Draft Legislation for Multinational Enterprises in Thailand

The Revenue Department has proposed a draft law requiring multinational enterprises (MNEs) to pay a fixed percentage of taxes to prevent a specific kind of tax evasion called “profit shifting”. This legislation, known as the “Top-up Tax Act,” aligns with OECD and G20 frameworks and is expected to be implemented in 2025. It aims to combat tax base erosion and establish a global minimum tax rate of 15%, with MNEs responsible for paying the difference if profits are shifted. The act will not apply to companies receiving tax benefits under the Investment Promotion Act. Following the Cabinet's approval in March 2023, the draft has undergone public hearings, and if enacted, it is projected to increase tax revenue by 12 billion THB annually.