Companies in Thailand are required to report and withhold taxes from their employees when paying for their salaries, and from their vendors when making payments for services they ordered. There are several withholding tax rates; 1% for transportation, 2% for advertising, 5% for rent, 3% for most other services. You may also be obligated to withhold taxes when you make payments to overseas vendors, if the transactions meet the criteria. A good corporate bookkeeping and accounting service will help you deal with all the complexities of withholding tax in Thailand

More Withholding Tax Information

There are 3 types of withholding tax forms used;

  • Form PND 1, for taxes withheld from employees
  • Form PND 3, for taxes withheld from vendors who are not juristic persons - eg. freelance workers
  • Form PND 53, for taxes withheld from vendors who are juristic persons

Form PND 1 is self explanitory. The company keeps income tax from the employee's salary and submits it to the revenue department on the employee's behalf. This is done on every pay period. At the end of the year the company supplies a Withholding Tax summary to the employee. It shows how much the employee earned during the year and how much taxes the emplyee paid. The employee then submits their Personal Income Tax forms to the revenue department and the revenue department calculates if the employee has paid enough tax. There may be either money owed, or money to be credited.

Now the other form of Withholding tax, specifically PND 3 and PND 53, ensures that the Thai Revenue Department gets tax from the vendor(s) in advance instead of having to wait till year-end for the vendor(s) to file their income tax returns. The withholding tax needs to be delt with for any service invoice over 1,000 THB.

Here is how it works; you order a service from Company A and after the successfull execution of the service Company A invoices your company 10,000 THB. That service is eligable for a 3% withholding so you need to pay Company A as follows; 10,000 + 7% VAT = 10,700 THB minus 3% withholding tax on the 10,000 THB, which equals 300 THB, so 10,700 THB - 300 THB = 10,400 THB. For the 300 THB you will first submit a withholding tax form to the Company A and then you will submit the payment of 300 THB to the revenue department when you file PND 53.

Withholding Tax Registration Process

Any company carrying on business in Thailand must process tax registration in order to receive a tax identification number from the Revenue Department. The company needs to submit the following documents;

  • an application form (Lor Por 10.3),
  • a copy of the company’s registration certificate,
  • copy of the company’s house registration,
  • a map to the company

It must register at the Area Revenue Office (The revenue office, which the company office is located near) within 60 days after the date the company was registered.

Due to the complexity of TAX registration it is advisable that you allow an expert, like Professional Corporate Services, to aid your company with the process.

EXTREMELY IMPORTANT - For more information on our Withholding Tax Registration Services or to consult with a professional at PCS for FREE please don't hesitate to Contact Us!

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