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What is Transfer Pricing?
Transfer prices refer to the terms and conditions which so-called “associated enterprises” agree for their “controlled transactions.” Examples of such transactions are the provision of management services, the supply of goods and the provision of loans.
According to this widely used OECD definition, enterprises are associated if:
"(a) an enterprise participates directly or indirectly in the management, control or capital of another enterprise or (b) the same persons participate directly or indirectly in the management, control or capital of two enterprises."
How we can help?
Review of TP policy and preparing risk assessment (traffic light) reports
Preparation of TP documentation (local file, master file)
Review of "TP Disclosure Form”
If you are not sure whether you will be subject to Thai TP regulations. Click this button. This will be continue in Thai.
Documentation
Prepare TP documentation (i.e. local file, master file)
Annual update of TP documentation (i.e. local file, master file)
[+ TP Risk Assessment] -- optional
[+ Review of disclosure form] -- optional
Benchmarking Study
Comparable search
Public information review (i.e. website, financial information)
Audit trail ready
[+ Brief TP characterization & key related party transactions] -- optional
TP Planning
High-level analysis of functions, risks and assets (FRA)
Identify potential TP treatments
[+BM] -- optional
TP Risk Assessment
Review and assess the current TP treatments and financial results
Identify potential TP risks/exposures and/or opportunities
[+BM] -- optional
TP Controvercy
Bilateral and multilateral Advance Pricing Agreement (APAs)
Advanced rulings and unilateral APAs
Interaction with tax authorities
Analysis, economic and technical support
Transfer Pricing (TP) laws in Brief
All related party transactions must be priced at the market value unless justifiable reasons are provided, e.g. sale/purchase of goods, provision/receipt of services or loans, etc. TRD has the power to assess additional income or disallow expense if they believe the market value is not used by the Company. If the transfer pricing adjustment results in additional taxable profit, a tax penalty of up to 100% and a surcharge of 1.5% of the tax payable per month (capped at the tax amount) would apply.
TRD issued the Department Instruction No. Paw.113/2545 on 16 May 2002 as the Transfer Pricing Guidelines which require all related party transactions to comply with the arm’s length concept and apply transfer pricing methods such as the comparable uncontrolled price, resale price, cost plus, or other internationally accepted methods to determine the market price for related party transactions.
The Revenue Code Amendment Act No. 47 was issued on 18 November 2018 to set out transfer pricing documentation requirements. In particular, any “related companies or partnerships” with revenues more than Baht 200 million will be required to submit annual reports together with their corporate income tax returns and transfer pricing documentation within sixty days (extended to 180 days for the first submission) from the date on which the notification was received from the tax assessment officers. The failure to submit the annual reports or transfer pricing documentation will result in a maximum fine of Baht 200,000.
Thai Revenue Department introduced FAQ for TP implications (in Thai). Click this button for more detail.
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