Thailand dividend tax: taking profit out of a company

A Thai company pays corporate income tax on its profit first, at the standard rate of 20% (small companies use a tiered scale instead). What is left after that tax can be paid out as a dividend, but only by a resolution of the shareholders' meeting, or as an interim dividend declared by the directors when there is enough profit. When the dividend goes to a foreign shareholder — a foreign company that does no business in Thailand, or an individual, resident in Thailand or not — the Thai company withholds 10% at source (Revenue Department). For a Russian or UK shareholder, a double tax treaty does not lower this further: both treaties let Thailand charge more, not less, so 10% is what actually gets withheld. For other countries, check the applicable treaty's dividend article. After that, a bank can send the rest abroad under Bank of Thailand rules.

In short

• Corporate income tax on profit: 20% standard rate, a tiered scale for small companies.
• A dividend can only be paid out of profit, by a shareholders' resolution or an interim dividend from the directors — never while a loss is uncovered.
• Thailand withholds 10% on a dividend to a foreign shareholder, company or individual.
• For Russia and the UK, the treaty does not cut this 10%; it only sets a ceiling Thailand is allowed to charge, and Thailand's own rate is already below it. Check the relevant treaty for other countries.
• Tax in your own country of residence is a separate question, on top of the Thai withholding.

The path of the money

Step	Who acts	What happens	Legal basis
1. Profit is taxed	The company	Corporate income tax, 20% standard rate	Revenue Code
2. Reserve is set aside	The company	At least 5% of profit, until the reserve reaches 10% of capital	CCC s. 1202
3. Dividend is declared	Shareholders' meeting, or the directors for an interim dividend	Resolution to pay out of the remaining profit	CCC s. 1201
4. Tax is withheld	The company	10% withheld from the dividend before payment	Revenue Department
5. Money is sent abroad	The bank	Transfer against the resolution, shareholder list and other papers the bank asks for	Bank of Thailand rules
6. Tax at home	The shareholder	Depends on the shareholder's own country	Home-country law

Which profit can be paid out

A dividend comes only from profit. The Civil and Commercial Code lets the shareholders' general meeting declare an annual dividend, or lets the directors declare an interim dividend between meetings when the company has enough profit; either way, a dividend can never be paid while the company has an uncovered loss, and it must be paid within one month of the resolution (CCC s. 1201, as amended in 2022). Before every dividend, the company must also set aside at least 5% of the profit for a legal reserve, until that reserve reaches 10% of the registered capital (s. 1202).

In practice this means two checks before a dividend goes out: does the balance sheet show profit rather than accumulated losses, and has the reserve already reached the 10% of capital set by law — the company's articles may require a larger reserve — or does this payment still need to top it up. Our lawyers go through the latest accounts and the company's articles with the directors before a dividend is proposed, so the resolution matches what the law and the books actually allow.

Withholding tax on dividends

The Thai company withholds 10% on a dividend paid to a foreign company that does no business in Thailand, and on a dividend paid to an individual shareholder, whether that person is a Thai tax resident or not (Revenue Department). A resident individual has a choice: treat the 10% as the final tax on that income, or include the dividend in the annual return, add the 20/80 credit to the declared income and claim that same credit against the tax due — but only for the part of the dividend that came from profit taxed at the 20% corporate rate, not from profit taxed on a small-business scale (Revenue Department). Filing a PND 90 return that includes dividends walks through that return.

A branch of a foreign company is taxed differently: when it sends profit out of Thailand, it pays 10% of the amount sent, under a separate rule for branch remittances (Revenue Code s. 70 bis). That rule is about a branch sending its own profit abroad; whether it can also apply to a dividend paid by a Thai subsidiary to its foreign parent is not settled in what we could confirm, so a subsidiary's dividend is treated under the ordinary 10% withholding above, and we check this point before relying on it for a branch structure.

The Board of Investment treats a dividend differently when it is paid out of profit that was exempt from corporate tax under a BOI promotion: under the Investment Promotion Act, s. 34, such a dividend is not taxed if it is paid while that corporate tax exemption is still running, or within six months after it ends — not six months after the BOI promotion period generally. Confirm the current reading with the BOI or the Revenue Department before paying such a dividend near that cut-off.

Dividends and double tax treaties

A double tax treaty is an agreement between two countries that sets limits on how much each may tax the same income, so the two do not both tax it in full. For dividends, Thailand's treaties set a ceiling on what Thailand is allowed to charge — the Russia treaty allows up to 15%, and the UK treaty up to 20%, or 15% in some cases. Thailand's own domestic rate is only 10%, which is already below both ceilings, so 10% is what gets withheld. The treaty does not create a right to a lower rate here, because Thailand was never charging the higher ceiling in the first place.

We have not seen the treaty dividend caps for the US, Australia or Germany confirmed from a primary source, so we check the relevant treaty text before relying on a specific percentage for those countries.

Paying a dividend: shareholder resolution and paperwork

A dividend is not just a bank transfer — it needs paperwork before the money moves:

1. Check the latest accounts for profit and the reserve required under s. 1202.
2. Hold the shareholders' meeting (for the annual dividend) or a board meeting (for an interim dividend) and pass the resolution.
3. Notify shareholders of the dividend in writing.
4. Pay within one month of the resolution (CCC s. 1201).
5. Withhold 10% and issue the shareholder a withholding tax certificate.

Our team prepares the resolution and the shareholder notice in Thai and in English or Russian, so every shareholder can read exactly what was decided and when payment is due.

Sending dividends abroad

Bank of Thailand rules allow a company to send dividends and profit abroad. Banks typically ask for the shareholders' resolution, the current shareholder list and sometimes other company documents before they process the transfer. Under Bank of Thailand rules, a transfer of USD 200,000 or more per transaction usually needs supporting documents behind the payment, with an exception where the bank's own know-your-business checks are already satisfied; the exact document list is each bank's own practice, not a published checklist, so it can differ from one bank and branch to another.

We tell shareholders in advance which documents their bank is likely to ask for, to reduce the risk that the transfer is held up at the last step after the dividend has already been declared and taxed.

Dividends or a director's salary

A foreign shareholder who also works for the company often has a choice between taking money out as salary and taking it out as a dividend, and the two are taxed quite differently. Salary is taxed on Thailand's progressive personal income tax scale, from 0% up to 35% (Revenue Department), and whether a work permit is needed depends on the work actually done, not on how the pay is labelled; check the current Department of Employment rules before paying a director as an employee. A dividend, by contrast, comes only from profit that has already borne corporate tax — 20% at the standard rate, less for a small company on the SME scale, or possibly none during a BOI exemption — with a further 10% usually withheld on the way out to the shareholder.

Neither route is automatically better: it depends on how much profit the company has, the shareholder's own tax residency, and whether a work permit is already in place. We look at the situation as a whole — the company's accounts, the shareholder's residency and immigration status — before suggesting either one, and we do not suggest a split designed mainly to reduce tax.

What is not settled

Two points in this area have no clear official answer yet. Whether the 10% withholding is the final tax for a non-resident individual, the way it is for some resident individuals, is not addressed in the Revenue Code text we reviewed. And whether the 20/80 dividend tax credit is available at all when the underlying profit was taxed at a small-business rate rather than the standard 20% rate is also not settled. We have not found official guidance on either question, so we check the current practice with the Revenue Department before relying on either outcome for a specific shareholder.

A worked example (illustrative figures only). A company with THB 1,000,000 of profit pays 20% corporate tax, leaving THB 800,000. Assuming the legal reserve is already fully funded, all of it is available for a dividend. Withholding 10% takes THB 80,000, leaving THB 720,000 to send to the shareholder abroad.

If you live outside Thailand

If you are a UK, US, Australian or other EU taxpayer, Thai withholding is only half the picture: your home country has its own rules on taxing a foreign dividend and on crediting tax already paid in Thailand. Check this with your own tax adviser before assuming the 10% is the end of it.

If you are a Russian tax resident, you owe personal income tax on the dividend — 13% up to RUB 2.4 million a year, 15% above that, as Russian tax guides describe the current rates — and the treaty lets you credit the Thai 10%, though never for more than the Russian tax itself; check the current filing and payment deadlines with the Federal Tax Service. As the Federal Tax Service explains it, a stake of more than 10% in the Thai company must also be reported, and a controlling person files a CFC notice every year.

What next

Before a dividend goes out, we check the accounts, the reserve and the company's articles, and prepare the resolution and the shareholder notice on both languages. If your company has accumulated profit and you want to know what you would actually receive after Thai tax, send us the latest accounts — our tax support for a foreign company owner in Thailand covers dividends, filings and the paperwork a bank will ask for before it sends the money abroad.

Two related questions come up often alongside dividends: when you become a Thai tax resident changes how the dividend is taxed in your own hands, and how foreign income is taxed differently from company dividends — money you bring in from abroad follows a separate set of rules. If you already split your time between two countries, a typical example of splitting income between two tax residencies shows the kind of year-by-year accounting that question usually needs.