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10 October 2018

Thailand releases revised draft Transfer Pricing Act

On 27 September 2018, Thailand’s National Legislative Assembly published the revisions to the draft Transfer Pricing Act (the draft TP Act). The new draft takes into account comments made during a July 2017 public hearing on the first draft Act, which had been approved in principle in May 2015.1

The key features of the draft TP Act are:

  • The new TP Act will be effective for accounting years starting on or after 1 January 2019.
  • Taxpayers with related parties2 are required to prepare reports, including descriptions of the related-party relationships and to disclose values of the related-party transactions for each fiscal year in accordance with the specified format, and submit them to the tax authority within 150 days from the closing of the accounting period.
  • The revenue threshold for taxpayers subject to the requirement is THB200 million (US$6 million) per year (increased from THB30 million (US$0.9 million) per year in the original draft).
  • Failure to file the required report and/or additional documents/evidence or to submit incomplete/incorrect documents or evidence without a reasonable cause is subject to penalties.

The National Legislative Assembly will likely enact the draft TP Act very soon. Accordingly, for those taxpayers who have not yet prepared transfer pricing documentation in the past, it is recommended that they begin reviewing their related-party transactions as the first step in preparing transfer pricing documentation prior to the announcement of further details of this measure and associated regulations.

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ENDNOTES

1 See EY Global Tax Alert, Thai Cabinet approves draft transfer pricing act, dated 9 January 2018.

2 Based on the language in the draft, the disclosure requirements apply to any taxpayer that has related parties and meets the revenue threshold, irrespective of whether the taxpayer enters into any transaction with any related party.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

EY Corporate Services Limited, Bangkok

  • Papatchaya Akkararut
    papatchaya.akkararut@th.ey.com
  • Hirohisa Furuse
    hirohisa@furuse@th.ey.com
  • Senaka Senanayake
    senaka.senanayake@th.ey.com

Ernst & Young LLP, Thai Tax Desk, New York

  • Sarunya Sutiklang-viharn
    sarunya.sutiklang-viharn1@ey.com

Ernst & Young LLP, Asia Pacific Business Group, New York

  • Chris Finnerty
    chris.finnerty1@ey.com
  • Kaz Parsch
    kazuyo.parsch@ey.com
  • Bee-Khun Yap
    bee-khun.yap@ey.com

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ATTACHMENT

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Document ID: 2018-6189

 
 

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