We buy a consulting service from a non-thai company outside of Thailand, our book keeping firm says we need to deduct 15% withholding tax when we pay them the invoice.

So, as an example:

If we pay an invoice valued 1000 thb, the consultant company will only receive 850 thb, as 150 thb needs to be paid to the government, is this really correct?

Yes.

Overseas 15%, local only 3%.

Overseas 15%, local only 3%.

Thank you for info, what this withholding tax really mean, how does it work, is there any possibility that we can get it back later?

ayayay, on 30 Dec 2013 - 19:10, said:ayayay, on 30 Dec 2013 - 19:10, said:

rayongchelsea, on 30 Dec 2013 - 16:15, said:rayongchelsea, on 30 Dec 2013 - 16:15, said:

Overseas 15%, local only 3%.

Thank you for info, what this withholding tax really mean, how does it work, is there any possibility that we can get it back later?

No, because your company hasn't paid the tax, your client has. If your client's company is domiciled in a jurisdiction without a double tax treaty with Thailand then no chance of your client ever receiving a tax rebate.

Your client could domicile the company elsewhere to save future WHT deductions but that's about it.

Edited December 30, 201312 yr by wooloomooloo

I'm not sure that the data in this link is entirely accurate but gives you an idea:

http://www.rd.go.th/publish/766.0.html

Edited December 30, 201312 yr by wooloomooloo

Your client could domicile the company elsewhere to save future WHT deductions but that's about it.

I omitted the other option - your client doesn't do business with you to avoid such taxation.

Edited December 30, 201312 yr by wooloomooloo

Your client could domicile the company elsewhere to save future WHT deductions but that's about it.

I omitted the other option - your client doesn't do business with you to avoid such taxation.

Depending on how the fee was agreed if they are expecting a certain payment the OP may have to pay extra so he actually pays the WHT?

Overseas 15%, local only 3%.

Thank you for info, what this withholding tax really mean, how does it work, is there any possibility that we can get it back later?

Depending on where the consulting service is resident for tax purposes, they may be able to claim taxes paid overseas (i.e. the Thai withholding tax) as a credit against their corporate income tax.