Is an Electricity Bill Subject to Withholding Tax? At What Rate — and the VAT Invoice
When a business pays the utility for electricity, does it withhold tax, at what percent, and can the electricity be used as input VAT — how do you get the tax invoice? This page lays it out clearly for business owners, accountants and commercial tenants: the tax treatment of “electricity”, both the withholding-tax side and the VAT side, plus the case where you pay electricity through a building owner/landlord — referenced to Revenue Department rules.
Electricity bought directly from the utility (MEA / PEA) is NOT subject to withholding tax — the rate is 0%. For two legal reasons: (1) electricity is “goods” under Section 77/1(9) of the Revenue Code, and a sale of goods is outside the scope of withholding tax (which applies to services / hire-of-work / rent); and (2) the utility is a state enterprise, not a company or registered partnership under Section 39, so the payer has no withholding duty (per Revenue Department ruling กค 0706/11293). But electricity carries 7% VAT — a VAT-registered business can request a full tax invoice in the company's name to claim it as input VAT. Watch out: if you pay “electricity” through a landlord/building owner as a service charge or bundled into rent, that portion may fall under 3–5% withholding (see the table below).
Does an Electricity Bill Need Withholding Tax?
Why Electricity Is Exempt (Goods + State Enterprise)
Two mutually reinforcing reasons keep electricity outside withholding:
Reason 1 — electricity is “goods”, not a service: under Section 77/1(9) of the Revenue Code, “goods” includes electric current. Selling electricity is therefore a sale of goods, and buying goods is outside the scope of withholding tax (unlike services, hire-of-work or rent, which are withheld).
Reason 2 — the utility is a state enterprise: MEA and PEA are state enterprises, not a company or registered partnership under Section 39, so a payer to the utility has no withholding duty. The Revenue Department addressed this directly in ruling No. กค 0706/11293 (payments to the PEA).
Water charges (from MWA/PWA) follow the same principle — a state enterprise and/or a sale of goods — and are likewise not withheld.
Paying Electricity Through a Landlord — Withhold? At What %
If a tenant does not pay the utility directly but pays the landlord/building owner, whether to withhold depends on what the charge is billed AS:
| How the electricity is paid | Withholding |
|---|---|
| Bought directly from the utility (MEA/PEA) | None (goods + state enterprise) |
| Landlord recharges “actual electricity” (pass-through of units) | Generally none (still electric current = goods) |
| Billed as a “service charge” | 3% (payer is a juristic person) |
| Bundled into / billed as “property rent” | 5% (the rent portion) |
The VAT Invoice: Getting It in the Company Name & Claiming Input VAT
Even without withholding, electricity carries 7% VAT on the bill (see where the VAT line sits in how to read the electricity bill). A VAT-registered business can use that VAT as input VAT to credit/refund. The key condition is holding a full-format tax invoice stating correctly:
The company's name, address and 13-digit tax ID, matching its registration (not a personal name or the landlord's).
The words “Tax Invoice”, invoice number and date, the electricity line, the pre-VAT amount and the 7% VAT shown separately.
The meter/bill in the company's name — if the meter is still under a personal name or a previous owner, transfer the account to the company or ask the utility to issue the invoice in the company's name.
Booking Electricity in the Accounts + Scope of This Page
About the Author
Compiled by the CapSolar team under Frank Lee (Founder). CapSolar is a commercial & industrial solar EPC/PPA provider in Thailand that condenses tax principles and energy paperwork from official sources so businesses can decide on energy and cost with confidence (this article is general information, not case-specific tax advice).
FAQ
High Business Electricity Bills? Cut Them at the Source With Solar
Handling the tax on electricity correctly helps, but cutting the units you buy from the utility with rooftop solar (self-consumption) saves far more per unit. CapSolar assesses free from your actual bill whether EPC or PPA fits your business.