Transfer Pricing Requirements in Thailand
In an era of increasing global trade and multinational operations, transfer pricing has become a critical compliance area for businesses operating in Thailand. Transfer pricing refers to the rules and methods for pricing transactions between related entities within the same corporate group to ensure they reflect arm’s-length terms, those that would be agreed upon by unrelated parties. For multinational enterprises (MNEs), non-compliance can lead to tax adjustments, penalties, and reputational risks. Thailand, as a key Southeast Asian hub, has aligned its regime closely with the OECD Transfer Pricing Guidelines, emphasizing transparency and fairness in intra-group dealings.
This article provides an overview of Thailand’s transfer pricing requirements as of October 2025, drawing on the latest regulatory developments. It covers the legal framework, key obligations, methods, reporting, penalties, and tips for compliance.
Legal Framework
Thailand’s transfer pricing rules are primarily governed by Section 71 Bis of the Revenue Code, introduced to formalize the arm’s-length principle. The Thai Revenue Department (TRD) enforces these provisions, with authority to adjust taxable income if transactions between related parties deviate from market standards. Secondary adjustments may treat excess profits as deemed dividends or loans, potentially triggering withholding taxes.
Key Requirements and Thresholds
- Revenue Threshold for Disclosure and Documentation: Companies with annual total revenue exceeding THB 200 million must submit a Transfer Pricing Disclosure Form, due within 150 days of the fiscal year-end. These entities are also required to prepare and maintain full transfer pricing documentation. Entities below this threshold are exempt from formal reporting but must still adhere to the arm’s-length principle and provide information if requested.
- Country-by-Country Reporting (CbCR): MNE groups with consolidated global revenue of THB 28 billion or more must file a CbCR, providing aggregated data on income, taxes, and activities by jurisdiction. This applies to accounting periods starting on or after January 1, 2021. The ultimate parent entity files within 12 months of the fiscal year-end, with notifications submitted via the Transfer Pricing Disclosure Form.
Documentation Obligations
Robust documentation is the cornerstone of compliance, serving as evidence of arm’s-length pricing during TRD audits.
- Transfer Pricing Disclosure Form: Mandatory for company revenue reach THB 200 million and due within 150 days of the fiscal year-end.
- Full Documentation Package:
- Local File: Details Thailand-specific transactions, including a functional analysis, economic analysis, comparability studies, and financial data. Must be in Thai and prepared annually for revenues reach THB 200 million.
- Master File: A high-level group overview, covering business structure, intangibles, financing, and transfer pricing policies. Requirements should be aligned with OECD standards.
Documentation must be retained for at least five years and submitted within 60 days of a TRD request. For fiscal years before 2021, taxpayers may use internal guidelines or OECD formats.
Approved Transfer Pricing Methods
Thailand endorses five OECD-compliant methods, selected based on transaction type and data availability. Taxpayers must justify their choice and demonstrate why alternatives were unsuitable.
Other methods may be used with prior TRD notification.
Benchmarking prioritizes internal comparables (e.g., the company’s own unrelated transactions) over external databases.
| Method | Description |
| Comparable Uncontrolled Price (CUP) | Compares prices in identical uncontrolled transactions. |
| Resale Price Method (RPM) | Subtracts a gross margin from resale prices to unrelated parties. |
| Cost Plus Method (CPM) | Adds a markup to costs in controlled transactions. |
| Transactional Net Margin Method (TNMM) | Examines net profit margins relative to costs or sales. |
| Profit Split Method (PSM) | Allocates combined profits based on each party’s contributions. |
Penalties for Non-Compliance
The TRD imposes strict penalties to deter evasion:
- Disclosure Form Issues: Up to THB 200,000 for late, incomplete, or inaccurate filings.
- Documentation Failures: Up to THB 200,000 for not providing upon request.
Conclusion: Navigating Compliance in Thailand
Thailand’s transfer pricing landscape rewards proactive compliance. Foreign investors and MNEs should conduct regular policy reviews, and consult local experts to mitigate risks. By maintaining robust documentation and aligning with OECD principles, companies can not only avoid penalties but also optimize their global tax strategies.
For tailored advice, reach out to tax professionals familiar with TRD practices. As Thailand’s economy grows, staying ahead of transfer pricing requirements will be essential for sustainable operations.
Reference : https://www.rd.go.th/english/15205.html