Tax-Free Dividends From Abroad?

[falang07]

Hello, imagine this situation: I have a foreign IBC company and make my Thai wife one of the shareholders. Later on, I send some dividends to her Thai bank account for the previous year. This is supposed to be tax-free, am I right (if I send the dividends from profits realized in the previous year)? Thanks for your valuable input

[KeyserSoze01]

You have not provided enough information to give you an opinion.

What is YOUR country of origin and what is your residency status?

Are the shares in the company you receive dividends from in your name or your wife's?

If you are a US citizen, then no, you cannot "hide" dividend income by funneling the proceeds to your wife's account. Especially if it flowed through your bank accounts first.

[falang07]

I am saying that she will be one of the shareholders, why should it be a problem? I suppose any shareholder has the right to receive dividends. I just need to know if this is tax-free in Thailand if remitted in the following year, dividends are paid from profit that was already taxed.

[manarak]

I am saying that she will be one of the shareholders, why should it be a problem? I suppose any shareholder has the right to receive dividends. I just need to know if this is tax-free in Thailand if remitted in the following year, dividends are paid from profit that was already taxed.

The money needs to stay at least 12 months abroad before being imported into Thailand. "last year" is not enough.

[falang07]

This is a foreign (EU) company, not Thai. It will be sent directly from the company's account in EU to her Thai bank account.

[falang07]

<p>

The money needs to stay at least 12 months abroad before being imported into Thailand. "last year" is not enough.

OK, so 12 month is the key then, thanks for pointing this out. So for example, if the foreign company receives a payment of €10,000 on 15th January 2012, then she can receive €10,000 after 15th January 2013, right?

[manarak]

<p>

The money needs to stay at least 12 months abroad before being imported into Thailand. "last year" is not enough.

OK, so 12 month is the key then, thanks for pointing this out. So for example, if the foreign company receives a payment of €10,000 on 15th January 2012, then she can receive €10,000 after 15th January 2013, right?

I believe the easiest would be to setup a foreign bank account for her and to let the funds stay there for 12 months.

[falang07]

So the 12 months period is counting from the time the money arrive on her private account, not the time it was earned by the company she is shareholder of?

[falang07]

No one knows?

[falang07]

I have got some more news from http://www.rd.go.th/publish/6045.0.html:

Dividends

Taxpayer who resides in Thailand and receives dividends or shares of profits from a registered company or a mutual fund which tax has been withheld at source at the rate of 10 per cent, may opt to exclude such dividend from the assessable income when calculating PIT. However, in doing so, taxpayer will be unable to claim any refund or credit as mentioned in 2.4.

It means that dividends taxed at 10% (or more) can be excluded from the personal income tax.