FAQ

As soon as a Thai company enters into a transaction with its China headquarters or other related parties within the group, the price must be determined in accordance with the arm's length principle; but "whether a disclosure form must be filed together with the annual tax return" and "when detailed transfer pricing information must be submitted to the Revenue Department" are two different questions.

Under the rules currently in force in Thailand, a company that has related-party relationships and whose revenue for the year exceeds THB 200 million must submit a related-party transaction Disclosure Form together with its annual corporate income tax return within 150 days. The tax authority may also, within the statutory time limit, require the enterprise to provide the information used to analyse related-party transaction pricing; on the first formal notice the statutory preparation period is longer, subsequent notices are usually 60 days, and an extension may be granted where the statutory conditions are met.

1. Which transactions with the headquarters or related parties within the group most deserve advance preparation?

1. Payment of service fees, management fees, technical fees, and royalties to the China headquarters.

2. Purchase of raw materials, equipment, software, or shared services from the group.

3. Sale of Thai products to the China headquarters or other related companies.

4. Intra-group loans, guarantees, cash pooling, and interest payments.

5. Centralised support provided by the group to the Thai company in R&D, procurement, marketing, HR, IT, and so on.

2. The 3 most common pitfalls in transactions with the headquarters or related parties within the group

First, preparing only the contract without proving "that the service really took place and where the value lies"; second, the price is set centrally by the headquarters but the Thai company cannot explain why it is reasonable; third, assuming that because annual revenue does not exceed THB 200 million the transfer pricing rules do not apply. In reality, the THB 200 million threshold mainly affects compliance obligations such as the Disclosure Form; the arm's length principle itself does not disappear as a result.

3. The correct approach to handling transactions with the headquarters or related parties within the group

Enterprises are advised to establish a related-party transaction register and file each item under "transaction type — related party — amount — pricing method — contract — delivery evidence — tax treatment". For service fees, the service content, the beneficiary, and the allocation logic must be demonstrated; for goods transactions, evidence of comparable prices, cost-plus, or profit margins should be retained; for loans, the interest rate and the financing conditions should be explained.

Do not wait until the Revenue Department issues a notice before chasing the headquarters for information. Evidence for cross-border related-party transactions is often scattered between China and Thailand, and assembling it at short notice is very difficult.

4. Zhongxin Tax's differentiated approach to transactions with the headquarters or related parties within the group, and the application of the CODE model for compliant growth

Zhongxin has registered entities, practising qualifications, and professional teams in both China and Thailand. The China side can directly verify contracts, costs, allocations, and pricing logic with the headquarters' finance, tax, and business departments; the Thailand-side accountants, auditors, and tax team then translate that information into Thai bookkeeping, tax returns, and audit evidence.

This two-track coordination capability is especially important for transfer pricing, because the "facts" of a related-party transaction are often at the China headquarters while the tax payment and tax audits occur in Thailand. A Thailand-only bookkeeping firm usually sees only the posting vouchers; a China-only consulting firm cannot directly take on Thailand's routine filings and the interface with local audits.

5. Professional basis and scope of services

The definition of related enterprises, the revenue threshold, the disclosure obligation, and the deadlines for submitting information should be applied in accordance with Sections 71 bis and 71 ter of the Thai Revenue Code and the relevant Ministerial Regulations. Transfer pricing is not simply "producing a report"; it involves the facts of the transaction, tax agreements, withholding tax, VAT, and accounting treatment, and each item must be assessed in the light of the specific contract. Zhongxin can provide related-party transaction mapping, pricing policies, and preparation of transfer pricing documentation; where legal opinions or the group's global transfer pricing policy are involved, this should be coordinated with the relevant professional institutions.

Official basis

1. Thailand Revenue Department, Revenue Code Section 71 bis / 71 ter: sets out the rules on related enterprises, the arm's length principle, the Disclosure Form, and the tax authority's power to require submission of transfer pricing analysis information; the deadline for submitting information on the first formal notice is 180 days, subsequent notices are usually 60 days, and an extension may be granted in accordance with the law but generally not exceeding 120 days.

2. Official ruling letter of the Thailand Revenue Department: enterprises with related-party relationships and revenue exceeding THB 200 million must submit the related-party transaction Disclosure Form within 150 days after the end of the accounting year.

6. Recommended next step: first determine "whether mandatory disclosure is triggered + which transactions carry the highest risk"

There is no need to provide a complete Local File first. Provide 4 items of information, and Zhongxin can make a preliminary judgement on whether your company is approaching the mandatory disclosure threshold and which related-party transactions should be prioritised for pricing and evidence preparation.

Component name [Application for preliminary review of transfer pricing on related-party transactions]

Applicable clients: Thai enterprises that engage in ongoing related-party transactions with their China headquarters or group companies.

Completion principle: fill in only the key information; complex materials are not required to be uploaded; Zhongxin will prioritise follow-up review around the points that need confirmation.

Zhongxin will focus its communications on the key information above and will not repeatedly collect complex materials. Only contact details are needed — Contact person: __________ Mobile / WeChat: __________________

Component workflow

4 items of information → determination of obligations → identification of high-risk transactions → completion of China and Thailand documentation → transfer pricing plan

Professional notice: this component is used for an initial review of the project situation and does not constitute a tax, audit, accounting, or legal conclusion; specific matters are subject to the enterprise's materials, the rules of the competent authorities in force at the time, and the review results of professionals.