Thailand: Revised transfer pricing disclosure form; country-by-country reporting notification and Q&As

The Thai Revenue Department revised the transfer pricing disclosure form and provided additional explanations along with a set of “questions and answers” (Q&A) and updates on the notification process for country-by-country (CbC) reporting.  

• A notification in Section C of the transfer pricing disclosure form, via the e-filing system, must be made within 150 days of the end of an accounting period (for each entity with revenue of more than THB 200 million).
• One representative entity of the multinational enterprise (MNE) group must be selected to log-in to the CbC reporting system for filing and uploading a list of all “constituent entities” in Thailand. The filing needs to be done as early as possible, but no later than the deadline for the CbC reporting notification (that is, an MNE group must have only one representative for filing). The file can be downloaded from the main page of the CbC reporting system website.

• The consideration between related parties is still based on the definition from Clause 1 and 2 of Section 71 bis.  The definition from Clause 3 of Section 71 bis is not yet being enforced. 
• A joint venture entity is required to prepare and submit transfer pricing documentation if it meets the revenue threshold as well as the related-party definition. 
• Dividend payments are not required to be included in the transfer pricing disclosure form.
• The taxpayer is required to fill in only the reimbursement reflecting the mark-up, while the reimbursement without mark-up is not required to be disclosed in the transfer pricing disclosure form.
• If an entity applies TFRS 16 for rental fees, the amount of the right to use the asset will be filled in the “Purchase of Property, Plant and Equipment” (PPE) column, and the amount of interest expense in the “Other Expense” column.
• With respect to intercompany loan transactions for the purchase of assets from third parties, if the assets are not ready for use, the interest expense will be included in the “Purchase” of the PPE column. If the assets are ready for use, the interest expense will be included in the “Interest Expense” column.
• For an MNE group with a foreign ultimate parent entity (UPE), the threshold for preparing the CbC report is based on the CbC reporting regulations/requirements in the country where the UPE is located. 
• The transfer pricing disclosure form can be filed separately from PND 50. 

The Thai Revenue Department launched the transfer pricing disclosure form with a revised Section C by adding questions concerning the CbC reporting notification.  In order for each entity that satisfies the threshold to be ready to submit the transfer pricing disclosure form with the new required information in Section C, it may be advisable for each entity to contact its UPE to gather, in advance, the information required for the transfer pricing disclosure form. Moreover, the related parties in Thailand in the same consolidated MNE group need to consider having a discussion and consultation with their UPE in order to select a representative entity in Thailand. 

Finally, taxpayers that meet the threshold for filing the transfer pricing disclosure form need to review the new explanation and Q&As to be better prepared to manage any risks of being challenged for incorrect or incomplete information inclusions in the transfer pricing disclosure form and thereby avoid possible penalties. 

Read a March 2022 report prepared by the KPMG member firm in Thailand