When a company buys software online from a USA company, the double taxation treaty between Thailand and the USA requires the company in Thailand to withhold 5% tax and submit it to the Thai Revenue Department within the 7th of the following month using form PND 54. And because the Thai company cannot really withhold the tax when you make the payment online for the software, it has to submit the tax anyway from its own pocket. This tax will be treated as a non-tax deductible expense.

Also the company has to submit 7% VAT on behalf of the USA software company. However, the Thai company can claim it back as its input VAT.

Contact MSNA for your Thai accounting and tax questions.