Transfer Pricing in Thailand

The legal framework

Thailand's transfer pricing rules are young in statute and older in practice. Dedicated provisions reached the Revenue Code only through the Revenue Code Amendment Act (No. 47) B.E. 2561, which inserted Sections 71 bis, 71 ter and 35 ter for accounting periods beginning on or after 1 January 2019. Before that the Revenue Department policed intra-group pricing under Section 65 bis(4), allowing an officer to substitute market price for transfers, services or loans priced below market without justifiable reason, read with Departmental Instruction Paw 113/2545. Neither has been repealed, and both still matter for legacy years.

Section 71 bis paragraph 1 carries the adjustment power: where related entities set commercial or financial terms differing from those independent parties would have set, in a manner from which profit shifting can be believed to have occurred, the assessment officer may restate income and expenses for the purposes of Section 65, 70 or 70 bis. Paragraph 2 defines the relationship by a 50 per cent direct or indirect capital test, applied vertically or through a common holder. A third limb, catching entities linked by capital, management or control, is drafted but has never been brought into force. The definition captures Thai-to-Thai dealings as readily as cross-border ones, which matters wherever group members sit on different tax rates.

Ministerial Regulation No. 369 supplies the profit-shifting test; Notification of the Director-General on Income Tax No. 400, effective for periods beginning on or after 1 January 2021, supplies the methodology. Thailand is not an OECD member and the Guidelines are not enacted; they are persuasive material only, though the Revenue Department concedes its market-price methods follow OECD principles.

Methods, comparables and benchmarking

Notification No. 400 clause 5 recognises the five familiar methods: comparable uncontrolled price, resale price, cost plus, transactional net margin and transactional profit split. There is no hierarchy. Clause 6 requires the most appropriate method, weighed against the functional analysis, data availability and the reliability of comparability adjustments. A method outside the five is available, but the taxpayer must show that no recognised method can reasonably be applied and notify the Director-General in writing, with a preliminary explanation, within the accounting period in which it is used. That is a prospective filing obligation, not a position to be raised for the first time on audit.

Two features repay attention. Ministerial Regulation No. 369 clause 3 binds the officer to an order of preference: internal comparables from the taxpayer's own ordinary-course dealings with independent parties must be used where they exist, external data only where they do not. Clause 3(2) then permits external data from inside or outside Thailand, the domestic basis for pan-Asian comparable sets where Thai data is thin.

On the range, the law is looser than practice suggests: clause 8 directs adjustment to a point within the range that best reflects the circumstances. The interquartile range and adjustment to the median are audit convention rather than statutory rules, although Thailand's OECD profile records the interquartile range as the measure used; a reasoned non-median point remains arguable on the text. Nothing requires the Thai entity to be the tested party, but Notification No. 407 clause 2(2)(f) obliges the taxpayer to justify the choice and explain why other methods were rejected. Clause 9 imposes a four-limb benefit test on services, shareholder-activity charges falling outside the standard; clause 10 requires DEMPE-style intangible analysis. There is no Chapter X guidance, no interest limitation rule and no safe harbours.

Documentation: what the Revenue Department expects

Three obligations sit in the annual cycle, and the one that starts the clock is pegged to the Section 69 deadline of 150 days after the accounting period end. The disclosure form under Section 71 ter paragraph 1 is filed alongside form PND.50 by every entity related under Section 71 bis paragraph 2 with revenue above THB 200 million, the threshold fixed by Ministerial Regulation No. 370. It lists related parties in and outside Thailand, transaction values, restructurings and intangible transfers. Online filing attracts a further eight days in practice, but that Ministry of Finance allowance is renewed periodically and should be checked before relying on 158 days. Country-by-country reporting is staged: for groups whose prior-period consolidated revenue reached THB 28 billion, the notification identifying the reporting entity is made on the disclosure form within the same 150 days, but the report itself, in OECD XML and English, is due within twelve months of the last day of the accounting period where a Thai ultimate or surrogate parent files, under a Ministry of Finance notification of 23 December 2021. A secondary filer has 60 days from the Revenue Department's submission notice. For parent filers Thailand therefore aligns with the twelve-month Action 13 norm.

The local file works differently: there is no annual filing. Under Section 71 ter paragraph 2 an officer may, with the Director-General's approval, demand it in writing within five years of the disclosure form being lodged. The response window is 60 days, extendable to 120 for necessary cause, and 180 days where it is the entity's first notice. Notification No. 407 prescribes the contents: value chain, group structure down to the ultimate shareholder, restructurings, intangible transfers, transaction-level pricing policy and assumptions, contracts, a functional analysis with year-on-year changes, method selection and rejection reasoning, and the benchmarking study. Clause 4 requires Thai; English files with key sections translated are tolerated in practice, not permitted by right.

Thailand has no separate master file obligation. Notification No. 407, the only instrument prescribing Section 71 ter content, contains none, and the group-level material is embedded in the local file. Commentary attaching a THB 28 billion master file threshold has borrowed the CbCR figure. Relief from the benchmarking study alone is available under clause 3 where revenue is THB 500 million or less and there are no counterparties on different tax rates, none incorporated abroad and no carried-forward losses used, or where an APA covers the transaction.

Audits, penalties and the enforcement climate

Section 35 ter imposes a fine of up to THB 200,000 for failing to comply with Section 71 ter, or filing incorrect or incomplete information without reasonable cause. The fine is criminal and separate from any tax. The Revenue Department publishes the levels it compounds at for late disclosure forms: THB 50,000 within seven days of the deadline, THB 100,000 beyond that, and the full THB 200,000 where officers find the failure rather than the taxpayer correcting it.

An adjustment carries the general consequences. Section 22 imposes a penalty of one times the additional tax on assessment following a summons and Section 26 two times where no return was filed; Section 27 adds a surcharge of 1.5 per cent per month, reduced to 0.75 per cent under an approved extension and capped at the tax. Section 27 bis allows the penalty, but not the surcharge, to be waived. Documentation buys no discount on an adjustment penalty; it defends only the Section 35 ter fine.

Two mechanics need modelling in advance. Clause 11 of Notification No. 400 is a genuine secondary adjustment rule: an uncollected receivable or overpaid expense arising from a primary adjustment is deemed Section 40 assessable income paid to the counterparty, which can pull withholding tax onto a deemed cross-border payment. Clause 12 permits a domestic corresponding adjustment only where the primary adjustment is final and paid and the amount was already taxed in the counterparty's hands; downward adjustments are otherwise unavailable outside MAP. Section 19 restricts a summons on a filed return to two years, extendable to five with the Director-General's approval where evasion is suspected.

Dispute resolution and advance certainty

Advance certainty in Thailand means a bilateral APA or nothing. The Revenue Department's guideline of 18 March 2025 confirms the programme is exclusively bilateral; older commentary describing unilateral APAs is out of date. An APA runs for three to five accounting periods, with rollback of up to two prior periods on request. The pre-filing meeting request must reach the Director-General at least six months before the last day of the first covered period, and the formal application by the last day of that period. The package spans fourteen headings in Thai and English; there is no fee and no published statistics.

MAP is available under the treaty network. The request goes to the Director-General in Thai, within the treaty limit, typically three years from first notification. Three constraints matter: a final Thai court judgment binds the Revenue Department, so litigating first can foreclose a MAP outcome; collection is not suspended; and surcharge and penalties are not relieved through MAP, though surcharge is reduced for APA cases. No Thai treaty contains MAP arbitration and Thailand's stated policy is against it. Domestically, Section 30 gives 30 days from the assessment notice to appeal to the Commission of Appeal and 30 days from its ruling to the court, while Section 31 keeps the tax payable meanwhile unless deferral is approved. Note Section 21: a taxpayer who ignored the officer's summons without reasonable cause loses the right to appeal at all. Refunds follow Section 71 bis paragraph 3, on form Kor.10, within three years of the filing deadline or 60 days of written notice of the adjustment.

Pillar Two and what changes in 2026

The active front in Thai international tax is no longer transfer pricing legislation. Sections 71 bis, 71 ter and 35 ter are unchanged since 2018 and Notifications Nos. 400, 407 and 408 since 2021, the only intervening amendment being procedural — DG Notification (No. 2) of 18 January 2022, gazetted 7 April 2022, deeming the disclosure form filed when the e-filing receipt number is issued; the THB 200 million, THB 500 million, THB 28 billion and THB 200,000 figures have all held. What moved is Pillar Two. The Emergency Decree on Top-up Tax B.E. 2567 was gazetted on 26 December 2024 and took effect from 1 January 2025, applying a 15 per cent minimum effective rate to groups above the EUR 750 million threshold through a domestic top-up tax, an income inclusion rule and an undertaxed payments rule. A Revenue Department reference table of 17 February 2026 maps the secondary legislation — eight Director-General Notifications, a Ministry of Finance notification raising the substance-based income exclusion, and Cabinet-approved draft Royal Decrees — to the GloBE rules, with safe harbours keyed to the OECD Side-by-Side Package of 5 January 2026. Amount B is not adopted; the OECD profile records it as under consideration, and Thai distributors are still priced under Notification No. 400.

How practitioners should respond

Reconcile the disclosure form to the ledgers before filing, because it is the document that selects you. Build the local file during the year and in Thai: 60 days is not enough to construct a benchmarking study from scratch, and only a first notice buys 180. Address the internal comparables question explicitly, since Ministerial Regulation No. 369 clause 3 makes it the officer's starting point rather than a fallback. Justify the tested party and record why rejected methods were rejected, because Notification No. 407 asks for both. Model the clause 11 secondary adjustment and its withholding consequence before conceding any price change. Where a treaty partner and transaction volume justify it, open the bilateral APA conversation early enough to clear the six-month pre-filing lead. Keep two items under annual review: limb (3) of the related-party definition, still dormant, and Amount B. No Thai judgment interpreting Sections 71 bis or 71 ter has surfaced publicly, so the Revenue Department's own instruments, read closely, remain the authority that counts.