Thailand Dividend Tax: Withholding Tax for Foreign Shareholders

Who This Article Is For

If you hold shares in a Thai company, or are considering investing or setting up a holding structure through a Thai company, this article clarifies a question that often gets confused: before dividend money reaches a shareholder’s hands, how many layers of tax does it actually go through in Thailand? And are there legitimate ways for foreign shareholders to reduce that tax burden?

This article is for investors — wherever they are based — who are planning a Thai business structure, or encountering Thailand’s dividend tax system for the first time. It focuses on understanding the framework, not on tax-filing mechanics, and does not substitute for case-specific tax advice.

Core Framework: Thailand’s Two-Layer Dividend Tax Structure

The tax logic behind dividends paid by Thai companies is essentially “one layer at the company, one layer at the shareholder” — two separate taxes levied at different stages.

Layer One: Corporate Income Tax (CIT)

The Corporate Income Tax (CIT) rate for ordinary Thai companies is 20% (in effect for most standard-sized companies since 2015). After a company earns a profit, it first pays 20% CIT; the remaining 80% is the after-tax profit available for distribution.

Layer Two: Dividend Withholding Tax (WHT)

When a company distributes its after-tax profit as dividends to foreign shareholders, it must withhold Withholding Tax (WHT) at 10% on the dividend. This tax is deducted directly by the dividend-paying company at the time of payment and remitted to Thailand’s Revenue Department; the shareholder receives the net amount after deduction.

The legal basis for foreign corporate shareholders is Section 70 of the Revenue Code; the dividend-paying company must file Form CIT 54 and remit payment by the 7th of the month following the payment month. Foreign individual shareholders are covered under Section 50(2)(e), at the same 10% rate.

The Real Impact of the Two-Layer Tax Burden

Combined, the two layers work like this: on a pre-tax profit of 100, paying 20% CIT leaves 80; withholding 10% WHT on that 80 (i.e., 8) means a foreign shareholder actually receives 72 — that is, 72% of the pre-tax profit.

This “72 reality” is the baseline every foreign investor should use when analyzing returns on a Thai investment. Any analysis that mentions only one of the two taxes is incomplete.

Thai Corporate Shareholders Get an Exemption — Foreign Shareholders Do Not

By way of comparison, a Thai company that holds shares in another Thai company benefits from a “participation exemption” mechanism — one that does not apply to foreign shareholders:

• Thai corporate shareholders holding less than 25%: a default 50% exemption applies (the remaining 50% is included in taxable income)
• Thai corporate shareholders holding ≥25%, for at least 3 months before and after the holding period, with no cross-shareholding: can apply for a 100% exemption
• Companies listed on the Stock Exchange of Thailand (SET) receiving dividends from a Thai company: qualify for a 100% exemption after just 3 months of holding

This mechanism applies only between Thai domestic corporate entities and does not extend to foreign shareholders. So holding shares “through a Thai company as an intermediate layer” does not mean these exemptions apply — even when the intermediate layer is a qualifying Thai holding company, a foreign shareholder receiving dividends from that intermediate layer must still pay 10% WHT. The exemption only takes effect at the point where a Thai corporate shareholder receives dividends from another Thai company; it does not extend to the foreign-shareholder level.

Which Tax-Reduction Arrangements Suit Foreign Shareholders, and Which Don’t

Foreign shareholders in Thailand do not have a “standard exemption” the way Thai corporate entities do, but there are two legitimate tax-reduction routes, each with its own conditions:

Worth investigating:

• You have a Double Taxation Agreement (DTA) between your jurisdiction and Thailand, and the DTA rate is below the default 10% (not every DTA reduces the rate)
• Your investment has been approved for promotion by Thailand’s Board of Investment (BOI), and dividends are planned within the BOI exemption period or within 6 months after it ends
• You are a Taiwanese shareholder holding ≥25% of the capital of the dividend-paying company (the Thailand–Taiwan tax arrangement carries a preferential 5% rate)

Misconceptions not worth relying on:

• Assuming a DTA automatically lowers the tax — for most common jurisdictions with a Thai DTA (including Hong Kong, Singapore, mainland China and the UK), the DTA’s dividend rate is the same as the default rate, with no reduction
• Assuming an offshore holding company can bypass Thai WHT — WHT is withheld at source in Thailand, regardless of where the holding structure is based

Practical Action Points

Route One: Applying for Double Taxation Agreement (DTA) Benefits

Thailand has signed DTAs with more than 60 countries and territories, including Hong Kong, China, Singapore, the UK, and Taiwan.

First check whether your DTA actually lowers the rate.

Based on currently available information, the dividend-article rate under the Thai DTAs with Hong Kong, Singapore, mainland China and the UK is around 10% — the same as Thailand’s default WHT rate — so there is no reduction. Investors still get withheld at 10%; the DTA’s main function is to prevent the same income from being taxed again in your tax residence jurisdiction (by obtaining a tax credit), rather than saving tax on the Thai side. The exact terms depend on the individual DTA; check the treaty text before proceeding.

Special case for Taiwanese investors:

Thailand and Taiwan have no formal diplomatic relations, but a tax arrangement signed in the name of their respective representative offices is recognized as applicable by both tax authorities. Under the Thailand–Taiwan arrangement, the dividend rate is:

• Beneficial owner holds ≥25% of the capital of the dividend-paying company: 5% WHT
• Other cases: 10% WHT

The arrangement has applied since 2013 (confirm against the current text of the Thailand–Taiwan arrangement and current Revenue Department guidance).

The 5% rate is not automatic — the shareholder must hold ≥25% and actively apply for it.

The DTA application process: the Certificate of Residence (CoR) is key

A preferential DTA rate must be actively applied for; the core document is a Certificate of Residence (CoR) issued by the tax authority in your tax residence jurisdiction.

• The CoR must be submitted to the Thai dividend-paying company before the dividend is paid
• If it is not submitted before payment: the dividend-paying company must first withhold at the default 10% rate; the shareholder can apply to the Revenue Department for a refund afterward, generally within 3 years of the filing deadline
• The Revenue Department generally requires confirmation that the applicant is the true beneficial owner of the dividend, to rule out pure conduit structures

Route Two: Dividend Arrangements for BOI-Promoted Companies

Thailand’s Board of Investment (BOI) offers tax incentives for specific industries and projects.

BOI Section 31: CIT exemption

A BOI-approved promoted project can, depending on category and location, receive a CIT exemption of 5 to 8 years, with some projects reaching up to 13 years. During the exemption period, profit from the promoted activity is not subject to CIT — meaning the first layer of tax disappears.

BOI Section 34: dividend tax exemption

Section 34 provides that beneficiaries (including foreign shareholders) receiving dividends paid out of the profit of a promoted activity from a BOI-promoted company are exempt from income tax. However, note:

1. Six-month dividend window: the tax-exempt dividend must be distributed within 6 months after the CIT exemption period ends; if this deadline is missed, ordinary tax rates apply
2. A gray area for foreign corporate WHT: Section 34 uses the wording “exempt from income tax.” Whether this fully covers the WHT obligation that would otherwise apply to a foreign corporate shareholder under Section 70 depends on the specific terms of the promotion certificate — get case-specific legal advice to confirm

The Reality of Holding Structures

Some investors consider holding their shares in a Thai company through an offshore holding company (such as a holding entity set up in Hong Kong or Singapore).

What needs to be made clear:

• Under Section 70 of the Revenue Code, when a Thai dividend-paying company pays dividends to a foreign corporate entity (including an offshore holding company), WHT is withheld at source in Thailand regardless of where the holding company is based
• If an offshore holding company wants to claim DTA benefits, besides submitting a CoR, it generally must also meet the DTA’s beneficial-ownership requirements, and pass the Revenue Department’s review of whether the structure has genuine commercial substance
• Under international tax practice and Thailand’s increasingly rigorous enforcement trend, a pure conduit holding structure lacking genuine commercial activity risks having its DTA benefits denied — get advice from a professional with Thai and international tax expertise before using such a structure

For case-specific tax arrangements, consult a Thailand-based tax advisor; for general questions about how the system works, ask Zagdim.

Common Misunderstandings

Misunderstanding 1: Having a DTA With Thailand Automatically Means Lower Tax on Dividends

The dividend-article rate under the Thai DTAs with Hong Kong, Singapore, mainland China and the UK is around 10%, the same as Thailand’s default WHT rate. Having a DTA does not mean paying less WHT in Thailand; its main function is to prevent the same income from being taxed twice in your residence jurisdiction.

Misunderstanding 2: Taiwanese Shareholders Automatically Get the 5% Rate

The 5% rate under the Thailand–Taiwan arrangement applies only if the beneficial owner holds ≥25% of the capital of the dividend-paying company, and only after actively submitting a CoR application. If the holding is below 25%, or no application is made, the withholding stays at 10%.

Misunderstanding 3: BOI Companies Are Completely Tax-Exempt, Including on Dividends

BOI Section 31 primarily exempts CIT; the Section 34 dividend exemption has a time limit (within 6 months after the exemption period), and whether it fully covers foreign corporate WHT depends on the specific promotion certificate — it is not an automatic, full exemption.

Misunderstanding 4: An Offshore Holding Company Can Bypass WHT

WHT is withheld at source in Thailand, regardless of where the shareholder is incorporated. When an offshore holding company receives a Thai dividend, WHT is still withheld at the Thai end.

Misunderstanding 5: A Thai Company Only Pays Tax Once

CIT (at the company level) and WHT (at the shareholder level) are two separate taxes, levied independently. What a foreign shareholder actually receives is the amount left after both layers of tax.

Thailand Dividend Tax FAQ

Q: What’s the difference in WHT rates between foreign individual and foreign corporate shareholders?

At the default rate, both are 10%. The legal basis differs (corporate: Section 70; individual: Section 50(2)(e)), but the actual withholding rate is the same. If your jurisdiction has a DTA with Thailand and you meet the conditions, you can apply for the DTA rate — in both cases, a Certificate of Residence must be submitted before payment.

Q: How do you apply for a Certificate of Residence (CoR)?

The CoR is issued by the tax authority in your tax residence jurisdiction — for example, Hong Kong’s Inland Revenue Department or Taiwan’s Ministry of Finance. The process: the foreign shareholder applies for a CoR from their own local tax authority, then submits it to the Thai dividend-paying company, which can then withhold at the DTA rate. The application process varies by jurisdiction and generally requires an application form plus supporting documents. The key point: the CoR must be submitted before the Thai dividend is paid; submitting it afterward does not qualify for the preferential rate — the only option then is to apply for a refund (generally within 3 years of the filing deadline).

Q: If 10% has already been withheld, can it still be refunded?

Yes, a refund can be applied for. This is generally submitted to the Revenue Department within 3 years of the filing deadline, and requires the withholding tax certificate plus the relevant DTA documents (including the CoR). The refund process is fairly involved; it’s advisable to engage a Thailand-based tax advisor to handle it.

Q: What happens to dividend tax after a BOI company’s CIT exemption period ends?

Once the CIT exemption period ends, the company goes back to paying 20% CIT. To still benefit from the Section 34 dividend exemption, the dividend must be paid within 6 months after the exemption period ends; if that deadline is missed, ordinary tax rules apply. How far Section 34 covers foreign corporate WHT depends on the specific promotion certificate.

Q: Taiwan has no formal diplomatic relations with Thailand — does the Thailand–Taiwan arrangement have legal effect?

Based on current information, the tax arrangement signed in the name of Thailand’s and Taiwan’s representative offices is recognized as applicable by both tax authorities, with tax effect equivalent to an ordinary DTA. Before applying for the preferential rate, confirm the arrangement is still in effect, and follow current guidance from Thailand’s Revenue Department and Taiwan’s Ministry of Finance.

Q: Does the 20% CIT rate apply to all Thai companies?

20% is the standard corporate rate. Exceptions include: small and medium-sized enterprises have a tiered rate arrangement, and BOI-promoted companies have zero CIT during their exemption period. This article uses the standard company as its baseline; follow the latest rules from Thailand’s Revenue Department (rd.go.th) for specifics.

Q: If a Thai company has both BOI-promoted and non-promoted income, how is dividend tax calculated?

Generally, the source of the dividend needs to be distinguished — a dividend from BOI-promoted profit may qualify for the Section 34 exemption, while a dividend from non-promoted income is taxed under the ordinary rules (including WHT). Thai tax authorities generally require companies to keep separate accounts for the two types of profit; mixing them together can affect the exemption claim. Follow the specific terms of the promotion certificate and your tax advisor’s guidance.

Disclaimer

This article is based on publicly available guidance from Thailand’s Revenue Department (rd.go.th) and Board of Investment (boi.go.th) as of June 2026, and is provided for general information only. Tax rates, exemption conditions and filing procedures may change as regulations are updated; the terms of each DTA are governed by the treaty text itself and the current interpretation of the relevant tax authorities. Tax arrangements vary by individual and company circumstances — consult a professional qualified in Thai tax before making any business decision.

Have a question about this guide? Leave a comment below, or ask Zagdim directly.