Our company needs to hire the Service Engineer from Japanese company which is registered in Japan and their employee must come to fix the machinery of our customer in Thailand, about 5-6 days. Japanese company has no permanent establishment in Thailand. Do we need to deduct the withholding tax when we will make the payment to them?
Panwa: If Japanese company will send their employee to work in Thailand, about 5-6 days, it shall be considered that they has an employee for carrying on the business in Thailand under the section 76 B, which is in accordance with Thailand Revenue Code. However, such assessable income is considered as the business profit and shall be tax exempted in Thailand in accordance with the article 7 of Double tax agreement convention between Thailand and Japan. Thus, the company does not need to deduct the withholding when the company will make the payment to them.