Thailand Withholding Tax (WHT): How to Deduct and File PND3 and PND53
1. What withholding tax is, and who has the duty to withhold
The Revenue Code requires that when a government agency, individual, partnership, company, association or other group of persons acts as the payer and pays another person the various categories of assessable income listed in Section 40 (such as salary, service fees, rent, brokerage fees, interest and royalties), it must withhold tax from that payment at the time of payment (Section 50). The person having the duty to withhold must remit the tax withheld under Section 50(1)(2)(3)(4) to the District Office (Section 52).
Where a government agency is the payer, the official making the payment calculates and withholds the tax before payment; where there is no payment voucher, the matter is handled on the same basis as Sections 50, 52 and 59 (Section 53). In short: because the money is paid out by you, the responsibility to withhold and to file rests on you (the payer), not on the recipient.
2. Use PND3 for individuals, PND53 for juristic persons
When remitting, the person with the duty to withhold must submit, together with the remittance, a list (return) of the withholding in the form prescribed by the Director-General of the Revenue Department, itemizing each recipient of assessable income and the tax withheld (Section 59). In practice the return is distinguished by the type of recipient:
- PND3 (ภ.ง.ด.3): used when the recipient of the payment is an individual (natural person).
- PND53 (ภ.ง.ด.53): used when the recipient of the payment is a company or juristic partnership.
- Annual summary: in January of each year, the person with the duty to withhold must also file with the assessor a list of the assessable income paid during the whole year (Section 58).
3. A withholding tax certificate must be issued for every deduction
Each time the person with the duty to withhold deducts tax at source, it must issue to the person from whom tax is withheld two copies of a withholding tax certificate with identical contents (Section 50 bis). The timing for issuance is:
- Employment income (Section 50(1)): issued by February 15 of the following tax year; if the person from whom tax is withheld leaves employment during the year, within one month from the date of leaving.
- Other income (Section 50(2)(3)(4)): issued immediately each time tax is withheld.
Government paying a juristic person 1%
When a government agency, municipality or the like is the payer and pays Section 40 income to a company or juristic partnership, tax is withheld at 1%, and that tax may be credited against the juristic person’s income tax for the period (Section 69 bis).
Juristic person selling immovable property 1%
When paying a company or juristic person that sells immovable property, the payer withholds at 1% and remits it upon registration of the rights and juristic act (Section 69 ter).
Paying a foreign juristic person Cross-border
When paying a foreign juristic person that does not carry on business in Thailand but receives income under Section 40(2)(3)(4)(5)(6), the payer withholds at the income tax rate for juristic persons (Section 70).
4. Remittance and filing deadlines
- Domestic withholding: the tax withheld must be remitted to the District Office within seven days from the date of payment (Section 52), together with the withholding list (Section 59). In practice it is reported monthly on a consolidated basis (PND3 / PND53); the specific monthly filing deadline follows the rules set by the Revenue Department (our firm can help confirm).
- Payments abroad: withholding tax on payments to a foreign juristic person must be remitted, and the list submitted in the form prescribed by the Director-General, within seven days from the last day of the month of payment (Section 70).
- Records for inspection: the assessor may send a notice requiring submission of a list of payments or supporting evidence, and the recipient must comply within 15 days of receiving the notice (Section 51).
5. How the withholding tax rate is actually set
The body of the Revenue Code sets out the withholding mechanism and obligations (Sections 50, 52 and 59), while the specific withholding rates for service fees, rent, brokerage fees, interest, royalties and other categories of income are mostly set separately by ministerial regulation or Royal Decree and are not written into the text of the sections themselves. These rates are therefore governed by the official rate schedule / Royal Decree (our firm can help confirm). Only where a section expressly states the rate (government paying a juristic person; a juristic person selling immovable property) is it fixed at 1% (Sections 69 bis and 69 ter); for payments to a foreign juristic person the rate is the juristic-person income tax rate combined with any applicable tax-treaty relief, with the exact rate governed by the official rules.
If the payer fails to withhold and remit under Sections 50 and 53, or withholds an insufficient amount, it is jointly liable with the income earner for the tax not withheld or for the shortfall; conversely, where tax has been duly withheld, the payer is solely liable to pay it and the income earner is correspondingly relieved (Section 54). Late compliance may also give rise to additional tax and the like, with the exact amounts governed by the official rules; a person who voluntarily pays additional tax in accordance with the criteria specified in the ministerial regulation may obtain a corresponding discharge (Section 3 ter). SLF Accounting can handle your monthly PND3 / PND53 withholding tax filing and the issuance of withholding tax certificates, and confirm the applicable rate case by case — contact us for assistance.
FAQ
When do I need to withhold tax, and which payments are subject to it?
When you, as the payer, pay another person assessable income listed in Section 40 of the Revenue Code (such as salary, service fees, rent, brokerage fees, interest and royalties), you must withhold tax from the payment under Section 50 at the time of payment and remit it under Section 52. The withholding rate applicable to each type of income is mostly set by ministerial regulation or Royal Decree and is governed by the official rate schedule; our firm can help confirm it.
What is the difference between PND3 and PND53?
Both are withholding returns filed together with the remittance, in the form prescribed by the Director-General of the Revenue Department (Section 59). Use ภ.ง.ด.3 (PND3) when the recipient of the payment is an individual (natural person); use ภ.ง.ด.53 (PND53) when the recipient is a company or juristic partnership. In addition, a list of all payments made during the year must be filed each January (Section 58).
How soon must withholding tax be remitted, and must a certificate be issued?
Domestic withholding tax must be remitted to the District Office within seven days from the date of payment (Section 52); withholding tax on payments to a foreign juristic person must be remitted within seven days from the last day of the month of payment (Section 70). At the same time, for every deduction you must issue to the person from whom tax is withheld two copies of a withholding tax certificate with identical contents (Section 50 bis).
What happens if I forget to withhold, or withhold too little?
The payer is jointly liable with the income earner for the tax not withheld or for the shortfall (Section 54), and additional tax may arise, with the exact amount governed by the official rules. We recommend paying the shortfall as soon as possible and consulting our firm for assistance; SLF Accounting can handle your monthly withholding tax filing and the issuance of certificates.