Thailand Implements a Global Minimum Tax/Top-Up Tax


An emergency decree enacted on 25 December 2024 (Top-Up Tax Emergency Decree, B.E. 2567 (2024)) and published in the Thailand Royal Gazette on 26 December implements a domestic minimum top-up tax, income inclusion rule (IIR) and undertaxed payment rule (UTPR) that are aligned with Pillar Two. The decree, which applies for accounting periods starting on or after 1 January 2025, was confirmed by the House of Representatives and Senate on 8 and 13 January, respectively.
The decree provides for the application of a top-up tax on the profits of in-scope multinational enterprises (MNEs) to ensure they are subject to an effective tax rate (ETR) of at least 15% and will apply to Thai operations of a group that has annual revenue of at least EUR 750 million in at least two of the previous four accounting periods.
The year 2025 marks the first year covered by the top-up tax, although the filing of the return and collection of the tax will occur 15 months after the end of covered multinational enterprises’ (MNE) fiscal year (extended to 18 months for the first fiscal year). Accordingly, the first tax return filing and payment of top-up tax are due on 30 June 2027 for MNEs with an accounting year ending on 31 December 2025.
One notable omission in the emergency decree is the transitional safe harbor provisions, which were initially expected to be part of the law. However, we anticipate that these provisions will be included in the forthcoming sub-legislation. If implemented, the safe harbours would alleviate the initial compliance burden during the transition period (up to 31 December 2026), benefiting eligible in-scope MNEs.
The government anticipates that it will collect THB 12 billion annually from in-scope MNEs operating in Thailand.