The cabinet has approved in principle a set of decrees and regulations under the 2024 Top-Up Tax Act to specify detailed guidelines for the imposition and calculation of the tax, says Kulaya Tantitemit, director-general of the Revenue Department.
The cabinet resolution, adopted on Tuesday, approved four pieces of legislation issued under the Act. The decrees and the regulations define the scope of multinational enterprise (MNE) groups subject to the top-up tax and set out rules for adjusting income, expenses, and covered taxes for the purpose of calculating the tax.
Ms Kulaya said the act has already come into force for large multinational enterprises for accounting periods beginning on or after Jan 1, 2025. To ensure that taxpayers can accurately calculate the tax in compliance with the decree, the Finance Ministry, through the Revenue Department, proposed additional detailed decrees and regulations to the cabinet.
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The approved pieces of legislation consist of: a royal decree prescribing criteria for determining whether multinational enterprise groups that have undergone corporate restructuring fall within the scope of the top-up tax; a royal decree setting out criteria relating to entities that are not constituent entities of a multinational group.
Others are a ministerial regulation prescribing rules for the allocation of residual top-up tax revenue received by Thailand in cases where no constituent entity of a multinational enterprise group located in Thailand records profits; and a ministerial regulation prescribing rules for adjusting income, expenses, and covered taxes for the calculation of the top-up tax, as well as criteria for calculating the domestic top-up tax in Thailand.
Ms Kulaya said the secondary legislation was drafted with reference to the Global Anti-Base Erosion (GloBE) Model Rules, Commentary, and Administrative Guidance developed by the Organisation for Economic Co-operation and Development (OECD). The objective is to align Thailand’s top-up tax implementation with international standards, ensuring global consistency and acceptance.