Withholding Tax Rates in Cases of Recipient Being a Legal Entity

     Withholding tax is a form of tax payment where the payer is responsible for deducting tax at the source and submitting it to the Revenue Department. The payee will receive a withholding tax certificate from the payer as proof for subsequent income tax reporting.

In cases where the recipient is liable to pay corporate income tax (Por Ngor Dor 53), the withholding tax rates are as follows:

1. Assessable income according to Section 40 (2) and (3) of the Revenue Code, such as brokerage fees and goodwill, licensing fees, or other rights

• Withholding tax rate of 3% for corporations or partnerships established in Thailand
• Withholding tax rate of 10% for foundations or associations, excluding those specified by the Finance Minister under Section 47 (7) (B) of the Revenue Code

2. All cases under Section 40 (4) (A) of the Revenue Code

• Withholding tax rate of 1% for corporations or partnerships conducting business in Thailand, excluding commercial banks or companies under the law governing capital market business, securities business, and credit foncier business, and asset management companies
• Withholding tax rate of 10% for foundations or associations, excluding those specified by the Finance Minister

3. Specific to interest on bonds and debentures under Section 40 (4) (A) of the Revenue Code

• Withholding tax rate of 1% for commercial banks or companies under the law governing capital market business, securities business, credit foncier business, and asset management companies

4. Specific to interest on bonds, debentures, bills, loan interest, loan interest under enforcement, which are required to be withheld under the Petroleum Income Tax Act, the remainder after withholding tax under the said law, and the difference between the redemption price and the selling price of bills or debt securities issued and first sold by a company or a partnership or another legal entity at a price lower than the redemption price, under Section 40 (4) (A) of the Revenue Code

• Withholding tax rate of 1% for corporations or partnerships conducting business in Thailand, excluding commercial banks or companies under the law governing capital market business, securities business, and credit foncier business, and asset management companies
• Withholding tax rate of 10% for foundations or associations, excluding those specified by the Finance Minister

5. Dividend or profit-sharing or any other benefits according to Section 40 (4) (B) of the Revenue Code, withholding tax rate of 10% in the following cases:

• Companies or partnerships established under foreign law conducting business in Thailand
• Companies or partnerships established under Thai law (excluding registered companies and limited companies holding not less than 25% of all voting shares in the dividend-paying limited company and the dividend-paying limited company does not hold shares in the dividend-receiving limited company, whether directly or indirectly)

6. Rental income or other benefits obtained from the lease of assets according to Section 40 (5) (A) of the Revenue Code

• A withholding tax rate of 10% is applicable (foundations or associations, excluding those specified by the Finance Minister)
• A withholding tax rate of 5% applies to companies or partnerships established under Thai law.

   For rental of ships as per the Maritime Commerce Act used for international goods transportation,

• A withholding tax rate of 1% applies to companies or partnerships established under Thai law.

7. Income from freelance professions under Section 40 (6) of the Revenue Code, including law, medical practice, engineering, architecture, accounting, fine arts etc. For companies or partnerships established under Thai law, a withholding tax rate of 3% applies. For foundations or associations (excluding those specified by the Minister), a withholding tax rate of 10% is applicable.

8. Remuneration that is considered assessable income according to Section 40 (7) of the Revenue Code (contract work requiring the contractor to supply materials) and Section 40 (8) of the Revenue Code. The withholding tax rate of 3% is applicable, excluding foundations or associations and in the case where companies or partnerships established under foreign laws operate in Thailand with a permanent branch office in Thailand.

9. Remuneration. A withholding tax rate of 5% applies to companies or partnerships established under foreign laws operating in Thailand without a permanent branch office in Thailand.

10. Prizes in competitions, luck contests, and other similar events are subject to a withholding tax rate of 5%.

11. Advertising fees are subject to a withholding tax rate of 2%.

12. Assessable income according to Section 40 (8) of the Revenue Code, specifically for payments derived from providing services, has a withholding tax rate of 3%, excluding:

1. Payments according to clauses 8, 9, 12, and 15, which are specified to withhold tax at source specifically
2. Public transportation fare payments
3. Payments for hotel and restaurant services
4. Life insurance premium payments

13. Rewards, discounts, or any benefits resulting from sales promotion have a withholding tax rate of 3% (excluding foundations or associations).

14. Insurance premiums for accidents are subject to a withholding tax rate of 1% (applicable to companies or partnerships engaged in accident insurance business in accordance with Thai law).

15. Transportation fees, excluding payments for public transportation fares, have a withholding tax rate of 1% (excluding foundations or associations).

16. Assessable income according to Section 40 (8) of the Revenue Code, specifically payments derived from the sale of goods such as rubber sheets or other types of rubber from rubber trees, cassava, taro, rice, corn, sugar cane, coffee beans, oil palm fruits, have a withholding tax rate of 0.75%.

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

Tel. +66 2272 8000

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