An emergency decree on top-up tax (B.E. 2567), implementing the Pillar Two global minimum tax rules in Thailand, was published in the government gazette on December 26, 2024, and became effective January 1, 2025.
- The decree imposes a 15% global minimum tax on multinational enterprises (MNEs) with consolidated revenues of at least €750 million per year for two out of the four preceding fiscal years.
- The decree covers the imposition of a top-up tax under various rules initiated by the OECD: (1) income inclusion rule, (2) undertaxed payments rule, and (3) domestic minimum top-up tax rule. Although the decree does not specify how the numerator and denominator are adjusted to arrive at the effective tax rate for Pillar Two purposes, it mentions that these details will be prescribed in a ministerial regulation. The decree also lacks safe harbor provisions but states that these will be prescribed in a future Royal Decree, allowing the top-up tax to be deemed zero in various circumstances pursuant to the OECD guidance.
- The decree also provides administrative details in broad alignment with the OECD’s global anti-base erosion (GloBE) model rules, which include the requirement for taxpayers to file returns and pay top-up tax within 18 months after the end of the first reporting year and within 15 months for subsequent reporting periods. Under the decree, one or more in-scope entities can be nominated as being responsible for top-up tax filing and payment on behalf of other in-scope entities that are liable to top-up tax. The decree also includes various provisions for top-up tax payment in installments and refunds. Penalties and surcharges for failure to comply with the decree in various situations are also specified.
Read a January 2025 report prepared by the KPMG member firm in Thailand