BANGKOK, THAILAND – Thailand moved to implement a global minimum tax regime aimed at closing loopholes for multinationals and raising an extra 12 billion baht a year.
Cabinet backed global minimum tax bills
The caretaker cabinet approved four draft laws on Tuesday to give effect to the Global Minimum Tax framework. Government spokesman Siripong Angkasakulkiat confirmed the decisions, adding that the texts would take effect once published in the Royal Gazette.
“This will enable Thailand to collect additional taxes in line with the target of 12 billion baht per year.”
said Siripong Angkasakulkiat, government spokesman.
How the top-up tax mechanism worked
The international agreement targeted corporate groups with annual revenue above 750 million euros and ensured an effective minimum tax rate of 15 percent. If a subsidiary in Thailand paid less than that, the home government of the group could previously levy a top-up tax to claim the difference.
Thailand now secured the right to collect this top-up tax itself so that the additional revenue would remain in the country.
Government highlighted expected benefits
The government cited four main reasons for the reform, starting with higher tax revenues for the national budget. It also pointed to closer alignment with international standards and a reduction in profit shifting, known as BEPS.
A fourth aim was fairer tax competition, intended to place Thailand’s investment promotion on a more financially sustainable footing.
No fiscal burden for the next administration
Siripong stressed that the new rules would not create a budget burden for any future elected government. On the contrary, they were expected to generate additional funds from the first year of implementation.
The measures were defined as subordinate legislation under the overarching tax law adopted in 2024, and detailed rules would be set out in two royal decrees and two ministerial regulations.
Response to global tax competition
The move came against the backdrop of a global “race to the bottom”, in which many countries had cut corporate tax rates to attract investment. The global minimum tax, driven by the OECD, was designed to halt that downward competition.
More than 140 countries had joined the initiative, and Thailand sought a strategic advantage by moving quickly while presenting itself as a reliable international partner.
Implications for companies in Thailand
Large multinational enterprises with operations in Thailand would have to account more precisely for their profits, while tax authorities would gain stronger enforcement powers. For small and medium-sized Thai companies, however, nothing was set to change, as the reform targeted only globally active corporate giants.
The government signalled that any business operating in Thailand would be expected to contribute fairly to public finances.
Debate over fairness and competitiveness
Supporters of the global minimum tax argued that it would end aggressive tax planning and secure billions in revenue worldwide. At the same time, some investors questioned how attractive Thailand would remain in international competition once the new rules applied.
The discussion revolved around whether the global minimum tax represented an overdue step toward greater fairness or posed a potential brake on new investments during uncertain economic times.