Thailand deliberates transfer pricing law

Thailand’s Council of State is deliberating the country’s first law on transfer pricing. If passed the bill w ould allow Thailand Revenue Department (TRD) officials to enquire into profits from crossborder transactions of multinational companies.

The final draft of the law w as approved by the Cabinet in May this year. It w as created in line w ith OECD guidelines.

Thailand has no specific anti¬avoidance legislation. The only provision in place is a Departmental Instruction (No.Paw 113/2002), w hich states that a company operating in Thailand must calculate its net profit for corporate tax in accordance with section 65 of the Thai Revenue Code.

The new law w ould require companies to provide transfer pricing documentation to the TRD within 150 days after the end of the accounting period. Failure to do w ould result in a penalty of up to Bt400,000 ($12,000).

“We cannot now say w hat date the law w ill be effected,” said Benjamas Kullakattimas, tax partner at KPMG in Thailand. “If the law is issued this year though, it is possible the TRD w ill want the taxpayer to start providing transfer pricing documentation from the 2015 tax year, due May 30 2016.