Withholding Tax For Foreign Visitor?

[josephbloggs]

Hi people,

My company is currently negotiating with a highly specialised guy from Europe to give some training to some of our staff on some highly specialised equipment. He will be in Bangkok for seven days and we will be paying him 5000 Euros. This sum will be invoiced to us from his German company and we will be paying by TT transfer. My accounts department tell me this will be subject to 15% withholding tax. So, now it's going to cost us significantly more (as we've already agreed they get 5000 Euros. Is this really the case or are they mistaken? It seems strange to me.

A German company will be invoicing us from Germany for some training from a German. We pay Germany accordingly. Why would this attract 15% withholding tax? I'll be the first to admit I don't know the law on this and that's why I'm asking here - it just seems illogical to me.

If this is so, what if we sent staff to be trained in Germany instead? The invoice from Germany would be identical, so how would that work?

Please be aware I'm not trying to circumvent the law, I'm trying to understand it to make sure we do things correctly. If we have to pay the extra 15% we will. But obviously I'd rather not if it isn't necessary.

Our company has full BOI privileges if that makes any difference.

Thank you for any input.

Edited January 24, 2013 by josephbloggs

[Tywais]

Some information here.

http://www.doingbusinessthailand.com/thailand-taxes/thailand-taxe-understanding-thai-withholding-ta.html

http://www.sherrings.com/Withholding-Tax.php

[whybother]

When my company pays invoices to Australia, we pay the invoice amount less the 15%, and the Australian company claims it back on their tax. This is allowed because of the tax treaty between Australia and Thailand.

You should ask the German company how they deal with it.

[josephbloggs]

Thanks for the links, some useful info there. Seems my accountant was right, unfortunately.

Will do some digging around to see about how the double tax agreement may make a difference.

Cheers.

[josephbloggs]

When my company pays invoices to Australia, we pay the invoice amount less the 15%, and the Australian company claims it back on their tax. This is allowed because of the tax treaty between Australia and Thailand.

You should ask the German company how they deal with it.

It turns out that Germany and Thailand have signed a "double tax" treaty and so the transaction is exempt from 15% withholding tax. We do have to pay 7% VAT however, but this can be claimed back.

Woop!

[whybother]

When my company pays invoices to Australia, we pay the invoice amount less the 15%, and the Australian company claims it back on their tax. This is allowed because of the tax treaty between Australia and Thailand.

You should ask the German company how they deal with it.

It turns out that Germany and Thailand have signed a "double tax" treaty and so the transaction is exempt from 15% withholding tax. We do have to pay 7% VAT however, but this can be claimed back.

Woop!

According to this post (http://www.thaivisa....5/#entry3874319), the withholding tax applies. (it was in 2010 though)

This (http://www.pwc.com/en_TH/th/tax/assets/2012/thai-tax-2012-booklet.pdf on page 24) also indicates that withholding tax applies.

Edited January 25, 2013 by whybother

[FritsSikkink]

Don't forget the workpermit.

[Maestro]

A work permit is not necessary for the situation described in the OP, but a "Notification for engagement in necessary and urgent work under section 9" must be filed with the Department of Employment.