Withholding Tax (WHT)
The withholding tax (“WHT”) is a tax deducted at source from the payment of a service invoice. WHT rates depend on the nature of provided services (cf. below detailed rates).
Upon payment of a service invoice, the payer must provide a withholding tax certificate to the vendor to justify the WHT deduction, the latter constituting a prepayment of the vendor Corporate Income Tax. Each amount of Withholding Tax deducted therefore constitutes a tax credit of the Corporate Income tax payable the following year.
How to calculate WHT?
WHT deductions shall be calculated on services expenses greater than 1,000 THB, or expenses lower than 1,000 THB but with a time commitment such as monthly subscriptions.
The WHT to be deducted is calculated based on the invoice amount exclusive of VAT.
Withholding tax rates applicable to Thai resident companies:
| Service | Rate |
|---|---|
| Rent | 5% |
| Rental service fee | 3% |
| Transportation (*) | 1% |
| Advertising | 2% |
| Non-life insurance premiums | 1% |
| Professional fees | 3% |
| Royalties | 3% |
| Interest | 3% |
| Dividends | 10% |
| Prizes / rewards | 5% |
| Water & electricity | No deduction |
| Public transportation / air ticket | No deduction |
Notes:
(*) Not applicable to public transportation.
Example of WHT calculation:
| Service | Net | VAT Rate | VAT | Gross | WHT Rate | Total WHT | Pay to supplier |
|---|---|---|---|---|---|---|---|
| Rental | 100,000 | exempt | – | 100,000 | 5% | 5,000 | 95,000 |
| Accounting fee | 10,000 | 7% | 700 | 10,700 | 3% | 300 | 10,400 |
| Air ticket | 20,000 | 0% | – | 20,000 | 0% | – | 20,000 |
Withholding tax submission requirement
The WHT shall be submitted to the Revenue Department by the 7th of each month for payments made in the previous month. For instance, the WHT deducted from a payment on the 15th of December shall be submitted to the Revenue Department by the 7th of January.
However, companies registered with the e-filing of the Revenue Department are granted an additional 8 days to file their tax returns, which allows them to submit their WHT by the 15th of the month.
Fines & penalties for late submissions apply as follows:
- Fines: 1.5%/month of the tax due amount.
- Penalties: 100 THB within the first 7 days / 200 THB after 7 days.
What is a Withholding Tax Certificate?
The WHT constitutes a prepayment of the vendor Corporate Income Tax, that is why the payer deducting the WHT shall provide a withholding tax certificate to the vendor in order to justify the deduction to the Revenue Department.
Such WHT certificates are needed for your monthly WHT submissions which Plizz will prepare as follows:
| PND 1 Form: Withholding Tax Return – Employees (for taxes withheld from employees) |
| PND 53 Form: Withholding Tax Return – Companies (for taxes withheld from vendors who are juristic persons) |
| PND 3 Form: Withholding Tax Return – Individual (for taxes withheld from vendors who are not juristic |
