10% deduction on dividends received from Thai stocks

[jippytum]

On my bank savings account i am able to claim the interest of 15% deducted at source from the tax authorities.

Is it possible to claim in the same way the10% tax deduction at source from Thai stock dividends ?

[Langsuan Man]

What country taxes are you talking about ?

[fletchsmile]

I rarely trade individual Thai shares, and prefer mutual funds/ unit trusts and TFEX futures and options. Messing around with dividends and tax is one of the many reasons for that.

Short answer probably not. Long answer below is more complicated:

It would be worth you having a read of the following page of the SET's website around taxation on equity investments:

http://www.set.or.th/en/regulations/tax/tax_p1.html

As you can see it will depend on whether you are Thai or foreign, and whether you are in Thailand or not if a foreigner. The page isn't that clear as it says "doing business in Thailand", so I'm not 100% sure whether that relates to someone working here or just relates to doing business or just living here. I also think it could be talking more about tax residency. The Thai version also also isn't that clear either

1.ภาษีอากรของนักลงทุนไทยและนักลงทุนต่างชาติที่ประกอบกิจการในประเทศไทย

What is clear though is that if you're a foreigner and individual investor and outside Thailand it's 10% WHT on dividends. Most people won't be able to reclaim that.

In some cases depending on your country/nationality how they tax you/ whether a DTA is in place, you may even have additional tax above that to pay if say your country taxes you on worldwide income regardless of where you're resident, and their tax rate is higher. So you may suffer the 10% in Thailand and it's possible to suffer more on top of that in certain circumstances in your home country.

There is also an additional twist/ factor on mutual funds which is worth noting. This one I can say with certainty, as I receive dividends regularly from mutual funds, and where I am tax resident in Thailand as a non-Thai, I can generally elect to either:

1) pay a flat rate of 10% WHT.

2) Have the dividends paid gross and then include it in other income on your tax return and pay tax my marginal rate of tax.

So in years where I work here and pay tax, I pay the flat 10% on dividends from mutual funds, as this is cheaper than paying tax at my marginal / top rate.

But in years where I haven't worked here, I have asked in the past for dividends to be paid gross without the 10% WHT deduction. This can then be covered by your personal allowances and the nil rate band. So depending how much you get you can end up paying no tax on the dividends. i.e receive gross calculate your tax due on all your income and see if it's lower than 10%. We also do it this way for my wife too.

I don't think this choice is available for Thai stocks when you look at this table, only mutual funds. But it's worth knowing

Cheers

Fletch

Edited March 23, 2016 by fletchsmile

[happydays]

It's very easy to reclaim the 10% withholding tax on dividends as long as you have the tax receipts which should be sent to you each time you receive a dividend. I take the receipts to my local tax office in January/February each year, they do the paper work for me & I get a cheque by post about a month later.

[sendintheclowns]

It's very easy to reclaim the 10% withholding tax on dividends as long as you have the tax receipts which should be sent to you each time you receive a dividend. I take the receipts to my local tax office in January/February each year, they do the paper work for me & I get a cheque by post about a month later.

I'm Very curious to know

Do they not want to see your Tax ID?

Do you file a Thai tax return?

[bitcoinforever]

capital gains is tax free , that is great every Thai should be trading shares, futures,otions and every expat except-- u.s. taxed on worldwide income so you get hit with capital gains on the u.s. end

[Pattaya46]

It's very easy to reclaim the 10% withholding tax on dividends as long as you have the tax receipts which should be sent to you each time you receive a dividend. I take the receipts to my local tax office in January/February each year, they do the paper work for me & I get a cheque by post about a month later.

I'm Very curious to know

Do they not want to see your Tax ID?

Do you file a Thai tax return?

Me too

Don't you need to get at least 500'000 baht dividends to be able to reclaim *part of* these 10% ?

[happydays]

It's very easy to reclaim the 10% withholding tax on dividends as long as you have the tax receipts which should be sent to you each time you receive a dividend. I take the receipts to my local tax office in January/February each year, they do the paper work for me & I get a cheque by post about a month later.

I'm Very curious to know

Do they not want to see your Tax ID?

Do you file a Thai tax return?

[happydays]

The first time you go to your local tax office they will issue you with a tax ID number. Every year you submit a tax return (my local tax office fill this out for me & just ask me to sign it) & as long as your total gross income is less than the zero rate band you will receive a tax rebate.

[happydays]

It's very easy to reclaim the 10% withholding tax on dividends as long as you have the tax receipts which should be sent to you each time you receive a dividend. I take the receipts to my local tax office in January/February each year, they do the paper work for me & I get a cheque by post about a month later.

I'm Very curious to know

Do they not want to see your Tax ID?

Do you file a Thai tax return?

Me too

Don't you need to get at least 500'000 baht dividends to be able to reclaim *part of* these 10% ?

Currently you get a B30,000 Personal Allowance & taxable income between B0-150,000 is taxed at 0% & 150,001-300,000 is taxed at 5%. So, gross dividends (including tax deducted) up to B180,000 will get you a full tax rebate & 180,001-330,000 will get you a 50% rebate.

Hope this makes sense.

Cheers