Say your company pays a contractor a monthly service base of 100,000 baht, excluding VAT if applicable. If the normal withholding rate for that payment is 3%, you hold back 3,000 baht, issue a withholding certificate (the "50 Tawi") and file the return yourself. If you pay through your bank's e-Withholding Tax service instead, the amount withheld falls to 1,000 baht, for a qualifying transaction. The bank helps remit the tax and reduces the payer's filing and certificate work, but the company still checks data, approves payments, reconciles accounts and retains evidence.
The 1% rate is not entirely new. Ministerial Regulation No. 402 for the 2026 to 2027 period was published in the Royal Gazette on 9 October 2026.
Before scoping work, use the six-question e-Withholding Tax readiness checklist to organize your preparation. See your result immediately without entering contact details.
What happened
On 16 June 2026, the Thai Cabinet approved a two-year extension of the tax measures that promote electronic tax systems. The Revenue Department announced the same day that one measure cuts withholding rates of 5%, 3% and 2% down to 1% for payments made through the e-Withholding Tax system, from 1 January 2026 to 31 December 2027.
On 9 October 2026, the Royal Gazette published Ministerial Regulation No. 402 (B.E. 2569), signed by the Minister of Finance on 1 October 2026. It replaces clause (17/5) of Ministerial Regulation No. 144 (B.E. 2522), which had earlier been amended by No. 389 (B.E. 2566). Its main provisions are:
- Qualifying payments of the specified income types made from 1 Jan 2026 to 31 Dec 2027 are subject to 1% withholding.
- The condition is that the payer remits the tax using the method set under section 3 Pannarasa of the Revenue Code, which is electronic remittance.
- The explanatory note says the purpose is to encourage businesses to remit tax electronically.
What it covers
The regulation lists seven groups. In business terms:
- Fees, commissions and other section 40(2) income paid to companies or juristic partnerships
- Goodwill, copyright and other rights under section 40(3) paid to companies or juristic partnerships
- Property rent under section 40(5)(a), except charter of ships used for international transport of goods
- Professional fees and contracting under sections 40(6) and (7)
- Prizes from contests, competitions or lucky draws
- Performance fees paid to individual public entertainers domiciled in Thailand
- Hire of work, prizes, discounts or benefits from sales promotion, advertising fees and other services, except hotel services, restaurant services and life insurance premiums
Several groups also exclude payments to foundations or associations that run income-generating businesses, and to those designated under section 47(7)(b). Before you change rates in any system, have your accountant read each clause of the regulation itself.
Why this matters for finance and ERP teams
The first effect is supplier cash flow. For a payment that used to carry 3% withholding, the amount held back drops by two thirds. The payee receives more cash at payment time. Lower withholding does not automatically reduce the payee's final income tax liability.
The second effect is paperwork. Banks offering the service, such as SCB, say the bank remits the tax on the business's behalf, the payer does not file the withholding return or issue certificates for payments made through the system, and the bank sends the company a monthly summary report. These are SCB service terms; confirm the channel and reports available from your own bank. This does not remove filing obligations for other transactions.
The third effect sits inside your accounting system. A company that pays through two channels, ordinary transfers and e-Withholding Tax, will have the same kind of service expense at two different withholding rates. If your ERP ties the rate only to the expense type and ignores the payment channel, your books and the bank's remitted amounts will not match.
One more point: the regulation was published in October, but the period starts on 1 January 2026 under Regulation No. 402. If you have paid through e-Withholding Tax since the start of the year, ask your accountant to check which rate was applied to earlier payments, and raise any difference with the Revenue Department or your bank.
Follow one payment from invoice to the ledger
Suppose a company buys services for 100,000 baht and both the transaction and payee qualify for the 1% rate. This example uses only the withholding tax base, excluding VAT and any contract-specific conditions. Withholding is 1,000 baht and the net payment from this base is 99,000 baht. Completing the work requires the following steps.
- Record the supplier invoice and payable. Check the income category, tax base, payment date and payee details against the documents, especially the tax ID and receiving bank account. Director-General Notification No. 20 specifies payer and payee tax IDs, income type, amount, VAT if applicable and withholding tax among the required information.
- Have the authorised person approve the payment and select the bank e-Withholding Tax service the company has enrolled in. An ordinary online transfer does not become e-Withholding Tax because someone selects a 1% rate in the ERP.
- Prepare payment data using a channel supported by the bank. Read the returned results for accepted payments and rejected tax data. Sending a file alone is not evidence of completion.
- Track remittance evidence and the Revenue Department's electronic receipt. Under clause 7 of Ministerial Regulation No. 364, tax payment is complete when the electronic receipt from the Revenue Department is received. Keep successful fund transfer and completed tax payment as separate statuses.
- Reconcile the invoice, payment, bank report, tax and general ledger. Retain references that let the team trace a payment. Assign discrepancies to an owner for review and correction before closing the item.
The payer benefits from less return-filing and certificate work for transactions covered by the system. The payee receives more cash where the reduced rate applies and can check withholding information through Revenue Department services. How much duplicate entry the accountant avoids depends on whether the accounting system and bank data can actually work together.
What can be automated, and who still decides
Useful candidates for automation include retrieving payable data, checking required fields, calculating from approved rates, preparing payment data, importing returned results and matching records to highlight differences. The scope must be agreed and tested against the company's actual systems before any of these steps can be described as automatic.
Income classification, eligibility for the 1% rate, exceptions, payment approval and unusual cases still need an accounting or tax owner. Examples include an invoice with several income categories, partial payments, cancellation after submission or incorrect payee details. The system should not guess and close these items itself.
A useful acceptance criterion is that the team can see each transaction's status, who must resolve it and what evidence supports closing it. Faster submission alone is insufficient if finance still has to chase remittance results at month end.
How much work does an Odoo or accounting-system integration require?
Where supplier records are consistent, the company already uses a bank's e-Withholding Tax service and usable exports or imports exist on both sides, work can begin with a gap review, process changes and sample transactions. Replacing the entire ERP may be unnecessary.
The effort increases when supplier data is inconsistent, several banks or payment channels are used, report formats differ, historical records need migration or partial-payment and cancellation rules are extensive. Those cases need discovery and exception testing before a responsible estimate of time and cost is possible.
For Odoo, start with supplier records, payables in Accounting, payment approval and bank reconciliation. The same checkpoints apply to other accounting systems. Having an ERP or an API does not establish immediate compatibility with the chosen bank service. Check the enrolled service, access rights, data formats and actual return process with the bank first.
Preparing a scoped engagement with Enersys
The proposed Enersys scope connects ERP payables and supplier records with the bank e-Withholding Tax channel, then brings bank results and Revenue Department receipt evidence into the ledger and reconciliation process. A starting discussion can focus on one company, one bank and one recurring payment group.
For the first conversation, just tell us which accounting system and bank you use, and which task your team repeats. Do not send real invoices, bank account numbers or supplier records at this stage. If we agree to review the process in detail, we can then look together at redacted examples of invoices, bank reports and supplier records, along with the current approval process.
Before development, agree which transactions use which rate, who approves them, which data needs validation, where duplicate entry can be reduced, how incomplete transactions will be tracked and which evidence supports reconciliation. Then define test cases, acceptance criteria and a cost estimate based on the actual systems.
This is a way to scope a service around each company's readiness. It does not announce a ready-made connector for every bank or guarantee immediate automation of every step. To request an assessment, review the e-Withholding Tax service and send your requirements with the accounting system, bank and monthly repetitive work your team wants to address.
This article summarises the law and proposes a systems workflow. Have your accountant, auditor or the Revenue Department confirm unclear cases before changing rates or correcting historical records.
Read next for the monthly close
If your company uses ordinary transfers and e-Withholding Tax in the same month, read e-Withholding Tax vs e-Filing: eligibility, evidence and unresolved transactions. It explains which items the payer must still file, bank evidence for the payee, and the difference between data corrections and additional tax remittance.
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