Ransomware identified as the fastest growing malware threat

Bernard Collin, CEO of SafeComs Network Security


What is ransomware?

Ransomware is a type of malware that encrypts files on a targeted system or network. Once the targeted files are encrypted, the ransomware demands payment in exchange for providing a key to decrypt the files, often around $1,000 – $20,000 in Bitcoins. We’ve seen cases where as much as $5M was paid to the attackers. Most ransomware variants opportunistically target victims. They can infect a wide array of devices from computers to smartphones. Any networked device could potentially be affected by ransomware.

It’s important to know that paying the ransom never guarantees that the decryption key will be received, or that the encrypted files will be restored.

How do you get ransomware?

Most ransomware is unintentionally downloaded by clicking on a malicious link, often in a spam email. It’s also possible to pick up ransomware during a visit to a malicious or compromised website by way of  drive-by downloads, which don’t require user engagement for the infection to be successful.

Occasionally ransomware is the result of brute force attacks carried out by way of the Remote Desktop application, which is becoming increasingly popular as  the working population works from home.

It’s easy to imagine just one person in your organisation accidentally clicking on a malicious link or falling victim to an attack. With just one compromised employee, your entire network could be in jeopardy. 

Early ransomware infections were typically opportunistic attacks against random targets. Today ransomware is often deployed as part of a targeted campaign with specific victims in mind. Malicious links and spam emails will be tailored to the unique professional situation of the intended target, and will usually contain material related to a plausible activity (i.e. “here is your budget for revision, please approve…” or, “here is the link to our company outing with all our photos, feel free to share with your friends…”).

A developing trend

A growing trend with PDPA and the “Working from Home” Covid campaign is the additional capability of data exfiltration. If a victim doesn’t pay the ransom, their files may end up being published on a publicly exposed server, for all to see.

In addition to the embarrassment, there’s also a profoundly serious business risk due to the loss of confidentiality amongst clients and the potential of heavy fines incurred under the governance of PDPA.

To make matters worse, ransomware today doesn’t require technical expertise. Malicious actors can simply use a RaaS (Ransomware as a service) application, which allows them to rent the malware along with technical support and tutorial features, and simply share some portion of the loot with the ransomware’s creator after the fact.

This level of accessibility and ease of use makes ransomware a particularly worrisome threat. 

Who is a target?

The largest companies were the initial targets; however, their technical capability makes them harder to penetrate. Now we see a move towards smaller entities in the service industry, where costs rarely allow for a full-time IT team with security expertise. Most engineers would have a lower technical profile, enough to support business operations without any kind of  subject specific security knowledge.

Data Security

How to stay protected

At SafeComs we believe that SMEs deserve the best protection available at an affordable price, with expertise similar to what was once reserved for large Enterprises. Our experts are available on an individual project or ongoing basis, with enough time to review the security status, evaluate the risks and put in place mechanisms and procedures to secure your company and its systems.

This is why we created a Cybersecurity Awareness training program, delivered online with a certificate of completion for each employee. We review security status and advise on best practices, in addition to testing the resistance of your company to emerging threats. We use sophisticated tools to block malware and the transfer of their encryption programs, developing and enforcing security policies aimed at protecting your enterprise from any angle.

How can I prepare for a ransomware attack?

The following elements are vital to creating a secure environment for the company and employees:

  •       An incident response plan that describes how to react to malware is paramount
  •       Your backups are critical. Not on a network disk, not onsite, encrypted and with a daily history.
  •       Up to date antivirus, anti-phishing, Security patches, SPAM filter and a policy to block encrypted files, an important vector of malware today.
  •       Monitor your internet traffic and limit access to sites not required for your activity.
  •       Segregate data with privileges elevation, not everybody needs access to everything
  •       Control and approve the third party who can access your network
  •       Have a mechanism to record and report incidents

Bernard Collin is the CEO of SafeComs Network Security. SafeComs monitors PCs and Servers across South East Asia with a unique proprietary tool, Total Control. Headquartered in Thailand, SafeComs supports a large network of prestigious SMEs in the region and delivers quality security solutions to their clients. SafeComs is responsible for the security of systems and data of HLB Thailand.

Get in touch

Whatever your question our team will point you in the right direction

Start the conversation

Foreign e-service providers liable to VAT in Thailand starting 1 September 2021

HLB Thailand Tax Services Team


Starting from September this year, foreign e-commerce businesses will be liable for 7% VAT on services provided to customers in Thailand. In addition to boosting VAT collections, the law aims to create a level playing field for domestic and foreign operators providing services online to Thai customers.

E-service businesses expected to be affected include:

  • Online hotel reservations
  • Subscription to online movies, music, and e-books
  • Online gaming services
  • Online advertising
  • Sticker downloads
  • Websites, applications, and online market places
  • Online streaming

Popular foreign online platforms expected to be affected include Apple, Google, Facebook, Netflix, Line, YouTube, Tiktok, etc.

The Thai Government expects to generate annual revenue of Baht 5 billion from this measure.


The amendments to the Revenue Code to impose VAT on foreign e-services are contained in The Revenue Code Amendment Act (No.53) B.E. 2564.

The key principles remain the same as the draft law issued last year (see our article dated 23 September 2020).

When the e-services tax becomes effective on 1 September 2021, the onus for paying VAT on e-services from abroad, which previously rested under the law with consumers, will shift to the foreign e-service providers.

The Revenue Department has aimed to develop taxation practices in line with international standards set by the Organization for Economic Cooperation and Development (“OECD”), with more than 60 countries including Australia, New Zealand, Japan, Taiwan, and South Korea already adopting similar practices in accordance with the OECD’s recommendations.

Key amendments

The definition of the term “Goods” under section 77/1(9) of Revenue Code has been amended to exclude intangible assets delivered through the internet or any other electronic network i.e. electronic services.

Electronic Services and Electronic platforms are defined as follows:

“Electronic Services” means services including intangible assets delivered via the internet or any other electronic network and the nature of which renders their service essentially automated and impossible to ensure in the absence of information technology.

“Electronic platforms” means a market, channel, or any other process used by multiple service providers to provide electronic services to customers.

Foreign e-services providers will be required to register to pay VAT if they derive revenues over THB 1.8 million in a year from e-services provides to customers in Thailand that are no VAT registrants e.g. individual consumers.

Persons liable to remit VAT are divides into two categories:

  • Foreign e-service providers providing services from abroad to non-VAT registered customers that use such services in Thailand.
  • Electronic platform owners, who are liable to VAT instead of the foreign suppliers operating on their platform, providing services electronically to non-VAT registered customers that use such services in Thailand.

E-service providers who fall under the above criteria are required to register for VAT and remit VAT every month, similar to domestic businesses. However, such e-service providers are prohibited to issue tax invoices.

This will be a “pay-only” system meaning that service providers will be liable to VAT on revenues but cannot offset VAT paid on expenditures.

To facilitate taxpayers, the VAT processes such as registration, return filing, and payment can be performed electronically through the Revenue Department’s Simplified VAT System for e-Service (“SVE”) online platform.

Revenue Department enforcement procedures

The Thai Revenue Department will enforce the new law through various measures, including:

  • Requesting information concerning financial transactions of e-service operators from taxpayers and/or financial institutions.
  • Social sanctions by providing the lists of VAT registered e-business operators on its website for the public to investigate and report non-compliance to the Revenue Department.
  • Exchange of information for tax purposes with other countries using Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAC) and the Automatic Exchange of Information portal (AEOI).

Supplementary regulations and information guides are expected to be issued by The Revenue Department in the coming months to provide further details on the implementation of VAT on foreign e-services. Click here for the latest guide in English which provides detailed information about VAT on electronic services provided to non-VAT registrants in Thailand by non-resident service providers.

Read an English translation of the Amendment Act

Rohit Sharma

Principal, Transfer Pricing


Transfer Pricing documentation and adjustment rules clarified

HLB Thailand Transfer Pricing Team


The Director-General of Thailand’s Revenue Department has released an important notification on transfer pricing, laying down the rules, procedures, and conditions to be followed by tax assessment officers when inspecting the pricing of related party transactions and determining any adjustments to be made.

The notification, formally known as “Notification of the Director-General of the Revenue Department on Income Tax (No.400)”, provides further clarity for taxpayers about the transfer pricing documentation that they are expected to maintain. It is effective for accounting periods commencing on or after 1 January 2021.

The release of the notification is a welcome move and indicates the intention of the Revenue Department to make Thailand’s Transfer Pricing laws consistent with the OECD Transfer Pricing Guidelines, with the ultimate objective of create a level playing field for all taxpayers and curbing profit shifting practices.

Adjustment of controlled transactions

Transactions between related parties – referred to as controlled transactions – shall be compared with comparable uncontrolled transactions between independent parties.

A tax assessment officer shall have the power to adjust the income and expenses of a taxpayer if the remuneration of a controlled transaction is different from the remuneration for a comparable uncontrolled transaction.

Comparable uncontrolled transactions

Controlled and uncontrolled transactions are comparable if none of the differences between the transactions could materially affect the factors being examined or if appropriate adjustments can be made to eliminate the material effects of any such differences.

According to a ministerial regulation issued in 2020, tax assessment officers shall first consider similar transactions that the taxpayer has made with third parties – internal comparables – if they are available.

In assessing the degree of comparability between controlled and uncontrolled transactions, the notification provides that the following factors shall be taken into account:

  1. Contractual terms
  2. Functions, Assets, Risks
  3. Characteristics of the property or service transferred
  4. Economic circumstances
  5. Business strategies pursued

Acceptable transfer pricing methods

Consistent with the OECD’s Transfer Pricing Guidelines the notification recognizes five acceptable Transfer Pricing methods:

  1. Comparable Uncontrolled Price (CUP) Method
  2. Resale Price Method (RPM)
  3. Cost Plus Method (CPM)
  4. Transactional Net Margin Method (TNMM)
  5. Profit Split Method (PSM)

Like the OECD’s Transfer Pricing Guidelines, there is no hierarchy recommended for selecting a method. The most appropriate method shall be used, after consideration of the methods’ strengths and weaknesses, appropriateness for the controlled transaction, availability of reliable information, and degree of comparability.

A taxpayer may use a method that is not one of the five acceptable methods, but only if they have assessed that the five acceptable methods cannot be used and that the other method selected is the most appropriate method. The taxpayer will need to notify the Director-General of the Revenue Department in writing in the year that the method is applied and explain the method used and why the five acceptable methods cannot be used, together with supporting documentation and evidence, for examination by a tax assessment officer.

Two or more transactions, which are so interlinked that they cannot be analyzed separately, should be aggregated and tested together under the most appropriate Transfer Pricing method. This approach generally applies to margin-based analysis such as RPM, CPM, TNMM.

Adjustment approach

Adjustment to the income or expenses in relation to a controlled transaction can be made by a tax assessment officer if the compensation receivable for the transaction is outside the interquartile range. However, the notification is silent on the point of adjustment, e.g., lower quartile, median, upper quartile, or whether anywhere in the interquartile range could be considered arm’s length (to find out more, read our insights on year-end adjustments).

Service transactions

Where the controlled transaction is for services, the compensation received shall be regarded as compensation received from an independent transaction if the following conditions are met:

  • The compensation is for services actually performed.
  • The service is beneficial or expected to be of economic or commercial benefit to the service recipient.
  • It is a service that an independent company under comparable circumstances would pay to receive services from an unrelated company, or in order to have that service performed by its own internal departments.
  • The compensation is the same as the compensation that would have been determined if dealing independently for comparable services.

Compensation for service transactions that is for the benefit of shareholder ownership shall not be considered compensation that would be required if acting independently.

This is consistent with the OECD Transfer Pricing Guidelines, which provides that shareholder activity would not be considered to be an intra-group service, and thus would not justify a charge to other group members.


In the event that the controlled transaction involves intangible property, the following issues should be taken into account when consider the compensation for the transaction:

  • In the case of exploitation of intangible property, the duties that each contracting party is responsible for in respect of the development, improvement, maintenance, protection and the exploitation of the intangibles, by taking into account the assets used and the risks accepted.
  • In the case of granting the right to use, sell or transfer intangible property, the benefits expected to be received, geographic restrictions, unique or non-exclusive features and the right to participate in the development of the intangible property.

Corresponding adjustments

If a tax assessment officer adjusts the income or expenses of a controlled transaction of one party, the officer has the power to make corresponding adjustments of the income or expenses of the counterparty to the transaction.

The first party must have accepted and paid the tax arising as a result of the adjustment or if it raised an objection, the matter must have been decided on appeal or by a court judgement and the party has accepted to pay the tax according to the judgement. Furthermore, the counterparty should not have concealed or given false information about the controlled transaction.

Adjustments should be made in accordance with the provisions of Thailand’s Double Tax Agreements if applicable.

Advance Pricing Agreements

For the benefit of avoiding double taxation under the double tax agreements that Thailand has made with other countries and to prevent transfer pricing disputes in the future, a Thai company transacting with related parties overseas can submit a request for an advance pricing agreement, for the determination of transfer prices over a fixed period of time in the future.

Rohit Sharma

Principal, Transfer Pricing


Online filing of Transfer Pricing disclosure forms now mandatory

HLB Thailand Transfer Pricing Team


The Director-General of the Revenue Department has issued a notification making it mandatory for companies to submit their transfer pricing disclosure forms online unless they have reasonable grounds for filing a paper form.

The notification was issued on on 14 January and is effective for accounting periods commencing on or after 1 January 2020.  Many companies in Thailand adopt a 31 December year end, and will need to follow the notification when filing a disclosure form for the 31 December 2020 year.

Only companies with Baht 200 million (USD 6.7M) or more in revenues in an accounting period must file the disclosure form with the Revenue Department, disclosing details of their related parties and transactions during the year with related parties.

Companies must register to submit the form online. Registration and filing of the form must be done through the Revenue Department’s website, either directly or via the Ministry of Finance’s “Tax Single Sign On” system.

The form will be considered submitted upon receiving the reference number from the online filing system.

If a disclosure form is filed by paper it must be accompanied by a letter explaining the reasons why the company cannot submit the form online.

Compulsory online filing of transfer pricing forms will greatly enhance the Revenue Department’s ability to review and analyse the information disclosed in the forms, and assist in the selection of taxpayers for transfer pricing audits.

Read the official notification in Thai language

Rohit Sharma

Principal, Transfer Pricing


February 2021 Thailand Tax Update

HLB Thailand Tax Team


The Thai government continues to monitor the financial impact of the pandemic on the country’s economy and has announced several new tax concessions in response.

 Extended deadline for e-filing of WHT and VAT returns

 Monthly WHT returns and VAT returns filed electronically are normally due for filing within the 15th and 23rd of the next month respectfully.

 For monthly WHT returns and VAT returns filed electronically, which are normally due for filing during the months of February 2021 to June 2021, the filing date has been extended to the last day of the month.

 This extension therefore applies to withholding tax returns (PND 1, PND 2, PND 3, PND53) and VAT returns (Por Por 30 and Por Por 36) for the tax months of January 2021 to May 2021.

Extended deadline for e-filing of 2020 personal income tax returns

The deadline for filing personal income tax returns (PND 90 and PND91) electronically for the 2020 tax year has been extended to 30 June 2021. The deadline for filing a paper return has not been extended and remains 31 March 2021.

Social Security Contribution rate for employees reduced to 0.5%

Monthly contribution rates were reduced at the beginning of the year from 5% to 3% for both employers and employees for 3 months from January to March 2021.

A reduced contribution rate of 0.5% has now been announced for employees only for February and March 2021.

The monthly wage base for contributions ranges from Baht 1,650 to a maximum of Baht 15,000 for each employee. The maximum contribution for February and March 2021 for an employee will therefore be reduced to Baht 450 per month for the employer and to Baht 75 per month for the employee.

Land and building tax reduced by 90% 

Land and building tax payable for the 2021 year has been reduced by 90%. Land and building tax was also reduced by 90% last year due to the pandemic.

Property registration fees reduced to 0.01%         

The Thai Cabinet has approved another reduction of registration fees for the purchase of new residential properties from developers.

 The 2% transfer registration fee and the 1% mortgage registration fee will both be reduced to 0.01%, effective from 3 February 2021 to 31 December 2021. A similar fee reduction had expired on 24 December 2020.

 The mortgage must be registered at the same time as the transfer and the price and the mortgage must both not exceed Baht 3 million.

Duangnetr Sarachai

Principal, Tax & Legal Services


Radapak Arthapridi

Principal, Tax & Legal Services


Transfer Pricing Terminology Broken Down and Explained

HLB Thailand Transfer Pricing Team


At HLB Thailand, we want Transfer Pricing to be accessible to everyone. We understand that it’s easy to get lost in the jargon, so we’ve put together this easy to search glossary to lend a hand.

It is by no means exhaustive, but it’s a convenient place to start your Transfer Pricing journey. If you’re going to deal with transfer pricing, these are the 30 or so terms you’re going to need to know.

Anti-abuse rules and Anti-avoidance laws

These are some of the domestic taxation laws that you might run afoul of if you get transfer pricing wrong – they’re specifically aimed at ensuring people within a tax jurisdiction are paying the right amount of tax on their business profits as well as with punishing those who attempt to evade or reduce their tax contributions.

Arm’s Length Principle

The Arm’s Length Principle is an international standard set out by the OECD. It’s used for determining transfer prices and ensuring that controlled transactions are made at “arm’s length”. It ensures transfer prices between related parties are equivalent to prices unrelated parties would charge in the same or similar circumstances. This involves identifying situations or transactions undertaken by unrelated parties that are comparable to the situations or transactions between related parties. Many countries have addressed Transfer Pricing risks by introducing domestic rules based on the Arm’s Length Principle.

Arm’s Length Range

This is the range of financial figures used to establish whether or not the Arm’s Length principle has been met. Arm’s Length Ranges are generated by looking at the comparable Arm’s Length data. You’ll need to make sure that your particular Transfer Pricing method produces a result that lands within the Arm’s Length Range. We’ll look into the various Transfer Pricing methods you might use in just a bit.

The Arm's Length Range is used to justify a transfer price.

Associated/Related enterprises, companies, or parties

These terms are commonly used for companies who share ownership and/or common management control and would be subject to transfer pricing rules if they transact with one another. 

In Thailand, the Transfer Pricing laws state that two companies are considered related parties if:

1. One entity holds shares in or is a partner of the other entity, either directly or indirectly, of not less than 50
percent of the other entity’s total capital;

2. A shareholder that holds shares, either directly or indirectly, of not less than 50 percent of the entity’s total
capital, holds shares in another entity, either directly or indirectly, of not less than 50 percent of the entity’s
total capital; or

3. Entities are related in the capital, management, or control so that an entity may not operate independently
from the other entity, as prescribed by Ministerial Regulations. 

Related parties must deal with each other at Arm’s Length and their transactions are subject to Thai Transfer Pricing legislation.

Independent enterprises

These are transactions that occur between two related companies or entities. If you’re selling goods to a company that you own 50 percent or more of the shares in, that’s a controlled transaction. , so-called because you’re able to assert more control over the prices agreed than you would if you didn’t own a majority stake in the other company.

Controlled transactions

These are transactions that occur between two related companies or entities. If you’re selling goods to a company that you own 50 percent or more of the shares in, that’s a controlled transaction. , so-called because you’re able to assert more control over the prices agreed than you would if you didn’t own a majority stake in the other company. 

Uncontrolled transactions

These are transactions that occur between unrelated companies and which are therefore not subject to Transfer Pricing regulations. 

Functional analysis

Functional analysis is a breakdown of the critical functions, use of assets and assumption of risks undertaken by all related businesses involved in a controlled transaction. These can then be compared against similar figures from uncontrolled transactions with independent enterprises – again, it’s all about proving that you’ve followed the Arm’s Length Principle.

Functional analysis is a key part of comparability analysis and is the foundation of all Transfer Pricing analysis as a whole. The OECD Transfer Pricing Guidelines consider the assumption of risks to be a crucial part of the functional analysis, as the assumption of greater risks carries the expectation of greater profits.


This is how you assess whether your controlled transactions are being priced fairly. A scientific methodology is required to arrive at the most suitable comparable companies to serve as benchmarks. Thailand prefers you benchmark your transfer prices against those of local companies – if you’re selling goods to a related company, how much would your related company be able to buy those goods for if they were purchasing from a local company rather than your own? This is benchmarking.

Benchmarking analysis is required to arrive at an arm's length range to justify the transfer price.

Comparability Analysis

This is how you go about making sure that your transfer prices are set at the going market rate. By comparing the controlled transactions your company is involved in with legally comparable uncontrolled transactions, you’ll be able to see if you’ve applied the Arm’s Length Principle correctly. You’re likely to encounter at least a few complicating factors while running your analysis, so it’s best to consult an expert who can convincingly weigh them up against the going market rate.

Comparable companies

This is where you compare a controlled transaction with an uncontrolled one – but the two are only legally comparable if there are no factors that could conceivably be regarded as different. It’s simply a case of making sure that factors are taken into account when making the comparison, and this comparison could then be used to calculate a transfer price that meets the Arm’s Length Principle and keeps you on the right side of compliance. (see our article on Thailand clarifies rules for use of internal and external comparables to get more insights into this subject)

comparable companies

Berry ratio

The Berry ratio is a simple calculation used in Transfer Pricing to indicate whether or not a company is making a profit on its value-added activities. You can calculate your Berry ratio by dividing your gross profits by your operating expenses. This measurement is most applicable to service providers who can calculate the remuneration for value-added functions. Under the Berry ratio, the mark-up is applied to the operating expenses that represent the remuneration only for the value-added functions but excludes the cost of goods sold. Under the Berry ratio, the mark-up is applied to the operating expenses or value-added expenses representing the remuneration only for the value-added functions, excluding the cost of goods sold. The Berry ratio application is subjective, and you’ll need an expert to navigate you through its applicability to your business.  

CFC (Controlled Foreign Corporation)

A CFC is a subsidiary or related entity of a multinational corporate group that’s located in a foreign jurisdiction. Some countries have introduced CFC legislation into their tax laws designed to limit artificial deferral of tax by using offshore low taxed entities.

Year-end/Voluntary Adjustment

This adjustment is one your company would make before you file your tax returns. It’s basically where you report a transfer price from a controlled transaction your company has taken part in and adjust the price that was actually set in the transaction to one that the taxpayer – you – consider in line with the Arm’s Length Principle. (Refer to our article on Year-end transfer pricing adjustments and customs valuations to get more insight)

Intragroup or Intracompany service

This is the rendering of a service to a related company – one that you’ll need to make sure is paid or received at the same rate that an independent enterprise could have provided the same service for.

Direct Charge method

This is one of the many methods of charging for an intragroup service. The Direct Charge Method requires a clearly identified agreement outlining how the transaction will be conducted. Speak to us for more info on this. . (See our article where Thai Revenue Department mentioned what they want to see for service transactions transfer pricing documentation and adjustment rules clarified)

Direct Costs

Direct costs are associated with the production of goods or the rendering of a service – raw materials, equipment needed to process the raw materials, the paying of salaries to those producing the goods or providing services etc.

Indirect Charge Method

This is just another of the potential methods you can use to calculate the agreed price in an intragroup or intracompany transaction. Each transaction will have a preferred method, so speak to us directly for more info on which one to choose and how to make it work for you.

Indirect Costs

These are costs not directly related to the production of goods or the rendering of services. Indirect costs include overheads like the petrol used for delivery, repairs on vehicles or machinery, software updates and the like. 

Double Taxation Treaty

A double taxation treaty or agreement is made between two countries to ensure that enterprises operating in both tax jurisdictions won’t be taxed twice by two different regimes. Most double tax treaties incorporate the Arm’s Length Principle as a basis for allocating profits (and thus taxes) between associated enterprises.

Double Taxation Treaties are tax treaties which affect transfer pricing.


An ‘intangible’ is something that belongs to a company but is not a physical or financial asset. They include things like intellectual property or organizational know-how. Intangibles generally fall into one of two groups, marketing intangibles and trade intangibles.

  1. Marketing intangibles are used in customer-facing business operations and include things like
    trademarks, trade names, customer lists and customer relationships.
  2. Trade intangibles have more to do with internal operations and include things like patents, know-how,
    designs and models used for the production of goods or the provision of services.

Whenever a company’s intangible assets are used for commercial purposes by another party, a royalty rate will be agreed upon, either as a fixed value or as a percentage (depending on the license agreement) of the revenue gained through their use.

Intentional Set-Off

An intentional set-off is when a related company benefits from the actions of another related company. In order for the benefits to be mutual, the parent company or the two related companies will agree to find a means of repaying the benefits in one form or another. Intentional set-offs can get messy so you’ll want to be sure that your documentation is in order to prove that everything is above board. More on intentional set-offs and incidental benefits can be found under Chapter VII, section B. 1.4 of the OECD’s BEPS Action Plan 13.

Multinational enterprise group (MNE group)

This is a group of multinational companies that all share a common owner or are controlled by the same legal entity despite operating in more than one country.

Read More: How Country-by-country reporting (CbCR) regulations are evolving in Thailand

Multinational enterprise (MNE)

This is a company operating in more than one country that belongs to a larger group or parent company.

Read More: What’s the difference between a Master file and a Local file?

OECD Transfer Pricing Guidelines

Published for the first time in 1995, the Organisation for Economic Co-operation and Development (OECD) has been the leading organization in developing global transfer pricing guidelines. Thailand is adopting very similar rules to the OECD’s, but because they are not exactly the same you’ll always want to consult a local specialist to ensure your documentation requirements have been met.

Transfer Pricing Adjustments

This is an adjustment made by a tax authority for revenues or expenses generated from controlled transactions that fail to satisfy the Arm’s Length Principle. Transfer Pricing adjustments can be applied to controlled transactions occurring within the same or multiple tax jurisdictions.

Can the Thai Revenue Department adjust the counterparty to the controlled transaction? Refer to our article on transfer pricing documentation and adjustment rules clarified to get more insight.

Repatriation of Funds

This is just the returning of profit to a related company if you’re found to deviate from the Arm’s Length Principle when carrying out a controlled transaction. The potential consequences for tax evasion are catastrophic, so it’s best to avoid them altogether.

Tested Party

A tested party refers to a participating related company in a controlled transaction – typically it’s used to refer to a company whose functions, risks and assets are the least complex in the transaction and whose data is easily available for analysis in the public domain.

Transfer Pricing

This is the price applied to transactions between related companies, including adjustments made to ensure that the price is similar to what would have been paid if the companies were entirely separate from one another.

Transfer pricing terminology - transfer pricing meaning

Read More: Everything you’ve ever wanted to know about Transfer Pricing in Thailand 

Transfer Pricing Methodologies

There are many methods you can use to calculate Transfer Pricing in accordance with the Arm’s Length Principle. These include:

Traditional Transaction Methods: The Comparable Uncontrolled Price (CUP) method, Resale Price Method (RPM) and the Cost Plus Method (CPM) are considered traditional transaction-focused methods for establishing the Arm’s Length Principle in Transfer Pricing.

  • Comparable Uncontrolled Price (CUP) Method: This method compares the price of goods or services in a controlled transaction against the price of similar goods or services in a similar uncontrolled transaction. The key here is comparability in terms of product, price, circumstances, location and terms and conditions of the arrangement.
  • Cost Plus Method: This method uses the costs incurred by the supplier of the goods or services in a controlled transaction to determine an appropriate transfer price. This method requires you to add a mark-up on the costs to determine an appropriate profit in light of the functions performed and risks assumed. You’ll need to be sure you’ve taken functions and risks as well as current market conditions into account. Once you’ve added the mark-up on the costs, you should have a transfer price in line with the Arm’s Length Principle.
  • Resale Price Method: This method looks at how much a product could be resold to an independent company after it has been purchased from a related company in a controlled transaction. The resale price is reduced by the resale price margin. What is left after subtracting the resale price margin can be regarded, after adjustment for other costs associated with the purchase of the product (e.g. custom duties), as the arm’s length price of the original transfer of property between the associated enterprises. This is based on the gross margin realised in comparable uncontrolled transactions. This method is generally used for pure distributors that resell products without physically altering them or adding substantial value to them.

There are various factors or deficiencies in the application of CUP, CPM, or RPM – you’ll need an expert to help you select the most appropriate method to analyse the controlled transaction.

Transactional Profit Method:  Profit Split Method (PSM) and Transactional Net Margin Method (TNMM) are considered traditional profit-focused methods for establishing the Arm’s Length Principle in Transfer Pricing.

  • Profit Split Method: This method looks at how profits ought to be split in a controlled transaction. The goal is to produce the approximate division of profits that would have been found following a transaction that meets Arm’s Length standards. The approximate division is based on combined profits derived by the counterparties to the transaction. This method is mostly used in highly-integrated or complex controlled transactions involving the creation of an intangible asset.
  • Transactional Net Margin Method: The TNMM examines the net profit that a company derives from a controlled transaction relative to an appropriate base (e.g., costs, sales, or assets). Typically, TNMM is used as financial data on comparable independent companies that are commonly publicly available. Moreover, TNMM is also more tolerant of accounting inconsistencies. Its use of net operating profit analysis, which naturally captures both cost of goods sold and operating expenses, allows for a more consistent comparison of financial results, albeit differing accounting treatments to cost classification.

Transfer Pricing Disclosure Form

In Thailand, the transfer pricing disclosure form is a report which includes details of related parties and transactions during the year with related parties. A company must file this form if its annual revenues are greater than THB 200 million. The form must be filed online on or before the corporate income tax return filing date. 

Read More: The impact of COVID-19 on your Transfer Pricing arrangements

HLB’s Transfer Pricing specialists are here to help. 

Thailand’s Transfer Pricing rules are complex, and can differ greatly from those in neighbouring countries. To stay compliant, book a meeting with Rohit Sharma and his team of local Transfer Pricing experts at HLB Thailand today. 

Get in touch

Whatever your question our team will point you in the right direction

Start the conversation

Thailand’s new Transfer Pricing law: Assessing the risks for taxpayers

HLB Thailand Transfer Pricing Team


The new transfer pricing (TP) legislation in Thailand signals a tougher approach on TP, with the next step being its enforcement through tax audits.


Thailand’s Revenue Code has for a long time contained provisions to give revenue officers the power to assess transactions for tax purposes at market prices. Off the back of these provisions, the Revenue Department issued an instruction in 2002 to provide guidance on determining the market price of transactions between related parties. The instruction essentially followed the OECD’s TP guidelines.

To fulfill Thailand’s commitment as a member of the OECD’s Inclusive Framework on BEPS, legislation was introduced to codify the arm’s-length principle into the Revenue Code and impart specific powers to assessment officers to impose TP adjustments on either income or expenses arising from non-arm’s length transactions, effective for accounting periods starting on or after January 1 2019.

The legislation also introduced mandatory TP documentation requirements and filing of TP disclosure forms by certain taxpayers.

Recent developments

Transfer pricing regulations continued to evolve in 2020, with draft rules for country-by-country reporting released for public consultation. The draft rules propose making the report effective for accounting periods commencing on, or after January 1 2020.

In November 2020, a regulation was issued on the use of internal and external comparables, which aligned with the OECD’s TP guidelines. If internal comparables are not available, the regulation requires information on similar transactions between independent parties to be used, regardless of whether such transactions take place in or outside the country or are undertaken by domestic or foreign companies.

A clarification may be needed in the future on the circumstances in which foreign comparables will be acceptable, as the Thai Revenue Department has previously expressed a strong preference for the use of Thai comparables.

Disclosure requirements

Many companies in Thailand adopt a December 31 year end, and these companies would have filed disclosure forms for the first time in respect of their December 31 2019 financial year.

Only companies with Baht 200 million ($6.7 million) or more in revenues in an accounting period must file the disclosure form with the Revenue Department, disclosing details of their related parties and the transactions during the year with these parties.

The filing deadline was extended to August 31 2020 because of the pandemic and the Revenue Department then offered to reduce the penalty from Baht 200,000 ($6,900) to Baht 5,000 ($173) if the form was filed late due to the pandemic and it was filed electronically by December 31 2020.

The Revenue Department will now have significant data about taxpayers’ related party dealings in Thailand. That data will be analysed and used to formulate the next steps for determining the selection of taxpayers for TP audits. It is understood that the Revenue Department has already started to make enquiries to taxpayers.

Impact of COVID-19 on transfer pricing

By June 2021, the Thai Revenue Department will have received the second round of disclosure forms for the December 31 2020 financial year (Read more about online filing of Transfer Pricing disclosure forms)

In terms of analysing and identifying year on year trends, the Revenue Department will need to seriously consider the comparability of information that will be reported for the 2020 year, in light of the pandemic’s impact on trading conditions.

The information disclosed by taxpayers will likely not be sufficient to undertake meaningful analysis of year on year trends without requesting further information from taxpayers.

The new TP legislation grants the Revenue Department five years from the date of submission of the disclosure form to request additional information. The time given to reply is 60 days, extendable to 120 days but in the case of the very first request, the law grants a taxpayer 180 days to reply.

The Thai Revenue Department has not issued guidelines on the TP implications of COVID-19. The OECD issued a guidance at the end of 2020 under the OECD TP Guidelines, which was approved by Thailand, as a member of OECD’s Inclusive Framework. This guidance should be helpful in setting expectations in the event of a TP audit. (Read more about the impact of COVID-19 on transfer pricing).

Thailand is a manufacturing and distribution hub for many multinationals. Usually, their subsidiaries operate in Thailand as low risk or routine businesses, meaning they perform routine functions and assume routine risks as compared to the entire value chain.

The Thai Revenue Department may therefore expect a reasonable return on a year-on-year basis for such companies. As such, these companies should document the reasons for any decline in profitability due to the pandemic in their TP documentation, showing clearly how it was caused e.g. by lower capacity utilisation, lower market demand, exceptional fixed costs, or other factors.

The introduction of TP legislation and the new disclosure regime has likely caused multinationals to pay more attention to the pricing of their transactions with Thai based related parties. One of the first challenges for taxpayers and the Thai Revenue Department may concern the appropriateness of the TP documentation maintained to explain the impact of COVID-19 on trading results.




Get in touch

Whatever your question our team will point you in the right direction

Start the conversation

January 2021 Thailand Tax Update

HLB Thailand Tax Team


Below you will find a summary of recent tax developments in Thailand plus a reminder of key reporting dates for employers in the next few months.

Social Security Contribution rate reduced to 3%

To provide relief from the impact of the Covid-19 pandemic, monthly contribution rates have been reduced from 5% to 3% for employers and employees for 3 months from January to March 2021.

The monthly wage base for contributions ranges from Baht 1,650 to a maximum of Baht 15,000 for each employee. The maximum contribution is therefore reduced to Baht 450 per month (normally Baht 750) from January to March 2021 for employers and employees. 

Reminder – upcoming employer obligations 

Employers are reminded to request details of deductions and allowances for the 2021 year from their employees (Form Lor Yor 01) for the purpose of computing income tax to be withheld from salaries and wages during the 2021 year.

Upcoming deadlines for reporting income paid to employees in the 2020 year are:

2021 workers compensation – important dates

Employers will be required to pay workers compensation premiums and make wages declarations as usual this year.

No extension planned for filing personal income tax returns

The Thai Revenue Department has no plans at the moment to extend the filing deadline for personal income tax returns for the 2020 year, according to news reports. The Revenue Department extended the deadline last year by 5 months. It believes the recent Covid-19 outbreak in Thailand will be contained in 2-3 months.

Personal income tax returns are due for filing by 31 March 2021, extended to Thursday 8 April 2021 for returns filed electronically.

Unemployment benefits

Unemployment benefits due to force majeure caused by the pandemic have been revised with effect from 19 December 2020.


Any questions?

If you would like to know more about the topics covered above please contact:

Duangnetr Sarachai: [email protected]

Radapak Arthapridi: [email protected]


Duangnetr Sarachai

Principal, Tax & Legal Services


How Country-by-country reporting (CbCR) regulations are evolving in Thailand

HLB Thailand Transfer Pricing Team


The Thai Revenue Department (TRD) has recently released draft rules for the country-by-country report (CbCR or CbC report) for public consultation.

These rules make the CbC report effective in Thailand for accounting periods commencing on, or after January 1, 2020, so taxpayers need to familiarise themselves with the proposal.

The changes have come about as part of Thailand’s commitment to implement the OECD/G20 BEPS project outcomes. This is a significant development for Thailand, which informs the world that it’s serious about tackling BEPS.

The draft rules spell out the definitions as provided by the 2017 OECD Transfer Pricing Guidelines for enterprise groups, multinational enterprise (MNE) groups, constituent entities (CE), ultimate parent entities (UPE), and surrogate parent entities (SPE).

Taxpayers are provided guidance on matters, such as who is impacted by this law, what the filing obligations are, the format of CbCR, the means of filing the CbC report and the timelines.

Which entities are subject to CbCR?

Any entity that satisfies one of the following criteria, and has consolidated group revenues of no less than THB 28 billion (approx. USD 925.6 million) in the immediately preceding accounting period, is obligated to prepare and submit a CbCR.

If the accounting period of the preceding year is less than 12 months, the revenue threshold will be calculated proportionally to such an accounting year. For example, if the accounting period of the immediately preceding year was from January 1, 2020 – June 30, 2020, the revenue threshold would be THB 13,923.50 million (THB 28 billion x 182/366 days).

General cases

  1. A Thai headquartered (HQ) MNE group – an entity registered under Thai law and is the UPE of the group, or the SPE as appointed by the UPE to file the CbC report in its tax jurisdiction, as required.
  2. The SPE registered under Thai law – as appointed by the group to file the CbCR on behalf of the group.

Specific case

An entity that does not satisfy conditions one and two of the general cases, but is carrying on business in Thailand (foreign MNE subsidiaries) and meets one of the following conditions:

  1. A foreign UPE of the MNE group (located outside of Thailand) that does not require the UPE to file a CbC report in its tax jurisdiction and the UPE does not appoint the SPE in the jurisdiction that requires surrogate parent filing of the CbC report;
  2. If the foreign UPE of the MNE group or SPE, located outside of Thailand, does not have a qualified competent authority agreement (QCAA) with Thailand, or such QCAA is not yet effective at the last day of the CbC report submission period; or
  3. The TRD has been notified of the systematic failure from the residence jurisdiction of the UPE or SPE.

Reporting deadline

If the above threshold and conditions are met, the Thai-based UPE or SPE must prepare and submit the CbC report within 12 months (in a general case) of the last day of the financial reporting year. For a specific case, the report must be filed within 60 days of being requested by the TRD.

Reporting format

The CbCR report should be in English and filed electronically. It should follow the CbC report XML Schema as prescribed by the OECD. The currency used when preparing the CbC report would be the functional currency of the UPE.

Below is an illustrative chart that assumes the reporting entity has a December 31 year-end, summarising the CbC report timelines:

Assessing the impact of the draft rules

It can be argued that the most significant impact is felt by Thai HQ MNE groups which are required to prepare and file a CbC report for the first time as a result of the new rules. The draft rules are mostly in-line with the OECD.

For the MNE groups with UPEs located outside of Thailand, operating within Thailand, the new rules provide flexibility and allow for CbC reports (FY2020 and onwards) to be filed in Thailand.

Although Thailand has signed the multilateral competent authority agreement (MCAA), it is yet to activate any exchange relationships with other tax jurisdictions. Nevertheless, it is expected that these will be activated to enable the exchange of data/information with other tax jurisdictions automatically.

There are still many unanswered questions, such as whether a local filing is required for previous years (in case the Thai group was subject to CbCR in other countries), notification requirements, or how to address different year ends to arrive at a consolidated group revenue.

It is expected that the TRD will release formal guidance on areas discussed above to implement the rules effectively.

It is an opportune time for MNEs to evaluate their transfer pricing risks and ensure that their policies properly allocate profits to the various jurisdictions in which they operate.

HLB’s Transfer Pricing specialists are here to help. 

Thailand’s transfer pricing rules are complex, and can differ greatly from those in neighbouring countries. To stay compliant, book a meeting with Rohit Sharma and his team of local transfer pricing experts at HLB Thailand today. 

Download Article published in International Tax Review

Rohit Sharma

Principal, Transfer Pricing


What’s the difference between a Master file and a Local file?

Rohit Sharma, Principal, Transfer Pricing


In July 2017, the Organisation for Economic Co-operation and Development (OECD) incorporated and updated the guidelines on Transfer Pricing, aligning the recommendations from Action Plan 13 of the Base Erosion and Profit Shifting (BEPS) Inclusive Frameworks for Multinational Enterprises.

Understanding these changes is essential for taxpayers with related party transactions.

Under Chapter V of the 2017 OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, a three-tiered approach to Transfer Pricing documentation has been incorporated for taxpayers with related party transactions. 

The approach includes the preparation of three documents: Master File, Local File, and the Country-by-Country Report.

Why the three-tiered approach?

In order to standardise the Transfer Pricing documentation process, the three-tiered approach aims to:

​Ensure taxpayers give appropriate consideration to Transfer Pricing requirements, to establish prices and other conditions for transactions between associated enterprises, and in reporting the income derived from such transactions in their tax returns. The goal is to:

  1. Provide tax administrations with the information necessary to conduct an informed Transfer Pricing risk assessment.
  2. Provide tax administrations with useful information to employ in conducting an appropriately thorough audit of the Transfer Pricing practices of entities subject to tax in their jurisdiction, although it may be necessary to supplement the documentation with additional information as the audit progresses.

These objectives provide guiding principles to both taxpayers and tax administrators.

With these guidelines, the taxpayers are able to:

  • Prepare appropriate Transfer Pricing documentation.
  • Carefully evaluate Transfer Pricing methodology at or before the time of filing a tax return, and the compliance with the applicable Transfer Pricing rules. 

The tax administrators are able to:

  • Assess the information needed to conduct a Transfer Pricing risk assessment, to make an informed decision on whether to perform a Transfer Pricing audit.
  • Access or demand, on a timely basis, all additional information necessary to conduct a comprehensive audit.

Master file and a Local file

What is a Master File? 

There’s no getting around it. The OECD and G20s Transfer Pricing policies have made it mandatory for Multinational Enterprises to prepare a Master File. 

The standard three-tiered approach requires Multinational Enterprises to articulate a high-level group overview along with the details of Transfer Pricing policies for their intercompany transactions. 

This assists tax administrators to assess the Base Erosion and Profit Shifting related, or Transfer Pricing risks.

The Master File is a document containing high-level information about the global business operations, global supply chain, geographical locations (where the Group has footprints), description of the business activities of members of the Group, the Group’s intangibles, and financing arrangements within/outside the Group. 

Chapter V of the OECD’s Transfer Pricing Guidelines requires the Master File to include:

  • Group’s organisational structure
  • Group’s business or businesses, including details about their supply and value chain
  • Group’s intangibles, research & developments along with its Transfer Pricing policies
  • Group’s financial activities along with its Transfer Pricing policies
  • Group’s financial and tax positions (details of advance pricing arrangements etc.).

The Master File is to be prepared by the ultimate parent entity of the Group or a surrogate as appointed by the ultimate parent entity, within 12 months of its fiscal year-end or any country-specific requirement. 

The Master File should be made available to all relevant tax authorities in the jurisdictions where the Group has a presence. Furthermore, the Master File may be prepared for the Group as a whole or on a segment basis, based on the specific guidance/requirement of the local jurisdiction.

The threshold for filings of the Master File

The threshold suggested by the OECD has consolidated group revenues equal to, or more than EURO 750 million or a near equivalent amount in domestic currency. 

This threshold, however, varies across jurisdictions. In the Netherlands, for example, the threshold is exceeded if the consolidated group revenues are equal or over EURO 50 million.

In Indonesia, the threshold is exceeded if, during the previous year, one or more of the following is reached: 

  • Gross revenue is above IDR 50 billion
  • Tangible goods of affiliated party transactions are above IDR 20 billion 
  • Any class of non-tangible goods related to party transactions are above IDR 5 billion

Or, if any of the related party transactions were with a tax jurisdiction, with a tax rate lower than the Indonesian corporate tax rate of 25%, in the current fiscal year.

 The timeline for filings of the Master File

The OECD suggests that the Master File needs to be prepared within 12 months of the fiscal year-end. 

For some countries, like Indonesia, the Master File will need to be prepared within four months of the end of the fiscal year.

It is, therefore, integral for Multinational Entities to consistently monitor local requirements.  

What is a Local File? 

A Local File is Transfer Pricing documentation already prepared in the local jurisdiction of a member of a Multinational Entity’s group. 

While the Master File provides an overview, the Local File is more detailed. It’s an analysis of the local entity’s intercompany transactions, and is expected to be prepared and lodged with the local tax authority as per the local rules. 

Although the requirements may vary from country to country, specified by the local tax authorities, typically, the Local File will contain the following:

  • Management/department structure of the local entity
  • A detailed description of the business and business strategy pursued by the local entity along with the functions performed by the counterparty(ies)
  • Key competitors of the local entity
  • Financial information of the local entity 
  • Details of intercompany transactions along with its Transfer Pricing policies
  • Detailed functions performed, risks assumed and assets utilised by the local entity with respect to the intercompany transactions
  • Economic analysis:
    • Selection of Transfer Pricing methodology 
    • Selection of tested party
    • Selection of years for comparison
    • Selection of comparable companies
    • Selection of the most reliable profit level indicator
    • Adjustments for accounting and other factors
    • Determination of an appropriate range of results
    • Comparability analysis and adjustments performed, etc.

The thresholds and timelines for preparing and filing the Local File vary from country to country, so it’s crucial to have an understanding of the local legislation in each country an entity operates in.

The objective of the Local File is to ensure that the local entity is remunerated based on the functions it performs and risks it assumes with regard to the intercompany transaction(s), with the objective of satisfying the Arm’s Length principle.

Update on the Local File in Thailand 

When it comes to preparing a Local File in Thailand, taxpayers need experts that know the local jurisdiction. Here’s how Thailand has updated the Local File requirements.

Arms Length

According to Section 65 bis (4) and Section 65 ter (15) of the Revenue Code, all transactions are to be undertaken at an Arm’s Length price.

It also provides specific powers to the assessment officers to impose Transfer Pricing adjustments in respect of income or expenses arising from non-Arm’s Length transactions.

 The Instruction 

In 2002, specific Transfer Pricing guidelines were issued in the form of Departmental Instruction No. Paw 113/2545 – also known as “the Instruction”. 

The Instruction provides the assessing officers with guidelines for interpreting the existing Transfer Pricing laws when conducting tax examinations, and outlines the approach that taxpayers should follow when establishing Transfer Prices. 

The Instruction is, broadly speaking, consistent with the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations.

The recent addition of the “Notification of the Director-General of the Revenue Department on Income Tax (No.400)”, provides further clarity for taxpayers about the transfer pricing documentation they’re expected to maintain. It is effective for accounting periods commencing on or after 1 January, 2021.

 New provisions

Recently, the National Legislative Assembly strengthened the enforcement of Transfer Pricing regulations by adding more provisions to the Revenue Code.

This included Section 71 bis, Section 71 ter, and Section 35 ter. 

Section 71 bis defines the term “related parties” and authorises the assessment officers to assess and adjust the revenue and expenses of such companies with related parties when they’re not being priced appropriately. The pricing of transactions should be determined as if the related companies were acting independently of each other. 

Section 71 ter requires companies with revenue exceeding THB 200 million in an accounting year to submit a Transfer Pricing disclosure form and prepare supporting documentation together with its annual corporate income tax return (PND 50) for accounting periods commencing on or after 1, January 2019. 

Entities failing to comply with the legislation are subject to a penalty of no more than 200,000 baht as stipulated in Section 35 ter.

Our observations

Since joining the OECD’s BEPS Inclusive Framework, Thailand has committed to implementing the four minimum standards of its package, including the three-tiered Transfer Pricing documentation structure, Country by Country report, Master File, and Local File as mandated by the Action Plan 13.

Taxpayers will need to ensure that they can demonstrate the substance behind their existing tax structures and arrangements, especially if those structures have transactions with low tax jurisdictions.

For further insight on Thailand’s most up to date approach to Transfer Pricing documentation, refer to our article on implications of the recent “Notification of the Director-General of the Revenue Department on Income Tax (No.400)”.

This additional information will help the Revenue Department assess whether activities undertaken by the taxpayer in relation to the counterparty to the transaction support the Transfer Pricing policies and the Arm’s Length principle

The tax administrators will want to analyse the current Transfer Pricing policies in order to conduct an informed Transfer Pricing risk assessment, determining where to target their Transfer Pricing audit activity. 

On 13 April, 2020, the Thai Revenue Department released a public consultation document on the Country by Country report. 

We believe that the law will be introduced shortly and should conform to the global standard of the three-tiered approach.

Watch this space for our comments on the public consultation document released by the Thai Revenue Department on Country by Country report.

If you want to learn more about Transfer Pricing, check out our article “Everything you’ve ever wanted to know about Transfer Pricing in Thailand (with examples)”.

HLB’s Transfer Pricing specialists are here to help. 

Thailand’s transfer pricing rules are complex, and can differ greatly from those in neighboring countries. To stay compliant, book a meeting with Rohit Sharma and his team of local transfer pricing experts at HLB Thailand today. 

Read More: The impact of COVID-19 on your Transfer Pricing arrangements

Get in touch

Whatever your question our team will point you in the right direction

Start the conversation

How is the Covid-19 pandemic impacting Thailand’s medical hub ambitions?

Oxford Business Group

As Thailand begins to gradually ease coronavirus-related restrictions, the government is looking to cement the country’s position as an advanced medical hub in Asia.

From May 3, small retailers, street food vendors, restaurants outside malls, parks and outdoor sports venues have been permitted to reopen as policymakers look to kick-start economic activity that has been curtailed by lockdown measures.

Alcohol sales have resumed for home consumption, while restaurants that have reopened may only serve soft drinks and must ensure that customers are seated at least 1.5 metres apart.

Although some restrictions have been lifted, Thailand has also extended its state of emergency until May 30. International flights remain suspended and bars, cinemas, department stores and indoor sports facilities are among the popular entertainment attractions that are still closed.

The decision to begin easing the lockdown was prompted by several consecutive days in which new confirmed infections were in the single digits.

As of May 5, Thailand’s cumulative Covid-19 count stood at 2988 cases and 54 deaths.

Upon relaxing measures on May 3, the government said it would closely monitor the situation for two weeks before deciding whether to ease more restrictions or re-impose strict lockdown measures.


Medical hub ambitions

Thailand’s response to the coronavirus pandemic has been aided by a robust health care system.

Indeed, Thailand was ranked sixth out of 195 countries in the 2019 Global Health Security Index, calculated by researchers at the Nuclear Threat Initiative and John Hopkins Centre for Health Security.

This meant Thailand was the highest ranked emerging economy and Asian country in the index, which is specifically devised to measure a country’s preparedness for a pandemic.

Prior to the outbreak of Covid-19, Thailand was already working to establish itself as the medical hub of Asia.

Guided by Ministry of Public Health’s 2016-25 strategic plan entitled ‘Thailand: A Hub of Wellness and Medical Services’, stakeholders have been working to develop an advanced medical industry ecosystem underpinned by innovation and research and development (R&D).

The strategic plan also aligns with the government’s overarching ‘Thailand 4.0’ strategy, designed to help the country escape the so-called ‘middle-income trap’ through the cultivation of innovative, high-value manufacturing and service industries. 

Already popular as an international health care tourism destination, the push to further develop the country’s medical ecosystem was partly driven by Thailand’s ageing population, which is expected to result in increasing domestic demand for quality health care services.

Thailand ranks second in ASEAN behind Singapore in terms of the percentage of the population aged over 60, and this proportion is expected to increase significantly over the next 50 years.


New incentives

As the global pandemic has added further strains to frontline health services and back-end supply chains, Thailand’s Board of Investment (BOI) announced additional measures in April to accelerate investments in the medical industry, which could have positive implications for the sector’s broader strategic goals.

Complementing the pre-existing tax holiday of between three and eight years for qualified companies operating in the medical device, equipment and supply industry, the new measures include a 50% reduction in corporate income tax for a further three years. This additional incentive is available to firms who apply before June 30 and begin production before December 31.

Furthermore, manufacturers that adjust existing production lines to manufacture medical devices or parts will be exempted from import duties on machinery in 2020, provided they apply before September.

Additional tax benefits are being offered to companies producing non-woven fabric used to manufacture medical masks or medical devices.

“These measures are aimed at a fast response to this specific situation, but were designed to also pave the way for longer-term development,” Duangjai Asawachintachit, secretary general of Thailand’s BOI, told OBG.

“We believe that our proven capability to manage the pandemic, as well as enhanced local technological capabilities and strong existing supply chains, will further accelerate investments in medical innovations and biosciences, both in the short and long term,” she said, adding that the number of initial inquiries that the BOI had received in response to the new incentives made her optimistic about investment in the sector in 2020.


Neighbourhood demand

Although Thailand is already well positioned as a centre for medical innovation, it may face more competition as governments re-evaluate their dependency on overseas shipments of essential items.

“Taking into account the disruption in global supply chains, lots of countries within the region will look to become more self-sufficient in producing medical devices and pharmaceuticals that can strengthen their resilience against infectious disease outbreaks,” Paul Ashburn, co-managing partner of business consultancy firm HLB Thailand, told OBG.

“However, Thailand had already made a head start, so it is well placed to capitalise on increased regional demand over the next 12 months,” he added.

Ashburn pointed out that Thailand’s immediate neighbours in the greater Mekong region – Cambodia, Laos, Myanmar and Vietnam – all have lower GDPs per capita and less advanced health care systems.

As such, affluent patients from neighbouring countries are likely to still seek medical treatment in Thailand’s superior medical facilities once border restrictions are eased, even if it may take longer for medical tourists from other core markets in the Middle East, US, Europe and the Indian subcontinent to return en masse.

In addition, as many of Thailand’s neighbours will not be able to immediately count on domestic production to stockpile personal protective equipment and necessary medical supplies in the wake of the pandemic, Thailand will be an obvious source market due to its production capacity and close proximity.

Get in touch

Whatever your question our team will point you in the right direction

Start the conversation

Cloud accounting – sending your financials sky high

HLB Thailand Cloud Services Team


Cloud accounting software is revolutionising how businesses manage their finances.

The advent of cloud computing – the practice of storing and accessing data and programs over the internet – has seen new business models evolve to permit businesses to interact more seamlessly with customers and suppliers online. It is also causing a shake up in the accounting world as more and more accounting software developers offer a cloud based accounting solution or face the risk of being left behind.

Cloud accounting typically involves processing of the company’s financial data using an internet based program rather than accounting software installed on the user’s computer, with the data also stored online.

One of the biggest advantages of using cloud-based accounting software is the ability to access your financial data online anywhere you have an internet connection.

For example, employees who are working away from the head office can still login as normal and have full access to the organisation’s financial information. Likewise, managers in the head office can login to check the performance of overseas branches in real time. On-line collaboration means that the business owner, staff, and the external accountant are all accessing the same data.

Another advantage of cloud accounting is that if a business’s data storage system fails, is stolen or a business gets caught in a natural disaster, none of the accounting data is lost because it is all stored online.

At the forefront of cloud accounting is a company originating from New Zealand called Xero.

Xero’s rapid growth is attributed to what they call “beautiful accounting software”. It has been designed specifically with non-accountants in mind, to help entrepreneurs run their businesses quickly and easily. Applications exist for smartphones and tablets, giving businesses another way to access their accounts anywhere, check the financial position, or issue invoices on the run.

For a small monthly fee, Xero provides full accrual accounting, including a cashbook with automated daily banks feeds, invoicing, debtors, creditors, expense reimbursement and reporting.

The software includes an intuitive invoicing system where invoices can be created and sent online along with the ability to receive payment online. Users can also create quotes and purchase orders which are easily converted into sales invoices and purchase invoices respectively once confirmed by the other party.

Another function is the ability to attach files to specific transactions and invoices. Source documents can be attached in this way, so if are in a meeting and have a query about a supplier invoice for example, you can call up the attachment and view it on-line. Files can be added to Xero by email, uploaded or by taking a photo with the Xero mobile app.

The software offers several useful features for businesses dealing in more than one currency. Invoices can be created in any currency and foreign bank accounts can be added.  Xero receives hourly exchange rates for over 160 currencies, so the impact of exchange rate movements can be calculated automatically. Financial reports can be generated in any currency, a handy function for international businesses that need to keep accounts in a foreign currency for statutory reporting purposes but need to generate financial reports in their home currency as well.

Because Xero and other cloud based accounting systems typically have an open API, hundreds of third-party add-ons have emerged which perform business-specific  functions not covered by the core software, creating an “ecosystem” of cloud based software.  This is a big advantage for businesses looking to save time and money as many of these add-ons can talk and integrate with each other, eliminating repetitive data entry and increasing  visibility of real-time financial and non-financial information.

In Xero’s case, it has created an add-on marketplace, much like the Apple App Store, to house all of the add-ons which range from CRM, to point of sale, to property and hotel management systems.

Expect to see an increasing adoption of Xero and other cloud based accounting software in South East Asia as businesses seek to modernise their financial processes and demand greater access to financial data and real time performance.



Get in touch

Whatever your question our team will point you in the right direction

Start the conversation
Get in touch

Share to:

Copy link:

Copied to clipboard Copy