Transfer pricing documentation requirements clarified

The Director-General of Thailand’s Revenue Department on 30 September 2021 issued a notice on the documentation and evidence that corporate taxpayers will be requested to provide to support their analysis of the terms of their transactions with related parties.

The documentation and evidence specified in the notice is consistent with the requirements of the OECD’s transfer pricing guidelines.  

The notice is issued under Thailand’s new transfer pricing legislation, in effect since 2019, which requires the annual filing of related party disclosure forms by companies with Baht 200 million (USD 6 million) or more in revenues in an accounting period. Companies that are required to file a related party disclosure form may subsequently be requested by the Revenue Department to provide the documentation and evidence contained in the notice.

A company will not be required to submit a benchmarking study for an accounting period if its total revenues are less than Baht 500 million (USD 15 million); it has no transactions with related parties that are subject to a different corporate income tax rate; it has no transactions with foreign related parties; and a prior year tax loss has not been claimed as an expense by the company or by related companies that have transactions with the company.

Companies that have made a bilateral advance pricing agreement with the Revenue Department for intra-group transactions with affiliates that are resident of Thailand’s treaty partners are also exempted from providing a benchmark study for the transactions covered by the agreement.

All documents or evidence must be submitted in the Thai language and their submission will be considered complete upon receiving a document submission number from the Thai Revenue Department.  

The notice is effective for accounting periods starting on or after 1 January 2021.