What withholding tax is, briefly
When a Thai business pays certain categories of recipients, it must withhold a portion of the payment and remit it to the Revenue Department on the recipient's behalf. The recipient gets a withholding certificate and credits the amount against their own annual tax.
It is a collection mechanism, not an additional tax. But the obligation sits with the payer — and missing it is the payer's problem, not the recipient's.
PND.1 — Withholding from employees
Salary payments to employees are withheld under PND.1. The rate is calculated using the progressive personal income tax brackets, projected over the year. Bonuses and lump sums use the same logic but with different averaging rules.
Filed monthly, by the 7th of the following month (15th if filed online). An annual reconciliation, PND.1 Kor, is filed in February with the year's totals.
PND.3 — Withholding from individuals (non-employees)
Payments to individuals who are not your employees — independent contractors, freelance service providers, individual landlords — fall under PND.3.
- Service fees to individuals3% withholding rate.
- Rent to individuals5% withholding rate.
- Hire-of-work payments3% standard.
- Professional fees3% for most professional services.
PND.53 — Withholding from juristic persons
Payments to companies (juristic persons) for the same categories use PND.53. The rates are similar, but the form is different and the certificate format differs.
A common mistake: paying a Thai limited company on PND.3 because the bookkeeper assumed "service = PND.3." The form depends on the recipient type, not the service type. Check the recipient's registration before filing.
The withholding certificate must be issued at the time of payment, not at month-end. Recipients need it for their own filings, and a delayed certificate is one of the most common audit findings we see.
The errors we see most often
Wrong form (PND.3 instead of PND.53, or vice versa). Wrong rate (3% applied to rent instead of 5%). Late certificate issuance. Missing certificate for a payment you actually withheld.
Each is small individually. Cumulatively, they are what triggers a Revenue Department visit. The filing process itself is not difficult — the discipline of doing it consistently every month is.