Thailand will implement a 15% global minimum corporate tax on multinationals with annual revenues exceeding €750 million as of January 1, 2025.
Objectives
This initiative, according to the OECD framework, aims to:
- Ensure fair tax contributions: To prevent multinationals from using tax havens to reduce their tax liabilities.
- Create a level playing field: To disincentivize tax competition among countries offering extremely low corporate tax rates.
- Promote global economic equity: To help governments generate revenue to fund public services and infrastructure.
Effects on Multinationals and Transfer Pricing
Companies currently benefiting from low tax rates in Thailand could face additional taxes to reach the minimum threshold. In addition, they must improve their reporting and transparency to comply with OECD guidelines. Multinationals must review their tax strategies and operational structures, including their Transfer Pricing policies, to adapt to these new regulations.
Effects on the Thai Economy
Implementing this global minimum tax rate should strengthen Thailand’s reputation as a transparent and cooperative member of the international business community. Potential benefits include:
- Increased foreign investment: Due to aligning with OECD standards, Thailand may attract multinationals searching for stable and consistent business environments.
- Increased revenue generation: The policy could increase government revenues, allowing reinvestment in key sectors such as health, education, and infrastructure.
- Strengthened global partnerships: Thailand’s proactive approach to tax reform can foster stronger relationships with other countries and international organizations.
Conclusion
Thailand’s implementation of a 15% global minimum tax is a significant advance toward tax fairness and alignment with international standards. Multinationals should prepare for these changes by reviewing their tax strategies and ensuring compliance with the new regulations, especially regarding Transfer Pricing.
Call to Action
At TPC Group, we have an experienced Transfer Pricing team at your disposal to assist you in any requirement you may have.
