Thailand has entered a new phase of international tax compliance and transparency following the Cabinet’s approval of measures supporting the OECD’s global tax framework in June 2026.
These reforms aim to combat tax evasion, improve transparency, reduce profit shifting by multinational enterprises (MNEs), and align Thailand’s tax system with international standards as part of its long-term objective of OECD membership. Our Tax advisers at our Bangkok law firm Herrera and Partners H&P have prepared a summary of this Thailand legal update:
1. Automatic Exchange of Financial Information (CRS)
The Common Reporting Standard (CRS), developed by the OECD, establishes a framework for participating jurisdictions to automatically exchange financial account information for tax purposes.
Under CRS, financial institutions such as banks, securities companies, investment funds, and certain insurance providers may be required to collect and report information regarding account holders who are tax residents of foreign jurisdictions.
Information subject to reporting may include:
• Name and address of the account holder
• Tax Identification Number (TIN)
• Country of tax residence
• Account number
• Account balance
• Interest, dividends, and investment income
This information can be exchanged annually between tax authorities of participating countries, enhancing the ability of governments to detect offshore tax evasion and undisclosed foreign income.
Implications for Individuals
The expansion of international tax information exchange means that overseas financial assets are becoming increasingly transparent to tax authorities worldwide.
Individuals who may be affected include:
• Thai tax residents with overseas bank accounts
• Investors holding foreign securities or investment portfolios
• Digital nomads and remote workers earning cross-border income
• High-net-worth individuals with offshore assets or structures
Taxpayers should ensure that foreign-sourced income and overseas assets are properly disclosed and reported in accordance with applicable tax regulations.
2. Global Minimum Tax (GMT)
Thailand has also adopted the OECD’s Global Minimum Tax framework under Pillar Two, which introduces a minimum effective tax rate of 15% for large multinational enterprise groups.
The objective of the GMT is to address tax avoidance strategies that shift profits to low-tax jurisdictions and to ensure that multinational businesses pay a minimum level of tax regardless of where profits are recorded.
Scope of Application
The rules generally apply to multinational enterprise groups with consolidated annual revenue of at least EUR 750 million (approximately THB 29 billion) in at least two of the previous four fiscal years.
As a result, the regime primarily affects large multinational groups rather than small and medium-sized enterprises (SMEs).
Top-Up Tax Mechanism
If a multinational group pays an effective tax rate below 15% in a particular jurisdiction, a Top-Up Tax may be imposed to increase the effective tax rate to the minimum required level.
For example:
• Effective Tax Rate: 5%
• OECD Minimum Rate: 15%
• Additional Top-Up Tax: 10%
This mechanism reduces incentives for profit shifting and promotes a more level international tax environment.
Impact on Investment Incentives
One significant consequence of the Global Minimum Tax is its impact on traditional tax incentive programs, including certain tax exemptions granted under investment promotion schemes.
Where tax incentives reduce a multinational group’s effective tax rate below 15%, another jurisdiction may collect the difference through the Top-Up Tax rules.
As a result, governments worldwide, including Thailand, are reviewing existing investment promotion policies and exploring alternative incentive mechanisms such as:
• Qualified refundable tax credits
• Direct financial grants
• Cash subsidies
• Non-tax investment incentives
These approaches aim to maintain competitiveness while remaining consistent with OECD requirements.
What Businesses in Thailand should do?
Multinational enterprises operating in Thailand should consider the following actions:
Review Tax Structures
Assess existing corporate structures, financing arrangements, and intellectual property holdings to determine potential exposure under Pillar Two rules.
Evaluate Effective Tax Rates
Identify jurisdictions where the group’s effective tax rate may fall below 15%.
Prepare for Enhanced Compliance
Develop internal processes and reporting systems capable of supporting increased tax transparency and international reporting obligations.
Reassess Investment Incentives
Evaluate the continued effectiveness of tax-based incentives under the Global Minimum Tax framework.
Our conclusion
Thailand’s adoption of international tax transparency standards and the Global Minimum Tax framework represent a significant shift in the country’s tax landscape.
The implementation of CRS strengthens cross-border information exchange and increases transparency regarding overseas financial assets, while the Global Minimum Tax introduces a new global standard for taxing multinational enterprises.
Although these reforms primarily affect multinational groups and individuals with international financial activities, they reflect a broader movement toward greater transparency, stronger compliance requirements, and closer alignment with international tax standards.
Businesses and taxpayers should proactively assess the impact of these developments and ensure that their structures, reporting processes, and compliance frameworks are prepared for the evolving global tax environment.
If you are looking for international tax advice in Thailand, please contact our lawyers and accountants in Bangkok at info@herrera-partners.com
