Many people have received a document called a “withholding tax certificate,” commonly known in Thailand as a “50 Bis” certificate, but may not understand what it is, why it matters, or how to use it. This article explains the purpose of a 50 Bis certificate and how to read its details so you can use it when managing your taxes.
How income tax fits together
Before looking closely at the 50 Bis certificate, let’s first understand how income tax fits together so we can see the bigger picture and why the certificate matters.
Advance tax payments
Advance tax is tax paid to the government before the deadline for filing an annual tax return. The two main types are half-year tax and withholding tax.
Annual tax is reduced by advance payments
When it is time to file an annual tax return, both types of advance tax payments are deducted from the tax calculated. You may receive a refund or need to pay more, depending on how much tax you paid in advance.
Withholding tax is deducted from the annual tax calculated
Withholding tax taken from your income during the year is applied when calculating annual income tax. It is deducted from the tax calculated, reducing the amount you owe or resulting in a refund.
What is withholding tax?
Withholding tax is income tax that a payer, such as a company or employer, deducts from the recipient’s income, such as an employee's or service provider’s, at the time of payment.
The relationship between payer and recipient
Withholding tax arises from the relationship between a payer and a recipient. The payer is responsible for deducting tax from the recipient's income and sending the withheld amount to the Revenue Department.
The payer must withhold tax in advance
By law, the payer must withhold tax from the recipient's income at the rate set by law.
The recipient receives less than the full amount
When withholding tax is deducted, the recipient does not receive the full amount because part of the income has already been withheld as tax.
The withheld amount is called withholding income tax
Tax deducted from the recipient's income is called withholding income tax.
The recipient receives a withholding tax certificate (50 Bis)
After tax is withheld, the recipient receives a withholding tax certificate, known as a 50 Bis, as evidence for filing an annual tax return.
The 50 Bis certificate supports tax filing and calculation
The 50 Bis is an important document that the recipient uses when filing an annual tax return. It shows how much tax was withheld and helps calculate tax payable or a refund.
What is final tax?
Final tax is withholding tax treated as a final payment. It does not need to be combined with other income when filing an annual tax return.
Withholding tax does not usually end the obligation
Generally, having tax withheld does not mean the tax obligation is over. It is an advance payment and must be included in the annual tax calculation.
Final tax may be treated as the end of the tax obligation
Final tax is an exception under which a taxpayer may choose not to include the income in the annual tax calculation.
Interest and dividends are examples of final tax
Examples of income that may qualify for final tax include interest and dividends.
Interest is withheld at 15%
Interest received is subject to withholding tax at a rate of 15%.
Dividends are withheld at 10%
Dividends received are subject to withholding tax at a rate of 10%.
Details on the 50 Bis certificate
A 50 Bis certificate contains several important details that you need to understand to manage tax matters correctly.
Parts of a 50 Bis certificate
A 50 Bis certificate contains key information, including the withholding payer, the recipient, income type, amount paid, tax withheld, and payment date.
Withholding payer (the person making the payment)
This section shows information about the payer, such as their name, address, and taxpayer identification number.
Person subject to withholding (the recipient)
This section shows information about the recipient, such as their name, address, and taxpayer identification number.
Income type
This section shows the type of income received, such as salary, wages, or service fees.
Items 5 and 6 on the 50 Bis certificate
Items 5 and 6 on the 50 Bis certificate do not identify the type of income; they show details about withholding tax.
Payment date and amount
This section shows the payment date and the amount received by the recipient.
Tax withheld
This section shows the amount of tax withheld.
Using income figures when filing a tax return
The income amount shown on the 50 Bis certificate is used to calculate annual income tax.
Using withheld tax when filing a tax return
The withheld tax amount is deducted from the tax calculated, reducing the tax due or contributing to a refund.
Managing 50 Bis documents
Keeping 50 Bis certificates organized is important and helps you manage your taxes effectively.
Keeping the document
Keep the 50 Bis certificate safe so you can use it as evidence when filing a tax return and checking the information for accuracy.
Requesting a 50 Bis certificate each time
Request a 50 Bis certificate whenever tax is withheld so that you have evidence for your tax return.
What happens if you do not have a 50 Bis certificate?
Without a 50 Bis certificate, you may not be able to use the tax already withheld in your tax calculation. You could end up owing more tax or receive a smaller refund.
Key points about the 50 Bis certificate
- Withholding tax is an advance tax payment
- A 50 Bis certificate is evidence of withholding tax
- Final tax is withholding treated as final
- Keep your 50 Bis certificates organized
- Request a 50 Bis certificate whenever tax is withheld
We hope this article helps anyone who wants to understand the 50 Bis certificate and apply that knowledge to managing taxes correctly.
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