Update Sep 2023
This blog explains about e-withholding tax in Thailand and SAP solution for e-withholding tax including additional customizations that you need to consider.
e-Withholding Tax system is a new service of the Revenue Department that listens to the needs of those in the process of reporting the amount of tax withheld, both the person liable to withhold tax and the taxpayer from whom tax is withheld. The system uses information technology designed and developed to integrate with financial technologies for greater ease and convenience. It reduces steps in the process for all relevant parties employing the Revenue Department’s D2RIVE strategy and new normal policy which every sector, business operator, and individual globally must comply with.
The new e-Withholding Tax system manages withholding tax completely in One Step. As an electronic medium service that meets international standards of security, it is an alternative way to cover the withholding tax steps in what has been a daunting process and makes the system shorter and more pleasant. Expense on messengers and printing are therefore avoided. Moreover, the documents according to Section 50 Bis are digitised and so not easily lost. It also promotes transparency with its channel to check evidence at the Revenue Department website (www.rd.go.th) 24 hours without having to keep physical documents. Taxpayers who are responsible for filing withholding tax can use the e-filing system. Although filling withholding tax returns via internet is easy, using the e-Withholding Tax system is easier.
Source: Ministry of Finance e-withholding tax
In addition, as part of tax measures to help those affected by COVID-19 by increasing financial liquidity - Thai Cabinet approved an amendment to Ministerial Regulation no. 361 (B.E. 2563) to expand the scope of the withholding tax reduction to include a reduction—from 5% to 2%—of the withholding tax on certain taxable income for payments made via the e-withholding tax system. The reduction of withholding tax from 5% and from 3% to 2% for payments made through the e-withholding tax system would be extended for the period 1 October 2020 through 31 December 2022.
Source: KPMG Thailand: Tax measures supporting R&D, electronic tax systems and e-filing
Refer to Revenue Department announcement on 24 January 2023, to broaden private sector use of e-Tax Invoice, e-Receipt and e-Withholding Tax systems, from January 1, 2023 to December 31, 2025: -
Point 1: e-withholding tax transactions must not generate withholding tax certificate (50BIS) and must not include in withholding tax report (PND).
Solution:
Configuration:
See list of e-withholding tax income types and sample withholding tax types and withholding tax codes at SAP Help portal
> Product Assistance > Local Versions > Asia-Pacific > Thailand > Financial Accounting (FI) > Accounting and Financial Close > Financial Accounting - General Topics > Taxes (FI-AP/AR) > Withholding Tax
> Product Assistance > Country/Region-Specific Functions > Thailand > Finance > Accounting and Financial Close > Financial Accounting - General Topics > Taxes (FI-AP/AR) > Withholding Tax
Code Changes:
Point 2: Based on bank statement scenario, there are two-ways of withholding tax posting for e-withholding tax :-
Solution:
Configuration:
Important Note: if your company uses multiple banks that have both cases, you need to maintain 2 sets of withholding tax codes (for Case 1 & Case 2) and users must know which code they should input when posting invoice, which depends on the bank used for payment.
Point 3: Amend Payment Advice or Payment Medium Structure sent to Banks to include withholding data.
Payment Advice has various format since every banks have its' own formats therefore Businesses need to customize the payment advice file as per Bank’s requirement.
Payment medium structure (FPAYH/ FPAYP) already included with some withholding tax data by reading WITH_ITEM (table that stores withholding tax data) using class method cl_idfi_cgo_dmee_utils -> get_tax_info.
Under the current logic of the format TH_CGI_XML_CT below screenshot shows withholding tax data that's already provided and populated in those fields:
If other fields are required such as income type & description, posting indicator (to determine withholding tax condition) then the event 06 of the Payment Medium Workbench could be used for a similar select from WITH_ITEM or any other tables.
More detail with sample coding, check blog Thailand: How to include e-Withholding Tax Payment information in any format.
Also check SAP Note 2253571 – Collective information note: CGI_XML_CT, CGI_XML_DD extended with BADI enhancement.
Additional Customization that you may consider:-
Posting of e-withholding tax payment to AP-Bank has to be done manually (FB05) whereby in paper withholding tax, Posting withholding tax payment to RD is included in program RFIDYYWT. As such Business may consider to do customize program to automate posting withholding tax payment to AP-Bank, also since it could be payment to multiple banks therefore the customize program shall also include the logic to determine AP-Bank from house bank maintained in invoice or payment.
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This blog is intended to provide Customers and Partners how to handle e-withholding tax in Thailand based on the input & feedback from customers who initiated to apply e-withholding tax at end of year 2020.
Please share your feedback and thoughts in a comment. If you have questions about e-withholding tax in Thailand, you can post your question here.
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