Asia-Pacific Transfer Pricing Handbook

Chapter Thirty-One

Thailand Transfer Pricing

During The Middle of the first decade of the twenty-first century, the Revenue Department of Thailand recognized that international business transactions are continuing to increase dramatically. The Revenue Department of Thailand understood that international investment has increasingly expanded at an unprecedented rate in many countries. As a result of these developments, the Revenue Department of Thailand set up a transfer pricing regime to address these tax issues that remain in force today.

The Revenue Department of Thailand views a multinational enterprise (MNE) as being a “group of companies” having “mutual interests.” The Revenue Department of Thailand views transfer pricing that takes place by the MNE as the process of trading goods or services with other MNE members. Transfer pricing, then, is the price that related contracted parties set for goods or for services where the prices may deviate from the market price. The Revenue Department of Thailand defines the market price or the arm’s length price as the price on consideration, service fee, or interest that independent parties acting in good faith would charge in a commercial manner for the product or service. That product or service or loan would have the same characteristics, categories, or types of property, or service, or loan, that the first party would transfer or provide on the date provided for the date of the property transfer, the providing of services, or lending. ...