Issue of Personal Income Tax: The Choice of Tax Payment for Interest Income and Dividends.

Abstract

          Currently, personal income tax planning—particularly regarding interest and dividend income—has become increasingly important, as these sources represent significant income for investors and savers. This article analyzes tax considerations and legal benefits to enable taxpayers to select the most appropriate and accurate tax payment method based on their actual tax burden. The purpose of this academic article is to study the issues related to personal income tax, specifically in cases where individuals must choose how to pay taxes on income derived from interest and dividends. The findings reveal that under Section 40(4)(a) of the Revenue Code, when the payer is responsible for withholding tax at a rate of 15% in accordance with Section 50(2)(b), taxpayers have two options: (1) accept the 15% withholding tax as a final tax, or (2) include such income with other income on the P.N.D.90 tax return and calculate tax under the progressive rate structure. For dividends (Section 40(4)(b)) from legal entities established under Thai law, which are eligible for tax credit under Section 47 bis, the taxpayer may opt to pay tax at a flat rate of 10% as a final tax without including it with other income, in accordance with Section 48(3), paragraph two. Alternatively, they may include such dividends with other income to benefit from the tax credit under Section 47 bis. However, in doing so, all dividend income received during the tax year must be included; selective inclusion of certain items is not permitted. The knowledge presented in this article supports effective tax planning, helps reduce complexity, and minimizes the risk of errors in calculating personal income tax.