Corporate Tax in Thailand 2026 for Taiwanese-Owned Companies: CIT 20%, VAT 7%, Withholding Tax and Dividend Repatriation

Key takeaways

• Thai corporate income tax (CIT) is 20% on net profit. Qualifying SMEs pay 0% on the first THB 300,000 and 15% up to THB 3 million. BOI-promoted companies may enjoy a CIT holiday of 3 to 13 years.
• VAT stays at 7% until 30 September 2027 under Royal Decree No. 807 (B.E. 2569). The statutory rate is 10%; the 7% rate has applied continuously since April 1999 and is extended by royal decree each year.
• Thailand collects tax largely through withholding at source. Domestic rates run from 1% to 5%; payments to foreign recipients are withheld at 10% (dividends) or 15% (interest, royalties, service fees) unless a treaty reduces them.
• Under the Taiwan–Thailand tax agreement, dividends paid to a Taiwanese parent holding at least 25% are withheld at 5% instead of 10%; royalties at 10%; interest at 10% or 15%.
• Dividends paid out of BOI-exempt profits are exempt from withholding tax entirely during the holiday period.
• Transfer pricing: companies with revenue of THB 200 million or more must file a related-party disclosure form with the annual return; a local file must be ready within 60 days of request.
• Pillar Two: Thailand's top-up tax applies from fiscal years starting 1 January 2025 to groups with consolidated revenue of EUR 750 million or more. Most Taiwanese SMEs are outside scope, but listed groups are not.
• The five most common errors by Taiwanese subsidiaries: paying the Taiwan parent for services without withholding 15%, booking management fees without transfer pricing support, missing the half-year CIT return, claiming input VAT on non-compliant invoices, and distributing dividends before the DBD filing is complete.

1. Why Taiwanese companies get Thai tax wrong

Taiwan's tax system is built around self-assessment, annual filing and relatively light withholding. Thailand's is the opposite: the Revenue Department collects most tax at the point of payment, through monthly withholding returns, and treats a missed withholding as the payer's liability. A Taiwanese subsidiary that pays its parent for IT support, management or royalties without withholding will owe the tax plus a 1.5% monthly surcharge, even though the parent received the money.

This guide sets out the rules a Taiwanese-owned Thai company must follow in 2026, in the order the Revenue Department will check them: corporate income tax, VAT, withholding tax, and finally how to send profits home.

Residence and source of income: who Thailand can tax

Thailand applies two principles at the same time. Under the residence principle, a Thai resident is taxed on income from everywhere. Under the source principle, anyone, resident or not, is taxed on income that arises in Thailand. Which principle applies decides what a Taiwanese group pays in Thailand.

What this means in practice for Taiwanese groups:

• Thai subsidiary: because it is resident by incorporation, its income earned outside Thailand (for example commissions or interest received from Taiwan) is included in its Thai CIT base.
• Taiwan parent with people in Thailand: a Taiwanese company whose employee or agent in Thailand regularly negotiates or concludes sales may be treated as carrying on business in Thailand under s. 76 bis, and then pays Thai CIT on that income, not just withholding tax.
• Source follows the work, not the payment: salary paid in Taiwan to a Taiwanese manager working in Thailand is Thai-source income under s. 41 para. 1 and must be taxed in Thailand, wherever and by whoever it is paid.
• Expatriates who stay 180 days or more: they become Thai tax residents, and foreign income earned from 1 January 2024 is taxable in the year it is brought into Thailand (Por. 161/2566), subject to any applicable tax treaty.

2. Corporate income tax (CIT)

Rates

A Thai subsidiary of a Taiwanese company is a Thai company and pays 20% on worldwide income. A Taiwanese company that merely sells into Thailand without a permanent establishment pays no CIT, but its Thai customers must withhold on certain payments.

Tax base and common adjustments

Net profit is accounting profit adjusted under Sections 65 bis and 65 ter of the Revenue Code. Items Taiwanese finance teams most often get wrong:

• Entertainment expenses: deductible only up to 0.3% of revenue or paid-up capital (whichever is higher), capped at THB 10 million.
• Management fees to the parent: deductible only with a written agreement, proof of services actually rendered and arm's-length pricing. "Head office allocation" without documentation is routinely disallowed.
• Losses: carried forward 5 years; no carry-back.
• Depreciation: statutory maximum rates (buildings 5%, machinery 20%, computers 33.3%); accelerated depreciation available for SMEs and certain BOI activities.
• Provisions and reserves: generally not deductible until the liability is actually incurred (severance provisions are the classic example).
• Donations: deductible up to 2% of net profit (public charity), with an additional 2% for education and sports.

Filing and payment

3. Value added tax (VAT)

Rate and registration

• Rate: 7% (6.3% VAT + 0.7% municipal tax), extended by Royal Decree No. 807 (B.E. 2569) for VAT liabilities arising up to 30 September 2027. The statutory 10% rate would otherwise apply, and the extension has been renewed annually for nearly three decades; budget for 7% but keep contracts flexible on the rate.
• Registration threshold: annual revenue above THB 1.8 million (Form Por.Por.01, before exceeding the threshold or within 30 days after).
• Zero-rated: exports of goods, services performed in Thailand and used entirely abroad, international transport.
• Exempt: unprocessed agricultural products, educational and healthcare services, domestic land and water transport (domestic air transport is taxable), lease of immovable property, small businesses under the threshold.

Monthly compliance

• Por.Por.30 filed and paid by the 15th of the following month (23rd if e-filed).
• Input VAT is creditable only against a tax invoice that meets the formal requirements of Section 86/4: the words "ใบกำกับภาษี" (tax invoice), seller's and buyer's name, address and tax ID, serial number, date, description, VAT amount shown separately. Thai-language tax invoices from suppliers that omit the buyer's tax ID or head-office/branch number are a leading cause of disallowed input VAT in Taiwanese subsidiaries.
• Input VAT on entertainment, passenger cars (up to 10 seats) and their fuel is non-creditable.
• e-Tax invoice and e-receipt are available and increasingly expected by large Thai customers.

VAT on services bought from the Taiwan parent

When the Thai subsidiary pays its Taiwanese parent for services used in Thailand (software licences, engineering support, cloud hosting), the Thai payer must self-assess 7% VAT under Section 83/6 (Form Por.Por.36, by the 7th of the following month) and may then credit it as input VAT in the month in which the Por.Por.36 tax is paid. The cash effect is neutral for a fully taxable business, but failure to file Por.Por.36 attracts penalties and blocks the input credit.

4. Withholding tax (WHT)

Domestic withholding (payments between Thai entities)

Monthly returns are due by the 7th of the following month (15th if e-filed). The payee receives a withholding certificate (Form 50 bis) and credits the amount against its own tax.

Cross-border withholding (payments to Taiwan)

Under Section 70 of the Revenue Code, a Thai payer must withhold final tax on the following payments to a foreign company that does not carry on business in Thailand:

PND.54 is due by the 7th of the month following payment. The Thai payer should obtain from the Taiwanese recipient a Certificate of Residence issued by Taiwan's National Taxation Bureau to apply treaty rates, and should keep it on file for the Revenue Department.

The most expensive mistake: Thai subsidiaries often treat "technical service fees" paid to the Taiwan parent as exempt services under the treaty, when the Revenue Department recharacterises them as royalties (15%, or 10% under the treaty) because they involve the transfer of know-how or the right to use technical information. The contract wording, the deliverables and the invoice description all matter.

Payments to Taiwanese individuals

Fees paid to a Taiwanese individual consultant who performs the work outside Thailand risk being treated as Thai-source under Section 41, paragraph one (income from the business of an employer in Thailand). The safer position is to rely on the treaty exemption, supported by a Certificate of Residence and evidence that the work was performed outside Thailand. Work performed inside Thailand is Thai-source employment or service income from day one, is withheld under PND.1 or PND.3, and requires a work permit.

5. Repatriating profits to Taiwan

Dividends: the standard route

• The Thai company closes its books, has the accounts audited and holds the AGM (within 4 months of year-end).
• The AGM or board resolves to pay a dividend. Under the 2017 amendment to the Civil and Commercial Code, the dividend must be paid within 1 month of the resolution.
• The company must first set aside a legal reserve of 5% of net profit each time a dividend is paid, until the reserve reaches 10% of registered capital (Section 1202).
• Dividends may only be paid out of retained profits; no dividend may be paid while there are accumulated losses.
• The company withholds 10% (or 5% under the treaty where the Taiwanese parent holds 25% or more) and files PND.54 by the 7th of the following month.
• The remitting bank requires the dividend resolution, audited accounts, withholding evidence and, for amounts of USD 200,000 or more, supporting documents and a Foreign Exchange Transaction form; the Bank of Thailand does not restrict outward dividend remittance when these are provided.

BOI companies: dividends paid out of profits that enjoyed a CIT holiday are exempt from withholding tax if paid during the holiday period or within 6 months after it ends (Investment Promotion Act, Section 34). Dividends paid out of non-promoted profits are taxed normally, so maintain separate profit accounts. For how BOI promotion is obtained, see The Complete Guide to Establishing Your Business in Thailand 2026: BOI, IEAT and FBL .

Taiwan side

The Taiwanese parent includes the Thai dividend in its taxable income at 20% and credits the Thai withholding tax under Article 22 of the agreement and Section 3 of Taiwan's Income Tax Act, up to the Taiwan tax attributable to that income. Keep the PND.54 receipt and the Thai withholding certificate, legalised where the National Taxation Bureau requires it. Because Thailand's 20% CIT is above Taiwan's 14% low-tax threshold, a Thai subsidiary is generally not a controlled foreign company for Taiwan CFC purposes; an intermediate holding company in a low-tax jurisdiction may be.

Alternatives to dividends

Fees and royalties reduce Thai taxable profit, which is why the Revenue Department audits them. The safest structure is one where each route is supported by a contract, a transfer pricing analysis and evidence of performance.

6. Transfer pricing and Pillar Two

Transfer pricing (Sections 71 bis and 71 ter)

• Companies with annual revenue of THB 200 million or more must file the related-party disclosure form with PND.50 and prepare a local file, to be submitted within 60 days of a Revenue Department request.
• The Revenue Department may adjust income and expenses between related parties to arm's-length values and assess tax within the normal audit period: a summons within 2 years of filing, extendable to 5 years where there is evidence of evasion, and up to 10 years where no return was filed.
• Penalty for failing to file the disclosure form: up to THB 200,000.
• Country-by-country reporting applies to groups with consolidated revenue of THB 28 billion or more.

Even below the THB 200 million threshold, a Taiwanese subsidiary paying management fees or royalties to its parent should hold a benchmarking study; the Revenue Department's power under Section 65 bis (4) to adjust non-arm's-length prices applies regardless of size (Thailand has no general anti-avoidance rule).

Pillar Two top-up tax

The Emergency Decree on Top-up Tax B.E. 2567 implements the OECD global minimum tax from fiscal years beginning on or after 1 January 2025. Multinational groups with consolidated revenue of EUR 750 million or more in at least two of the preceding four years pay a top-up tax to bring the effective rate in Thailand to 15%. The main effect for Taiwanese listed groups is that BOI tax holidays lose part of their value; the BOI has introduced alternative incentives (cash grants through the Competitiveness Enhancement Fund) in response. Groups near the threshold should model the impact before relying on a CIT holiday.

7. Other taxes to budget for

8. Annual compliance calendar for a Thai subsidiary (31 December year-end)

9. Five mistakes Taiwanese subsidiaries make most often

• Paying the parent without withholding. Every cross-border payment to Taiwan should be classified (dividend, interest, royalty, service) before it is made, and PND.54 filed. The Thai company is liable for unwithheld tax plus 1.5% per month.
• Head-office charges with no paper. An intercompany agreement, evidence of services and a transfer pricing analysis are needed before the expense is deductible.
• Ignoring PND.51. The half-year return based on estimated profit is unfamiliar to Taiwanese finance teams; underestimating by more than 25% costs a 20% surcharge.
• Claiming input VAT on defective tax invoices. Check buyer tax ID, branch number and the words "tax invoice" on every supplier invoice.
• Paying dividends out of order. Dividends before the legal reserve, before the audited accounts are approved, or while accumulated losses exist are void against creditors and expose directors to personal liability.

Thai corporate tax is not high by regional standards, but it is procedural: the Revenue Department enforces through monthly withholding returns, formal tax invoices and documentation of related-party charges rather than through the headline rate. A Taiwanese subsidiary that builds its monthly calendar around PND.1/3/53/54, Por.Por.30/36 and the half-year PND.51, classifies every payment to the parent before it is made, and keeps BOI and non-BOI profits separate will rarely have a problem repatriating dividends. If a dispute with a Thai counterparty or the authorities does arise, see Debt Recovery in Thailand 2026 for how Thai courts and enforcement work.

Louis Group's Bangkok and Taipei offices provide Thai tax compliance review, cross-border payment classification, transfer pricing documentation, BOI incentive planning and dividend repatriation support for Taiwanese-owned companies, in Chinese, Thai and English.

This article reflects Thai and Taiwanese law and administrative practice in force as of October 2026 and is provided for general information only. It does not constitute legal or tax advice. Rates, thresholds and treaty positions may change; please consult a qualified adviser on your specific circumstances.

Related reading

• The Complete Guide to Establishing Your Business in Thailand 2026: BOI, IEAT and FBL
• Debt Recovery in Thailand 2026: Prescription, Court Fees, Enforcement and Contract Design

Frequently asked questions (FAQ)

What is the corporate income tax rate in Thailand in 2026?

20% of net profit for standard companies. SMEs with paid-up capital of THB 5 million or less and revenue of THB 30 million or less pay 0% on the first THB 300,000 and 15% up to THB 3 million. BOI-promoted activities may be exempt for 3 to 13 years.

Is Thai VAT still 7% in 2026?

Yes. Royal Decree No. 807 (B.E. 2569) keeps the rate at 7% for VAT liabilities arising up to 30 September 2027. The statutory rate is 10%.

How much tax is withheld on dividends from Thailand to a Taiwanese parent company?

10% under domestic law, reduced to 5% under the Taiwan–Thailand tax agreement where the Taiwanese company holds at least 25% of the Thai company. Dividends paid from BOI-exempt profits during the holiday period are exempt.

Does the Thai subsidiary have to withhold tax when paying its Taiwanese parent for services?

Yes, 15% under Section 70 unless the treaty exemption for business profits applies (no permanent establishment in Thailand and the payment is not a royalty in substance). The subsidiary must also self-assess 7% VAT on Form Por.Por.36.

Can the Taiwanese parent credit Thai withholding tax in Taiwan?

Yes. Thai tax withheld on dividends, interest and royalties is creditable against Taiwan income tax on the same income, up to the Taiwan tax attributable, with the Thai withholding certificate and PND.54 receipt as evidence.

When is transfer pricing documentation required in Thailand?

Companies with annual revenue of THB 200 million or more must file a related-party disclosure form with the annual return and prepare a local file available within 60 days of request. Smaller companies should still hold benchmarking support for intercompany charges.

Does Pillar Two affect Taiwanese companies in Thailand?

Only groups with consolidated revenue of EUR 750 million or more. For those groups, Thailand's top-up tax (effective from 2025) raises the effective rate to 15% and reduces the benefit of BOI holidays.