Transfer Pricing 27 Aug 2020

Thailand Transfer Pricing problems and solutions for MNE

 

Conclusion from the fieldwork of TP’s examination, TP documents preparation and the comparison with the testing of tested company

Summited of filing a Disclosure form is merely a valid confirmation when TRD requests it when auditing process with TP’s documents (Master file, Local file, contracts and relevance evident supporting)

 

Main problems encountered

1. 1.All business transferred transactions between group as being controlled by the parent company both the purchasing of tangible and in-tangible assets and sales.
2. 2.Price determination of both buy and sell is subject to have hidden of big tax risk occurred because there is no background and comparison of transactions evident supporting.
3. 3 Annual year of operating profit is very low to loss Improperly by not reasonable.
4. 4.The average profit of the tested company in each DBD’s TSIC business group are higher than subsidiaries. As a result, income and costs need to be recalculated in order to find taxable profits and payment process to TRD.
5. 5.According to item 4, based on the tested company average calculated in the Inter-quartile Rang (IQR) come out in the selection process? How to select those figures to using for tax calculation?
6. 6.According to item 5, re-evaluate the profit before tax and re-calculate the corporate tax payment plus the surcharge and penalty. 
7. 7 Lack of transfer pricing knowledge and understanding of both Top management executives, related persons and accountant team for TP’s execution.

 

Solution 3 key principles

 

1.The local file data supporting that has to focus on a risk analysis by each category, As analysis process who(parent or subsidiary) taken high or low risks and cost or expense for set-up prices processing between buying and selling in annual year 2019 and next 2020 and 2021 onward

2.Summarizehe risks to find the best ways tax analysis included BOI privileged to choose profit margins from IQR.

3.There must be a strategy for choosing a testing company because it determines the profit margin that is important for tax payment in year 2019, 2020 and 2021.

 

The last one is evidence gathering. Emphasize as “substance over form” and “Prepare to dispute” from the evidence available when TRD come to examination.

Questions or need advice call 66-081-8396592

 

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