Advance Blog

February 28, 2018
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Update on the Revenue Department’s policy development on OECD Base Erosion and Profit Shifting (BEPS) project Inclusive Framework


Name: Position: Company:
Matthew Hung Senior International Tax Manager Minor International
Panupong Panpattanasil International Tax Manager Minor International
Tanva Mahitivanichcha Partner Grant Thornton
Melea Cruz Partner Grant Thornton
  1. On 6 February 2018, the Revenue Department’s (“RD”) policy development team invited private sector representatives, including AustCham, to attend a forum discussing Thailand’s involvement in the OECD Base Erosion and Profit Shifting (“BEPS”) project Inclusive Framework (“IF”);
  2. Joining the IF commits Thailand to align our tax regulations in various core areas, including:
    1. compliance with transfer pricing principles and documentation (including country by country reporting),
    2. making dispute resolution mechanisms more effective,
    3. countering harmful tax practices,
    4. preventing the granting of treaty benefits in inappropriate circumstances;
  1. The RD are currently exploring and likely to become signatories of the OECD’s multilateral instrument (“MLI”).  Where Thailand has a bilateral double tax agreement (“DTA”) with another country which is already a signatory of the MLI, new anti-avoidance provisions will automatically be inserted into those DTAs that restrict their application in certain circumstances.
  1. Critically, with regard to harmful tax practices, the OECD’s working group has taken objection to ringfencing in the current International Headquarter, Regional Operating Headquarter, Treasury Centre and International Trading Centre tax regimes (“the Tax Regimes”).  The OECD considers these regimes feature ringfencing as a preferential tax rate is given to profits on income from sources outside of Thailand, while Thailand ringfences its domestic tax collection with a higher CIT rate on income from Thai sources;
  2. The RD intend to respond to the OECD by legislating a new, replacement scheme to the Tax Regimes, with first drafts being circulated amongst the various ministries in the first quarter of 2018.  The RD are not in a position to release any details about the replacement Tax Regime, although:
    1. Existing beneficiaries of the Tax Regimes are expected to be entitled to benefits through to 2021 (or, subject to some legal confirmation, potentially 2027) although the RD shall seek to incentivize existing beneficiaries to migrate to the new scheme;
    2. Some components would be more (and others less) favourable to taxpayers, than the existing regimes;
    3. Non-corporate income tax benefits granted by the schemes, such as waiver of 4:1 Thai:Expat employee ratios and personal income tax, are not under review;
  1. The RD indicated that the current transfer pricing (“TP”) legislation has been approved by the Thai Cabinet and is in process for review by the National Legislative Assembly.  With respect to the effective date of the TP legislation, the RD noted that the effective date stated on the current draft is obsolete and will be amended.  While the RD has not provided a tentative effective date for the TP legislation, the RD expects that legislation to take effect in 2019, whereby taxpayers may be required to prepare TP documentation based on fiscal year 2018 transactions.
  2. We await further updates from the RD in due course.


Matthew Hung is an international and Australian corporate income tax generalist. Specialties: corporate income tax, international income tax, income tax planning, income tax consulting, income tax compliance


Panupong Panpattanasil  is Tax and transfer pricing enthusiast, with experience from both professional firm and international corporation. Lead and execute wide scope of international tax and transfer pricing projects. Highly motivated and take pleasure in leading and motivating others.


Tanva is a Partner at Grant Thornton working in Tax Consulting. His expertise includes foreign investment planning and structuring, trade privilege structuring, customs compliance, transaction tax structuring, and regulated industry compliance. He is a member of the Law and Tax Committee, and the Customs and Trade Facilitation Committee at the Federation of Thai Industries.

MeleaMelea is a Tax Partner at Grant Thornton in Thailand. Her expertise is in international taxation, transfer pricing, tax compliance, tax assessments, tax advocacy and expatriate tax services. She has over 20 years of experience providing tax consulting services to clients in various industries including manufacturing, real estate, consumer services, and automotive. She has also been a member of the Philippines Bar since 1997.

Grant Thornton and Minor International

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