Insights

The Thai Revenue Department (TRD) sets higher tax collection targets each year, increasing pressure on both the tax authority and taxpayers. The TRD is accelerating its transformation towards an AI-enabled, data-driven administration to enhance operational effectiveness and improve overall tax collection.

This tax news will be of interest to: Thai companies that are part of multinational enterprise (MNE) groups and engage in intercompany transactions. Introduction The Thai Revenue Department (TRD) has implemented an artificial intelligence (AI)–driven big data analysis system to improve operational efficiency, review taxpayers’ data, and assess potential risk areas or red flags. The system classifies taxpayers as either “good” or “risky”. If potential red flags are detected, the system notifies the TRD to consider initiating a tax audit. You may refer to our transfer pricing (TP) series Part 1: Potential Red Flags. In addition, the TRD has recently launched the QUICK BIG WIN scheme, which allows eligible taxpayers to receive tax refunds within a significantly shortened timeframe and without undergoing a tax audit if they meet the scheme’s criteria. This aims to enhance taxpayer liquidity and support business operations.

This tax news will be of interest to: Thai companies that are part of multinational enterprise (MNE) groups and engage in intercompany transactions. In our Part 3: we have provided guidance on how companies can minimise risks during a tax/TP audit related to intra-group services, as well as examples of evidence and supporting documents. In this article, you will find guidance on how to minimise risk related to royalty transaction.

transfer pricing regulations

This tax news will be of interest to: Thai tax entities with a total annual revenue of more than THB 200 million, which have also had transactions with related companies

As Thailand is currently combating the deadly COVID-19 pandemic, life seems to come a full circle for many multinational corporations (MNCs). More than a year back, Thailand taxpayers with cross-border related party transactions were wondering how to set transfer pricing for their related party transactions amidst high business uncertainty caused by this once-a-century pandemic. After having battled a nearly two-year business uncertainty, the transfer pricing margin question has come back to haunt many of the Thai taxpayers.

For many businesses, Thailand’s tax and legal infrastructure can seem dauntingly complex. In addition, finding the right tax and legal advice could also be challenging. Given that existing regulations can provide government officers with broad interpretative discretion, businesses must constantly keep themselves abreast of the latest compliance requirements and practices. There is no “one-size fits all” solution or approach to optimise tax savings and legal compliance. Each business is unique in its requirements and circumstances. The effective advisor must thoroughly understand the client’s business and objectives and be aligned with the client on the key priorities, financial capacity, real world commercial limitations, and risk appetite. Furthermore, in the course of obtaining tax and legal advice, businesses often feel the experience wanting. Lawyers, tax advisors, and accountants seem to speak in coded language and are removed from the commercial realities faced by the clients. Professional opinions and recommendations often seem complicated and impracticable. At Grant Thornton in Thailand, we understand the need for high-quality professional services that are tailored to each client’s unique requirements. We strive to provide clients with professional services that leverage our international and local expertise while maintaining approachability. This approach aligns with our core principles of collaboration and respect – the key pillars of our CLEARR values which form the basis of our client-centric approach to delivering services. Quality with a personal touch We strive to provide personalised advice to businesses of all sizes and across a broad spectrum of industries. At Grant Thornton, our partners and senior professionals are accessible to our clients, irrespective of the size and nature of the assignment. This involvement ensures that our clients’ needs are thoroughly understood by our team at all levels, and that our deliverables meet the client’s expectations and requirements. A relationship-led approach We believe in that our relationship with clients should not be transactional. Rather, the relationship should be founded upon trust and professionalism. At Grant Thornton, we strive to understand our clients’ businesses, industries, strengths, and also relative weaknesses in order to develop the appropriate solutions and advice for our clients. We take pride in the long-term professional relationships that we cultivate with clients – often spanning years or even decades. Two kinds of synergy We believe in harnessing the synergy of people and technology to deliver exceptional services. We have invested heavily in training our people and developing a collaborative culture within our firm. This enables us to avoid complex chains of communication, and streamline our decision-making process. We strive to extend this collaborative culture to our clients, thereby allowing us to work in tandem and effectively with our clients. Furthermore, recognizing that we are living an age where technology can be harvested to improve efficiency and the quality of deliverables, we routinely assist our clients in exploring and adopting automation technologies to address their needs. Our tax and legal services Our advisory services include assistance in a range of corporate legal and tax matters ranging from tax planning and compliance, international tax advisory, transfer pricing, tax dispute resolution, business establishment, investment promotion application, and customs & trade advisory. Our services include: ● Tax advisory and compliance services ○ Planning and calculation for corporate income tax, VAT, and withholding tax ○ Preparation of tax audits and dispute resolution ○ Evaluation of the company’s tax compliance with tax and auditing obligations ○ Preparation and submission of tax returns ● Transfer pricing ○ Preparation of planning and strategy for domestic and international transactions, including intellectual property solutions ○ Preparation and review of transfer pricing documentation ○ Review of transactions and supply chains ● Customs and trade advisory services ○ Identification of customs and trade privileges ○ Preparation for tax and import or export controls ○ Assistance with customs audits and dispute resolution ○ Valuation, classification, and verification of product origins ● Corporate secretarial services ○ Registration and setup of the company, including application for Foreign Business Licenses ○ Preparation of angular general meetings and board meetings ○ Arrangement of social security requirements and other certifications or notarisations ● Legal advisory and compliance services ○ Preparation and submission of business registration ○ Submission of business incentives and required permits ○ Performance of compliance reviews ○ Preparation for compliance with foreign ownership requirements ● Business permits and licenses ○ Preparation and submission of applications to the Board of Investment ○ Preparation and submission of required permits for products, including for food, cosmetics, and hazardous substances ● Work permits and visas ○ Applications for work permits and visas ○ Assistance with visa conversions Finding the right path forward Tax and legal matters can seem complex or complicated. Nonetheless, with the right insight and advice, these complexities can be navigated, and the associated risks managed. At Grant Thornton, our mission is to assist our clients in cutting through regulatory webs, thereby enabling clients to focus on building and growing their businesses. If you would like to learn more about Grant Thornton or get in touch with our team, you may contact us at: +66 2 205 8142

Transfer pricing disclosure form in Thailand may be complex, but serious penalties await companies that fail to meet government requirements. Here we provide some of the details on how these disclosure form works.

This newsletter provides an update on Thailand’s Country-by-Country Reporting regulations involving various business circumstances, for accounting periods beginning after 1 January 2020.

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 the economic outlook in Thailand less bright than in years past, we look at how the country can find a new way forward for future business success.

As we have seen, Thailand plans to spend money attracting new businesses and tourists, all while lowering personal income taxes. Given such an array of new expenses, the treasury arm of the Thai government would ordinarily come under pressure to balance the budget. Indeed, we have already seen the Ministry of Finance struggling to locate new sources of revenue. Thailand’s Revenue Department has considered plans for imposing taxes on capital gains, casting the tax net wide enough to include on-line operators. Banks will be required to report account holders with high-volume cash transactions in an effort to seal off tax evasion. Plans are in place to increase the tax base – with a target of adding 200,000 new taxpayers per annum.

As the world’s economic engine slows, countries are moving to stimulate their economies by increasing government spending and cutting taxes to inject cash into the domestic economy. Such actions are intended to boost the economy, and prevent it from stalling.

In this article, we explain how taxpayers could leverage on Advance Pricing Agreements (“APAs”) to guard against the uncertainties of tax compliance in an era of increasingly complex tax rules.

In an ever-increasing integrated global economy, businesses have been establishing their footprints in various locations across the continents. These so-called “multi-national corporations” or “MNCs” have sophisticated supply chains and business platforms comprising of dozens, if not, hundreds of entities, all of which are directly or indirectly related to one another. Under this corporate umbrella, the affiliates would trade and transact with one another.

Thailand may soon join several countries in taxing digital services and products that are provided by foreign e-commerce operators. In July 2018, the Thai Cabinet approved of a draft law that, if enacted, will see Thailand imposing value added tax (“VAT”) on foreign operators that provide services and content through the internet or electronic media to Thai consumers.