Thailand advances 15% global minimum tax on multinationals
Thailand’s Cabinet has approved steps to implement the OECD-backed 15% global minimum corporate tax for large multinationals, aiming to curb profit shifting to tax havens and raise about 10 billion baht in annual revenue.
- Thailand's Cabinet has approved a 15% global minimum corporate tax on large multinational companies, aligning with an OECD-led agreement.
- The policy aims to prevent profit shifting to tax havens and is expected to generate about 10 billion baht in additional annual revenue for the state.
- To comply with the 15% tax floor, the government will adjust its investment incentives, shifting from tax reductions to OECD-accepted subsidies or tax credits.
Thailand’s Cabinet has approved the collection of a 15% global minimum corporate tax on large multinational companies under an agreement led by the Organisation for Economic Co-operation and Development (OECD), aiming to prevent profit shifting to tax havens and generate about 10 billion baht in additional state revenue each year.
Speaking after the Cabinet meeting on Tuesday (June 16), Ekniti Nitithanprapas, Deputy Prime Minister and Finance Minister, announced that the Cabinet had approved Thailand’s official exchange of Global Minimum Tax information with other countries.
Under the plan, companies will begin submitting information to the Revenue Department in June 2027, when international data exchange is also scheduled to start. The Cabinet also authorised the finance minister or a designated representative to submit the information to international organisations and partner countries.
“The key goal of this policy is to close loopholes used by multinational companies to shift profits to tax havens in order to avoid tax obligations in the countries where they actually conduct business,” Ekniti explained.
The Revenue Department estimates that the top-up tax collected under this mechanism will generate around 10 billion baht a year for the state.
Thailand to adjust BOI incentives under OECD tax rules
Ekniti noted that enforcing the 15% minimum tax rate would directly affect multinational companies that have received investment incentives from the Board of Investment (BOI), as some incentives may have reduced their effective tax rates below the global minimum threshold.
The government is therefore preparing to adjust its incentive structure, moving away from tax-reduction mechanisms that conflict with the 15% tax floor and shifting towards subsidies or tax credits in forms accepted by the OECD.
The Finance Ministry is currently amending the Revenue Code to support the changes, while the BOI’s Competitiveness Enhancement Fund will serve as an additional mechanism to support investors, he added.
Cabinet approves three additional tax measures
Ekniti also outlined three other tax measures approved by the Cabinet.
The first is a reduction in electronic withholding tax from the previous rates of 5%, 3% and 2% to 1%. The measure will remain in force until December 2027 and is expected to boost private-sector liquidity by about 27 billion baht.
The second measure aims to encourage businesses to shift towards digital tax systems. Companies will be allowed to deduct twice the value of expenses incurred from investing in electronic tax invoice systems, helping reduce paperwork and administrative burdens.
The third measure is designed to support social development by allowing double tax deductions for donations to education and sports made through the e-Donation system. This measure will also run until December 2027.
