3 Taxes on International Payments from Thailand: A Business Guide for 2026

You have registered a company in Thailand and just received your first invoice from an overseas supplier. You click 'send transfer' in your banking portal — and that is where things get complicated. The bank requests forms. The Revenue Department expects a withholding. And on top of the invoice amount, your company owes the government 7% VAT. Three separate obligations that 8 out of 10 new business owners in Thailand overlook entirely.

Cross-border payments from a Thai-registered entity are not simply wire transfers. They are tax events — with strict deadlines, mandatory filings, and automatic penalties for non-compliance. Here is a clear breakdown of each obligation.

Quick Answer

• Withholding Tax (WHT) — when paying for services to an overseas provider, the Thai company must withhold tax at source from the payment amount and remit it to the Revenue Department

• VAT 7% — when settling a foreign supplier invoice, the Thai company must self-assess and pay VAT via Form PP.36 no later than the 7th day of the following month

• Bank documentation — every international transfer requires supporting documents confirming the purpose of payment (invoice, contract, or loan agreement)

• Late filing penalty for PP.36 — 1.5% per month on the unpaid VAT amount, plus a fixed fine

• WHT rates depend on the type of income and whether a Double Taxation Agreement (DTA) exists between Thailand and the recipient country

Scenarios and Options

Scenario 1: Paying an IT Development Firm in Singapore

A Thai company contracts a Singapore-based firm to build a mobile application for 100,000 THB. Here is what happens:

• The company must withhold WHT. Thailand and Singapore have an active DTA, which may reduce the applicable rate. Without a DTA, the standard rate for royalties and technical services is 15%.

• The company must separately self-assess and remit 7% VAT (7,000 THB) via Form PP.36 before the 7th of the following month.

• The bank will require a copy of the Singapore supplier invoice and a completed Foreign Exchange Transaction Form for currency control purposes.

Scenario 2: Purchasing Goods from a Chinese Manufacturer

When importing physical goods, the framework changes. VAT and customs duties are assessed at the point of import — not via PP.36. WHT generally does not apply to payments for tangible goods. However, bank documentation remains mandatory for every transfer.

Scenario 3: Paying Google or Meta for Advertising

This is one of the most common scenarios for businesses in Thailand. Google and Meta invoice from overseas entities. Your Thai company is required to:

• Withhold WHT — typically 15% for royalty or licence-type payments, though classification depends on the payment structure

• File Form PP.36 with 7% VAT within the prescribed deadline

In practice, many companies overlook these obligations entirely. The Revenue Department has significantly increased scrutiny of such payments since 2024, and enforcement is active.

Scenario 4: Transferring Funds to a Related Overseas Entity

If a Thai company pays a connected foreign company — for services, management fees, or intellectual property — transfer pricing rules apply. The Revenue Department may challenge the transaction value if it does not reflect arm's-length market pricing. Penalties in these cases are substantial.

Comparison Table

WHT rates shown are standard rates without DTA reduction. Where a Double Taxation Agreement is in force, rates may be significantly lower.

Main Risks and Mistakes

1. Missing the PP.36 filing deadline. This is the most common error. Penalties are automatic — 1.5% per month on the unpaid VAT, plus a fixed fine of up to 2,000 THB per late submission. These accumulate quickly.

2. Failing to withhold WHT. If the Thai company does not withhold the tax at source, the Revenue Department will pursue the Thai entity — not the foreign supplier. The liability falls entirely on your company.

3. Misclassifying the payment type. The distinction between 'payment for services' and 'payment for goods' determines whether WHT applies. An incorrect classification leads to additional tax assessments and penalties during audit.

4. Incomplete bank documentation. Banks may block an international transfer if the supporting documents are insufficient or incorrectly formatted. Bangkok Bank and Kasikorn Bank are particularly strict on transfers exceeding 200,000 THB. Always prepare a clean invoice and signed contract in advance.

5. Not applying DTA benefits. Thailand has signed Double Taxation Agreements with 61 countries, including Singapore, Hong Kong, the UAE, Germany, Japan, and the United Kingdom. Failing to apply a relevant DTA means overpaying WHT — sometimes by a factor of two or more.

6. Transfer pricing exposure. Payments to related or affiliated foreign entities are subject to transfer pricing scrutiny. If the Revenue Department determines the price is not at arm's length, it may reassess the transaction and impose penalties of up to 200% of the additional tax assessed.

FAQ

Do we owe Thai VAT via PP.36 even if the supplier already charged VAT in their own country? Yes. Thai VAT under Form PP.36 is a self-assessed obligation of the Thai buyer — it is entirely independent of any VAT included in the foreign supplier's invoice.

Can VAT paid via PP.36 be used as input tax credit? Yes. VAT remitted under PP.36 can be claimed as input tax in your monthly VAT return (Form PP.30), reducing your overall VAT liability.

What is the deadline for remitting withheld WHT? Withheld WHT must be remitted to the Revenue Department by the 7th day of the month following the payment. The relevant form for overseas payments is Form PND.54.

Does WHT apply to payments for physical goods? Generally no. WHT applies to payments for services, royalties, interest, and dividends. Payments for tangible imported goods are typically exempt from WHT.

What if the bank refuses to process the transfer? Provide a complete documentation package: a signed contract in English or Thai, a detailed invoice clearly stating the purpose of payment, and the recipient entity's registration documents. For transfers exceeding 1,500,000 THB, the Bank of Thailand may require additional supporting evidence.

How does paying a foreign freelancer work? The same rules apply. WHT is mandatory (rate depends on applicable DTA), PP.36 must be filed for the VAT component, and bank documentation is required. Under Thai tax law, a freelancer is treated as a service provider — no different from a corporate entity.

Can payments in cryptocurrency avoid WHT? No. The tax obligation is triggered at the point the expense is recorded — not at the moment of fund transfer. The method of payment does not eliminate the obligation to withhold and remit tax.

Does Thailand have a DTA with the UAE? Yes. Thailand and the UAE have an active Double Taxation Agreement. This can reduce standard WHT rates on dividends, interest, and royalties for payments between the two jurisdictions.

Before every international payment, verify three things: whether WHT applies, whether PP.36 is required, and whether your bank documentation is complete and correct. Set a recurring calendar reminder for the 7th of every month — this single date covers both PND.54 (WHT) and PP.36 (VAT) filing deadlines. Engaging an accountant experienced in cross-border transactions is strongly recommended; the cost of professional advice is far lower than the cost of penalties.

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