Hope all is well on your side. As per your request, we would like to provide you with a quick update of transfer pricing development in Thailand below.
Through our strong relationship, we have recently discussed with the head of transfer pricing audit and APA working unit and a senior tax officer from legal unit from Thai Revenue Department (“TRD”). We would like to share the unofficial information below with you. Hope this information is useful for you.
• The TRD has drafted the transfer pricing regulations. We were informed that the first draft transfer pricing laws contain several tax provisions. The regulations will require taxpayers to (i) submit the transfer pricing form with annual tax return and (ii) prepare the transfer pricing documentation by laws. There may be an upfront fixed penalty for taxpayers who do not comply with those. We heard that the transfer pricing laws should be tentatively enacted around third quarter this year.
• The most recent update is that in this year the TRD is under tax collection. The TRD would like to more focus on transfer pricing audits. The Director of TRD has asked general tax officers (not only specialized transfer pricing audit team) to conduct transfer pricing audits. The head of transfer pricing audit team has provided several transfer pricing trainings to other general tax officers (especially in Large Tax Organization).
• Based on our observations in the markets, we have seen that general tax audit team of electronics industry invited some taxpayers to the TRD to talk about transfer pricing. In addition, some of our automotive clients got a request from the general tax audit team to submit the segmented gross margins (e.g. domestic vs export, by products) for 2009 to 2013. These actions by general tax officers have shown that the TRD has really more focused on transfer pricing audits. There will be more and more to come.
• In addition, we would like to inform you that the former head of transfer pricing audit team early retired and joins us as a full-time tax advisor. She has worked with TRD for more than 35 years. She conducted the investigations on corporate income tax, withholding tax and VAT. For the last 10 years with TRD, she set up a transfer pricing audit team with audit procedure.
It is strongly recommended that the transfer pricing documentation should be prepared in advance to manage the transfer pricing risks and to show compliance effort. Please feel free to contact us if you have any questions or require any assistance. We would be happy to have a call or meeting to discuss any concerns that you may have.