We are a Qatar registered company that has a Thailand partner company. Our main line of business is that we refer buyers for real estate properties and we also have agency agreements with different Thai developers and real estate brokers. Currently, part of our commissions is received by such Thailand partner company and are transferred to our Qatar Company. Thus, we would like to inquire from you the following;
Q1 – Are there any taxes that our partner has to pay for international money transfer?
Panwa: In case your Thai partner Company receives the commission from Thai real estate brokers companies on behalf of Qatar Company, it is considered as the advance payment. When they transfer it to Qatar Company, they do not have responsibility to pay tax.
Q2 – What are the taxes that must be withheld by our Thai partner company for commissions received from Thai company’s agency agreements or for marketing or consulting services provided?
Panwa: In case your Thai partner Company is a VAT registrant and received the commission from Thai real estate broker companies, it is considered as business occurred in Thailand. Therefore, it should be subjected to VAT 7% (it is collected from them). Moreover, Thai real estate brokers companies should deduct the withholding tax at 3% from such payment before VAT.
Q3 – As the profits of our Qatar Company received commissions under agency agreements and under marketing / advisory service agreements with Thai companies. Thus, what are the taxes that should be paid by Qatar Company? Is there any way to avoid these taxes, i.e. if we state that the services are purchased and will be used outside Thailand.
Panwa: For the case that Qatar company does not have the permanent establishment in Thailand and receive such commission or other services fee from Thai partner company, it is considered as the business profit, which it is exempted income tax in Thailand according to Double Tax Agreement and Royal Decree issued under the Revenue Code regarding Revenue Tax Exemption (No. 18), B.E. 2505 (1962). Therefore, Thai company does not need to withhold the tax from these payments.
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