Thailand has adopted the OECD’s global minimum tax framework through the Emergency Decree on Top-Up Tax B.E. 2567 (2024). Published in the Government Gazette on December 26, 2024, this legislation implements a 15% global minimum effective tax rate for large multinational enterprise (MNE) groups. The emergency decree took effect on January 1, 2025.
The emergency decree was enacted through expedited procedures to implement “pillar two” of the OECD’s Base Erosion and Profit Shifting (BEPS) 2.0 project’s Global Anti-Base Erosion (GloBE) Rules. This swift implementation ensures Thailand can collect relevant tax revenues and prevents potential revenue losses from MNEs that might otherwise shift profits to jurisdictions with lower tax rates or to countries that have already implemented similar top-up tax legislation.
Key aspects of Thailand’s implementation of the global minimum tax through the emergency decree are described below.
Top-Up Tax
The emergency decree introduces a dual mechanism for collecting additional top-up tax from MNEs whose effective tax rate falls below 15%. The first mechanism is a domestic top-up tax that targets MNEs operating within Thailand when their local effective tax rate is lower than 15%. The second mechanism is the income inclusion rule, which determines when a company’s foreign income should be included in the parent (main) company’s taxable income. This rule applies to Thai-based entities—including ultimate parent entities (UPE), intermediate parent entities, and partially owned parent entities—that hold ownership stakes in low-tax foreign jurisdictions.
Scope
MNEs subject to Thailand’s implementation of the global minimum tax framework are defined in the emergency decree as those whose UPEs report consolidated revenue of at least EUR 750 million (approximately THB 28 billion) in at least two of the four accounting periods preceding the relevant fiscal year.
Reporting and Payment
In-scope MNEs must comply with specific reporting obligations to the Thai Revenue Department. The filing deadline is set at 15 months after the UPE’s accounting period ends, requiring submission of MNE information documentation, the GloBE Information Return, and a Thai top-up tax return with the corresponding payments.
Noncompliance with these requirements may result in fines under the Revenue Code, as well as potential criminal liability if the noncompliance is found to be willful.
Impact on Investment Incentives
Some of the MNEs subject to the emergency decree’s provisions may also be recipients of Board of Investment (BOI) tax incentives. Existing promoted projects may convert their corporate income tax (CIT) exemption to a reduced CIT rate of 10% (from the standard 20% rate). This applies for a period of up to twice the remaining full-year CIT exemption period, combined with the existing five-year tax reduction period, not exceeding 10 years total. Other investment promotion benefits remain unchanged. For new investment projects, applicants will receive the same 10% CIT rate for a period of up to twice the CIT exemption period plus the tax reduction period, not exceeding 10 years total.
Takeaways
The Emergency Decree on Top-Up Tax represents Thailand’s commitment to global tax standards while protecting its revenue base. Both Thai and foreign MNEs—particularly those with BOI privileges—must carefully consider their tax structures and compliance obligations. The BOI’s adaptive measures demonstrate Thailand’s effort to maintain investment attractiveness while implementing the OECD global minimum tax framework. MNEs should assess their positions and begin complying with the newly implemented rule.
For more information on Thailand’s implementation of the global minimum corporate tax, or on any aspect related to tax regulations in Thailand, please contact Saravut Krailadsiri at [email protected] or Supawadee Thananearamitkun at [email protected].
