Aranong Chaitong
CEO, Prospect REIT Management Co., Ltd.
Manager of the Prospect Logistics and Industrial Property Fund (PROSPECT)

At the beginning of the year, I often receive questions from colleagues and friends about:

  • Can individuals like us choose how to file taxes on REIT dividends? Should we include the total dividend income and claim the dividend tax credit, or opt for Final Tax where tax is withheld and settled?
  • How does the tax treatment of REITs compare to mutual funds, such as Property Funds?

Here are the answers: enlightened

  • REIT dividends are classified as assessable income under Section 40(4)(c). You can choose to file your taxes at year-end by including the dividend income and claiming the dividend tax credit, or opt for Final Tax.
  • Currently, mutual funds, including Property Funds, also file taxes at year-end and have the same filing options as REITs.
  • As of August 20, 2019, all mutual funds have transitioned from assessable income under Section 40(8) to Section 40(4)(c), aligning with REITs.

REIT dividends have always been classified as assessable income under Section 40(4)(c). Initially, income from Property Funds was classified under Section 40(8), but this changed with the Debt Instrument Act of 2019, effective August 20, 2019, to Section 40(4)(c), similar to REITs.

Therefore, the option previously available to Property Funds to allow the payer to withhold or not withhold tax at source is no longer applicable. The payer must withhold tax at source, but we can choose whether to include this dividend income when filing taxes at year-end and use the dividend tax credit, or to use Final Tax where tax is withheld and settled without including it in the year-end filing.

However, if you receive dividends from various investments, such as mutual funds, stocks, and REITs, you must be cautious. If you choose to file your income tax at year-end by including the dividend income, you must include all dividend income from all investments. You cannot selectively include some and treat others as Final Tax.

Things to Watch Out For:
If you choose a filing method, you must include all dividend income from your investments. Don’t hesitate or be indecisive. Check the tax withholding certificate to see which income type you selected.

Recommendation:
Try calculating your taxes first to see which method suits you best. Make sure before filing.

For more information, visit:
https://www.rd.go.th/fileadmin/user_upload/kormor/newlaw/dc689.pdf Debt Instrument Act 2019
https://www.rd.go.th/553.html Assessable Income under Section 40

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Email: [email protected]