Thailand Share Premium Corporate Tax
Whilst Thailand's Civil and Commercial Code permits an issue of shares at a premium and also prescribes that share premiums are part of the reserve funds of a company, Thailand's Revenue Code is silent about taxation of share premiums.
And because of that, proponents of share premium tax planning schemes in Thailand think it's all a bit laissez-faire.
But that's not entirely true and for international businesses contemplating a share premium tax plan in Thailand, below is a Thailand Revenue Department Tax Ruling that summarizes the opinion of the Revenue's tax lawyers about share premium tax plans.
Tax Ruling No Gor Khor 0702/3214
“A share premium, being the amount of money from an issue of shares that is over and above the par value of the shares, will not be considered as constituting the assessable income of the company. But if it is found that the share premium is too excessive for it to represent the goodwill of the company, compensation for the effects of share dilutions, or normal commercial dealings between shareholders, etc, or the share premium is actually disguised income such as disguised service fee, subsidy or financial assistance income then the share premium will be considered as constituting assessable income.”
This Tax Insight is general information only. It should not be used to determine any particular matter without consulting with an experienced Thailand tax advisor.