Taxation on Equities Investments in Thailand

Thought this would be interesting for some readers here.

Thailand’s equities are very open for individual foreign investors because they are treated the same as individual thai investors in terms of taxes with zero percent capital gains tax and 10% tax on dividends.

Thai taxes applicable to investors in listed companies are as outlined below:

1. Taxation of Thai or foreign investors doing business in Thailand

Types of Income 
(From direct investment in SET/TFEX)
Tax Rate
Capital Gains *
  • Individual Investor
  • Juristic Investor
  • Tax exempt
  • Pay corporate income tax but no withholding tax
Dividends
  • Individual Investor
  • Pay 10% withholding tax on dividends from listed or limited companies.
  • Pay 10% withholding tax on dividends from a mutual fund if the taxpayer decides not to include the dividends with other income at year-end.
  • Dividends from any Board of Investment-supported company are tax-exempt.
  • Juristic Investor
  • Pay 10% withholding tax if the taxpayer is not a listed company.
  • Tax-exempt if the taxpayer is a listed company and holds the related shares or investment units for three or more months before and after the date of dividend payment.
  • Tax-exempt if (a) the taxpayer is a juristic entity holding 25% or more of the votable shares of the firm issuing dividends and (b) the issuing company does not hold any shares issued by the taxpayer. However, the taxpayer must hold the related shares or investment units for three or more months before and after the date of dividend payment
  • Tax-exempt if the dividends in question are from any company promoted by the Board of Investment.
Interest Income:
  • Individual Investor
  • 15% withholding tax.
  • Juristic Investor
  • 1% withholding tax.
  • No withholding tax on interest from a commercial bank paid to a financial, securities or credit foncier business.

2. Taxation of Foreign Investors.

Types of Income 
(From direct investment in the SET/TFEX)
Tax Rate
Capital Gains *
  • Individual Investor.
  • Juristic Investor.
  • Tax-exempt.
  • 15% withholding tax.
Dividends:
  • Individual Investor.
  • Juristic Investor.
  • 10 %withholding tax.
  • 10% withholding tax.
Interest Income:
  • Individual Investor.
  • Juristic Investor.
  • 15% withholding tax.
  • 15% withholding tax.

Note* : The capital gains tax resulting from trading on the Thai Futures Exchange Pcl. is the same as that from trading on The Stock Exchange of Thailand.

3 . Tax Treaties

To encourage foreign investment, Thailand has double taxation agreements with 52 countries or regions including those shown below. Institutional investors from 28 countries or regions are exempted from capital gains taxes.

Last update : February 24, 2009

1) Bangladesh 15) Mauritius
2) Belgium 16) Netherlands *
3) Canada * 17) Norway
4) Cyprus * 18) Oman
5) Denmark 19) Pakistan
6) France * 20) Singapore
7) Germany 21) Slovenia *
8) Hong Kong 22) South Africa
9) India 23) Spain *
10) Indonesia 24) Switzerland *
11) Israel * 25) Turkey *
12) Italy 26) The United Arab Emirates
13) Kuwait 27) United Kingdom & North Ireland *
14) Laos 28) Uzbekistan *

Note:* conditions apply.

4.Value Added Tax (VAT)

Investor must pay 7% VAT on services rendered to him by securities companies.

5. Stamp Duty

Both foreign and domestic transferors of share or debenture certificates must pay for duty stamps, to be affixed to the certificates according to the value of the book value, or the value of the transferred instruments (whichever is greater).

The stamp duty rate is THB 1 for every THB 1,000 or fraction thereof. However, the following transfers are exempt from stamp duty:

  • Transfers of registered securities where the TSD is the registrar.
  • Transfers of government bonds, state enterprise bonds or unit trusts.

 

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

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