Extension of withholding tax reduction to promote e-withholding tax system

The Thai government previously reduced the withholding tax (“WHT”) rates from 5% and 3% to 2%, through 31 December 2022.

Keywords: Mazars, Thailand, Tax, Revenue Department, e-Withholding Tax

7 April 2023

As part of the Thai government’s effort to promote the use of the e-withholding tax system, Ministerial Regulation No. 389, issued by the Ministry of Finance, was published in the Government Gazette on 10 March 2023. This regulation reduces WHT rates to 1% for certain types of payments made through the e-withholding tax system from 1 January 2023 to 31 December 2025. The reduced WHT rate of 1% applies to the following types of payments made to individuals and to companies or partnerships, excluding foundation or associations:

Payments to individuals	Payments to companies or partnerships
1. Rental, except for boat rental (Section 40(5))	1. Rental, except for boat rental (Section 40(5))
2. Income from liberal arts professions, e.g., engineering, architecture, accounting (Section 40(6))	2. Income from liberal arts professions, e.g., engineering, architecture, accounting (Section 40(6))
3. Income derived from a contract for work where the contractor has to provide essential materials besides tools (Section 40(7))	3. Income derived from a contract for work where the contractor has to provide essential materials besides tools (Section 40(7))
4. Prizes received from competitions and drawings (Section 40(8))	4. Prizes received from competitions and drawings (Section 40(8))
5. Income derived from the hire of work, awards, sales promotions, advertising, or other services, except service payments made to hotels and restaurants and life insurance premiums (Section 40(8))	5. Income derived from the hire of work, awards, sales promotions, advertising, or other services, except service payments made to hotels and restaurants and life insurance premiums (Section 40(8))
6. Income paid to cast members, i.e., actors or actresses, who are residents of Thailand (Section 40(8))	6. Income derived from the performance of work (Section 40(2))
	7. Fees for goodwill, copyright, or other rights (Section 40(3))