Question About Withholding Tax

[BKKBrit]

I have a Thai client that wants to sponsor an event in Europe. The invoice will be in Euros and the event organiser's bank is in Jersey to which payment needs to be made. I have spent hours going through tax law in Thailand - and I can't make head or tail of it.

Basically, for sponsorship of an event in Europe, does the Thai company have to pay any withholding taxes? And if there are withholding taxes, would it be best the Thai client pay direct to Europe or better if they pay me and I pay on their behalf? Can the withholding taxes be used to offset annual tax returns etc?

Thanks for anyone's guidance. I am swamped with this one and it's making me anxious!

[KamnanT]

There will almost certainly be a requirement to withhold tax from royalties or payments for services - the statutory rate for payments for services to a foreign company with no branch or permanent establishment in Thailand is 15%.

Which European country is the supplier domiciled in? If a dual taxation treaty (DTA) exists between Thailand and the supplier's country of domicile, it may specify a lower rate of withholding tax or an exemption for specific types of income. Most countries permit foreign withholding taxes paid to be credited against local taxes.

Edited February 14, 2012 by KamnanT

[BKKBrit]

There will almost certainly be a requirement to withhold tax from royalties or payments for services - the statutory rate for payments for services to a foreign company with no branch or permanent establishment in Thailand is 15%.

Which European country is the supplier domiciled in? If a dual taxation treaty (DTA) exists between Thailand and the supplier's country of domicile, it may specify a lower rate of withholding tax or an exemption for specific types of income. Most countries permit foreign withholding taxes paid to be credited against local taxes.

Thanks for this. The only references I could find were with holding taxes have to paid against 'dividends, repatriation of profits' to a company offshore. In this case, they're paying for a service. No, the country doesn't have a DTA with Thailand. Are you saying that the withholding tax paid here for this project can be credited against the Thai company's local taxes? If that's the case, then this will be a non-issue.

Thanks for your time..I appreciate it