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For many foreigners doing business in Thailand, the concept of withholding tax may seem odd. In some cases, especially for foreign-bound payments, withholding tax can go from being an oddity to becoming a problem.
Sometimes the withholding tax becomes an added tax to the customer because it’s simply not acceptable to withhold x% from an invoice originating from a foreign firm. That cost may be negligible in some cases, but one of our clients was spending a considerable amount on Google advertising and needed a better solution.
On Google’s help section, there are several references to this issue in India and elsewhere, but not Thailand. The money that is paid for advertisements run through Google’s AdWords system is ultimately headed for Ireland even though they have a branch in Thailand.
Google Ireland is the juristic entity that has to be taken into consideration, and according to officials at the revenue department this particular type of payment is covered by a tax treaty between Ireland and Thailand.
So the short answer is NO, you don’t have to withhold tax next time you pay your Google AdWords bill.
Acclime is Asia’s premier tech-enabled professional services firm. We provide formation, accounting, tax, HR and advisory services, focusing on delivering high-quality outsourcing and consulting services to our local and international clients in Thailand and beyond.