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Reduction of Withholding tax rate from 3 Percent to 2 Percent

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Reduction of Withholding tax rate from 3 Percent to 2 Percent

On 2 June 2021, Ministerial Regulation No. 373 (B.E. 2521) (1978) issued under the Revenue Code on income tax was enacted by the Ministry of Finance; the aim of which is to help relieve the burden of people affected by the COVID-19 outbreak by reducing the withholding tax rate from 3% to 2%. However, this reduction only applies to withholding tax through the e-withholding tax system, and is applicable to the payment of assessable income paid from 1 October 2021 to 31 December 2022 as follows:

  • Payment of assessable income derived from hire of work or employment under Section 40 (2) of the Revenue Code - which does not qualify as assessable income under Section 40 (8) of the Revenue Code - to companies or juristic partnerships.
  • Payment of assessable income for the right under Section 40 (3) of the Revenue Code only value received for goodwill, for copyright or any other rights to the companies or juristic partnerships.
  • Payment of assessable income for rent under Section 40 (5) (a) of the Revenue Code to the person subject to personal income tax or corporate income tax, except for the payment of assessable income under Section 40 (5) (a) of the Revenue Code; which is rent for a chartered seagoing ship in international transport under the law governing promotion of the merchant navy.
  • Payment of assessable income from liberal professions or from a contract of work under Section 40 (6) and (7) of the Revenue Code to a person subject to personal income tax or corporate income tax.
  • Payment of other assessable income under Section 40 (8) of the Revenue Code - for a prize won in a contest, competition, draw or any other action with a similar nature - to a person subject to personal income tax or corporate income tax.
  • Payment of other assessable income under Section 40 (8) of the Revenue Code to an actor or actress domiciled in Thailand who is subject to personal income tax.
  • Payment of other assessable income under Section 40 (8) of the Revenue Code for the hire of work, any price discount, rebate or any benefit in connection with sale promotions and services other than those stated in Clause 2 (3) (15) (16) and (17)1, but not including expenses for hotel accommodation, restaurants and life insurance premium.

In this regard, it shall not include the payment of any aforementioned assessable income to a foundation or association operating a business with income; or a foundation or association prescribed by the Minister of Finance under Section 47 (7) (b) of the Revenue Code.

  • 1 Ministerial Regulation No. 144 (B.E. 2522) (1979) prescribes the withholding tax rate in Clause 2 as follows:
  • (3) Tax shall be withheld at the rate of 10% on the payment of assessable income to an actor/actress domiciled outside Thailand.
  • (15) Advertisement shall be withheld tax at the rate of 2%
  • (16) Non-life insurance premium shall be withheld tax at the rate of 1%
  • (17) Shipping fees, but not including transportation fees for public transportation which shall be withheld tax at the rate of 1%.