On 21 November 2018, Thailand Transfer Pricing compliance laws were enacted into Thailand's tax code by Revenue Code Amendment Act (No 47).

The explanatory note for the Amendment states that by large-size companies in Thailand continuing with practices enabling them to transfer profits within their groups of related companies, this is significantly affecting tax collection and the fiscal state of the Government, and it is therefore appropriate to enact new laws consistent with international principles and guidelines.

The Transfer Pricing tax laws enacted by the RCAA (No 47) are as follows:

Revenue Code Amendment Act (No 47) BE 2561

Applicability

For corporate financial years beginning on or after 1 January 2019.

Power to Adjust Income or Expenses

As enacted under Section 71 bis of the Revenue Code:

• In the case a related company that has commercial or financial dealings, which are different to those of companies operating independently and believed to be for the purpose of transferring profits, audit officers have power to adjust the income or the expenses of the company to amounts comparable to companies operating independently for the payments of income tax and withholding tax.

• ​In the case a tax audit officer amends the income or expenses of a related company under the previous provision resulting in the company having to pay income taxes or withholding taxes that it has no obligation to pay, the company has the right to claim a refund of the excess taxes within 3 years from the last due date for filing tax returns or within 60 days of the date of receipt of the audit officer's notice of the amendment.

Related Party Reporting, Documentation and Evidence

As enacted under Section 71 ter of the Revenue Code:

• ​A company which is related to another irrespective of whether or not it is related for the whole of a financial year and whether or not there are any related party transactions in a financial year, shall prepare a report of its related party dealings and the values of its related party transactions for each financial year using the form prescribed by the Director-General of Revenue and file such report with its year-end tax return filing within the time limit for annual tax return filings.

• ​Within 5 years from the date of filing the report of related party dealings under the previous provision, a tax audit officer, with the approval of the Director-General of Revenue, may issue a notice to the related company requiring the related company to provide documents or evidence for the audit officers' analysis of the related party transactions.​

• ​A related company receiving a notice from a tax audit officer shall comply within 60 days from the date of receipt of the notice, except that if there's good reason for not being able to do so, the Director-General of Revenue may permit an extension of the time to comply to not more than 120 days from the date of receipt of the notice, and if such notice is the first notice received to not more than 180 days from the date of receipt of the notice.

• The provisions in Section 71 ter do not apply for a related company with gross business income up to an amount that's stipulated in a Ministerial Regulation, which amount shall not be less than 200 million baht.
  

Punishment

As enacted under Section 35 ter of the Revenue Code:

• A failure to comply with a requirement or a filing of a report, document or evidence inaccurately or incompletely without justifiable ground, shall be liable to a fine of not more than 200,000 Baht.
  

---