According to the liquidated company, if the liquidator already settled all liabilities then it still remain the money that need to divide and return to each shareholders as the ratio of holding share. In case of the shareholders’ equity as at the date of liquidation consist of the paid up capital, retained earnings and the capital reserve, then, the Company thought that each shareholders investment is each shareholders buying value  (it isn’t the par value of such share) and only the return amount to each shareholders that excess only such shareholders investment that is subjected as the assessment according to Revenue Code section 40(4)(f) of shareholders.

In case the shareholders are Thai resident or not, or they are juristic person registered follow the oversea law and did not operate in Thailand, does the Company have duty to withhold the tax from such benefit or not?

Panwa: Please note that the returning payment, the part that exceeded the capital (buying value) from the liquidated company  is considered as the assessment income according to Revenue Code section 40(4)(f).  When, the Company return such income to the shareholders, the Company should deduct the tax and submit to the Revenue Department as following :

  1. Incase of shareholders is an individual, it should calculate the withholding tax by the personal income tax rate except the shareholders isn’t Thai resident, the withholding tax calculate at rate 15% of the assessment income according to Revenue Code section 50(2).
  2. Incase of shareholders is a juristic person registered by oversea law and did not operate in Thailand, the withholding is calculated follow the payment of assessment income as the corporate income tax according to Revenue Code section 70.

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