Thailand Withholding Tax on Cross-Border Payments: A 2025 Compliance Guide for Foreign-Owned SMEs

gentlelawlawfirm
Sep 26, 2025
4 min read

Introduction

If your Thai entity pays service fees, royalties, interest, or dividends to an overseas recipient, Thailand withholding tax on cross-border payments can trigger immediate obligations on the payer. Getting it wrong risks surcharges and the loss of treaty benefits. This guide explains what is taxable under Section 70 of the Revenue Code, the standard domestic rates, how P.N.D.54 works, 2025 e-filing requirements, and how to claim DTA relief the right way.

What Exactly Is Taxable under Section 70

Under Section 70, when a Thai payer remits assessable income under Section 40(2)–(6) to a foreign company that is not carrying on business in Thailand, the payer must withhold and remit tax. Key categories include dividends, interest, royalties, and service fees performed in Thailand. Filing is due within 7 days after month-end in which the payment was made, by submitting the return to the Revenue Department.

Plain-English rule of thumb: If the service work is done in Thailand, Section 70 generally applies. If services are performed entirely outside Thailand, pure business profits are typically only taxable if the foreign vendor has a permanent establishment in Thailand under an applicable DTA.

Domestic Withholding Rates to Start From

Thailand’s domestic WHT rates for non-residents most commonly encountered are:

Dividends: 10%
Interest: 15%
Royalties: 15%
Service fees for work done in Thailand: generally treated at 15% unless treaty relief applies

These rates flow from the Revenue Code and implementing Royal Decrees, and are widely summarized by leading tax references. Always check the relevant DTA for reductions.

Note: Temporary reduced e-withholding tax rates that apply to domestic payments via the e-WHT system do not change the baseline rates for cross-border payments reported on P.N.D.54.

Using Double Tax Agreements to Reduce WHT

Thailand has concluded numerous Double Taxation Agreements (DTAs). DTAs can reduce WHT on interest and royalties, and for services may shift taxation to the country of residence unless the foreign supplier has a permanent establishment (PE) in Thailand.

TRD publishes treaty royalty and interest rate tables for many partner countries.
DTAs follow the principle: if a treaty rate differs from domestic law, apply the rate most beneficial to the taxpayer.

Compliance tip: To apply treaty rates, the Thai payer should obtain a Certificate of Residence (COR) issued by the foreign seller’s tax authority and keep it with the P.N.D.54 filing pack.

The P.N.D.54 Return — What, When, How

What to file:

P.N.D.54 is the monthly Withholding Tax and Profit Remittance Return for payments to non-residents under Section 70. The official English form describes it as “Payment of assessable income and deduction of withholding tax under Section 70.”

When to file:

Paper due date: within 7 days after the end of the month of payment.
Online due date: Thailand grants an 8-day e-filing extension, currently extended through 31 January 2027. In practice, this means the 15th of the following month for P.N.D. filings when submitted electronically.

How to file in 2025:

From 1 January 2025, the Revenue Department mandates electronic submission of withholding tax returns, with limited exceptions upon notification to the Area Revenue Branch Office.

Attachments to keep on file:

Proof of remittance, tax receipt, invoice or contract, evidence of overseas remittance and exchange rate, and COR if claiming treaty relief.

Practical Scenarios for SMEs

1) Paying a foreign software licensor

Characterize as royalty. Default domestic rate 15% unless a DTA gives a lower rate. File P.N.D.54. Keep COR from the licensor’s tax authority.

2) Paying an overseas consultant who worked entirely outside Thailand

If the work was performed wholly offshore and the consultant has no PE in Thailand, many DTAs treat the amount as business profits taxable only in the seller’s country. In that case, no Thai WHT may apply, but retain COR and documentation that services were performed abroad.

3) Paying cross-border interest to a foreign lender

Domestic rate 15%. Check DTA interest article; some partners reduce the rate for interest to financial institutions. File P.N.D.54.

4) Paying dividends to a foreign parent

Default domestic rate 10%, subject to any treaty reduction. Confirm shareholder’s eligibility and maintain COR. File via the appropriate withholding return.

Step-By-Step: How GENTLE LAW IBL Sets You Up To Pass an Audit

Legal scoping
- We identify the legal character of the payment under the Revenue Code and the relevant DTA article.
Treaty qualification
- We verify recipient residence and PE status, collect the Certificate of Residence, and document where services are performed.
WHT calculation and filing
- We compute at domestic or treaty rates, prepare P.N.D.54, and e-file within the extended deadline.
Document pack
- We assemble the Revenue Department’s required support: invoices, contracts, remittance evidence, exchange rates, tax receipts, and COR.
Process hardening for 2025
- We convert your team to mandatory e-submission and build internal cut-offs so nothing misses the 15th e-deadline.

Common Pitfalls and How To Avoid Them

Assuming e-WHT reductions apply to foreign payees These incentives are aimed at domestic e-withholding. Cross-border P.N.D.54 payments follow the Section 70 regime and treaty rules.
Treating offshore services as always non-taxable If any part of the service is performed in Thailand, or the foreign provider has a PE in Thailand, withholding may apply. Capture scope and work-location in the contract and deliverables.
Missing the e-filing window Paper is largely out. Thailand requires electronic submission for WHT returns from 1 January 2025, and the 8-day extension runs through 31 January 2027. Build calendar reminders tied to payment dates.

Quick Checklist for Controllers

Classify the payment correctly
Identify DTA article and rate
Obtain the Certificate of Residence from the payee
Confirm place of performance for services
Prepare and file P.N.D.54 via e-filing by the 15th when applicable
Archive invoices, contracts, remittance proof, and COR together with the return

Thailand Withholding Tax on Cross-Border Payments — Call to Action

If you have an upcoming overseas payment, ask our team to review it before you remit. GENTLE LAW IBL will map the correct WHT rate, prepare P.N.D.54, and document your treaty position so you stay compliant and audit-ready.