On 14 April 2020, the Thailand foreign currency conversion tax rules that apply for financial years commencing on or after 01 Jan 2019 were clarified by the Thailand Revenue Department.

This tax insight has been updated for the Revenue Department's Clarification.

The Foreign Currency Conversion Rules

For the financial years that commence on or after 01 Jan 2019, the Revenue Code Amendment Act (No 50) amends the foreign currency conversion rules for a Thai corporate entity that is not a bank or a financial institution, as follows: 

Previously		For financial years commencing on or after 1 Jan 2019

Foreign currency assets and liabilities at the end of year shall be converted into the Thai currency by:

Converting an asset that's in a foreign currency to the Thai Baht by using the average buying rates of commercial banks quoted by the Bank of Thailand and a liability in a foreign currency to the Thai Baht using the average selling rates of commercial banks quoted by the Bank of Thailand.		Converting an asset that's in a foreign currency to the Thai Baht by using the average buying rates of commercial banks quoted by the Bank of Thailand and a liability in a foreign currency to the Thai Baht using the average selling rates of commercial banks quoted by the Bank of Thailand; or
		Converting assets and liabilities that are in a foreign currency to the Thai Baht using the average buying and selling rates of commercial banks quoted by the Bank of Thailand; or
		Other generally accepted method as may be prescribed by the Minister.

Foreign currency transactions during the year shall be converted into the Thai currency by:

Converting the transaction to the Thai Baht using the exchange rate on the date of the transaction

Converting the transaction to the Thai Baht using the exchange rate on the date of the transaction

Goods valued or priced in a foreign currency shall be converted into the Thai currency by:

Converting the value or the price of the goods to the Thai Baht using the exchange rate on the date of acquir- ing the goods

Repealed (no longer applicable)

The Revenue Department's Clarification

On 14 April 2020 the Revenue Department clarified, as the RCAA (No 50) applies for the first time for financial years commencing on or after 01 Jan 2019, if a Thailand corporate entity is choosing a conversion method for fiscal year commencing on or after 01 Jan 2019 for the first time, then the Thailand corporate entity may do so without requiring the prior approval of the Revenue Department, provided that the Thailand corporate entity shall continue to use the chosen method in subsequent years without changing the method unless the prior approval of the Revenue Dept is firstly obtained.

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