Thai corporate income tax planning + Transfer Pricing documentation + Double Taxation Agreement structuring + BOI tax privileges + OECD Pillar Two Top-Up Tax — tax advisory by Thai tax attorneys + CPAs

Corporate Income Tax (CIT) rates in force for FY 2026

• Standard CIT — 20% of net profit (Revenue Code § 65)
• SME (paid-up capital ≤ THB 5 m, revenue ≤ THB 30 m) per Royal Decree 530: profit ≤ THB 300 k → 0%, THB 300,001–3,000,000 → 15%, > THB 3 m → 20%
• International Business Center (IBC) per Royal Decree 674: 8% (THB 60–300 m local spend), 5% (300–600 m), 3% (> 600 m)
• BOI promotion — CIT exemption 3–13 years depending on Category + Merit incentives
• EEC investment — CIT exemption + 50% reduction for an extra 5 years for S-Curve industries
• Petroleum / banking — special rates (e.g. 50%) under sectoral legislation
• Branch office — additional 10% Profit Remittance Tax on top of 20% CIT
• Foundations / associations — 2% on revenue or 10% on net profit

VAT — 7% through 30 September 2026

• Rate 7% (reduced from statutory 10%, renewed periodically by Royal Decree — current expiry 30 Sept 2026)
• Registration threshold — annual turnover > THB 1.8 m
• Zero-rated 0% — export of goods + international services + services used abroad
• VAT-exempt — education, healthcare, domestic transport, agricultural produce, residential rental
• Reverse-charge VAT — Thai recipient remits 7% on cross-border services (PP.36)
• e-Tax Invoice & e-Receipt mandatory for large enterprises
• VAT refund — 7% export refund within 3 months for Good Exporters
• Digital Service Tax — foreign service providers (Netflix, Google, Facebook) with Thai-customer revenue > THB 1.8 m/year must VAT-register under § 82/13

Withholding Tax (WHT) — domestic rates and DTA reductions

• Service in Thailand — 3% (domestic), 1% (advertising), 5% (rental)
• Domestic dividend — 10% (One-Tier reduction available for holding companies)
• Outbound dividend — 10% (DTA reduction to 5–10%)
• Outbound interest — 15% (DTA reduction to 10–15%, 0% for government loans)
• Outbound royalty — 15% (DTA reduction to 5–15%; SG / NL reduce to 5%)
• Outbound technical service — 15% (DTA reduction to 5–10%)
• Outbound capital gain — 15% (DTA exempt in SG, HK, NL etc.)
• Beneficial-ownership test — must be a beneficial owner, not a conduit or nominee

Transfer Pricing — legal framework and compliance steps

Legal basis: Revenue Code § 71 bis (arm's-length principle), § 71 ter (disclosure form), Ministerial Regulation No. 369 (2020) (TP documentation), Director-General Notification No. 400 (2021) (Local + Master File), Notification No. 408 (2021) (CbCR threshold THB 28 bn) — aligned with OECD TPG 2022 + BEPS Action 13.

Who is in scope: (1) any company with related-party transactions (common ownership ≥ 50% or common control), (2) revenue ≥ THB 200 m/year — must file TP-DF and prepare a Local File, (3) multinational groups with consolidated revenue ≥ THB 28 bn — must file CbCR.

Process: (1) identify RPTs — loans, services, royalties, cost sharing, cost allocation, goods/IP sales (2) Functional Analysis — Functions/Assets/Risks per entity (3) choose the most appropriate TP Method — CUP, Resale Price, Cost Plus, TNMM, Profit Split (4) Benchmarking Study — comparables from TP Catalyst / Royaltystat / S&P Capital IQ on an interquartile range (5) prepare Local File (bilingual TH/EN) + Master File (Global) before year-end (6) file TP-DF with PND.50 within 150 days of year-end (7) retain documentation ≥ 5 years.

Penalties: TP-DF default — up to THB 200,000/year; failure to produce Local File within 60 days — THB 200,000; revenue adjustment + 100–200% surcharge + 1.5%/month interest; 5-year assessment window (10 years for fraud). Risk can be capped through Advance Pricing Agreements (unilateral / bilateral / multilateral) under Revenue Code § 35.

Double Taxation Agreement (DTA) — 61-country treaty network

• Thailand has DTAs with 61 countries — covering G20, ASEAN, EU, USA, China, Japan, Korea
• Tax sparing credit — destination state credits Thai tax even where Thailand grants exemption (e.g. DE, BE)
• Permanent Establishment (PE) — Fixed Place / Agency PE / Service PE (6 months) / Construction PE (3–12 months)
• Beneficial-ownership test — substance + active conduct of business + risk bearing
• Anti-abuse — Principal Purpose Test (PPT) under OECD MLI 2017 (Thailand signed 9 Feb 2022)
• Tax Residence Certificate (RES.95) — obtainable from the Revenue Department in 30 business days
• Mutual Agreement Procedure (MAP) — resolves double taxation within 24 months
• Holding hubs: Singapore (0% capital gains), Hong Kong (0% capital gains), Netherlands (participation exemption), Mauritius (treaty + 0% capital gains — watch PPT)

BOI tax privileges — how they actually compute

• CIT exemption — A1+ 10–13 years no cap; A1 8 years no cap; A2 8 years capped; A3 5 years capped; A4 3 years capped; B none
• Merit-based incentives — R&D ≥ 1–3% of sales → +1–3 years; training → +1 year; decentralised location → +3 years
• 50% CIT reduction — additional 5 years after exemption ends (Category A only)
• Machinery import duty exemption (permit per shipment); raw-material import duty exemption (bank guarantee, 5 years)
• Dividend exemption on BOI-project dividends during the exemption period
• Land-ownership permit for office and executive residence
• Calculation trap — BOI vs non-BOI income must be split with proper common-cost allocation; this is the Revenue Department's #1 BOI audit issue
• Annual filing — Form S.BOT.3 must accompany PND.50

OECD Pillar Two GloBE Rules — 15% Global Minimum Tax (Thailand 2025)

Pillar Two introduces a 15% Global Minimum Tax for Multinational Enterprises with consolidated revenue ≥ EUR 750 m (≈ THB 28 bn). Thailand joined the OECD/G20 Inclusive Framework and a draft Top-Up Tax Royal Decree B.E. 2568 takes effect 1 January 2025 with three mechanisms: (1) Income Inclusion Rule (IIR) — parent jurisdiction collects top-up tax where a subsidiary's ETR is below 15%, (2) Under-Taxed Profits Rule (UTPR) — back-stops where the parent has no IIR, (3) Qualified Domestic Minimum Top-Up Tax (QDMTT) — Thailand collects first ahead of other jurisdictions.

Impact: a Thai BOI-exempt entity at 0% CIT will face a 15% top-up in the parent country (US, DE, JP, KR, FR, UK already implementing). That neutralises BOI savings above 15%. Mitigation options: (a) Substance-Based Income Exclusion (SBIE) — strips 5% of payroll + 5% of tangible assets from GloBE income (tapering to 5%/5% after 10 years); (b) defer investment into non-Pillar-Two jurisdictions; (c) restructure BOI as a Qualified Refundable Tax Credit (QRTC) instead of a CIT exemption; (d) build real substance — operations + headcount.

We deliver Pillar Two impact assessments, GloBE Information Return preparation, Transitional CbCR Safe Harbour analysis, QDMTT calculation, and restructuring advisory, coordinating with Big Four networks abroad.

Tax audit defence and Central Tax Court appeals

• Field audit / desk audit — 7-day prior notice + on-site visit
• Information request — 7-day production window (extendable 15); records retained ≥ 5 years (Revenue Code § 12)
• Tax Assessment Letter — back-tax + surcharge + interest
• Internal appeal — Appeal Committee within 30 days of assessment
• Central Tax Court appeal — within 30 days of the internal decision
• Supreme Court Tax Division — on questions of law
• Tax payment suspension via bank guarantee or tax bond
• Settlement / compromise under § 27 ter — typically 50% surcharge discount
• Our litigation track record includes former Revenue Department officials — defendable documentation from day one

Fees (fixed-fee per professional ethics)

• Annual tax health check — THB 95,000–250,000
• CIT / VAT / WHT compliance retainer — THB 35,000–150,000 / month
• Transfer Pricing Local + Master File — THB 250,000–850,000 / year
• Country-by-Country Report — THB 350,000–650,000
• TP benchmarking study (single transaction) — THB 95,000–250,000
• Advance Pricing Agreement — THB 850,000–2,500,000
• BOI tax-privilege calculation + S.BOT.3 — THB 65,000–180,000 / year
• Pillar Two impact assessment — THB 450,000–1,250,000
• Tax audit defence — THB 250,000–950,000 per case
• Tax Court appeal — THB 650,000–2,500,000 + 2% court fee (cap THB 200,000)
• Tax Residence Certificate (RES.95) — THB 25,000 per certificate
• No contingency fee — Lawyers Council Ethics Reg. B.E. 2529 § 11

Risks and disclosures (communicated before every engagement)

• No guarantee of audit outcome or APA approval — Revenue Department discretion
• We decline aggressive tax avoidance, treaty shopping, round-tripping and substance-less shell companies
• We decline money-laundering and transfer-mispricing engagements designed to hide profit
• Laws change — Revenue Code, TP regulation, Pillar Two, DTAs evolve frequently; clients receive a 6-monthly Update Memo
• Financial and trade-secret data are sensitive under PDPA § 24 — ISO/IEC 27001 + HSM + NDA + 10-year retention
• Sanctions screening — we decline OFAC / UN / EU listed clients
• Tax-position advice is a legal opinion, not an outcome guarantee