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Tax On Foreign Services?

baba
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baba Apprentice Member

baba

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Hi all,

I have a specific question with regard to foreign services executed in Thailand. In our group of companies we own a Thai company, which is legally independant and a Ltd. in Thailand. They plan to use a foreign service company to invest in new equipment. Duty on hardware imports is not the question, but my Thai counterparts are telling me, that they have to pay a 15 % tax on foreign services executed in Thailand (the company which will do this is an EU based company). This sounds rather strange to me, but you never know in the LoS :-)

I would greatly appreciate if someone here could enlight me just a little bit, thanks in advance!

baba

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singa-traz Gold Member

singa-traz

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Posted
Hi all,

I have a specific question with regard to foreign services executed in Thailand. In our group of companies we own a Thai company, which is legally independant and a Ltd. in Thailand. They plan to use a foreign service company to invest in new equipment. Duty on hardware imports is not the question, but my Thai counterparts are telling me, that they have to pay a 15 % tax on foreign services executed in Thailand (the company which will do this is an EU based company). This sounds rather strange to me, but you never know in the LoS :-)

I would greatly appreciate if someone here could enlight me just a little bit, thanks in advance!

baba

A quick google search with following key words: withholding, services, tax, thailand

So, yes, they have to pay 15% tax. If it was a US company, not sure this would have to be paid.

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baba Apprentice Member

baba

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A quick google search with following key words: withholding, services, tax, thailand

So, yes, they have to pay 15% tax. If it was a US company, not sure this would have to be paid.

Thanks, yes I haven googleing too, but too much info to sort it out. It seems the case that they have to pay 15 % duty/tax for the foreign services. Too bad, as we do not have a single Thai supplier who could take care of this work...

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Wekhin Explorer Member

Wekhin

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Posted

A quick google search with following key words: withholding, services, tax, thailand

So, yes, they have to pay 15% tax. If it was a US company, not sure this would have to be paid.

Thanks, yes I haven googleing too, but too much info to sort it out. It seems the case that they have to pay 15 % duty/tax for the foreign services. Too bad, as we do not have a single Thai supplier who could take care of this work...

A 15% withholding tax must be dedcuted when payment is made to a service provider who does not have a permanent branch in Thailand.

However, if that business entity is based in a country that has a tax treaty with Thailand, the withholding tax can normally be used as a tax credit in that country.

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h90 Star Member

h90

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please correct me if I am wrong, but if you also buy hardware and if you are lucky and buy some things which have no duty, just VAT on import (7 %).

than tell the company they shall make the equipment more expensive, but give the services for free. So you safe half of the money.

Hi all,

I have a specific question with regard to foreign services executed in Thailand. In our group of companies we own a Thai company, which is legally independant and a Ltd. in Thailand. They plan to use a foreign service company to invest in new equipment. Duty on hardware imports is not the question, but my Thai counterparts are telling me, that they have to pay a 15 % tax on foreign services executed in Thailand (the company which will do this is an EU based company). This sounds rather strange to me, but you never know in the LoS :-)

I would greatly appreciate if someone here could enlight me just a little bit, thanks in advance!

baba

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~G~ Gold Member

~G~

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Posted (edited)

It is correct, 15% witholding tax at source for foreign services.

h90: interesting idea, in case the supplier of hardware and the service provider is the same body. Is it so?

Edited by ~G~
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