Marginal Effective Tax Rates in Thailand

Abstract

The paper estimates the overall marginal effective tax rate for savers in Thailand and marginal effective tax rates classified by source of funds, category of owners and type of firms in Thailand. The marginal effective tax rate for domestic savers that include local investors and tax-exempt institutions are analyzed in the case of Thailand. As a byproduct, the marginal host country effective tax rates of foreign investors are also obtained in the case of Thailand that has no double tax treaties with other countries. The overall marginal effective tax rate for domestic savers is approximately 38.4 percent. In addition, the marginal effective tax rate for domestic savers in companies listed in the Security Stock of Exchange is 22.2 percent and that in unlisted firms is approximately 39.8 percent. The differential is due to a heavier use of owner equity whose savers in the non-SET firms have to bear capital gains tax and a less reliance of debt finance whose ultimate owners of non-SET firms bear a larger effective tax. For foreign investors, the overall marginal effective tax rate paid to Thailand is about 31.6 percent, much higher than tax rates of domestic saversb as foreigners do not benefit from dividend tax credit.