Tax Alert: Transfer Pricing Notification Letter

From our previous tax alert, "Compliance as a Key," issued in January 2026, there has been a notable development from the Thai Revenue Department (TRD). Since February 2026, the TRD has begun issuing notification letters to companies, requesting the formal submission of Transfer Pricing (TP) Local File documentation under Section 71 ter of the Revenue Code.

As highlighted in our earlier tax alert, this development further indicates that 2026 is a year in which the TRD is placing increased emphasis on tax compliance, particularly regarding transfer pricing.

Increasing transfer pricing enforcement in Thailand

The recent wave of notification letters reflects the TRD’s intensified monitoring of related-party transactions and taxpayers’ compliance with transfer pricing regulations. Companies that meet the criteria under Section 71 bis are required to prepare and submit the TP disclosure form and maintain TP documentation. The TRD will request TP documentation when a TP risk assessment is detected.

In the formal notification letters, companies are asked to submit TP documentation consistent with the requirements stipulated under Director-General Notification No. 407. This requires detailed information on related-party transactions, the transfer pricing policy adopted, financial data used in determining the adopted transfer pricing policy, functional analysis, any business restructuring, any transfer of intangible assets, benchmarking studies, and so on.

Importance of transfer pricing documentation readiness 

Given the TRD’s increasing scrutiny through these notification letters, companies must ensure that TP documentation is prepared in advance and kept readily available. Preparing TP documentation only upon receiving a notification letter may pose significant challenges.

In practice, preparing TP documentation can require considerable time and resources, including coordination across multiple departments within the organisation. Moreover, certain information may no longer be easily accessible due to:

• Business restructuring in previous years
• Changes in relevant personnel, such as employees transferring to other departments or leaving the company
• Difficulty in obtaining and lack of supporting documentation

When these situations arise, companies may face difficulties in providing information within the limited timeframe. The TP documentation may be insufficient or of low quality.

Our notable view

In light of the recent trend, companies should proactively prioritise TP documentation readiness under the Thai TP laws. In particular, companies should:

• Maintain proper documentation and internal records, especially for transactions related to business restructuring
• Prepare TP documentation in advance and ensure readiness
• Identify potential risks or issues related to related-party transactions and make corrections

TP risk analysis, review, and advance preparation of TP documentation will minimise risks and costs, and ensure TP compliance.