Let our experience be your guide


Let our experience be your guide

Automatic Exchange of Information – Thailand Updates

28 June 2021_ Thailand is getting ready to implement the Convention on Mutual Administrative Assistance in Tax Matters (“MAC”), to which it became a signatory state on 3 June 2020.

Under MAC, the member states are bound to make efforts to co-operate with each other, via the automatic exchange of information and administrative assistance, to prevent tax evasions and avoidances. The procedures of which comprise the Common Reporting Standard (“CRS”) that encompasses a person classified by another signatory state as the “Reportable Person”, and the Country-by-Country Reports (“CbCR”) to keep vigilant on the transfer pricing scheme.

Recent developments in Thailand to implement the automatic exchanges are as follows:

1. Draft Legislation of Section 10 ter the Revenue Code

The House of Parliament is considering the draft of new Section10 ter of the Revenue Code, which will empower the Director-General of the Revenue Department with competent authority under the conventions, e.g. MAC and tax treaties, to exchange information with the official of another state. The exchanges of information must be in compliance with the rules to be issued by the Ministry of Finance, which must in turn accord the terms and agreements of the relevant conventions and treaties.

The draft legislation was approved by the Thai cabinet, and sent to the House of Parliament on 8 September 2020.

2. Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (“MCAA CRS”)

On 18 May 2021, the Thai cabinet approved MCAA CRS, with an opt for the reciprocal automatic exchange of CRS. The Ministry of Finance will submit a letter to the Organization for Economic Cooperation and Development (“OECD”) to express its intention to become a signatory.

Thailand targets to exchange the first annual CRS by the end of September 2023. Since MCAA CRS requires the annual CRS to be automatically exchanged within 9 months after the end of any relevant calendar year for which the information is collected, this means the first CRS of Thailand will be the information collected during the year 2022.

Declaration of MCAA CRS will become valid after the signing and submission by Thailand to the OECD Secretariat, and will enter into effect upon Thailand issuing an act to ratify MCAA CRS.

3. Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports (“MCAA CbCR”)

During 31 May – 4 June 2021, a public hearing was held in Thailand to enter MCAA CbCR. After signing, Thailand will send a letter to inform the Secretariat of OECD. The exchange of information under CbCR will commence within 18 months from the end of the accounting period in which both MCAA CbCR and domestic laws necessary for implementation of CbCR will become effective.

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