Paying a Thai company or individual: how much withholding tax?

01Two documents, each doing a different job

Pay a service fee, rent or advertising charge to a company or individual in Thailand and you withhold tax before you pay. How many points you withhold is a judgement your finance team makes every month, and getting it wrong pulls in back-withholding, surcharge and certificate corrections.

The authority for domestic withholding does not sit in one document. It sits in two, and in practice they get cited interchangeably. Separating what each one governs removes much of the error rate.

Section 3 Teras of the Revenue Code empowers the Director-General of the Revenue Department to order payers who would not otherwise have a withholding duty to withhold — but the criteria, conditions and rates are set by ministerial regulation. That regulation is No. 144 (B.E. 2522), and its clause 2 is a schedule of rates by category of income.

The order the Director-General issued under it is Departmental Order Thor Por 4/2528. Its opening words cite Section 3 Teras of the Revenue Code and ministerial regulation No. 144 (B.E. 2522). It answers a different question: who must withhold from whom, and on what conditions and exceptions.

So check in two places. For the rate attaching to a category of income, go to clause 2 of regulation No. 144. For whether this particular payment is yours to withhold on, which class the recipient falls into, and whether an exception applies, go to Thor Por 4/2528. Check only one and you can reach a conclusion that reads correctly but will not hold up — hire of work, for instance, is listed at 3% in the regulation, while a payment to a company incorporated under foreign law with no permanent branch office in Thailand takes a different tier, and that distinction lives in the departmental order, not in the rate schedule.

02The tiers for common payments

The tiers below follow the categories and wording of clause 2 of regulation No. 144. Which clause a payment falls under turns on the category of income and the status of the recipient, not on what the contract calls it.

• 3% — hire of work; sales promotion rewards, discounts or other benefits; other service fees beyond those listed above and beyond advertising, freight and non-life insurance (hotel service charges, restaurant service charges and life insurance premiums excluded); section 40(2) income paid to a company or juristic partnership; section 40(3) income paid to a company or juristic partnership; section 40(6) income paid to a person liable to personal or corporate income tax.
• 2% — advertising fees, and other cases the regulation does not list separately.
• 1% — freight (fares for public transport excluded); non-life insurance premiums; purchases of aquatic animals and parts of them, whether fresh, chilled, frozen or otherwise treated to preserve them in transit; section 40(4)(a) income paid to a company or juristic partnership; ship charter hire used in international carriage of goods under the merchant marine promotion law.
• 5% — section 40(5)(a) income (rent and similar) paid to a person liable to personal or corporate income tax; payments to a company or juristic partnership incorporated under foreign law and carrying on business in Thailand; prizes from contests, competitions, prize draws and the like.
• 10% — section 40(4)(b) income paid to a company or juristic partnership, and, across several of the clauses above, cases where the recipient is a foundation or association carrying on revenue-earning activities (other than foundations and associations the Minister has prescribed under section 47(7)(b)).
• 0.5% / 0.75% — purchases of rice 0.5%, purchases of other agricultural produce 0.75%.

Several further clauses set tiers for particular subject matter — unpolished gemstone purchases at 1%, for example. Which clause and tier your own payment falls under has to be matched to the text payment by payment, by category of income and recipient status.

03The 1.0% tier: both conditions have to hold

Clause 2(17/5) of regulation No. 144 sets a separate 1.0% tier. That sub-clause was replaced by ministerial regulation No. 402 (B.E. 2569), published in the Royal Gazette on 9 October 2026. It is not a general reduction across all payments — both conditions have to hold at the same time:

• Timing — the payment is made between 1 January 2026 and 31 December 2027. The test is the date of payment.
• Method of remittance — the person liable to remit does so by the method prescribed under Section 3 Panaras of the Revenue Code. If the remittance does not go through that route, the tier that ordinarily applies to the payment still applies.

The categories the sub-clause lists are below. Each of them excludes foundations and associations carrying on revenue-earning activities, and foundations and associations the Minister has prescribed under section 47(7)(b):

• Section 40(2) income paid to a company or juristic partnership.
• Goodwill, copyright or other rights fees within section 40(3), paid to a company or juristic partnership.
• Section 40(5)(a) income paid to a person liable to personal or corporate income tax, excluding ship charter hire used in international carriage of goods under the merchant marine promotion law.
• Section 40(6) and section 40(7) income paid to a person liable to personal or corporate income tax.
• Prizes from contests, competitions, prize draws and the like within section 40(8), paid to a person liable to personal or corporate income tax.
• Performance fees paid to a public performer domiciled in Thailand who is liable to personal income tax, within section 40(8). The sub-clause carries its own definition of public performer: an actor in drama, film, radio or television, a singer, a musician, a professional sportsperson, or any performer for entertainment.
• Within section 40(8): hire of work, sales promotion rewards, discounts or other benefits, advertising fees, and other service fees beyond those listed above, paid to a person liable to personal or corporate income tax, excluding hotel service charges, restaurant service charges and life insurance premiums.

There is a timing gap worth noting. The previous 1% window ran out on 31 December 2025, while the new sub-clause was not published until 9 October 2026 — yet its period runs back, by date of payment, to 1 January 2026. Payments made between January and October 2026 that were already withheld at the former tier and remitted therefore do not match the text as it now stands. Regulation No. 402 contains no transitional provision, so the difference cannot be adjusted by reading off the rate schedule; it has to be worked through payment by payment against the Revenue Department's current practice. Only the rate changed. The return forms, the withholding certificates and the filing deadlines are unaffected.

04A sensible order to check in

First place the payment in a clause of regulation No. 144 clause 2 by category of income. Then look at the recipient's status — individual, company or juristic partnership, company incorporated under foreign law, foundation or association — to settle which tier within that clause applies. Then go to Thor Por 4/2528 to confirm you are among the payers that order designates and that no exception applies. If you want the 1.0% tier, confirm the payment date falls inside the period and that the amount is in fact remitted by the method prescribed under Section 3 Panaras. Then file on the applicable return by its deadline and issue the withholding certificate.

The step most often skipped is the second. A single clause frequently splits into several tiers by recipient status; read the clause number without reading the status and 3% and 10% get mixed up, or a payment that belongs at 5% is withheld at 3%.

Which clause and tier each of your payments falls under, which of them can take the 1.0% rate, and what to do about amounts already withheld at the former tier all have to be verified payment by payment against the contracts, the payment records and the method of remittance, and re-checked against the official text in force before filing.