What are dividends? The key points for business owners in 2026

Dividends are the share of profit that a company distributes to its shareholders after deducting expenses and corporate income tax. For business owners in Chiang Mai looking for help with this, understanding the definition and the lawful process for paying dividends is essential, because if the documents are not handled correctly, the company risks being called in for a retroactive audit by the Revenue Department. The accounting services in Chiang Mai team at YMTD is ready to clear up your questions so you understand this topic thoroughly in 2026.

Why managing dividends matters to your business in 2026

Paying dividends is not simply taking money out of the company and giving it to shareholders; it is a legal and tax process with serious binding consequences. If a company has no retained earnings but pays dividends anyway, it breaches the Civil and Commercial Code. In addition, even a small error in calculating withholding tax can turn into penalties and surcharges in the future. For business owners who want confidence at every step of running the business, professional accounting services in Chiang Mai from YMTD help plan dividend payments in line with liquidity and tax requirements, so your business grows steadily and sustainably.

Steps and method for calculating withholding tax on dividends

1. Conditions before paying dividends

Before paying dividends, the business must make sure the company has "retained earnings" in its financial statements, and the payment must be properly approved by a shareholders' meeting, with minutes of the meeting prepared as supporting evidence every time.

2. Withholding tax rate

Under the tax law in 2026, when dividends are paid to an individual resident in Thailand, the company must withhold tax at a rate of 10% of the dividend actually paid. For example, if a dividend of 100,000 baht is approved, the company must withhold 10,000 baht in tax and actually pay the shareholder 90,000 baht.

3. Remitting the tax

After withholding the tax, the business must file the withholding tax return (P.N.D.2) with the Revenue Department by the 7th of the following month (or the 15th if filed online).

Common mistakes in paying dividends and how to fix them

From our accounting services in Chiang Mai team's experience, the mistakes business owners most often encounter are:

  • Paying dividends despite accumulated losses: This is a serious breach of business law that usually happens because the figures in the financial statements are not understood.
  • No minutes of the meeting recorded: Even if the money was actually transferred, without minutes of the shareholders' meeting the Revenue Department may treat it as a personal withdrawal, which harms the shareholder's own personal income tax position.
  • Forgetting to file P.N.D.2: Resulting in unnecessary penalties and surcharges.
  • Incorrect bookkeeping: Many companies record dividends as an expense, but for tax purposes dividends are not an expense in computing corporate income tax.

To make bookkeeping easy and compliant with the law in 2026, an experienced accounting adviser greatly reduces these risks.

Summary and services from YMTD Accounting Partner

Paying dividends in 2026 calls for care in checking retained earnings, preparing the meeting documents, and calculating the withholding tax accurately. If you are a business owner in Chiang Mai who wants a professional to take care of accounting and tax, so you can focus fully on growing the business.

Contact YMTD Accounting Partner Chiang Mai, a quality accounting firm that understands what business people need, ready to take care of you from company registration through to tax filing and the annual audit, turning the hard parts into easy ones for you.

For advice on accounting and tax:
Tel: 081-542-3019
LINE: @ymtd
Contact YMTD Accounting Partner Chiang Mai. We are pleased to serve you to a professional standard.