What Multinationals should know about Thailand Corporate Tax Rate Changes for 2025

Thailand Corporate Tax Rate Overview and Global Changes

Thailand’s proactive stance on implementing the Global Minimum Tax (GMT) demonstrates significant changes to the corporate tax landscape for 2025. The country has recently joined the GMT initiative led by the Organization for Economic Co-operation and Development (OECD), aligning with global efforts to curb tax avoidance and ensure fair taxation. While the standard Corporate Income Tax (CIT) rate remains at 20%, the GMT aims to ensure that multinational corporations (MNCs) with annual revenues exceeding €750 (US$770) million pay a minimum tax rate of 15% on their worldwide profits, regardless of location.

New Corporate Tax Rate Adjustments for BOI-Promoted Companies

The current corporate tax rate of 20% applies broadly, but investment-promoted companies—under the Thailand Board of Investment (BOI)—could traditionally enjoy a CIT holiday for up to 13 years. However, with Thailand corporate tax 2025 changes, MNCs investing in the country must consider several key factors:

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1. Tax Incentive Adjustments: The BOI has introduced measures to mitigate the impact of the new tax regulations and support businesses in maintaining competitiveness. MNCs that have received BOI investment promotion can opt for a 50% reduction in CIT (resulting in a reduced Thailand corporate tax rate of 10%) instead of the usual exemption. This allows for an extended tax relief period—up to twice the standard incentive period, but not exceeding 10 years. This adjustment helps MNCs achieve an effective tax rate (ETR) closer to the 15% GMT threshold, thereby reducing additional tax burdens.
   • Effective Tax Rate (ETR): Under the new Thailand corporate tax 2025 regulations, MNCs must ensure their ETR in Thailand meets the minimum 15% threshold to avoid additional top-up taxes in their home jurisdiction. If an MNC’s effective tax rate falls below 15% in any jurisdiction, Thailand will impose a top-up tax to meet this minimum requirement, necessitating a reassessment of tax strategies.
2. Country-by-Country Reporting: The GMT will affect MNCs with consolidated group revenues exceeding €750 (US$770) million and falling under the Country-by-Country Reporting scope. This requires MNCs to provide a detailed report of their income, profits, taxes paid, and other economic activities for each country in which they operate.
3. Regulatory Compliance Costs: The new Thailand corporate tax rate framework could impact MNCs’ compliance costs. Companies need to adapt their tax strategies to meet these requirements, involving more detailed reporting and documentation.
   • It is essential for MNCs to conduct a thorough impact assessment and consult with professionals to navigate these changes effectively.

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Authored by

Written by Arunrat Chumroentaweesup, Consulting Manager based in the Bangkok office.