Dividend and Legal Reserve in Thailand – How to pay the Dividend and set a Legal Reserve in Thailand
Dividend will be paid when the company has a profit (sector 1201) having retained earning in account in case of deficit earning could not be paid. Dividend will be unanimously approved by Ordinary Annual Shareholder Meeting. In case has Preferred Share, this dividend will be paid to Preferred Share before payment to Common Share.
When payment of dividend, the company must first set the legal reserve for the company at least 5% of company’s profit for all time of dividend payment until this reserve reaches 10% of company’s capital (sector 1202).
QA – Dividend and Legal Reserve in Thailand
Q1: In Thailand has the Tax Credit for dividends?
Panwa: Any taxpayer who domiciles in Thailand and receives dividends from a juristic company or partnership incorporated in Thailand is entitled to a tax credit of 3/7 of the amount of dividends received. In computing assessable income, taxpayer shall gross up his dividends by the amount of the tax credit received. The amount of tax credit is creditable against his tax liability.