Tax From Dividends

[falang07]

Hello, according to http://www.rd.go.th/publish/6045.0.html, There are several types of income that the taxpayer shall not include or may not choose to include such income to the assessable income in calculating the tax liability. <p>and then <p>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. Does this mean dividends are excluded from the personal income tax in case the company income was taxed at 10% or more? No need to wait one year and only remit to Thailand then to avoid tax from dividends?

[Time Traveller]

Thai companies pay dividends with a withholding tax of 10%. You can choose this to be the final tax paid and not include the dividends in your tax return. OR, you can include them in your tax return and then you are able to claim back the tax credits which many companies have already paid through the corporate taxes and get a nice tax refund. Most people whose marginal tax rate is less than the corporate tax rate of the dividends would choose to do this but the only catch is that you must include all dividends.

It sounds like you are referring to foreign dividends? In which case I think these are treated differently from Thai registered companies. Best speak with an accountant or ask the revenue department directly.

Edited September 21, 2012 by Time Traveller

[wordchild]

my understanding is that the option to exclude dividend income from ones Thai tax return only applies to dividends received from a Thai registered company. Certainly that was the last advice i had on the subject a few years ago. The safest thing is to hold foreign dividends offshore until after Jan 1 of the following year. It may be a minor inconvenience the first year but after that it just becomes routine.

[falang07]

Does anyone ever check if these are remitted in the year after? I might just send 180,000 THB this year to stay under the tax exemption limit (including the 30,000 THB personal allowance per single taxpayer) and remit the rest next year, as suggested.

[falang07]

Yes, I was referring to foreign dividends, the corporate income tax is 10% in the country where my foreign company is incorporated so these dividends are paid from the corporate income taxed at 10%. The dividends themselves are not taxed when paid out, that is where my confusion starts, but I suppose was wrong and this does not mean they would be automatically tax free when remitted to Thailand since the law requires that the dividends are taxed at the source (yes, double taxation, as always).