Legal service for foreign clients
Transfer Pricing Documentation Under Thai Law in Thailand
Annual disclosure and Local File that hold up under review.
Quick answer
The two-hundred-million-baht revenue threshold is the dividing line. Cross it while trading inside your own group and the disclosure form covering connected counterparties must accompany the annual corporate income tax return, on that same deadline, backed by a file that justifies each price. Fail to produce that file when an officer asks within the assessment window and you face both a statutory fine and an upward adjustment to taxable profit.
From THB 90,000 — From THB 90,000 per fiscal year, by number of transaction categories · Complete documentation in 6–10 weeks
Who this is for
- Subsidiaries of multinational groups
- Thai companies with overseas subsidiaries
- Companies paying management fees to a parent
- Businesses trading mainly with affiliates
What you receive
- The related-party disclosure form ready to file
- A Local File in the Revenue Department's prescribed structure
- Functions, risks, and assets analysis
- A benchmarking study establishing the arm's-length range
Documents to prepare
- Group structure chart with shareholding percentages
- All intercompany agreements
- Intercompany transaction schedules by category
- Financial statements of the counterparties
How it works
5-step process
- 1
Confirm the filing threshold applies
Total revenue and the statutory relationship test are checked.
- 2
Run the functional analysis
Identify which entity genuinely creates value in the chain.
- 3
Select the pricing method
The method must fit the transaction, not flatter the result.
- 4
Benchmark
Comparables are drawn from databases and an interquartile range computed.
- 5
Document and file
The file is kept ready to produce within sixty days of request.
In depth
Transfer Pricing Documentation Under Thai Law: what foreign clients need to know
Related-party transactions that look unremarkable in the accounts — a trademark royalty paid to the parent, a central management charge, an intra-group loan — are where the Revenue Department asks the hardest questions, because no outside counterparty disciplined the price. Our job is to make that price explainable on paper before anyone asks, not after the summons letter arrives.
Trademark royalties and intangibles from the accounting and tax angle
When a Thai company pays a related foreign entity to use a trademark, the first issue is not the withholding rate but how much value that mark genuinely creates for the Thai business. If growth came mainly from local sales effort and the brand receives almost no regional advertising, a high royalty rate invites challenge at once. We therefore decompose the sources of revenue before fixing any rate.
In accounting terms, a purchased trademark is recognised as an intangible asset and amortised over its useful life, while an internally generated mark is normally not recognised at all. That distinction leaves two otherwise identical groups reporting different profits, and it is why financial statements alone cannot justify a transfer price without supporting documentation.
Disclosure thresholds and the file you must be able to produce
A company whose annual revenue reaches the statutory threshold must file the related-party disclosure form together with its corporate income tax return, and must hand over transfer-pricing analysis within the deadline once an officer requests it. Preparing that file in advance is both cheaper and safer than assembling it retrospectively under a request.
A working file describes the group structure, each entity's functions and risks, the transactions and their values, the pricing method chosen and why, and the benchmarking against independent businesses. The usual gap is proof that the paid-for service actually happened — work reports, meeting minutes, or recorded hours of the central team.
Intra-group loans, management fees, and interest you cannot simply pick
An intra-group loan carrying no interest, or interest below market, allows an officer to impute income to the lender at the rate it should have earned. Conversely, excessive interest is disallowed as an expense in the borrower. Referencing market rates together with evidence of the borrower's credit standing is therefore central to setting the rate.
Central management costs should be allocated by a driver that tracks the benefit each entity receives — headcount, sales, or transactions processed — rather than split evenly for convenience, and shareholder-only costs such as preparing group consolidated accounts should be stripped out of the charged base.
Cost structure: government fees vs professional fees
| Item | Official fee | Professional fee | Note |
|---|---|---|---|
| Related-party health check and risk assessment | No government fee at this stage | THB 25,000–60,000 | Produces a group transaction map and the items to fix before year-end |
| Preparing transfer-pricing documentation with benchmarking | The disclosure form is filed with the CIT return; no separate fee | THB 90,000–350,000 depending on transaction count and countries involved | Driven by how many benchmarking data sets are required and how many business lines exist |
| Responding to a request and representing you before the officer | Statutory surcharge and penalties if an assessment is raised | THB 60,000–250,000 | Costs fall sharply where documentation already existed for the year in question |
A royalty set above the benefit actually received
Situation: A Thai distributor paid a percentage-of-sales royalty to an affiliate with nothing on file explaining the rate
What we did: We separated profit arising from local selling effort from the brand's contribution, adjusted the rate, and documented the position as far back as the records allowed
Outcome: The enquiry closed with adjustments limited to the year where documentation was incomplete
An interest-free intra-group loan running for several years
Situation: The parent funded a plant expansion with no written agreement and no interest
What we did: We papered the loan, set a market-referenced rate reflecting the borrower's credit profile, and quantified the tax adjustments required
Outcome: Interest was clear from the following period onward with no imputed income raised for the past
When to act, and when waiting is fine
Annual revenue reaches the related-party disclosure threshold
Prepare the transfer-pricing file alongside year-end close rather than waiting for a request
You have just started paying royalties or management fees to an affiliate
Get the rate and allocation driver right in the first contract; retrofitting them costs far more
The Thai entity is persistently loss-making while the group profits abroad
Review the functions and risks promptly — this pattern is selected for review ahead of others
There are no cross-border dealings and every counterparty is independent
A full documentation set is not yet needed, but revisit it as soon as an affiliate is set up
FAQ
Frequently asked questions
Below THB 200M — is documentation needed?
No filing, but the arm's-length principle still applies and prices can still be adjusted.
Are management fees to a parent deductible?
Yes, if real services were rendered and benefited the Thai entity.
Are recurring losses risky?
Very — a limited-risk entity with persistent losses is the first thing officers question.
Do domestic related-party dealings fall under transfer pricing?
Yes. The arm's-length principle applies to related parties even when both sit in Thailand.
What withholding applies to a trademark royalty?
It depends on the recipient's residence and any applicable double-tax treaty; check the contract and tax residence before the first payment.
Must the transfer-pricing file be in Thai?
An officer may ask for a Thai version, so we prepare the file bilingually to meet deadlines without a rushed translation.
What happens if the disclosure form is not filed?
Statutory fines apply and the company moves into the risk group more likely to face a detailed review the following year.
Related services
Cross-Border Withholding Tax & Treaty Relief
Pay the right rate on outbound remittances and claim treaty relief properly.
Revenue Audit Defense & Assessment Appeals
Answer summons, assemble evidence, and appeal inside the 30-day window.
Accounting for Foreign-Owned Companies in Thailand
Bilingual reporting your head office understands and the Revenue accepts.
Written by: Thai Law & Accounting Services — attorneys and licensed accountants
Reviewed by: Reviewed by a Notarial Services Attorney registered with the Lawyers Council of Thailand.
Last updated: 2026-08
Information as of August 2026. Government fees and processing times change — verify with the relevant agency before acting, or let our team verify for you.