4 parties apply e-withholding tax system

29-Oct-2020 Intellasia | BangkokPost | 6:02 AM Print This Post

The Revenue Department has cooperated with 11 financial institutions to carry out an e-withholding tax system to reduce inconveniences when filing tax documents.

The system consists of four parties: payers, banks (system service providers), payees and the Revenue Department.

The payee will make payments via a bank along with required information.

Once the bank receives the payment, it will issue an electronic invoice for both the payer and payee, with the withholding tax applied for the payee.

The withholding tax amount will then be delivered to the Revenue Department within four working days after the date the bank receives the money.

The Revenue Department then issues an electronic receipt to the payer.

If the amount of withholding tax is missing, the payer can submit additional remittance through this system.

Evidence of a withholding tax certificate can be checked at any time at the Revenue Department’s website.

The 11 financial institutions that provide e-withholding tax services are Krungthai Bank (KTB), Kasikornbank, the Bank for Agriculture and Agricultural Cooperatives, Bangkok Bank, Mizuho Bank, Bank of Ayudhya, Siam Commercial Bank, Sumitomo Mitsui Banking Corporation, Standard Chartered Bank (Thai), TMB Bank and LH Bank.

The Revenue Department will reduce the withholding tax rate to 2 percent from 3 percent until end of the year 2021 as an incentive to entice taxpayers to use the e-withholding tax system, said director-general Ekniti Nitithanprapas.

An e-withholding tax system is one of the digital transformation strategies the department developed to make services more convenient for taxpayers, said Ekniti.

Taxpayers usually have to submit tax filings along with prepared documents as evidence for an intermediary, such as financial institutions, to conduct the withholding tax process.

The e-withholding tax system will provide greater convenience for users such as reduced costs by eliminating document delivery or storage needs, as well as reducing the steps in processing various tax-related operations, he said.

Reducing limitations in terms of lost documents and enhancing transparency in the process of deducting received money for the withholding tax are additional boons, said Ekniti.

The department reported the amount of withholding tax submissions for goods and services is around 7 billion baht per year.

Despite the lower withholding tax rate of 2 percent until end of the year 2021, the department will not lose this tax revenue because payees will eventually have to file the actual income tax return at end of the year, said Ekniti.

Payong Srivanich, KTB president and chair of the Thai Bankers’ Association, said financial institutions are ready to cooperate with the department on providing e-withholding tax services and there will be no service charges for the time being.

https://www.bangkokpost.com/business/2009399/4-parties-apply-e-withholding-tax-system

 

Category: Thailand

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