Thailand, as part of its commitment to international tax transparency and in line with the OECD’s Base Erosion and Profit Shifting (BEPS) Action 13, has introduced Country-by-Country Reporting (CbCR) requirements. These regulations aim to prevent tax avoidance by multinational enterprises (MNEs) through enhanced transparency and reporting on their global activities, income, taxes paid, and other financial details. This guide provides an overview of the CbCR obligations for multinational corporations operating in Thailand, outlining key requirements, penalties for non-compliance, and resources to ensure compliance with the regulations.

Applicability of CbCR in Thailand

Criteria for Reporting:

• CbCR requirements in Thailand apply to multinational enterprise (MNE) groups with consolidated annual revenues of at least THB 28 billion (approximately €750 million) in the preceding fiscal year.
• If the ultimate parent entity of the MNE group is a tax resident in Thailand, it must file a CbC report.
• A Thai constituent entity may also be required to file a CbC report if:
  • The parent entity’s jurisdiction does not require CbCR,
  • There is no qualifying agreement for the exchange of CbC reports between Thailand and the parent entity’s country, or
  • There is a systemic failure to exchange CbC reports with the relevant jurisdiction.

Relevant Legislation:

• The CbCR rules in Thailand are incorporated into the country’s Revenue Code and are aligned with the OECD’s BEPS Action 13 recommendations and international standards on tax transparency.

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Reporting Requirements

Information to be Reported:

• The CbC report must include detailed information for each tax jurisdiction in which the MNE group operates, including:
  • Total revenues (separating related-party and unrelated-party revenue),
  • Profit or loss before income tax,
  • Income tax paid and accrued,
  • Stated capital and accumulated earnings,
  • Number of employees,
  • Tangible assets, excluding cash or cash equivalents.
• A list of all constituent entities within the MNE group must also be provided, specifying their tax jurisdiction and principal business activities.

Form and Submission:

• The CbC report must be submitted in accordance with the OECD XML schema, ensuring that it meets global standards for data submission.
• The report is filed with the Thai Revenue Department (TRD), the competent authority for CbCR in Thailand. For further guidance on electronic submission, visit the Thai Revenue Department website.

Filing Deadlines

• The CbC report must be filed within 12 months after the last day of the reporting fiscal year of the MNE group. For example, for a fiscal year ending on 31 December 2023, the CbC report must be filed by 31 December 2024.
• In addition, Thai constituent entities must notify the Thai Revenue Department of the identity and tax residence of the reporting entity (whether it is the ultimate parent or a surrogate parent entity) by the last day of the fiscal year.

Penalties for Non-Compliance

Penalties:

• Failure to comply with CbCR obligations in Thailand can result in significant penalties, including:
  • Failure to file the CbC report within the required timeframe can attract fines of up to THB 200,000 (approximately €5,500).
  • Inaccuracies in the submitted report or failure to provide complete information may also result in further penalties.
  • The failure to notify the authorities of the reporting entity or providing incorrect information can lead to administrative fines.

Defences:

• Companies may be excused from penalties if they can demonstrate that non-compliance was due to reasonable cause, such as administrative or technical difficulties. However, ensuring timely and accurate submission is critical to avoid such risks.

Confidentiality and Use of Information

Data Protection:

• The CbC reports submitted to the Thai Revenue Department are used for tax risk assessment and are treated as confidential.
• Thailand is a signatory to the Multilateral Competent Authority Agreement (MCAA), which facilitates the automatic exchange of CbC reports between tax authorities globally under the OECD’s confidentiality guidelines. This means that Thailand will share CbC reports with other countries that have agreed to the MCAA, provided confidentiality and data protection standards are maintained.