The move comes as Thailand, like other countries, seeks to prevent companies from shifting profits from a high-tax country to a lower tax jurisdiction, which is a harmful tax practice that countries need to prevent in order to protect their tax revenues.
Thailand's stricter transfer pricing rules have been in effect since 2019, followed in 2022 by Thailand signing a multilateral agreement between the authorized officials for the exchange of country-by-country data reports, under which Thailand will start exchanging information with other countries from 2023 onwards.
According to the rules, companies with annual revenues of at least THB 200 million are required to prepare two documents: the TP Disclosure Form and the TP Local File, and large groups must also submit a Country-by-Country Report. These documents list all related parties and transactions with related parties, and include a detailed description of the Thai business and a benchmarking study. Multinational companies have to comply with these laws and regulations accurately and completely. Even companies with revenues under THB 200 million may face challenges from the Revenue Department, making it essential to define transfer pricing policies and have agreements to document them.
"Transfer pricing rules can be complex and challenging for multinationals to navigate. It is more important than ever for companies to carefully consider their transfer pricing policies and ensure compliance with regulations," said Jonathan Stuart-Smith, the partner of Tax team at Mazars Thailand.
Another key issue that companies must consider is the impact of currency fluctuations on profits. The allocation of foreign exchange risk can have a significant impact on a company's profitability. The team at Mazars in Thailand can help businesses to analyze their specific case and determine the appropriate allocation of foreign exchange risk.
To address the needs of multinational companies in Thailand, Mazars in Thailand offers a range of tax and transfer pricing solutions that aim to ensure that clients' transfer pricing policies comply with tax laws.
The firm's experienced team provides consultation and assistance with TP planning; TP policy implementation; TP compliance and documentation; benchmarking studies and support with handling investigations by the tax authorities.
"We are committed to help companies develop and implement transfer pricing policies that comply with the regulations and ensure they are prepared for any potential audits or challenges from the tax authorities. Our consultation will also help companies to mitigate the risk of a tax audit, additional tax assessed by the tax authorities, penalties and interest on overdue tax. We also help companies to ensure that the provisions for tax in the financial statements are complete and accurate," said Jonathan Stuart-Smith, the partner of the Tax team of Mazars in Thailand.
As a global leading tax advisory firm, Mazars has been offering and providing TP services for several years. The company currently has a team of over 20 full-time tax experts who have deep knowledge and experience, so it is well positioned to help companies stay compliant and achieve their business objectives in Thailand, said Mr. Jonathan Stuart-Smith.
Transfer pricing services are part of Mazars' broader range of tax, audit, and advisory services. Tax services currently contributes around 10% of the company's revenues. Driven by its expanded focus on tax and transfer pricing solutions, Mazars in Thailand aims to achieve robust growth by 20% per year for the next several years from offering the services. With such solutions available, businesses can be confident in their transfer pricing policies and focus on driving growth and profitability.
About Mazars:
Mazars is an internationally integrated partnership, specializing in auditing, accountancy, advisory, tax, and legal services. Operating in over 95 countries and territories around the world, we draw on the expertise of more than 47,000 professionals - 30,000+ in Mazars' integrated partnership and 17,000+ via the Mazars North America Alliance - to assist clients of all sizes at every stage of their development. More information can be found at www.mazars.com
About Mazars in Thailand:
Mazars in Thailand is a leading, accounting, audit, tax, legal, and advisory practice comprised of over 350 professionals. The practice has Thai, British, Dutch, Indian, German, Japanese, Australian, Vietnamese, and Korean nationals among its senior advisers, which ensures that the company is well placed to function as a bridge between businesses operating in Thailand and related companies overseas.
For more information, visit www.mazars.co.th.
Source: O.Openarms
