If you are a company operating in Thailand and pay overseas vendors for services, you will have to withhold some tax from the payments and submit it to the Thai Revenue Department within the 7th of the following month using form P.N.D. 54. The tax rates depend on the double taxation treaty between Thailand and vendors’ countries. If there is no such treaty, tax rate will be as stipulated in Thailand Revenue Code. Within the same period, paying to overseas suppliers, it also has to submit VAT return, form P.P. 36, which is the form that you submit 7% VAT on behalf of the vendor overseas. After you withhold the tax from the payment you make to the foreign vendors, sometimes you are requested by them to issue a withholding tax certificate for overseas vendors so that they can use the amount of tax withheld by you as a proof of their prepaid income tax.
How to get a withholding tax certificate for overseas vendors: You will have to get the withholding tax certificate in English from the Revenue Department and send it to them so they can use their tax credit in their country. The process will take 10-15 business day. You, as the payer, have to submit the following documents to Regional Revenue Office.
- A copy of the filed withholding tax return i.e. P.N.D 54. and VAT return, P.P. 36
- A copy of tax receipt issued by the Revenue Department
- A copy of document indicating overseas remittance of payment and exchange rates.
- A copy of service invoice
- A copy of your company affidavit issued not over 1 month
- Power of Attorney
- Other relevant documents, such as copy of royalty agreement, passport or ID card copy of the authorized signatory and the agent’s.
Contact MSNA your Thailand accountant for tax and accounting needs.