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Transfer Pricing Compliance in Thailand
Disclosure Form, Local File, Master File, CbCR, and Revenue Department audit defense — OECD-aligned.
Quick Answer
Thai companies with related-party transactions and revenue ≥ THB 200M must file a Disclosure Form and hold a Local File. All 5 OECD methods accepted. Compliance packages from THB 25,000 (Disclosure) to THB 450,000 (Local File).
FAQ
- When does Thai transfer pricing apply?
- Any company with related-party transactions (foreign or domestic) and annual revenue ≥ THB 200M must file a Disclosure Form (with PND.50) and maintain a Local File. Group revenue ≥ THB 28B triggers Country-by-Country Reporting (CbCR).
- Which arm's-length methods are accepted?
- The Thai Revenue Department accepts all five OECD methods: CUP, Resale Price, Cost Plus, TNMM, and Profit Split. Documentation must demonstrate method selection, functional analysis (DEMPE for IP), and benchmarking (Asia-Pacific comparables preferred).
- What are the penalties?
- Failure to file the Disclosure Form: up to THB 200,000. Failure to submit Local File on 60-day request: up to THB 200,000. Reassessment on non-arm's-length pricing: additional tax + 100% surcharge + 1.5%/month interest (capped at the tax due).
- Rates?
- Disclosure Form filing THB 25,000–45,000. Local File (functional analysis + benchmarking + economic analysis) THB 180,000–450,000 depending on transaction complexity. CbCR notification/filing THB 65,000. Master File (if group requires) THB 250,000+.
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Official sources
The information on this page follows the official sources below. Always check the latest version before you file.
- กรมการกงสุล — บริการรับรองเอกสาร (นิติกรณ์)— กระทรวงการต่างประเทศ
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- กรมการปกครอง — ทะเบียนราษฎร ทะเบียนครอบครัว— Department of Provincial Administration
- สภาทนายความในพระบรมราชูปถัมภ์ — ทนายความผู้ทำคำรับรองลายมือชื่อและเอกสาร— Lawyers Council of Thailand
- สำนักงานคณะกรรมการกฤษฎีกา — ฐานข้อมูลกฎหมายไทย— Office of the Council of State
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The Thai statutory framework
Thailand's transfer pricing rules sit in sections 71 bis and 71 ter of the Revenue Code, introduced by the Transfer Pricing Act effective for accounting periods beginning on or after 1 January 2019. Section 71 bis lets an assessment officer adjust income and expenses between related parties to the amounts that would have applied between independent parties. Section 71 ter imposes the disclosure and documentation obligation that makes the adjustment power workable.
The relatedness test is ownership or control based, and it captures both domestic and cross-border relationships. Companies frequently assume transfer pricing is only a cross-border issue and overlook management fees, interest-free shareholder loans and shared-service recharges between two Thai group companies, which are exactly the items an officer examines first.
Who files what
| Obligation | Trigger | Timing |
|---|---|---|
| Transfer pricing disclosure form | Revenue of 200 million baht or more in the accounting period, with related-party transactions | Filed with the annual PND 50, within 150 days of period end |
| Local file | On written request from the Revenue Department | Within 60 days of the request, extendable to 180 days for a first request |
| Master file | Where required of the group under the notification | Provided on request alongside the local file |
| Country-by-country report | Ultimate parent of a group meeting the consolidated revenue threshold | Filed with the annual return per the notification |
Method selection in practice
The Revenue Department follows the OECD methods: comparable uncontrolled price, resale price, cost plus, transactional net margin and profit split. For most Thai subsidiaries the practical choice is between cost plus for genuine service centres and the transactional net margin method for distributors and contract manufacturers, benchmarked against regional comparables where Thai-only sets are too thin to be reliable.
The weakest part of most files is not the method but the functional analysis. If the local file describes the Thai entity as a limited-risk distributor while the intercompany agreement leaves it carrying inventory and credit risk, the officer works from the contract and the conduct, not the label. Aligning agreements, conduct and the benchmark is what makes a file defensible.
Our scope on a transfer pricing engagement
- Related-party mapping including domestic relationships and interest-free or below-market intra-group loans.
- Functional and risk analysis with interviews, so the characterisation matches how the business actually runs.
- Benchmarking with a documented search strategy, rejection log and comparability adjustments.
- Drafting or remediating intercompany agreements so the legal terms support the tested characterisation.
- Disclosure form preparation, and representation during a Revenue Department documentation request or audit.
Common mistakes and how we avoid them
More questions we are asked
- Does the 200 million baht threshold count group revenue or entity revenue?
- It is tested on the filing entity's revenue for the accounting period, not the group's consolidated figure.
- Are purely domestic related-party transactions in scope?
- Yes. Section 71 bis is not limited to cross-border dealings, and domestic loss-utilisation patterns attract attention.
- How long do we have to produce a local file?
- Sixty days from the request, with an extension available to 180 days for a first request. Preparing after the request arrives is rarely enough time.
- Can we agree pricing with the Revenue Department in advance?
- Thailand operates an advance pricing arrangement programme, mainly bilateral. It is slow and document-heavy but valuable for large recurring flows.
- What happens if we simply do not file the disclosure form?
- Penalties apply for non-filing and for incorrect filing, and the absence of a file removes the taxpayer's ability to rebut an officer's adjustment with contemporaneous evidence.
Frequently asked questions
- Can a foreigner own 100% of a Thai company?
- Generally no for activities listed in the Foreign Business Act, where majority foreign ownership requires a Foreign Business Licence, a BOI promotion, or treaty rights such as the US–Thailand Treaty of Amity. Manufacturing and certain export activities are largely open, and BOI-promoted activities can permit full foreign ownership together with land-holding and visa privileges, so the right structure depends on the specific activity.
- What is the minimum registered capital for a Thai company?
- There is no general statutory minimum for a Thai-majority company, but practical thresholds apply: THB 2 million of paid-up registered capital per foreign work permit, or THB 1 million if the foreigner is married to a Thai national, and THB 3 million per foreign shareholder for a Foreign Business Licence. Capital should therefore be planned around the visa and work-permit outcome you need, not the incorporation minimum.
- How long does company registration take?
- Registration at the Department of Business Development can be completed within one to three working days once the name reservation, shareholder documents and company objectives are ready, and the VAT registration and social security registration follow afterwards. The realistic end-to-end timeline including bank account opening is two to six weeks, with the bank account usually being the slowest step for foreign directors.
- What ongoing accounting obligations does a Thai company have?
- Every Thai company must keep statutory accounts, file monthly withholding tax (PND 1, 3, 53) and VAT (PP 30) returns by the middle of the following month, file the half-year corporate income tax return (PND 51) and the annual return (PND 50), and have its financial statements audited by a Thai CPA and filed with the DBD each year. Dormant companies are not exempt — nil returns and an audited statement are still required.