Hire of work agreements are a big stamp duty tax risk for services companies in Thailand: In addition to withholding tax and VAT services companies in Thailand are subject to 0.1% stamp duty tax for their hire of work agreements.

Hire of Work Agreement

The Thai commercial business law defines a hire-of-work agreement as a contract under which a person (services provider or contractor) agrees to perform work for another person (the employer) who agrees to pay remuneration for the work.

According to this definition virtually any services agreement that is entered into is a hire-of-work agreement. Even a contract for maintenance of office machines is a hire-of-work agreement that subjects the services provider to SDT.

Payment of Stamp Duty Tax

For hire-of-work agreements, the Thai stamp duty tax law prescribes:

1. The services provider in Thailand is the person who's liable to the Revenue Department for the 0.1% tax, that shall be paid within 15 days of execution of the agreement; 
2. For a hire of work agreement outside Thailand, the tax shall be paid within 30 days of bringing the contract into Thailand, and the person who is liable to the Revenue Department for the tax is "the first holder of the agreement in Thailand"; and 
3. For a hire of work agreement that is to be executed in the presence of an official, it cannot be executed until the tax has firstly been paid.

Late Payment of the Tax

If stamp duty tax is not paid by the due date, the amount of the stamp duty tax is increased by large late payment charges called "surcharges" as follows:

Payment made within 90 days of the due date	200% surcharge
Payment made after 90 days of the due date	500% surcharge
Payment not made and discovered by a tax audit officer	600% surcharge

Thus, whilst stamp duty tax is only a 0.1% tax, if it is not paid within time or is not paid at all, the tax cost can be much higher than the amount that was due on the payment due date.

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