Educational Information Only
The content on this page is for general educational purposes and does not constitute legal advice. Every legal situation is unique. For matters involving investigation, arrest, litigation, or formal proceedings, consult a qualified legal professional.
Thailand Transfer Pricing: Compliance Under the 2018 Amendment
The Revenue Code Amendment Act (No. 47) B.E. 2561 (2018) introduced explicit transfer pricing rules for related-party transactions. Companies above the THB 200m revenue threshold must submit a Disclosure Form alongside annual tax returns. This guide covers the framework, documentation tiers, and penalties.
TL;DR
The Revenue Code Amendment Act (No. 47) B.E. 2561 (2018) introduced explicit transfer pricing (TP) rules into Thai tax law. Companies with annual revenue of THB 200 million or more and related-party transactions must submit a Transfer Pricing Disclosure Form alongside Form PND.50 (annual corporate tax return). Three tiers of documentation align with OECD BEPS Action 13: Master File, Local File, and Country-by-Country (CbC) Report at higher thresholds. The arm's length principle (ALP) is the test; methods follow OECD guidance with Thai adaptations.
Who Must Comply
- Thai-incorporated companies and Thai branches of foreign companies.
- With related-party transactions (broadly defined: 50%+ shareholding, common control, family ownership).
- With annual revenue ≥ THB 200 million.
Documentation Tiers
| Tier | Threshold | Content | Filing |
|---|---|---|---|
| Disclosure Form | ≥ THB 200m revenue | Summary of related-party transactions and pricing | With PND.50, annually |
| Master File | Multinational group with ≥ THB 750m group revenue (or similar threshold per Revenue notification) | Group structure, intangibles, financing, financial position | On request |
| Local File | As applicable | Local entity transactions, comparables, benchmarking, ALP analysis | On request (typically within 60 days) |
| CbC Report | Group with consolidated revenue ≥ EUR 750m / THB equivalent | Per-jurisdiction revenue, profit, tax, employees, assets | Per OECD timing |
Methods (Arm's Length)
- Comparable Uncontrolled Price (CUP)
- Resale Price Method (RPM)
- Cost Plus Method (CPM)
- Transactional Net Margin Method (TNMM)
- Profit Split Method (PSM)
Best-method selection is fact-specific. Benchmarking studies (commonly using S&P Capital IQ or RoyaltyStat databases) support comparable analyses.
Revenue Department Powers
- Adjust pricing where transactions deviate from ALP.
- Impose tax on the deemed arm's length amount.
- Penalties: 100% of additional tax + interest at 1.5% / month.
- Documentation request: typically 60 days to provide Local File / Master File on demand.
Common Mistakes
Avoid these traps:
- Skipping the Disclosure Form thinking related-party transactions are immaterial — the form is required at the entity-revenue threshold regardless of transaction size.
- Inadequate documentation — Revenue requests at audit can be served with short turnaround.
- Routinely using prior-year benchmarks without refresh — Revenue expects contemporaneous comparable analyses.
- Overlooking financing transactions (intercompany loans, guarantees) — these are within scope.
- Not aligning with substance — Thai-side functions, risks, and decisions affect the appropriate margin / profit allocation.
FAQs
1. Are domestic-only related-party transactions in scope?
Yes — the Disclosure Form covers all related-party transactions regardless of jurisdiction.
2. Can I use OECD benchmarks?
Yes — OECD methods and benchmarks are accepted with Thai context applied. Local comparables (Thai or regional companies) strengthen the analysis where available.
3. What about advance pricing agreements (APAs)?
The Revenue Department offers bilateral and unilateral APAs to lock in TP methodology in advance. Process is technical and lengthy but provides certainty.
4. Are personal services (intra-group secondments) in scope?
Yes — intercompany service charges (including secondments, IT, central functions) are in scope and must be priced at arm's length with appropriate benefit-test documentation.
5. How does the Disclosure Form interact with audit?
The form is the first signal Revenue uses to flag related-party arrangements for closer review. Inconsistencies between the form and the tax return are audit triggers.
Related Reading
Professional Legal Assistance
blog.ctaContext
Anglo Siam Legal provides experienced legal services across Thailand for both Thai nationals and foreigners.
Stay Informed
Get the latest updates on Thai law changes, new guides, and legal resources delivered to your inbox.
We respect your privacy. Unsubscribe anytime.
feedback.wasThisHelpful