What To Know
- The move aligns the country with a landmark international tax framework led by the Organization for Economic Co-operation and Development (OECD), which aims to prevent companies from shifting profits to low-tax jurisdictions and avoiding tax obligations in countries where they generate income.
- The Finance Ministry is also moving forward with amendments to the Revenue Code, while the BOI’s Competitiveness Enhancement Fund is expected to play a greater role in supporting investors under the revised framework.
Bangkok Business News: Thailand has taken a major step toward reshaping its corporate tax landscape after the Cabinet approved the implementation of a 15% global minimum tax on large multinational companies. The move aligns the country with a landmark international tax framework led by the Organization for Economic Co-operation and Development (OECD), which aims to prevent companies from shifting profits to low-tax jurisdictions and avoiding tax obligations in countries where they generate income.
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The Cabinet’s approval marks a significant milestone in Thailand’s efforts to strengthen tax transparency and safeguard state revenues in an increasingly interconnected global economy. Speaking after the Cabinet meeting on June 16, Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas confirmed that Thailand would officially participate in the exchange of Global Minimum Tax information with international partners. This Bangkok Business News report highlights one of the most important tax policy shifts undertaken by Thailand in recent years as governments worldwide move to tighten rules governing multinational enterprises.
International Cooperation to Strengthen Tax Collection
Under the approved framework, multinational corporations operating within the scope of the agreement will begin submitting relevant tax information to Thailand’s Revenue Department from June 2027. International exchanges of tax-related data are expected to begin during the same period, enabling authorities across participating countries to share information and improve oversight.
Officials say the initiative is designed to close loopholes that have allowed some multinational corporations to move profits to tax havens while conducting substantial business activities elsewhere. The OECD-backed framework seeks to ensure that large companies pay a minimum effective tax rate of 15%, regardless of where profits are ultimately recorded.
According to estimates from the Revenue Department, the top-up tax mechanism could generate approximately 10 billion baht in additional revenue annually, strengthening the government’s fiscal position and helping support future public spending priorities.
Investment Incentives Set for Major Changes
The implementation of the global minimum tax is expected to have a direct impact on multinational firms that currently enjoy investment privileges granted by Thailand’s Board of Investment (BOI). Some of these incentives have historically reduced effective tax rates below the newly established global minimum threshold.
To comply with OECD requirements while maintaining Thailand’s attractiveness as an investment destination, authorities are preparing to revise existing incentive programmes. Future support measures are expected to rely less on tax reductions and more on alternative mechanisms such as subsidies, grants and tax credits that are recognized under international guidelines.
The Finance Ministry is also moving forward with amendments to the Revenue Code, while the BOI’s Competitiveness Enhancement Fund is expected to play a greater role in supporting investors under the revised framework.
Additional Measures Aim to Boost Economic Activity
Alongside the global minimum tax initiative, the Cabinet approved three additional tax measures designed to stimulate economic activity and encourage digital transformation.
One measure reduces electronic withholding tax rates to 1% until the end of 2027, a move expected to improve private-sector liquidity by around 27 billion baht. Another allows businesses to claim double tax deductions on investments in electronic tax invoice systems, helping accelerate the transition to digital tax administration. A third measure offers double tax deductions for donations to education and sports projects made through the e-Donation platform.
Thailand’s decision to adopt the global minimum tax framework signals its commitment to international tax standards while seeking to preserve economic competitiveness. Although businesses will need to adapt to a changing incentive environment, policymakers believe the reforms will enhance transparency, improve revenue collection and strengthen investor confidence in the long term.
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