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thailand withholding tax

Withholding Tax on Payment to a Bank for Service Fee and Stamp Duty

In Thailand, there are many rates of withholding taxes to be considered when making a
payment. It is the duty of every company or other business entities to withhold
taxes when paying for salaries, transportation, advertising, rent or most other
kinds of services and remit the tax to the Revenue Department. Even when you
make payment to overseas vendors, you have to submit withholding taxes if the
transactions meet the criteria.

Today, THAI ACCOUNTANT discusses the withholding tax when paying for the service fee of a bank.

For instance, when a company requested a bank to issue a check to its supplier to
settle a service fee on its behalf, the bank would then charge the company for
both service fee for the issuance of the check and stamp duty for which the
bank is liable (whether the bank charged it separately or as part of their
service fee). In this situation, the Revenue Department requires the party
making the payment to deduct withholding tax of 3 % on the sum of the service
fee and the stamp duty, regardless of whether they are paid separately or

Another example is when a bank issued a bank guarantee for a company, and in return
charged the company a service fee and the stamp duty for which the bank is
liable (either charged separately or as part of the service fee) the company is
also required to deduct 3% withholding tax on the sum of the service fee and
the stamp duty, regardless of whether they are paid separately or together.

Contact MSNA for your questions on Withholding Tax and Thai taxation.



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Thailand Withholding Tax When Paying for Software to Germany

One of our accounting clients, a Thai company which is a software and computer dealer, has to pay a German company for software. The software can be installed only once on one computer with a specific period of usage. The transaction is considered permission to use or right to use the software pursuant to the double taxation treaty between Thailand and Germany. The company has a duty to withhold 5% tax from the software price when paying to Germany.

If the company has withheld the tax and paid to the authority higher than the amount required by law, the company has the right to file a claim for a refund within three years from the last day that the company had to submit the tax.

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