Today, THAI ACCOUNTANT got an interesting question regarding Corporate Income Tax:
We, a registered Thai company, are entitled to receive dividends from our subsidiary company in Japan. How will this affect our Corporate Income Tax?
Dividends received by Thai Companies from their subsidiaries which are foreign companies located overseas are exempt from corporate income tax provided that the following conditions are met:
– Thai Companies that receive dividends must hold at least 25% of shares with voting rights in the foreign company;
– Upon receipt of the dividends, Thai Companies must have held the shares for at least 6 months from the date of acquiring the shares in the foreign company;
– Dividends received must be paid out of the foreign company’s taxable profits which are subjected to normal rate of at least 15% in accordance with the foreign tax laws.
In the case that there is a tax exemption or reduction on taxable profits from the normal tax rate due to special rules or regulations in the foreign countries, the dividend income received by the Thai companies is still exempted from corporate income tax in Thailand.
If you have any tax or accounting questions, please contact MSNA.