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ResourcesCorporate and Tax AdvisoryThailand Tax LawTemporary Withholding Tax Cut in Thailand in Response to COVID-19

Temporary Withholding Tax Cut in Thailand in Response to COVID-19

Transcript of the above video:

As the title of this video suggests, we are discussing Thai taxes specifically a recently enacted tax cut pertaining to withholding tax here in the Kingdom of Thailand.

Basically there has been a withholding tax decrease pursuant to Thailand Tax Ministerial Regulations 361 - 2563. The 3% withholding tax has been decreased to 1.5% for domestic payments. This is beginning April 1 and ending September 30th, 2020. 

Now apparently this has been done in an effort to provide some relief to those businesses that are struggling as a result of the economic shut down and the added knock-on effects from this shut down to their commercial activities. We are definitely seeing some really detrimental consequences arising as a result of this shutdown. It appears that the Revenue Department and the various Authority here in Thailand have deemed that a slashing of the withholding tax rate is advisable under the current circumstances in order to provide some relief to businesses here in Thailand. So presumably the old rate will resume at the end of September or I should say October 1, and we will certainly update folks if that does not happen for sure; if this withholding tax decrease is extended thereafter.

Those who are watching this video it is wise to take into account that yes it has decreased for now; it is likely to return. It also can prove to be something of an administrative issue for those businesses operating here in Thailand because there needs to be internal changes with respect to accounting. For example, we have an Accounting Services division of our firm that assists our clients with ongoing accounting needs. It has proven a have caused not exactly consternation but you need to readjust certain aspects of your accounting apparatus either internally or if you outsource those services because this rate has changed so you have to change invoicing, you have to change certain practices with respect to paying one's taxes and filing one's corporate taxes.

So this withholding tax issue is definitely a boon. I think it is definitely a benefit and it is laudable that the Thai Revenue Department and the Authorities here in Thailand have tried to provide some relief to businesses here in Thailand but on the other side there are certain administrative considerations which need to be noted in order to accurately maintain one's books with respect to a business operating here in Thailand.