Requirements for Country-by-Country Report in Thailand

Keywords: Mazars, Thailand, Tax, Country-by-Country Report, CbCR, Bank of Thailand, MCAA, Ultimate parent entity, Surrogate parent entity, Revenue Department, PND 50

4 November 2021

Multinational enterprises (“MNE”) subject to CbCR filing in Thailand

The Notification applies to MNEs which had total consolidated group revenue in the previous accounting period of:

1. not less than THB 28 billion in a 12-month accounting period; or

2. not less than THB 28 billion in an accounting period of less than 12 months, when calculated in proportion to the number of days in the said accounting period. If the revenue is in a foreign currency, it must be converted into Thai baht based on the average buying rate of commercial banks for money transfers announced by the Bank of Thailand at the end of the accounting period prior to the CbCR filing period under the Notification.

An MNE is defined as:

1. two or more companies or legal partnerships with a controlling relationship according to generally accepted accounting principles relating to consolidated financial statements, and (i) such companies or legal partnerships are tax residents of more than one country, or (ii) any one of companies or legal partnerships is tax resident of one country and also conducts business through a permanent establishment in the other country; or

2. companies or legal partnerships which are tax residents of one country and also conduct business through a permanent establishment in the other country.

Entities of MNEs which are required to file a CbCR in Thailand

Under the Notification, the following entities of an MNE are required to file a CbCR in Thailand:

1. An entity incorporated under Thai law that is an ultimate parent entity (“UPE”).

2. An entity incorporated under Thai law which is not a UPE but is appointed by the UPE of the MNE as a surrogate parent entity (“SPE”) to file the CbCR in Thailand under the following circumstances:

(i) the country in which the UPE is a tax resident does not have a law requiring the UPE to file the CbCR.;

(ii) the UPE must appoint the Thai entity to be the SPE in writing, as well as notify the appropriate authorities in Thailand of this; and

(iii) the accounting period of the SPE must be the same as that of the UPE.

3. An entity conducting business in Thailand which is neither the UPE nor the SPE may be required to file a CbCR in Thailand if one of the following criteria is met:

(a) the UPE of the MNE is not required to file the CbCR in its country of tax residence;

(b) the UPE’s country of tax residence does not have a Multilateral Competent Authority Agreement (“MCAA”) on Automatic Exchange of Information with Thailand effective in the accounting period in which the CbCR shall be filed; or

(c) the Revenue Department has been notified of a systemic failure of the UPE’s country of tax residence.

However, the entity under 3. above may be exempt from the obligation to file the CbCR in Thailand if the following conditions are met:

(i)  the UPE of the MNE has appointed the SPE to file the CbCR in the country in which the SPE is a tax resident, and the SPE must notify the competent authority of its country of tax residence about such an appointment;

(ii)    the country in which the SPE is a tax resident has a law requiring that the CbCR be filed in that country and has a MCAA on Automatic Exchange of Information with Thailand effective in the period in which the CbCR must be filed in Thailand;

(iii)   the governing authority of the country in which the SPE is a tax resident has not notified the governing authority in Thailand of an information exchange system failure; and

(iv)  the Thai entity must notify the governing authority in Thailand regarding the appointment of the SPE.

Definition of UPE

A UPE is defined as:

1. a company or legal partnership that, directly or indirectly, controls other companies or legal partnerships of the MNE, which results in it having the obligation to prepare consolidated financial statements in accordance with generally accepted accounting principles of the country in which it is a tax resident, or it being required to prepare consolidated financial statements if its securities are traded on the stock exchange of the country in which it is a tax resident or are traded on the Stock Exchange of Thailand where that country does not have a stock exchange, and it is not controlled in the same way by another company or legal partnership in the MNE; or

2. a company or legal partnership which does not fall under (1) above, but which conducts business through a permanent establishment in other countries.

Reporting format

The CbCR must be in English. It must follow the CbCR XML Schema prescribed by the Organization for Economic Co-operation and Development.

Reporting deadline

The CbCR must be filed together with the annual corporate income tax return (Form PND 50) within 150 days of the end of the accounting period.

The Notification is effective for accounting periods starting on or after 1 January 2021.