There are certain categories of taxpayers and income which are exempt from Corporate Income Tax in Thailand as follows:
- The categories of taxpayers which are exempt from Corporate Income Tax are as follows:
– Companies which were granted exemption from tax for a period of time by the Board of Investment under the Investment Promotion Act (1977);
– Foreign organizations under mutual agreements or diplomatic organizations.
– Specific foundations or organizations; and
- The categories of income which are exempt from Corporate Income Tax are as follows:
– A special purpose vehicle (“SPV”) for securitization is granted the tax exemption on income derived from a securitization project approved by the Office of the Securities and Exchange Commission (“SEC”). Nevertheless, the operation and allocation of cash inflow for the settlement of debts and expenses must follow the plan approved by the SEC. moreover, no dividends may be paid to the shareholders of an SPV until all remaining assets and benefits have been transferred by the SPV back to the originator of the securitization project and the SPV ceases to exist.
– Interest on foreign loans paid to financial institutions organized under a specific law and wholly-owned by a foreign government;
– Interest on government bonds paid to a foreign company not carrying on business in Thailand;
– Interest on foreign currency deposits received from a commercial bank used for lending to non-Thai nationals domiciled or residing abroad, foreign companies not carrying on business in Thailand and foreign banks including those with a branch or representative office in Thailand.
– Dividends received from foreign investments are exempt from tax provided that the Thai company receiving the dividends has held at least 25% of the shares with voting rights of the company paying the dividends for a period of not less than six months before the date on which the dividends were received and the dividends were derived from net profits in the foreign country taxed at a rate of not lower than 15%. In the event that a “special law” in a particular foreign country provides a reduced tax rate or exemption for the net profits, the limited company which receives the dividends is still eligible for the tax exemption;
– Dividends or share of profits paid by an unincorporated joint venture to a Thai company or foreign company carrying on business in Thailand;
– Dividends received from a Thai company by a company listed on the Stock Exchange of Thailand. Dividends received by a non-listed company from another Thai company are also exempt from tax, provided that the company receiving the dividends holds at least 25% of the total shares with voting rights without any direct or indirect cross-shareholding. In other cases where one Thai company receives a dividend from another Thai company, one-half of the dividend is exempt from tax. However, in all cases, the listed or non-listed company receiving a dividend must have held the shares in the company paying the dividend for at least three months before and three months after the dividend was received. In the case of an amalgamation (merger) or entire business transfer (EBT), the new or surviving company can include the period of ownership of any predecessor company that was part of the amalgamation or EBT when counting the three-month period;
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