Under Section 71 bis of the Revenue Code, Revenue Department officials are granted the authority to adjust corporate taxpayers’ revenue and expenses in relation to related-party transactions that are not at arm’s length under the rules, procedures, and conditions set out in the related Ministerial Regulation.
Keywords: Mazars, Thailand, Tax, Transfer Pricing, Revenue Department, Ministerial Regulation
19 October 2020
In addition, under Section 71 ter of the Revenue Code, corporate taxpayers which have related parties as defined by the Revenue Department and which have annual turnover exceeding the threshold specified in the related Ministerial Regulation, which shall be not less than THB 200 million, are required to prepare and file a transfer-pricing disclosure form.
On 1 September 2020, the Cabinet approved two draft Ministerial Regulations in regard to transfer pricing, as follows:
1. A draft Ministerial Regulation in regard to adjusting the income and expenses of related companies or legal partnerships under Section 71 bis of the Revenue Code.
This Ministerial Regulation specifies the nature of commercial or financial operations which are believed to be the transfer of profits between related companies or legal partnerships, and sets out rules for Revenue Department officials to adjust the income and expenses of related companies or legal partnerships.
2. A draft Ministerial Regulation in regard to determining the amount of income of a company or legal partnership under Section 71 ter of the Revenue Code.
This Ministerial Regulation specifies that a company or legal partnership with income per accounting period of not more than THB 200 million is not required to report information regarding the total value of transactions between related companies or legal partnerships. This means that such companies or legal partnerships are not required to prepare a transfer-pricing disclosure form to be filed with their annual corporate income tax returns. This regulation shall apply to the income of a company or legal partnership whose accounting period begins on or after 1 January 2019.