Taxation - Thailand

26.02.2015

Withholding Tax

RateRemarks
All debt securities, Commercial Papers (CPs), Certificates of Deposit (CDs) except government bonds
15% on interest paymentsNo tax refund possible. CPs or CDs sold at discount from face value are not subject to tax on interest, but are subject to capital gains tax (tax on discount) as shown in the table below. Current practice is not to deduct withholding tax upon redemption of most of the Bills of Exchange (to be confirmed on a case-by-case basis).
Government bonds
0%MOF, BOT and financial instruments organised specifically for lending to promote agriculture, commerce or industry.
15%Other government bonds.
Equities, Unit Trusts
10% on dividend paymentsNo tax refund possible.

Capital Gains Tax

RateRemarks
All debt securities
15%Foreign institutional investors are subject to a 15% capital gains tax (CGT) on the salea of securities in Thailand. Both parties usually agree to deduct the CGT directly from the cash countervalue of the transaction. However, any securities holders resident in countries that have signed a double taxation treaty with Thailand may qualify for exemption from or a reduction of CGTb. Current practice is not to deduct withholding tax upon redemption of most of the Bills of Exchange (to be confirmed on a case-by-case basis).

CBL customers who buy and sell securities in this market will themselves be responsible for paying any capital gains tax, penalties or interest that may be charged by the tax authorities.
Commercial Papers (CPs), Certificates of Deposit (CDs)
15% on discount, that is, face value minus purchase priceCPs or CDs sold at face value with interest payments are not subject to capital gains tax (tax on discount) but are subject to withholding tax (as shown in the table above).

For individual investors of discount CPs, the 15% tax on the discount applies to the first individual investor only; subsequent individual investors are exempt from this tax.

a. Investors must declare their initial investment cost to their selling broker in order for the broker to withhold CGT.
b. If there is a double taxation treaty, investors can either be exempt from CGT or taxed at a lower rate, depending on the treaty.