Thailand Top-Up Tax Update: Secondary Legislation and Cabinet Approval


Thailand has taken major steps toward implementing the global minimum tax (Top-Up Tax) under Pillar Two. Recent developments include: 

  • Issuance of eight Director-General notifications and one Ministry of Finance notification detailing calculation rules for employee compensation and tangible asset values, substance-based deductions, and entities with special characteristics. 

  • Cabinet approval of four draft secondary laws to facilitate the implementation of the Emergency Decree. 

  • First filing deadline set for June 2027 for fiscal years starting 1 January 2025. 

  • OECD’s new Side-by-Side Package guidance expected to influence Thai safe harbour measures later in 2026. 

  1. Secondary legislations issued 

The Revenue Department released eight (8) notifications under the Emergency Decree on Top-Up Tax B.E. 2567 (2024), covering the following topics: 

  • Jurisdictional accounting standards equivalence 

  • Refundable dividend tax exclusions 

  • Rules for multi-location entities and special cases 

  • Calculation of substance-based deductions (employees and tangible assets) 

  • Exchange rate conversion for tax calculations 

  • Entity definitions and special characteristics 

Relief Measure: 

The Ministry of Finance (Notification of the Ministry of Finance on Top-Up Tax [No. 1]) has introduced transitional deduction rates for substance-based income exclusions: 

  • 2025: 9.6% (employee compensation), 7.6% (tangible assets) 

  • Gradual reduction through 2032 to ease initial compliance impact. 

  1. Cabinet approval of draft regulations 

On 30 December 2025, the Cabinet approved four (4) draft laws: 

  • Royal Decree prescribing the criteria for MNE groups that have undergone reorganization. 

  • Royal Decree prescribing the criteria for determining non-constituent entities 

  • Ministerial Regulation prescribing the criteria for allocation of Top-Up Tax under Undertaxed Payments Rule (UTPR) when no Thai CE has GloBE income 

  • Ministerial Regulation prescribing the criteria for adjusting income, expenses, and covered taxes, including Domestic Top-Up Tax rules 

  1. Preparing for Implementation 

First filing deadline: June 2027 for MNE groups with fiscal years starting 1 January 2025. 
Action Points for MNEs: 

  • Confirm EUR 750m revenue threshold (two of last four fiscal years) 

  • Identify filing entities and compliance responsibilities 

  • Implement systems for global data tracking 

  • Monitor legislative updates and safe harbour developments 

Please check our prior newsletter regarding the Top-Up-Tax in Thailand here: Thailand Implements a Global Minimum Tax/Top-Up Tax - BDO 

  1. OECD Side-by-Side Package  

On 5 January 2026, the Organisation for Economic Co-operation and Development (OECD) released new Administrative Guidance under the GloBE Model Rules introducing the “Side-by-Side Package.” Members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (Inclusive Framework or IF), including Thailand, have agreed to adopt this package, which features: 

  • Simplified Effective Tax Rate (ETR) Safe Harbour 

  • Extension of the Transitional Country-by-Country Reporting (CbCR) Safe Harbour 

  • Substance-Based Tax Incentive Safe Harbour 

  • Side-by-Side System 

As Thailand moves toward aligning its domestic compliance framework with OECD guidance, we anticipate additional safe harbour measures based on the Side-by-Side Package to be introduced later in 2026. 

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