Thailand Tax Code: Guide for Foreign Businesses 2025

A sweeping overhaul is coming: the Thailand Tax Code introduces a mandatory 15% minimum corporate tax for global groups with revenues above THB 26.78 billion, effective January 2025.

Are you ready to adapt your business structure and compliance strategy as rules on corporate tax, foreign ownership, and VAT shift in real time? This year, the Thai government is not only tightening reporting deadlines and documentation standards but also expanding sector access for international investors.

Whether you lead a multinational enterprise navigating top-up tax obligations or a growth-focused SME seeking Board of Investment incentives, understanding these pivotal updates is essential to maintain market access and penalty-free operations.

Thailand Tax Code for Foreign Businesses

Thailand’s 2025 tax code introduces major shifts for foreign businesses and investors. New rules center on a mandatory 15% minimum effective corporate tax for large multinational enterprises, a standard 20% CIT, and reforms to foreign ownership limits in key economic sectors.

Corporate Tax & Incentives

Understand these core features for 2025:

• Standard corporate income tax (CIT): 20%
• SMEs pay progressive rates: 0% on net profits up to THB 300,000, 15% from THB 300,001-3,000,000, 20% above that
• Special Economic Zone (SEZ) firms may receive a 10% CIT reduction
• Foreign subsidiaries are taxed on worldwide income, while foreign companies are taxed on Thai-sourced income only

Find the latest details from the Thai Revenue Department – Corporate Tax.

15% Minimum Tax & Compliance

From January 2025, the new 15% minimum tax applies to global groups with revenues above THB 26.78 billion (EUR 750 million). Key mechanisms include:

• Domestic Minimum Top-Up Tax: Ensures a 15% threshold on Thai income
• Income Inclusion Rule (IIR) and Undertaxed Payments Rule (UTPR): Secure minimum taxation on group profits worldwide
• 15-month timeline for compliance, with penalties of up to 200% for non-compliance
• BOI incentives remain, but if the effective tax rate falls below 15%, top-up payments are mandatory

Foreign investors should monitor ongoing ownership reform updates and leverage treaty incentives in business planning. The most successful investors in Thailand for 2025 will be those who adapt quickly to regulatory change and maintain airtight compliance.

Business Structures & BOI Incentives

Navigating Thailand’s 2025 regulatory landscape starts with understanding foreign ownership rules and selecting the right business structure.

Today, most sectors cap foreign ownership at 49%. Pending reforms aim to increase this ceiling and open new sectors, though final details are expected by late 2025.

Key legal forms for foreign businesses include:

• Branch office: Allows direct foreign company operations but limits expansion.
• Representative office: Handles non-revenue-earning activities (market research, sourcing).
• Thai subsidiary: Treated as a domestic entity for taxes; can own property and hire staff.
• Foreign Business License (FBL): Required for sectors restricted by the Foreign Business Act.
• Treaty of Amity: Special rights for US investors under bilateral agreements.

Foreign Ownership & Market Access

Planned reforms may allow foreign investors to own a majority stake or enter industries currently restricted.

• Monitor announcements from the Ministry of Commerce and Board of Investment.
• Prepare by reviewing shareholder structures in advance.
• Engage in scenario-planning for capital increases or restructuring as regulations evolve.

A practical risk minimization approach includes:

• Securing updated legal advice.
• Establishing compliance checkpoints for regulatory transitions.

Tax Breaks & Exemptions for Investors

Board of Investment (BOI) incentives are a primary pathway to reduced tax, sector access, and project-specific privileges.

• Possible benefits: Corporate tax holidays, SEZ reductions, easier permitting, and enhanced visa access.
• Minimum effective tax rate (ETR) override: Even with incentives, multinational groups must pay at least 15% if thresholds are met.

Application requires:

• Detailed investment proposals.
• Audited financials.
• Demonstration of economic impact per BOI criteria.

Direct updates and official application guides can be found via the Thailand Board of Investment.

VAT & Indirect Tax Compliance

Foreign businesses must register for Value Added Tax (VAT) in Thailand if annual turnover from taxable goods or services exceeds THB 1.8 million.

To comply with VAT obligations, international enterprises should:

• Register for VAT promptly upon reaching the threshold
• Submit monthly VAT filings and payments (due by the 15th of the following month)
• Collect, retain, and provide valid VAT invoices for each transaction
• Seek VAT refunds where eligible, such as for exported goods or certain input taxes

Timely VAT registration and accurate invoice handling are the cornerstones of tax compliance for foreign businesses.

Thailand VAT Rules for Foreign Businesses

The standard VAT rate is 7% and applies to most goods, services, imports, and digital services sold to Thai customers.

Foreign entities providing digital services to Thai consumers must comply with local VAT rules as non-resident suppliers.

• Documentation is critical: Invoices and supporting records enable input tax claims and cross-border compliance
• Cross-border digital and service providers must maintain transaction logs and comply with Thai Revenue Department guidelines

Businesses delivering digital services or cross-border transactions to Thai customers face stricter reporting and registration standards under the current regime.

Other Indirect Taxes to Watch

Besides VAT, international companies should monitor secondary business tax (SBT), excise tax, and stamp duty.

• SBT may apply to financial services, loans, and interest-bearing transactions
• Excise taxes trigger on goods like alcohol, tobacco, and vehicles
• Stamp duty is required for specified legal documents, including certain contracts and share transfers

Ensure transaction structures account for multi-tiered indirect tax exposure to avoid unexpected costs.

Active monitoring and robust documentation are crucial for minimizing indirect tax risks and maintaining full compliance when operating in Thailand.

Withholding Tax on Cross-Border Payments

Withholding tax is a central part of the Thailand Tax Code: Guide for Foreign Businesses and Investors, impacting all cross-border payments in 2025.

The standard rates for common outbound payments are:

• Dividends: 10%
• Interest: 15%
• Royalties: 15%
• Service fees to non-residents: 15%

These rates may change if a tax treaty applies or if correct documentation is missing.

Common audit triggers include:

• Misclassified payment types
• Missing withholding tax certificates
• Mismatched remittance and contract records

Incorrect filings or late deductions may draw penalties and additional scrutiny. Careful documentation is necessary for each transaction.

Source Rules, Residency & Treaty Relief

Tax is applied based on:

• Whether the income source is Thailand
• The residency status of the recipient
• Double Tax Agreement (DTA) coverage

Reduce obligations through:

1. Reviewing DTA partner lists (see Thai Ministry of Finance – Double Taxation Agreements)
2. Submitting full documentation, including tax residency certificates
3. Applying for a reduced rate or exemption before remittance

For 2025, accurately applying treaty relief and robust record-keeping are the most effective ways to reduce penalty risk and optimize tax costs.

Filing, Compliance & Penalty Risks

Staying compliant with Thailand’s tax rules in 2025 requires consistent tracking of new deadlines, robust documentation, and an agile response to regulatory updates.

Foreign companies must align their processes with the annual tax calendar, e-filing mandates, and heightened standards for documentation, especially under the new 15% minimum effective tax for large multinationals.

Key Tax Filing Steps for Foreign Companies

Essential compliance steps for foreign businesses include:

• Registering the legal entity and obtaining a tax identification number with the Thai Revenue Department
• Preparing and submitting monthly and annual tax returns through the government e-filing platform
• Ensuring all documentation is in Thai or accompanied by a certified translation, following Thai GAAP

Multinational enterprises qualifying for the minimum corporate tax face special deadlines, with a 15-month compliance window and post-incentive effective tax rate reporting.

Common Errors & Penalty Triggers

Frequent errors that attract penalties or audits include:

• Mismatched invoices, especially for cross-border transactions
• Late or incomplete filings and payments
• Missing or improper documentation for BOI incentives or treaty relief

Risk of investigation rises for:

• Large MNEs under the new minimum tax regime
• BOI-promoted entities claiming significant incentives

To minimize hidden risks, businesses should:

• Implement a compliance calendar with deadline alerts
• Conduct regular documentation checks and internal audits

Robust preparation and early filing are indispensable for protecting your business from costly penalties and regulatory scrutiny in 2025.

FAQ: Thailand Tax Code for Foreign Business

Foreign companies are only required to meet the new 15 percent minimum effective tax rate if their global revenues exceed THB 26.78 billion (approximately USD 830 million).

All other foreign-owned businesses follow Thailand’s standard Corporate Income Tax (CIT) rules.

Core Filing Requirements & Documents

To secure Board of Investment (BOI) tax privileges and ensure correct minimum tax calculation, companies need:

• Complete application dossiers with audited financial statements
• Project details and supporting documentation
• Effective tax rate (ETR) calculations after incentives are applied

Missing paperwork often delays approval or triggers compliance review.

Foreign Ownership Updates 2025

Foreign investors should watch official Ministry of Commerce (MOC) and BOI announcements for confirmed sector openings and cap increases.

• Regulatory changes are expected during 2025, but timelines and details may vary by sector
• Legal counsel and direct government sources provide the most current guidance

Penalty Reduction & Compliance Tips

To minimize risk of tax penalties in 2025:

• File returns electronically and meet all deadlines
• Keep meticulous records for all cross-border payments
• Schedule quarterly compliance reviews, especially during law transitions

Foreign-owned businesses entering Thailand in 2025 benefit most by tracking regulatory changes, submitting complete documentation, and building proactive compliance habits.

Conclusion

Navigating Thailand’s 2025 tax code offers significant advantages for foreign businesses ready to act with clarity and precision.

To move forward confidently, review your business structure, set up robust compliance checkpoints, establish a timeline for updated documentation, and stay alert to ongoing ownership or tax changes.

Contact us for tailored guidance. Themis Partner ensures you make well-informed decisions, build compliant processes, and unlock every available incentive as regulations evolve.