Withholding TAX Get Clarity

No, and this is where most errors start. Withholding applies to services, rent, professional fees, commissions, dividends, interest and royalties. It does not apply to buying goods. A supplier invoice for stock is not withheld, an invoice for work done is. Mixed invoices covering both need splitting.

It depends on who you are paying. Employees go on PND 1. Thai individuals who are not employees go on PND 3. Thai companies go on PND 53. Non-residents go on PND 54. The PND 3 and PND 53 distinction catches people out most, because it turns on whether your supplier is a registered company or an individual, not on what they did for you.

The payment amount before VAT. On an invoice of 100,000 baht plus 7,000 VAT, a 3 percent withholding is 3,000, not 3,210. You pay the supplier 104,000 and remit 3,000 to the Revenue Department. Calculating on the VAT-inclusive figure is one of the most common and most avoidable mistakes.

Yes, every time you withhold. It is the recipient's proof that tax was already paid on their behalf, and without it they cannot claim the credit against their own return. That makes it their money, not just your paperwork, which is why missing certificates turn into disputes. We have a free certificate generator in English if you need one now.

Your company becomes liable for the amount you should have deducted, plus the same penalties as if you had withheld it and failed to pay. You have already paid the supplier in full, so this comes out of your own money. Recovering it afterwards depends entirely on the supplier's goodwill.

A fixed fine that increases with the delay, plus a surcharge of 1.5 percent per month on unpaid tax, charged for every month or part month it is outstanding. Part of a month counts as a whole one, so filing on the first day of a new month costs the same as filing on the last.

Usually yes, on PND 54. Thailand's double tax agreements often reduce the standard rate, but the reduction is not automatic and applying the wrong rate cuts both ways. Over-withholding creates a refund your supplier has to chase, and under-withholding leaves your company liable for the difference. Worth checking the treaty before the first payment rather than after.

If tax has been withheld from money paid to you, it credits against your own liability when you file. Where the credit exceeds what you owe, the excess can be refunded, subject to Revenue Department approval. Either way it depends on holding the certificates, which is why keeping them filed as they arrive matters more than it seems at the time.