Transfer Pricing - Thailand
The transfer pricing regulations can be found in the Thai Transfer Pricing Guidelines and the Supplementary Clarification on Determination of Market Price for Multinational Enterprises. The Thai Transfer Pricing Guidelines do not have any legal status. Rather, they provide internal instructions from the Director-General of Revenue to the Revenue officers with regard to transfer pricing matters. Nevertheless, these Guidelines reflect the Revenue Department’s interpretation of tax law, so that non-compliance by a taxpayer is likely to lead to a tax dispute. As a result, taxpayers are expected to prepare and maintain transfer pricing documentation and supporting documents at their office, ready for inspection if and when requested.
The Thai Transfer Pricing Guidelines basically confirm the applicability of the general provisions of corporate income tax law to transfer pricing issues. One notable change was the introduction of the application of the concept of functions, risks and assets in assessing a taxpayer’s transfer pricing compliance. The Thai Transfer Pricing Guidelines also specify which transfer pricing methods are acceptable and what kind of information and documents the Revenue officers should request from a taxpayer when reviewing its transfer pricing practices. Furthermore, the Guidelines communicate to taxpayers that they may apply for an advance pricing agreement (APA) with the Revenue Department.
On 21 November 2018, Thailand passed specific transfer pricing provisions into law to modernize the outdated law and to
make transfer pricing disclosure mandatory. Therefore, the above-mentioned scope of legislation is still applicable.