QUERY REGARDING EXPORT TO THAILAND.

[SANJEEV JADHAV]

Dear Experts, we have received an order from our Thailand customer and accordingly we are going to raise invoice for design drawing and development service. Recently our customer has sent an email stating that “Design, Drawing and Development Service” will be considered as Service and will be required by Thailand tax laws to deduct 15% withholding tax. We require your help in this regard, Is it the correct provision as per Thailand Tax Law and applicable to the Indian supplier. Hoping your kind cooperation and suggestions in this regard.

[DR.MARIAPPAN GOVINDARAJAN]

The tax law in Thailand is to be referred first. If such provision is there then the double taxation avoidance agreement, if any, made between the two countries is to be analyzed for this purpose.

[YAGAY and SUN]

In addition to above reply, if Design and Drawing are printed on the paper and being sent via couirer then it will treated as Goods, if these are e-mailed or downloaded by foreign customer via Cloud then it will be treated as services as per the Indian Laws. On Thailand Tax Laws, please check whether any taxation treaty is between the countries are there or not.

AI Summary

Withholding tax on cross-border design and development services may depend on Thailand law and treaty status.
Whether payments for design, drawing and development are subject to withholding tax in Thailand depends on Thai statutory provisions and any double taxation avoidance agreement between Thailand and India. The legal characterization of the deliverable is material: physically printed drawings exported as goods may be treated as sales of goods, whereas electronically delivered materials (e mailed or cloud downloads) are treated as cross border services under the discussed domestic position, which affects the applicability of Thai withholding.