Definition & Rates
The Withholding Tax (WHT) is a deduction made on payments to suppliers for the provision of services. There is no WHT on the purchase of products. The WHT applies to expenses greater than THB 1,000 and to expenses for which a long-term agreement is in place although the expense may be lower than THB 1,000 (e.g. telephone or internet bills). The rate depends on the nature of services rendered as follows:
|Types of Services||WHT rate (%)|
|Professional services and Hire of work||3%|
|Rental of assets||5%|
|Non-Life Insurance (e.g. motor insurance)||1%|
|Telephone and Internet||3%|
Thai companies can use Withholding Tax deducted from their income as a credit against Corporate Income Tax due at year end (if any).
Calculation & Submission
The WHT is calculated on the amount before VAT and is submitted to the Revenue Department within the 7th of the following month (+8 extra days when submitted online).
Let’s say your Thai company pays an invoice to a supplier registered in Thailand for the provision of legal services for THB 10,000 + VAT on 5th January.
Total Before VAT: THB 10,000
+ VAT: THB 700
– Withholding Tax (3% * THB 10,000): THB 300
Grand Total: THB 10,400 to be transferred to the supplier and the WHT of THB 300 shall be submitted within 7th February.
Withholding Tax on Foreign Payments
There is a 15% WHT (10% for dividends) applicable on the payment to foreign companies that do not carry on business in Thailand. Such WHT may be reduced or even exempt under Double Tax Treaties.
The fine for late submission of the WHT is THB 100 if it is submitted within 7 days and THB 200 if it is submitted after 7 days from the due date. There is also a surcharge of 1.5% of the amount of tax payable per month.