Business Payment Tax

[Explorer]

Hi,

Need some info here -

My company engaged a foreign contractor for a project abroad (both project and contractor is out of Thailand), my accountant states there will be a 15% tax on the amount that was quoted by the contractor upon payment via money transfer (bank). In other words, the contractor will only get 85%of what was quoted and not 100%. True?

What tax is this? Are there any other taxes besides this that i would look out for?

Thank you in advance

[Explorer]

ok since no one answered yet, i'll add up abit.

while going through some sites i found the following -

"Foreign company not carrying on business in Thailand but receiving income from Thailand" Tax @ 15%

"Withholding tax @ 5% if paid to foreign company not having permanent branch in Thailand"

Does the above applies for all the contractors that my company would engage in all our projects abroad?

This would mean 15% + 5% tax from every payment for their services abroad?

FYI, my contractors does not have branch or office here in Thailand

Thank you in advance

[Explorer]

Morning all!

Just bumping this.

[mjnaus]

Sorry I can't help your further Explorer but I am struggling with the exact same issue (we have a bunch of foreign consultants and developers working for our Thai company). I found some info on a government site (most likely the same stuff you already read as well) stating we indeed have to pay 15% withholding tax (I guess we would need to pay this ourselves as our consultants won't be too happy paying some dumb Thai tax).

However, after talking this over with our consultant, she said we only need to pay 3% instead of 15% (but as far as I know, this would be the withholding tax paid to Thai consultants). Should I start looking for a new accountant?

I am sure many expat business owners are in similar positions, some info would be greatly appreciated!

[Flexsharp]

This is the with holding tax which you must deduct on payments to foreign contractors/consultants not having a branch in Thailand. There are different rates stipulated for different kind of activities. The rate for consulting is 15%. You can check the Thai revenue department website for more details.

If you pay the domestic consultants, then a different rate applies. 3% I believe is correct.

Theoretically, you are expected to deduct this from the payment you are making. However, practically if you have not discussed this before hand with the consultant, you would probably have to cover this yourself. We have done this at least once in the past.

Your Thai accountant should be able to advise on the matter.