Lowering Withholding Tax under Ministerial Regulation no. 389/2566 (2023) issued by virtue of the Revenue Code
Previously, the Ministerial Regulation no. 144/2522 (1979) had been issued to impose conditions of withholding tax, and then the Ministerial Regulation no. 373/2564 (2021) was issued to amend the Ministerial Regulation no. 144/2522 (1979) regarding the rate of withholding tax.
Recently, the Ministerial Regulation no. 389/2566 (2023) has been issued on 10th March 2566 (2023) to amend the previous Ministerial Regulation in regard to withholding tax at a lower rate compared to the one specified in the Ministerial Regulation no. 373/2564 (2021) in order to encourage and support business entities to submit tax via electronic system.
The rate of withholding tax has been reduced from 2.0 to the rate of 1.0 for the taxpayer who pays from 1 January 2566 (2023) to 31 December 2568 (2025) and for the types of assessable income as follows:
- The payment of assessable income under Section 40 (2) of the Revenue Code to corporations or juristic partnerships, but not include foundations or associations that generate revenue and foundations or associations prescribed by the Minister of Finance in accordance with the Revenue Code Section 47 (7) (b).
- The payment of assessable income under Section 40 (3) of the Revenue Code which is fees of goodwill, copyright, or any other rights to the corporations or juristic partnerships but does not include foundations or associations that generate revenue and foundations or associations prescribed by the Minister of Finance in accordance with the Revenue Code Section 47 (7) (b).
- The payment of assessable income under Section 40 (5) (a) of the Revenue Code to individuals or juristic person who are subject to personal or corporate income tax, but not include foundations or associations that generate revenue and foundations or associations prescribed by the Minister of Finance in accordance with the Revenue Code Section 47 (7) (b) and not include the payment of assessable income under Section 40 (5) (a) of the Revenue Code which is the rental fee of a boat in accordance with the law prescribing maritime promotion which is used with an international shipment.
- The payment of assessable income under Section 40 (6) and (7) of the Revenue Code to individuals or juristic person who are subject to personal or corporate income tax, but do not include foundations or associations that generate revenue and foundations or associations prescribed by the Minister of Finance in accordance with Revenue Code Section 47 (7) (b).
- The payment of assessable income under Section 40 (8) of the Revenue Code which applies only for the contest, competition, sweepstakes, or anything similar to those of the previously mentioned to individuals or juristic person who are subject to personal or corporate income tax, but not include foundations or associations that generate revenue and foundations or associations prescribed by the Minister of Finance in accordance with Revenue Code Section 47 (7) (b).
- The payment of assessable income under Section 40 (8) of the Revenue Code which applies only to the payment of performance fees to public performers who are subject to personal income tax and domiciled in Thailand. In this case, ” Public performers ” include actors in drama, film, radio, or television, as well as singers, musicians, professional athletes, entertainers, etc.
- The payment of assessable income under Section 40 (8) of the Revenue Code applies only to the income from the hire of work contract, reward payment, discounts or other benefits similar to those mentioned above in relation to promotions, advertisements, and other services which are not performance fees paid to public performers, payment for life and non-life insurance premiums, payment for transportation excluding public transportation and payment for hotel service fees and restaurant service fees to individuals or juristic person who are subject to personal or corporate income tax, but not include foundations or associations that generate revenue and foundations or associations prescribed by the Minister of Finance in accordance with Revenue Code Section 47 (7) (b). In this case, “Services” means any action that may generate value that is not a sale of goods. In this case, “Restaurant” means the business of selling food or beverages of any type, including the business of employing personnel to prepare food or drinks, whether in or from premises that are accessible for the public to consume.