On October 1, 2026, the FTCC CFO Committee hosted the Revenue Department of Thailand at the Oriental Residence Bangkok. A representative of the department presented on cross-border tax developments, followed by a panel built on questions submitted in advance by committee members, with Matthias Alber (CFO of Chanel and co-chair of the committee) and Vachirawit Kaew-udom (Director, Tax Controversy, Forvis Mazars). What follows is my own understanding of the session and what I think it means for CFOs at international companies in Thailand. It is not a transcript, and it does not speak for the department or the panelists.
The Digital Ambition
The session opened with a vision rather than an agenda. As I understood it, the Revenue Department's long-term ambition is a fully digital tax system: a taxpayer account held with the authorities, containing your income, expense and transaction data, from which the department pre-fills your returns and eventually calculates your liability for you. Not just personal income tax, but corporate income tax and, above all, VAT.
The logic is simple. Today a taxpayer carries two burdens: calculating and documenting the tax, then keeping the paper for at least five years by law, often ten in practice, in case of audit. If the department already holds the data, the retention burden falls away, and an audit only needs to cover whatever is missing from the system.
It was presented as an aspiration rather than a timetable, and I think that is the right way to read everything that followed: a clear direction of travel, with the practical steps still being built.
Some building blocks already exist. Pre-filled forms draw on data linked from third parties. E-tax invoicing infrastructure is in place. Employers report salary withholding electronically, which already allows personal income tax refunds to be processed automatically for low-risk individuals. For companies, my reading is that two areas still need to move before the corporate side can follow.
Evidence in court. Thai courts still work from paper evidence, so if a dispute goes to court, paper is what will be needed, and that is why paper is still requested at audit. Moving to digital evidence is a government-wide question rather than one for the Revenue Department alone. My understanding is that it sits within the government's wider digitalization agenda; I did not come away with a timetable.
The legislation. A draft law to make electronic tax invoicing mandatory has been prepared and is still going through the legislative process. Moving to 100% e-invoicing would also mean revisiting the VAT framework as a whole, so for now adoption stays voluntary. Uptake is growing. The cost of certified service providers can still be a hurdle for smaller companies, and the department is encouraging more accounting and technology firms to register as providers so that competition brings prices down.
The practical takeaway: plan for both. The direction is digital, and in the meantime paper still matters.
VAT Is the Centre of Gravity
If one tax kept surfacing throughout the morning, in the presentation, the panel and the audience questions, it was VAT. The digitalization roadmap is, in my view, fundamentally a VAT roadmap: e-invoicing feeds VAT compliance, automated refunds depend on e-invoicing, and the "refund first, audit later" idea is a VAT initiative first.
On refunds, the department was open that this is work in progress. Like tax authorities everywhere, it has to balance speed of repayment with control. A refund-first approach exists in concept and already benefits a list of compliant taxpayers, who can receive VAT refunds quickly; as I understood it, a wider rollout has not yet been finalized. The reasoning behind it is interesting: faster refunds should ultimately produce more revenue, because capital that is not waiting for a refund gets reinvested.
One question from the floor, on withholding tax rather than VAT, illustrated why this matters. A participant described a low-margin business where tax withheld at source by customers regularly exceeds the tax actually due, so the company files a refund claim every year, and each claim is followed by a full audit. Communication with the officers works well and there is good faith on both sides; the question was how to make the process lighter.
My takeaway from the answer is that active communication with the officer in charge is the best route today, and the department agreed to take the point back to government. In the longer term, once e-invoicing is universal, the department expects to have the transaction data to process refunds without a full audit cycle.
Audits: Risk-Based Selection, and Why Communication Matters
One clear message of the morning was about how companies get selected for audit. My understanding is that the department works from a list of around 100 confidential risk indicators and chooses each year which ones to run against its data. The principle was stated clearly: selection depends on your risk profile, not on individual officers.
Two examples of what the system looks for stood out. Cross-border transactions with low-tax jurisdictions, the obvious one. Less obvious, purely domestic profit shifting between a BOI-promoted entity taxed at 0% and a sister entity taxed at 20%, which is why domestic transfer pricing cases exist.
After selection, there are internal timelines for completing an audit, and in practice the pace also depends on the case and the officer handling it. The advice was the same as for refunds: keep communicating. Delays often come from an officer waiting for information the taxpayer did not know was needed, which is something both sides can avoid.
The panel added useful structure from the practitioner side. A random audit has a 60-day window, after which it can convert into a more detailed official audit. Dissolution audits deserve particular planning: for a company winding down, tax clearance is the last step before completing liquidation with the Department of Business Development, and it can take a long time, sometimes up to two years. Building it into the liquidation timetable from the start is the practical lesson.
Another question concerned the 20% surcharge on half-year corporate tax estimates for first-year companies and project businesses with fluctuating revenue. The committee flagged it as a point to follow for the many new businesses the Franco-Thai community brings to Thailand, and it remains open for discussion.
Transfer Pricing: Enforcement Has Started
Thailand has applied transfer pricing principles in practice for decades, but only legislated them in 2018, effective from fiscal year 2019. The law created a two-tier obligation. Everyone meeting the thresholds files a disclosure form with the annual return. Documentation is then produced only upon request.
Two thresholds define who is in scope. Related parties are determined by shareholding, direct or indirect, not yet by control. And total revenue must exceed 200 million baht in the year.
Until recently, documentation requests were rare. That has changed. In 2026 the department started issuing formal notices requesting transfer pricing documentation. A first notice gives you 180 days. A second notice gives you 60 days, extendable to 120. The audit regulations were reissued in 2021, so requests cover fiscal years 2021 onwards.
Of the OECD's three tiers, Thailand currently enforces only the local file. The master file exists in the law as a framework, but its content requirements have not been issued. Country-by-country reports arrive through automatic exchange from the parent's jurisdiction under Notification 408, so a French-parented group's CbCR reaches Thailand from France. The department keeps the right to request local CbCR filing and has not used it yet. I would not assume that lasts: the Pillar 2 transitional safe harbour relies on CbCR data, and the department needs that data to check safe harbour claims.
On what to submit, the message was straightforward: there is no prescribed format, the required content list has already been published, and the department will read what you file and come back with questions. Since the first batch of documents is still under review, there is no headline enforcement case to point to yet. More notices are coming.
Two points from the panel deserve attention. First, as I understood it, the department's main concern is not multinationals, which are used to international standards and usually hold documentation already, but local Thai companies, many of which are unsure whether they have related parties, what arm's length means in practice, or what they are required to file. Second, on management service fees paid to a head office or sister company abroad, the OECD tests apply: benefit to the Thai recipient, no duplication, not a shareholder activity, pass-through costs identified. But my takeaway is that the OECD simplified approach for low-value services, cost plus 5%, should not be assumed to be accepted, and a proper benchmarking study may be needed. Other countries, Australia among them, apply their own rules rather than the 5%.
There was also a technical exchange on Section 65 ter and how its non-deductibility rules interact with transfer pricing adjustments, which can produce circular results. The view expressed on the panel was that the adjustment should be computed on profit before tax rather than after. This is not yet a stated position of the department, so I would discuss it with your adviser before relying on it.
What to do now: If you have not prepared a local file, start. Use the OECD local file structure. If you pay management fees abroad, make sure you can evidence the benefit received, not just the invoice. Thailand's transfer pricing country profile on the OECD website sets out which parts of the OECD guidelines Thailand follows and where it has no specific regulation, and it is a useful reference for anticipating the department's position.
Software Royalties: Thailand Reverses a Long-Standing Position
For years, Thailand treated software licence fees paid to foreign vendors as royalties subject to withholding tax, even when the Thai payer was a pure end user with no right to modify, reproduce or distribute the software.
The presentation illustrated the problem with two treaties side by side. The Thailand-South Korea treaty defines royalties as "including software." The Thailand-France treaty does not mention software at all. Yet Thailand applied the same treatment under both, reasoning that an undefined treaty term takes its meaning from domestic law, and that the Thai Copyright Act treats software as a literary work. An earlier ruling was shown as an example: a Thai company paying an Indian group company for the right to use SAP software, with no right to modify, reproduce or distribute it, was held to be paying a royalty under the Thailand-India treaty, subject to 15% withholding.
The consequence for French groups could be double taxation. Thailand withheld tax, while the French tax authorities considered that the payment fell under business profits rather than royalties and did not grant a foreign tax credit. For past years, that question remains open.
In March 2025, the department issued a ruling (No. 0702/1626, 19 March 2025), available in the rulings section of its website, that reverses the position. The facts involved a Thai application developer paying service fees to a US cloud and software provider with no presence in Thailand. The fees were held to be business profits under Article 7 of the Thailand-US treaty, not royalties, and so not taxable in Thailand. A payment is now a royalty only if the payer acquires the right to reproduce, distribute, modify or make the software available to the public, or another right whose exercise without payment would infringe copyright. On that reading, ordinary end-user fees no longer qualify, and withholding may no longer be required on them.
My understanding is that the change was driven by international practice rather than OECD pressure. Thailand had long supported its reading by pointing to the UN Model Convention, the usual reference for developing countries, which until its 2021 edition said nothing about software use. The 2025 UN Model added a new sub-paragraph expressly covering payments for the use of software or the acquisition of a copy. Adding it implies the old general wording never covered end-user payments, which made it natural for Thailand to align its interpretation.
The caveat is practical. A new position takes time to be applied consistently across every revenue office. My expectation is that it will be discussed in local audits for a while, until further rulings consolidate it.
Thailand could also, in principle, return to taxing software payments in the future by renegotiating treaties to include the new UN wording. For now, the ruling stands.
What to do now: Review withholding on software payments to foreign vendors. For end-user licences, the ruling supports stopping. Document the position carefully and be ready to explain it at audit. For historical double taxation, the Mutual Agreement Procedure under the Thailand-France treaty is the route to relief.
Pillar 2: Filing Starts for Fiscal Year 2025
Multinational groups with consolidated revenue of 750 million euros or more fall under Thailand's top-up tax legislation. Constituent entities in Thailand have three filing obligations: a notification form, the GloBE Information Return (GIR) in the standardized OECD template with a Thai front page, and a top-up tax return.
The forms were expected to be published by the end of October 2026, with the electronic filing system launching in 2027 after a public consultation in which taxpayers can test it and give feedback.
For the first fiscal year in scope, 2025 for calendar-year groups, the deadline is 18 months after year-end, so June 30, 2027. Subsequent years are due at 15 months.
The most common question is about allocation. Thailand's domestic minimum top-up tax (QDMTT) is computed on a jurisdictional basis, aggregating all Thai entities of the group, and the default rule allocates the resulting liability in proportion to income. The natural question is: why should an entity already paying above 15% carry a share, when a 0% BOI entity in the same group is the reason the top-up exists? As I understood it, the answer is pragmatic. If the Thai entities sign an internal agreement designating who pays, and declare it to the department, the agreement overrides the default.
New BOI incentives designed to work under Pillar 2 were described as imminent, with a public consultation expected shortly after the session. The design should follow one of the two Pillar 2-compliant routes: Qualified Tax Incentives or Qualified Refundable Tax Credits. For BOI-promoted companies whose existing holidays are undermined by the minimum rate, this is the item to watch.
What to do now: Confirm whether your group meets the threshold. If it does, coordinate with the parent on the GIR, and model whether an internal allocation agreement among Thai entities makes sense. Watch for the BOI consultation.
Exchange of Information: GIR, Then Crypto
Many groups would rather not file the GIR locally in Thailand. Partly it is the burden; partly it is that the GIR contains detailed financial information on every entity in the group, and sister companies in the same country do not necessarily want to see each other's numbers.
The alternative is central filing by the ultimate parent, with the parent's jurisdiction exchanging the GIR with Thailand. That requires the GIR Multilateral Competent Authority Agreement, which Thailand signed on 4 August 2026, and which France has also signed. Signature alone does not activate exchange: Thailand first has to confirm its systems are ready and notify the OECD, which the department expects to do before March 2027. If that happens, groups filing centrally through a participating parent jurisdiction should not need to file the GIR locally for fiscal year 2025. I would check again closer to the deadline.
Next on the list is the Crypto Asset Reporting Framework. Thailand has not yet exchanged crypto account information through the automatic exchange network, and legislation to enable it is expected to go to Parliament in 2027.
Dispute Prevention: APAs and the MAP
The last topic was an encouragement to use the certainty tools that already exist.
For a future cross-border transaction, an Advance Pricing Arrangement lets you agree the pricing with the department in advance. An application manual is on the Revenue Department website.
For an existing conflict, the Mutual Agreement Procedure under Article 25 of the Thailand-France treaty offers a second route alongside domestic appeal: you ask your home competent authority to negotiate with Thailand's. Paragraph 1 covers taxation not in accordance with the treaty, which is precisely the historical software royalty situation. Paragraph 3 goes further and lets the authorities consult to eliminate double taxation in cases the treaty does not provide for.
Other Signals From the Panel
Permanent establishment risk for expatriates: no case yet, but a framework exists. For an executive seconded from headquarters, or holding dual contracts with the Thai entity and the parent, two questions decide the risk: is the employee's location a place of business of the foreign enterprise, and does the role form part of the foreign enterprise's business? The OECD's 2025 commentary on workforce mobility is the reference to read. On dual contracts, whether a markup is charged is the first indicator, but the absence of a charge does not on its own prove there is no service. As far as I know there has been no Thai enforcement case to date.
Business restructuring: several audits and an informal exit tax risk. The panel described a manufacturing entity converted into a limited-risk distributor as part of a regional reorganization, which triggered three consecutive audits: the year before conversion, the conversion year and the year after. For Thailand, cross-border restructuring is essentially a transfer pricing question: what functions, assets and risks moved, and what they should have been paid for. Thailand has no exit tax legislation, but my takeaway is that a step-up approach can still be applied in practice through transfer pricing. Planning the restructuring with transfer pricing documentation from the start is the best protection.
Pillar 1 is not coming soon; VAT fills the gap. My reading of the discussion is that nothing significant is expected after Pillar 2 in the near term. International tax is fragmented, with developed and developing countries pulling in different directions. As a source country, Thailand would like to tax the digital economy more, but a digital services tax is difficult while the US treaty is in force, which leaves VAT as the main tool.
A Few Personal Observations
Three things stayed with me after the session.
The department is open to moving with international practice. The session showed a department that follows international developments closely and is willing to revise its own positions when the international consensus moves, as it did on software. New positions naturally take time to be applied consistently across every office, and a technical view expressed on a panel is not the same as a stated position. What you hear at a session like this is the direction of travel. The practical lesson, repeated more than any other that morning, is to communicate actively with the officer in charge.
International commitments are moving quickly. Pillar 2, GIR exchange, CARF, the new UN Model, transfer pricing documentation: these are obligations Thailand has taken on internationally, and they are being implemented seriously and on schedule. Other parts of the system, such as evidence rules in court, e-invoicing and refund processes, depend on domestic legislation and wider government priorities, so they will move at their own pace. For finance teams, that means preparing for the new obligations now while keeping paper processes in place for a while longer.
This is a department worth engaging with. Coming to a foreign chamber, taking questions submitted in advance, being open about what is still in progress, and agreeing to take a member's concern back to government is a real sign of openness. Raising issues directly, in a room like this one, is far more useful than discussing them among ourselves, and the committee has shown that the door is open.
For CFOs at international companies in Thailand, the conclusion is simple. The compliance bar is rising, the department is moving in a clear direction, and the time to prepare is before the notice arrives.
This is a summary of a chamber session, written for finance leaders. It is not tax advice, and positions stated by the Revenue Department at an event are not binding rulings.
This article reflects my own notes and understanding of a session organized by the FTCC CFO Committee on October 1, 2026, at the Oriental Residence Bangkok. It is not an official record and does not represent the views of the Revenue Department, the panelists or the FTCC. The committee convenes finance leaders from the Franco-Thai business community, usually over breakfast, and sometimes in members' offices. Upcoming sessions include the BOI on December 3, the French Embassy's economic service on the 2027 regional outlook in early 2027, ESG and the CFO's role in May, and the Bank of Thailand on foreign exchange risk and monetary policy in July. To join, contact the FTCC.
Jerome Le Louer is Managing Partner of SmeCFO Asia, a fractional and interim CFO practice serving international companies across Thailand, Singapore, Hong Kong, Vietnam, Indonesia and the Philippines. He can be reached at [email protected].