Worldwide transfer pricing reference guide 2014

Thailand (continued)
Documentation requirements (continued)
• The structure and relationships between business entities within the same group, including the structure and nature of business carried
on by each entity
• Budgets, business plans and financial projections
• Taxpayers’ business strategies and the reasons for adopting those strategies
• Sales and operating results and the nature of transactions between business entities within the same group
• Reasons for entering into international transactions with business entities in the same group
• Pricing policies, product profitability, relevant market information and profit sharing of each business entity
• Functions performed, assets utilized and risks assumed by the related business entities should all be considered
• Support for the particular method chosen
• Other methods have been considered, details of those methods and the reasons for their rejection (contemporaneously documented)
• Evidence supporting the negotiation positions taken by the taxpayer in relation to the transactions with business entities in the same
group and the basis for those negotiating positions
• Other relevant documentation (if any) supporting the transfer prices
Documentation deadlines
The taxpayer is required to submit the transfer pricing documentation as and when requested by the TRD by the submission date
stipulated in the request letter. However, the taxpayer may request an extension of the submission deadline, if necessary. Such a request
must be a formal letter submitted to the TRD. In general, the maximum extension is one month after the TRD has received the letter.
Statute of limitations on transfer pricing assessments
Under Section 19 of the TTC, the statute of limitations is two years from the date of filing the tax return. This period may be extended to
five years upon suspicion of tax evasion or fraud.
Return disclosures/related party disclosures
No disclosure of the existence or non-existence of transfer pricing documentation is required to be submitted with a tax return. Nor is it
necessary to file any documentation with a tax return.
Under the Thai Federation of Accounting Professions and Securities and Exchange Commission (SEC) regulations, the related party
transactions of companies listed by the SEC must be disclosed in the company’s financial statements and annual report. Non-listed
companies are not required to disclose related party transactions in their financial statements.
Transfer pricing-specific returns
Not applicable.
Frequency of tax audit and transfer pricing scrutiny by the tax authority
Scrutiny of transfer pricing during a tax audit or inquiry in Thailand is common and the risk for an average multinational company is from
moderate to slightly high. The TRD expects taxpayers to cooperate in providing relevant transfer pricing supporting documentation. It is
likely that failure to do so will lead to a tax audit.
Since the corporate income tax reduction from 23% to 20% in 2013 and large government spending on improving infrastructure in
Thailand, the level of tax enforcement has been increasing especially in the area of transfer pricing. TRD does not focus on specific
country or industry; rather on multinational corporations of various industries that incurred intercompany fees, costs allocations,
consecutive losses and fluctuation of profitability.
Generally, the TRD makes transfer pricing adjustments to the deductibility of expense items through its annual routine visits to
Worldwide transfer pricing reference guide
296