Withholding Tax (WHT) in Thailand: A Guide for Business Owners
Many business owners are unsure about their withholding tax obligations. This guide explains what WHT is, when it applies, and what you need to do each month.
Withholding tax (ภาษีหัก ณ ที่จ่าย) is a mechanism where the payer of certain services withholds a percentage of the payment and remits it directly to the Revenue Department on behalf of the recipient. It is one of the most common tax obligations businesses encounter when paying for services in Thailand.
When Does Withholding Tax Apply?
WHT applies when you pay for a broad range of services, including: professional fees (lawyers, accountants, consultants), rental payments, advertising fees, transport and freight services, and certain other service categories.
The rate varies depending on the type of payment, the recipient (individual or company), and whether the recipient is a Thai resident or foreign entity. Common rates range from 1% to 15%.
What Does the Payer Need to Do?
When you make a payment subject to WHT, you must: deduct the correct percentage from the payment amount, issue a WHT certificate (หนังสือรับรองการหักภาษี ณ ที่จ่าย) to the recipient, file a monthly WHT return (PND.1 for employment income, PND.3 for individual service recipients, PND.53 for corporate service recipients), and remit the withheld amount to the Revenue Department by the 7th of the following month (or the 15th for e-filing).
What Does the Recipient Need to Do?
If your customers withhold tax from payments to you, you should receive a WHT certificate for each deduction. Keep these certificates — they represent tax already paid on your behalf and can be used as a credit against your annual tax liability.
Common Problems
Applying the wrong rate is a common issue and can result in penalties. Failing to file the monthly return, even in a month with no transactions, can also attract late-filing penalties. If you are unsure whether a payment is subject to WHT or which rate applies, consult your accountant before making the payment.
Note: This article is for general information only and does not constitute tax or legal advice. Thai tax law changes periodically — consult a qualified accountant for advice specific to your situation.