Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

November 24, 2021
2021-6247

Thailand amends Revenue Code to facilitate international exchange of tax information

Executive summary

Thailand’s Revenue Code Amendment Act (No.54) B.E. 2564 (2021) (the Amendment) was published in the Royal Gazette on 8 November 2021 (effective 9 November 2021), to accommodate the ratification process of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (the MAC), which Thailand signed on 3 June 2020.

The MAC empowers tax officials to exchange tax information with other jurisdictions which are party to the MAC (MAC jurisdictions). As the next step, Thailand is expected to deposit the instrument of ratification during December 2021. With this development, Thailand is also expected to be removed from Annex II of the European Union (EU) list of non-cooperative jurisdictions for tax purposes (the List), when the List is next updated in early 2022.

This Alert provides an update on Thailand’s ratification process of the MAC.

Detailed discussion

The Amendment was made specifically to accommodate the ratification process of the MAC in Thailand. The purpose of the MAC is to extend the information exchange network to all MAC jurisdictions (144 jurisdictions as of September 2021) and to ultimately help tax authorities worldwide to integrate and synchronize their data and information, in line with the objectives of the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS),1 as well as the Global Forum on Transparency and Exchange of Information for Tax Purposes.

The Amendment empowers the Director-General of the Thailand Revenue Department to exchange tax information, for the purpose of combatting tax avoidance, with other jurisdictions under Double Tax Avoidance Agreements or other similar agreements (including the MAC) to which Thailand is, or is going to be, a counterparty.

Thailand has been included on the List since 2017 due to its non-compliance with the EU’s tax transparency and fair taxation criteria. In response, Thailand abolished its previous tax incentivized headquarter regimes, i.e., ROH I (Regional Operating Headquarters I), ROH II (Regional Operating Headquarters II), IHQ (International Headquarters) and ITC (International Trading Centers) since 2019 to be compliant with the EU’s fair taxation criterion. Additionally, Thailand had committed to sign and ratify the MAC in order to comply with the tax transparency criterion, so that Thailand could be eventually removed from the List.

Timeline for deposit of the instrument of ratification

As noted, Thailand is expected to submit the instrument of ratification of the MAC during December 2021, which is viewed as the final stage of the MAC ratification process.

Implications

Thailand will be automatically eligible to exchange tax information with all MAC jurisdictions upon the MAC entering into force. The MAC would enter into force for Thailand on the first day of the month following the expiration of three months after the deposit of its instrument of ratification.

With this development, Thailand is expected to be removed from the EU’s List in early 2022. More specific details relevant to the Amendment will be subsequently published in ancillary laws and announcements.

_________________________________________

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

  1. See EY Global Tax Alert, Thailand publishes mandatory requirements for submission of Thai transfer pricing Country-by-Country reports, dated 4 November 2021.

 
 

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