Starting January 1, multinational companies operating in Thailand will be required to make up the difference in their corporate tax payments to meet a 15% rate under the new rule.

The top-up tax is designed to ensure multinational corporations pay a minimum level of corporate income tax, in line with the global minimum tax (GMT) initiative led by the Organisation for Economic Co-operation and Development (OECD).

If a multinational corporation’s corporate income tax rate is below 15%, it will need to pay the difference (to reach 15%) in the country where its parent company is based. However, Thailand’s new rule allows corporations to pay this difference within the country.

The introduction of this royal decree is based on the Global Anti-Base Erosion (GloBE) rules, an internationally agreed framework among members of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS). The goal is to ensure that large multinational enterprises in each country have an effective tax rate of at least 15%.

"The implementation of top-up taxes from 2025 is crucial to protect Thailand's tax interests and maintain the country's economic stability," said the Royal Decree.

Deputy Finance Minister Julapun Amornvivat previously estimated that the top-up tax could generate over 10 billion baht in additional state revenue annually.

Source: The Nation