Understanding Thailand's Withholding Tax: A Foreign Business Owner's Cheat Sheet
Withholding Tax (WHT) is the single most misunderstood Thai tax obligation among foreign business owners. Get it wrong, and the Revenue Department will assess your company — not your supplier — for the unpaid amount. Plus penalties.
The good news: WHT in Thailand is rule-based and very predictable once you know the categories. This cheat sheet covers what every foreign-owned Thai company needs to know.
Quick answer: When your Thai company pays for services, rent, advertising, or commissions — you must withhold a percentage and remit it to the Revenue Department by the 7th of the following month. Failure to do so makes your company liable for the unpaid tax.
What Is Withholding Tax?
Withholding tax is a prepayment of income tax. When a Thai company makes certain payments to a service provider (vendor, consultant, landlord, etc.), it's required to deduct a percentage at source and remit it to the Revenue Department. The recipient claims this withholding as a tax credit when filing their own income tax.
Think of it as the Thai government collecting income tax incrementally throughout the year — at the moment of payment — rather than waiting for the recipient's annual filing.
Standard WHT Rates for Domestic Payments
Below are the most common WHT rates when paying Thai-resident vendors and individuals. Rates vary based on the nature of the payment and the recipient's status (corporate vs individual).
| Payment Type | To Corporate | To Individual |
|---|---|---|
| Service fees (general) | 3% | 3% |
| Professional fees | 3% | 3% |
| Rent (immovable property) | 5% | 5% |
| Advertising fees | 2% | 2% |
| Transportation (domestic) | 1% | 1% |
| Commissions / brokerage | 3% | 3% |
| Royalties | 3% | 5% |
| Dividends | 10% | 10% |
| Interest (corporate) | 1% | 15% |
WHT on Foreign Payments (Cross-Border)
This is where things get more complex — and where most foreign-owned businesses make mistakes. When your Thai company pays a foreign vendor (overseas software, consultancy, royalties, dividends), Thailand's Section 70 generally requires 15% WHT. But Thailand has 60+ Double Tax Treaties (DTTs) that may reduce this rate.
Common Cross-Border WHT Rates (Without Treaty)
- Royalties / Software licenses: 15%
- Service fees (offshore): 15%
- Interest: 15%
- Dividends to foreign parent: 10%
- Capital gains: 15%
Treaty Benefits — Common Reductions
| Country | Royalty | Dividend | Interest |
|---|---|---|---|
| Singapore | 5–15% | 10% | 10–15% |
| USA | 5–15% | 10% | 10–15% |
| Japan | 15% | 10% | 10–25% |
| UK | 5–15% | 10% | 10–15% |
| Hong Kong | 5–15% | 10% | 10–15% |
Important: To claim treaty benefits, you must obtain a Certificate of Residence from the foreign vendor's tax authority and file the appropriate documentation with the Thai Revenue Department before payment.
The Three Forms You Need to File
- PND.3 — WHT on payments to individuals (Thai)
- PND.53 — WHT on payments to companies (Thai)
- PND.54 — WHT on payments to foreign companies (cross-border)
All three must be filed and remitted by the 7th of the following month. Late filing carries a 1.5% penalty per month plus surcharge.
5 Common Mistakes Foreign Business Owners Make
- Forgetting to withhold on rent. Office rent is one of the most-missed WHT categories. Even if your landlord is an individual, you must withhold 5% and issue a WHT certificate.
- Treating offshore SaaS as a local service. Subscriptions to Slack, Zoom, AWS, Google Workspace from a Thai company — all generally subject to 15% WHT (or treaty rate). This is enforced increasingly aggressively.
- Missing the 7th-of-the-month deadline. Penalties compound monthly. Set up automated reminders or outsource to a tax agent.
- Failing to issue WHT certificates. Vendors need the Form 50 BIS certificate to claim their tax credit. Failure to issue it damages relationships and may breach contract.
- Not claiming treaty benefits when available. Paying 15% when the treaty rate is 5% is wasted cash. Always check the applicable DTT before remittance.
Best-Practice Workflow
Run this checklist before every supplier payment:
- Is the vendor Thai-registered or foreign? (Determines PND form)
- What is the payment category? (Determines rate)
- Is this an individual or corporate vendor?
- If foreign — is there a treaty? Do we have a Certificate of Residence?
- Calculate the WHT amount and net it from the payment.
- Issue the WHT certificate (Form 50 BIS) on the same day.
- Aggregate all WHT entries for the month into PND.3 / 53 / 54.
- File and remit by the 7th of the following month.
How D PROMPT Handles WHT for Our Clients
Our monthly accounting retainer includes the full WHT cycle — we calculate, file, and remit on your behalf, issue all certificates to your vendors, and maintain a treaty database to ensure you never overpay on cross-border remittances. For most SMEs, this saves an estimated THB 30,000–120,000 per year in penalties and excess WHT alone.
If you're unsure whether you've been compliant, send us your last 3 months of WHT filings and we'll do a complimentary review.