3%	Applies to fees paid for legal, audit, or consulting services.
Rent	5%	Withheld on rental payments for properties or assets.
Prizes, awards, and commissions	5%	Withheld on payments to individuals.

3. Cross-Border Withholding Tax Rates

For payments made to non-residents, the following rates generally apply (subject to tax treaty relief):

Type of Payment	Rate	Details
Dividends	10%	Withheld when paid to non-residents.
Interest	15%	Applies to interest paid to foreign entities.
Royalties	15%	Withheld on payments for intellectual property usage.
Service fees	15%	Applies to cross-border payments for services.

Tax Treaties: Thailand has tax treaties with many countries that may reduce or eliminate WHT rates for certain payments. The payer must ensure compliance with the treaty provisions by obtaining relevant documentation (e.g., Certificate of Residence).

4. Filing and Payment Requirements

WHT Certificate:

The payer must issue a Withholding Tax Certificate (Form 50 Tawi) to the recipient, showing the amount withheld and remitted.

Monthly Filing:

Form PND.1: Withholding tax on salaries.
Form PND.3: Withholding tax on payments to individuals.
Form PND.53: Withholding tax on payments to companies.

Payers must file the appropriate WHT forms with the Revenue Department by the 7th day of the following month (if filed in person) or by the 15th day of the following month (if filed electronically).
Common forms include:

Payment:

The withheld amount must be paid to the Revenue Department along with the filing.

5. Penalties for Non-Compliance

Failure to comply with WHT obligations may result in:

Fines: Penalties for late filing or failure to withhold tax.
Surcharges: Interest at 1.5% per month on unpaid tax.
Legal Consequences: In cases of intentional non-compliance or fraud.

6. Practical Considerations

Double Taxation:

Recipients can claim the withheld tax as a credit against their final tax liability, preventing double taxation.

Tax Planning:

Businesses should carefully assess withholding tax obligations to ensure compliance and reduce unnecessary tax burdens.

If you need more details on withholding tax, filing procedures, or cross-border payments under Thai tax law, feel free to ask!

YouTube

Disclaimer

TMA Consulting Management has been paying attention to the updating of information through newsletters for many years, but we do not assume any responsibility for the completeness, correctness or quality of the information provided. No information contained in this article can replace the personal consultation provided by a qualified lawyer. Therefore, we do not assume any liability for damages caused by the use or non-use of any information in this article (including any kind of incomplete or incorrect information that may exist), unless it is caused intentionally or by gross negligence.