Insights

Thailand’s position on Article 12 (Royalties) of the recent 2025 OECD report reflects a robust commitment to source-based taxation for cross-border payments. Unlike the OECD’s preferred move towards residence-based taxation for royalties, Thailand continues to advocate for the right of the state where the income arises to collect tax. By expanding the definition of royalties and establishing clear source rules, Thailand ensures that a broad spectrum of payments for technology, equipment, and expertise remains subject to local withholding tax.

In the recent 2025 OECD report, Thailand has reaffirmed its position as a "Non-Member Economy" that prioritizes source-based taxation. By maintaining specific reservations on Article 5 - Permanent Establishment or “PE”, Thailand aims to ensure that foreign enterprises contributing to its economy through sustained physical or economic presence do not circumvent local tax obligations. These positions reflect a cautious approach toward the global trend of narrowing PE definitions, focusing instead on traditional and service-based activities.

The Royal Thai Government Gazette has announced the Labour Protection Act (No. 9), B.E. 2568 (2025) (“Amendment No. 9”), which amends key provisions under the Labour Protection Act B.E. 2541 (1998) (“Labour Protection Act”). The amendments are effective from 7th December 2025 introduce new protections, leave entitlements and employer compliance requirements.

The rapid shift toward hybrid and remote work has created a complex challenge for multinational enterprises: when does an employee’s home office create a taxable presence, or Permanent Establishment (PE), in another country? The recent 2025 OECD report addresses this head-on, providing much-needed clarity through revised commentary on Article 5 (Permanent Establishment or PE). For businesses with cross-border talent, these changes offer a more practical framework for assessing tax exposure in jurisdictions where employees may be working remotely.

Cloud & Software Services and Withholding Tax: Where Does Thailand Draw the Line?

Thailand’s Cabinet Approves Draft Financial Hub Act to Boost Global Investment To position Thailand as a key global financial hub, the Thai Cabinet approved the draft Financial Act on February 4, 2025, as proposed by the Ministry of Finance. This legislation seeks to attract foreign financial businesses to invest in Thailand, while simultaneously fostering the development of the nation’s financial industry, workforce, and infrastructure to meet international standards.

New technologies often create new markets that existing regulatory frameworks are not equipped to govern. Sometimes, these emerging markets are so novel that they create uncertainty or gaps in the tax system. The challenge for governments is to devise new tax rules that neither stifle the development of these markets nor create unfair tax loopholes. This is not an easy task.

Last year, the Thai Revenue Department (“TRD”) issued Departmental Instructions No. Paw 161/2023 and Paw 162/2023 concerning foreign-sourced income. According to these instructions, any Thai tax resident with foreign-sourced income will be taxed in Thailand when such income is remitted into the country, regardless of when you remit it.

On 15 March 2024, the Board of Investment (“BOI”) published an Announcement No. Sor 2/2024 by virtue of the Investment Promotion Act 1977, to promote investment in digital businesses in response to changing business operations and technology in the digital industry.

As we reflect on the challenges and opportunities of the past year, it's evident that many Thai entities have faced heightened scrutiny through tax audits, particularly amidst requests for tax refunds or company dissolutions. As we embark on 2024, we're gearing up with renewed determination to tackle this challenge head-on. We're excited to announce our initiative to raise awareness surrounding tax audits in these specific scenarios.

On 7 March 2024, the Cabinet agreed and approved the principle of OECD Pillar Two, also known as Global Minimum Tax, and tasked the Thai Revenue Department (“TRD”) with formulating the corresponding legislation.

The Thai government has been developing a new long-term resident visa programme as part of an effort to improve the country’s position as a hub for skilled professionals, and a residence destination for high net-worth individuals. The programme is expected to comprise four new classes of long-term resident visas: (1) professionals living in Thailand but working for an overseas employer, (2) highly skilled professionals employed in Thailand, (3) high net-worth persons, and (4) high net-worth retirees.

Thailand’s visa rules create major inconveniences for certain categories of foreigners. As a provider of Thai business advisory services, we explore these issues and suggest ways to fix the situation.

The Ministry of Commerce recently withdrew its endorsement of Thailand joining the CPTPP over concerns that the trade deal may harm farmers.

As businesses adjust to new realities during the COVID-19 pandemic, changes in transfer pricing and other areas will have significant tax planning implications, which we outline here.

With Thai businesses and citizens tightening their belts amid the COVID-19 economics crisis, we examine whether the Thai government's current tax reduction will provide sufficient help.