globaltaxnews.ey.comSign up for tax alert emailsPrintDownload

22 October 2021

Thailand publishes mandatory requirements for Thai transfer pricing documentation

Executive summary

The Thai Revenue Department published the Notification of Director-General of Revenue Department No. 407 (the Notice) on 30 September 2021, outlining the information that must be included in transfer pricing (TP) documentation when it is requested by the Revenue Department.

Under Thai tax law, TP documentation is not required to be filed with the transfer pricing disclosure form.[i] However, the TP documentation is generally required to be provided within 120 days of receiving a request from the Revenue Department (or 180 days if it is a first-time request under the new TP Act, which is applicable for the first fiscal year starting on or after 1 January 2019).[ii]

This Alert summarizes the key TP documentation requirements applicable to fiscal years starting on or after 1 January 2021.

Detailed discussion

Mandatory requirements for TP documentation

Information on taxpayers

  • Nature of the business, organization chart (with number of staff), value chain, key clients and competitors, business strategy and economic circumstance
  • Group shareholding structure
  • Description and impact of any business restructuring and transfers of intangible assets

Information on related-party transactions

  • Details including the nature and value of transactions, information about the counter party, such as the name and country of incorporation, price setting policy and assumptions used in adjusting the price, and a summary of the content of the relevant contract, including key terms and conditions
  • Function, risks and assets analysis (including changes compared to prior year)
  • Financial information used in determining the transfer price
  • How the TP method was implemented, including tested parties
  • Details of the benchmarking study

Other information

  • Additional information may be requested in writing by the Tax Assessment officer with approval from the Director General of the Revenue Department.

Documentation language

  • The TP documentation must be prepared in Thai.

Prior year TP documentation requirements

The Notice only applies to TP documentation prepared for fiscal years starting on or after 1 January 2021. Therefore, TP documentation for fiscal years ending before 31 December 2021, which is prepared in English or Thai and is based on the TP guidelines (Paw 113/2545), should be acceptable to the Revenue Department.

Benchmarking study exemptions

A benchmarking study is not required if either:

The taxpayer’s total revenue of the fiscal year is less than THB500 million (US$15 million), the taxpayer has only domestic related-party transactions, neither the taxpayer nor any of the relevant counter-parties have loss carryforwards for corporate income tax computation purposes and all are subject to the same corporate income tax rate.

The transactions are covered transactions under a bilateral Advanced Pricing Agreement (APA) concluded with the Thai Revenue Department, and the relevant fiscal year is covered by the APA.

Implications

Thai companies should review their Thai TP documentation processes and procedures to ensure compliance with the requirements of the Notice.

___________________________________________

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

EY Corporate Services Limited, Bangkok

Ernst & Young LLP (United States), Thai Tax Desk, New York

Ernst & Young LLP (United States), Asia Pacific Business Group, New York

Ernst & Young LLP (United States), Asia Pacific Business Group, Chicago

___________________________________________

Endnotes

See EY Global Tax Alert, Thailand publishes transfer pricing disclosure form, dated 27 November 2019.

  • See EY Global Tax Alert, Thailand enacts Transfer Pricing Act, dated 3 December 2018.

    Document ID: 2021-6082

     
     

    The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

     

    Copyright © 2024, Ernst & Young LLP.

     

    All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

     

    Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

     

    "EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

     

    Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

     


    Cookie Settings

    This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


    Yes, I accept         Find out more