Thailand: Guidance for taxpayers within scope of Pillar Two global minimum tax rules
Aimed at alleviating the effect of top-up taxes under the Pillar Two rules on taxpayers currently benefiting from Thai tax incentives
Guidance for taxpayers within scope
The Board of Investment (BOI) released BOI notification No. 1/2566 providing guidance to Thai taxpayers identified as generally being within scope of the base erosion and profit shifting (BEPS) Pillar Two global minimum tax rules (i.e., those within multinational enterprise groups that meet the consolidated group revenue of not less than THB 28 billion (approximately €750 million) and are subject to country-by-country (CbC) reporting requirements).
BOI notification No. 1/2566—which was announced by the Prime Minister on 16 May 2023 but was issued with effect from 20 March 2023— is aimed at alleviating the effect of top-up taxes under the Pillar Two rules on taxpayers currently benefiting from Thai tax incentives.
The notification allows qualified BOI-promoted companies currently enjoying BOI income tax exemption incentives in Thailand to elect to apply 50% of the statutory corporate income tax rate of 20%, thereby applying a 10% rate for the remaining tax exemption period. By electing a 10% rate in lieu of income tax exemption, the taxpayer’s tax incentive period will be doubled by the remaining tax exemption period. The elective 10% percent rate is limited to a maximum of 10 years, which includes the five years already granted to some taxpayers holding a BOI incentive, allowing a five-year 50% rate reduction after the expiration of the tax exemption period.
Read a July 2023 report [PDF 230 KB] prepared by the KPMG member firm in Thailand
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.