Following the enactment of specific transfer pricing law in 2019 and the requirement for submission of Country-by-Country Report (“CbCR”) in 2021, the Thai Revenue Department (“TRD”) is intensifying transfer pricing (“TP”) scrutiny. By virtue of Section 71 ter of the Revenue Code, the tax authorities started requesting information concerning taxpayers’ transfer pricing practice. So far, more than 200 letters have already been issued by the TRD.
Target-identifying criteria – The Tax Supervision and Audit Standards Division disclosed that the criteria in selecting TP audit targets would be two folds: (a) the taxpayers that are subjected to submission of Disclosure Form, and (b) such taxpayers are member of multinational groups that are subjected to submit the CbCRs. The Division will notify the responsible local area revenue offices nationwide to request transfer pricing information and stage the TP audits.
List of required documents and evidence – The TRD’s letters would be attached with the checklist table on the 18 items of information to be submitted. Taxpayers are required to tick in each item whether they submit such information or not. The required information is the same as that prescribed in the Notification of Director-General on Income Tax No. 407, such as information on business description, organization chart, shareholding structure, list of suppliers, customers, competitors, list of inter-company agreements, types, amount and pricing of inter-company transactions, range of financial indicators of comparable independent companies, etc.
Author’s Notes – Despite the checklist format, our advice to taxpayers is not to submitted the fragmented and disconnected information as this may lead to conflicting or inconsistent information and allow the tax auditors to fabricate their own version of the company’s transfer pricing practice, which might not be nice. Rather, taxpayers should submit the required information in the form of consistent and risk-sanitized Local File that would put the company in the most likeable light.
Dear Friends of DRKI, DRKI will be hosting a Webinar on 25 June 2026. An invitation will be sent to you again for registration.
Author: Susama Thaveesin, Director; Kanokphit Rasri, Manager
[Contact Person: Ms. Susama Thaveesin, Director]