Legal violations in incorrect and incomplete withholding income tax payments

     Withholding Income Tax refers to the tax amount deducted by the payer from the payment given to the recipient. The payer is responsible for submitting this deducted tax to the Revenue Department. Meanwhile, the recipient receives a tax withholding certificate from the payer as evidence of tax payment when filing their tax returns, demonstrating that they have paid their tax in the form of withholding tax throughout the year. In cases where the withholding income tax payments are not complete, this constitutes a legal violation as defined by the Revenue Department as follows:

     No. 1: Those responsible for withholding tax under Section 3 ter, Section 50, and Section 69 bis of the Revenue Code must submit a report in the form specified by the Director-General of the Revenue Department. They must also submit the tax amount they are responsible for withholding to the District Office within seven days from the date of payment of assessable income, regardless of whether they have already withheld the tax, as per Section 52 of the Revenue Code.

     No. 2: If the person responsible for withholding tax as per No. 1 does not withhold and does not submit the tax they are required to withhold to the District Office within the legal deadline, they and the income recipient are jointly liable for paying the tax equivalent to the amount of tax not withheld and not submitted, as per Section 54, Clause One of the Revenue Code. They must also pay an additional 1.5% per month, or part of a month, of the tax due, excluding fines, as per Section 27 of the Revenue Code.

     No. 3: If the person responsible for withholding tax as per Point 1 does not withhold tax, but instead pays the tax on behalf of the income recipient and submits the tax they are responsible for withholding to the District Office within the legal deadline, but the submitted amount is not correct, they and the income recipient are jointly liable for the unpaid tax amount, as per Section 54, Clause One of the Revenue Code. They must also pay an additional 1.5% per month, or part of a month, of the tax due, excluding fines, as per Section 27 of the Revenue Code.

     No. 4: If the person responsible for withholding tax as per Point 1 does not withhold tax, but instead pays the tax on behalf of the income recipient and submits the tax they are responsible for withholding to the District Office within the legal deadline in the correct amount, both the payer and the income recipient are exempt from tax liability to the extent of the correct amount that the payer has submitted, as per Section 54, Clause Two of the Revenue Code.

     No. 5: If the person responsible for withholding tax as per Point 1 correctly withholds and submits the tax to the District Office within the legal deadline, both the payer and the income recipient are exempt from tax liability to the extent of the correct amount that the payer has submitted, as per Section 54, Clause Two of the Revenue Code.

     No. 6: In the event that the person obligated to deduct tax at source as per No. 1 has deducted tax at source but has not remitted the tax amount that they were supposed to deduct to the District Office within the time specified by law, such a person, who is the payer, will be jointly liable with the income recipient for the payment of the tax due to the amount of tax missing, according to Section 54, Paragraph One of the Revenue Code. They will also be required to pay an additional 1.5% per month or part thereof of the tax due or remitted, excluding fines, according to Section 27 of the Revenue Code.

     No. 7: In the event that the person obligated to deduct tax at source as per No. 1 has deducted the correct amount of tax at source but has not remitted the tax amount that they were supposed to deduct to the District Office within the time specified by law, or has not remitted the tax at all, the income recipient who is liable to pay tax is relieved of their obligation to pay the tax amount that has been deducted. Moreover, the person who was supposed to deduct tax at source and who is the payer is solely responsible for paying that amount of tax, according to Section 54, Paragraph Two of the Revenue Code. They will also have to pay an additional 1.5% per month or part thereof of the tax due or remitted, excluding fines, according to Section 27 of the Revenue Code.

     No. 8: In the event that the Government or a governmental organization is the payer of assessable income under Section 40 of the Revenue Code, it is the responsibility of the officer making the payment to ensure that the amount of tax that should be withheld at source under Section 50 of the Revenue Code has been calculated and recorded in the disbursement document, and to deduct that amount before making the payment, according to Section 53 of the Revenue Code.

     No. 9: The calculation of additional amounts according to No. 2 to No. 8 should start from the expiration of the deadline for tax declaration or payment up to the day of payment or remittance, but the calculated additional amount should not exceed the tax due or remitted. This applies whether the tax due or remitted arises from the filing of the tax return or payment itself, or from an assessment or order by the assessment officer.

     No. 10: In the event that the person obligated to deduct tax at source as per No. 1 either fails to deduct and remit tax, or deducts and remits tax but not the correct amount as per No.2 to No. 8, but the income recipient has declared the assessable income amount that was not correctly deducted at source, or the amount that was deducted at source but not in the correct amount, and has filed a tax return and paid the tax, it is considered that the income recipient, who is a joint debtor of the person obligated to deduct tax at source, has paid the tax debt. Consequently, the person obligated to deduct tax at source, who is the payer, is relieved from the tax debt specifically for the tax amount due to the Revenue Department, according to Section 54, Paragraph Two of the Revenue Code. However, the person obligated to deduct tax at source still has the responsibility to pay an additional 1.5% per month or part thereof of the tax due or remitted, excluding fines, according to Section 27 of the Revenue Code.

     No. 11: In the case where the withholding tax agent has deducted withholding tax and issued a withholding tax certificate to the income earner, but has not remitted the funds to the Revenue Department, or has remitted the funds but not the correct amount, the withholding tax agent who is the payer of such funds shall bear sole responsibility. As for the income earner, they will be exempted from tax liability to the extent of the amount that has been deducted, as per Section 54, paragraph two of the Revenue Code. Therefore, the income earner has the right to consider the amount of tax withheld, as indicated in the withholding tax certificate, as a credit in the calculation of personal income tax and corporate income tax, under Sections 3 ter, 60, and 69 dec of the Revenue Code.

     No. 12: In the case where the withholding tax agent, as mentioned in No. 1, does not deduct and remit withholding tax, or has deducted and remitted withholding tax but not the correct amount as per No. 2 to No. 8, the assessment officer has the authority to collect such taxes from the withholding tax agent who is the payer first. Hohttps://www.rd.go.th/3564.htmlwever, if the collection from the payer is not possible or not the correct amount, the assessment officer has the authority to assess the tax liability of the taxpayer according to Section 18 of the Revenue Code, or issue a tax collection notice to the taxpayer according to Sections 19 or 23 of the Revenue Code, as the case may be, to assess the tax, penalty, and surcharge in accordance with Sections 22, 26, and 27 of the Revenue Code, to the correct amount accordingly.

     No. 13: In the case where the withholding tax agent, as mentioned in No. 1, deducts withholding tax from the sale of real estate as per Sections 50 (5) and 50 (6) of the Revenue Code, the withholding tax agent shall remit the tax to the officer in charge of registering rights and legal transactions, at the time of registration, and the officer in charge may not acknowledge, approve, or record until the tax has been fully remitted, as per Section 52, paragraph two of the Revenue Code.

     No. 14: The principles and methods of withholding tax deduction and remittance as per No. 1 to No. 9 shall be enforced in cases where the payer, who is required to deduct tax from assessable income paid and remit tax, must submit a report in the form as determined by the Director-General of the Revenue Department within seven days from the end of the month in which the assessable income was paid, as per Section 70 of the Revenue Code.

     No. 15: Any regulations, rules, orders, correspondence in response to queries, or interpretations that conflict with or contradict this order shall be considered null and void.

Data updated on February 10, 2023

Source: The Revenue Department, 90 Phaholyothin 7, Phayathai, Phayathai, Bangkok 10400

Tel. +66 2272 8000

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