The Thai Revenue Department (TRD) released a transfer pricing disclosure form to be filed by corporate taxpayers having revenues of at least THB 200 million or more per accounting year. The subject taxpayers with fiscal years beginning on or after 1 January 2019 then must submit the transfer pricing disclosure form to the tax authority within 150 days after the last day of the accounting period. A failure to report related-party transactions or to provide complete and accurate transfer pricing information and disclosures may be subject to a penalty assessment.

Information to be provided on the transfer pricing disclosure form includes:

• A list of related parties
• The value of related-party transactions separated by (1) domestic versus overseas, and (2) income versus expenses
• Details of expenses classified based on their nature (i.e., expenses for purchasing raw materials or goods, land, building and equipment, including royalties, management and technical service or commission fees, interest expenses)
• Some key yes/no questions on (1) Consolidated financial information; (2) Information about business restructuring between related parties; and (3) Information about sales, distributions, and transfers of intangible assets between related parties

The Thai tax authority may use information provided on the transfer pricing disclosure form to evaluate the level of related-party transactions, whether profits have been transferred out of Thailand, and those related-party transactions that may be the focus of transfer pricing audits. Other information may lead to more specific aspects of transfer pricing issues. For instance, taxpayers that have responsibility to prepare consolidated financial information and if a threshold is satisfied, would need to prepare a Master file as per base erosion and profit shifting (BEPS) Action 13 recommendations. Any business restructuring and intangible property transfer could possibly result in a special transfer pricing and tax investigation.

Accordingly, in preparing the transfer pricing disclosure form, taxpayers may want to consider the following actions:

• Review the list of related parties in the group. A subsidiary in Thailand may want to contact its parent company to compile a list of all related parties in Thailand and overseas. Concerning family-owned businesses, management may need to discuss the structure with shareholders to obtain a full picture of all entities whose shares are held by them and then evaluate whether the structure meets the criteria of related parties under Thai tax law. 
• Review all related-party transactions that are to be reported on the disclosure form and review whether the transfer pricing policy of each transaction is consistent with the arm’s length principle as well as determine that the taxpayer has necessary intercompany agreements including supporting documents and local files.
• For those taxpayers that must prepare consolidated financial information, consider whether a Master file is necessary.
• Review whether the business restructuring as well as sale, distribution, or transfer of intangible properties have been made with justifiable business and economic reasons, in accordance with the arm’s length principle, and with supporting documents.