There are, in fact, two different taxes that come into effect in this situation. In this column I will deal with withholding tax. 

According to the Section 70 of the tax laws, a company or juristic partnership incorporated under foreign law and not carrying on business in Thailand, but receiving assessable income paid from or in Thailand under following circumstances, shall be liable to pay tax. 

40 (2) Income derived from a post or from performance of work, whether in the form of fee, commission, discount, subsidy, meeting allowance, gratuity or bonus 

40 (3) Goodwill, copyright or any other rights, software, royalty, license fee 

40 (4) Interest, dividend, capital gains 

40 (5) Rental 

40 (6) Professional fees: legal, engineering, architecture, accounting, fine arts 

The tax above is a kind of corporate income tax collect from foreign business and it is a final tax, which means once you have deducted it from the foreign company and submitted it to the tax dept., the company's tax liability is finished - no more income tax will be collected from them. 

Almost every kind of income mentioned above is liable for a withholding tax rate of 15%, except paying dividends, which is rated at 10%. 

Your duty as the payer is to deduct and submit to the tax dept. by using tax form PND.54 by the seventh of the month following payment. 

If you fail to withhold this tax, you are liable to pay the tax on behalf of payee plus interest of 1.5% for every month that has passed since the date the payment was made to the foreign company. 

The withholding tax rate may be further reduced or exempted, however, depending on types of income under the provisions of any Double Taxation Agreements with the country where the foreign company is based. 

I will explain this further in my next column together with the remaining VAT issues concerned with making payments overseas.