The Impact of GMT on Multinational Businesses in Thailand

Last updated: 14 Mar 2025

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The Impact of GMT on Multinational Businesses in Thailand

1.Global Minimum Tax (GMT) and Its Implementation in Thailand
The Global Minimum Tax (GMT) is a corporate income tax reform initiated by the Organization for Economic Cooperation and Development (OECD) to address profit shifting to low-tax jurisdictions and reduce tax competition among countries.

2. Implementation of GMT in Thailand
Thailand will enforce the GMT starting in early 2025, requiring multinational corporations with annual revenues exceeding 750 million (approximately THB 28 billion) to pay a minimum corporate income tax of 15%, in line with the Base Erosion and Profit Shifting (BEPS) framework set by the OECD.

Although Thailand's corporate income tax rate is 20%, many multinational companies benefit from tax incentives provided by the Board of Investment (BOI), such as tax exemptions or reductions. As a result, some companies may pay less than 15% in taxes and could be required to pay additional taxes in their home country or under regulations of other jurisdictions.

3. Tax Collection Mechanisms Under GMT
Thailand will adopt two key OECD mechanisms:

Income Inclusion Rule (IIR): If a multinational companys effective tax rate in Thailand is below 15%, the home country of the company can collect the difference.
Undertaxed Profits Rule (UTPR): If the home country does not collect the additional tax, other countries where the company operates may impose additional taxes instead.

Additionally, Thailand is considering implementing a Qualified Domestic Minimum Top-Up Tax (QDMTT) to allow the Thai government to collect additional tax before other countries do.

4. Impact on Foreign Investment
Although the GMT reduces tax incentives for multinational companies, Thailand remains an attractive destination for foreign investors due to:

Its strategic location in Southeast Asia
A strong manufacturing and export base
A skilled workforce and well-developed infrastructure

Income Taxation for Foreigners in Thailand
Taxpayer Status

Resident: A foreigner who stays in Thailand for more than 180 days within a tax year is considered a resident and is subject to income tax on all income earned both in Thailand and abroad.
Non-resident: A foreigner who stays in Thailand for less than 180 days within a tax year is considered a non-resident and is only taxed on income derived from sources within Thailand.
If a foreigner stays in Thailand for less than 180 days, they are not required to pay income tax in Thailand.

Deductions and Allowances

Foreigners in Thailand are eligible for certain tax deductions and allowances similar to Thai citizens. Examples include:

Personal deduction: THB 60,000 per year
Spouse allowance: THB 60,000 (if legally married and the spouse has no income)
Child allowance: THB 30,000 per child (up to a maximum of three children)
Investment-related deductions: Contributions to provident funds, retirement mutual funds (RMFs), and life insurance premiums may be deductible.
Tax Filing

Foreigners working in Thailand are required to file Personal Income Tax Returns (Forms PND 90 and PND 91) with the Thai Revenue Department.

Individuals earning income in Thailand must submit their annual tax returns (PND 90/91) by March 31 of the following year for income earned in the previous tax year.

Experts recommend that the Thai government utilize the additional tax revenue to enhance workforce skills and strengthen the countrys long-term competitiveness.

Tags :

Tax &amp; Business Regulations

Foreign Investment in Thailand