Withholding Tax

[seancbk]

How much withholding tax does a Thai company need to withhold when paying an invoice from a Hong Kong based contractor?

Thanks

[onthemoon]

If you receive the invoice form Hong Kong and pay to Hong Kong, you don't withhold any tax for the Thai government, because they are not liable to pay Thai taxes.

[seancbk]

If you receive the invoice form Hong Kong and pay to Hong Kong, you don't withhold any tax for the Thai government, because they are not liable to pay Thai taxes.

Thanks for the reply.

The listed Thai company I'm dealing with are claiming they need to withhold 40% tax if they pay to an individual based in Hong Kong.

[onthemoon]

If you receive the invoice form Hong Kong and pay to Hong Kong, you don't withhold any tax for the Thai government, because they are not liable to pay Thai taxes.

Thanks for the reply.

The listed Thai company I'm dealing with are claiming they need to withhold 40% tax if they pay to an individual based in Hong Kong.

That's nonsense. If they pay to companies in Thailand, WHT is 1%, 2% or 3% (depending on what they pay for). If they pay to individuals, it can go up to 5% and I have even seen 10%, as the company needs to withhold taxes on the individual's income tax.

The entity in Hong Kong is not subject to any taxes in Thailand, so there is no WHT, period. I don't know what kind of game they are trying to play with you. Just tell them you'll have to increase your fees by 40% then.