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On January 1, 2025, Thailand’s Revenue Department began enforcing the Emergency Decree on Top-up Tax B.E. 2567 (2024), marking a significant step for Thailand toward implementing the OECD’s Global Anti-Base Erosion Model Rules under Pillar Two. This issuance aims to reduce tax competitions among countries by ensuring that in-scope multinational enterprise (MNE) groups are subject to an effective tax rate (ETR) of at least 15%.
Under this Emergency Decree, Thailand’s Revenue Department is authorized to collect Top-up Tax from MNEs operating in Thailand where the applicable ETR falls below the minimum threshold. This introduction may inevitably raise concerns among MNEs that have benefited under Thailand’s Board of Investment (BOI) as the BOI-granted tax incentives may trigger additional Top-up Tax liabilities.
In response, on November 12, 2025, the BOI, in collaboration with the Ministry of Finance, announced that it is in the process of revising the National Competitiveness Enhancement for Targeted Industries Act B.E. 2560 (2017) by introducing a Qualified Refundable Tax Credit (QRTC), which is a mechanism recognized by the OECD. This new form of incentive reflects a policy response aimed at aligning Thailand’s investment promotion regime with the OECD’s global minimum tax framework. However, this incentive is intended to be offered as an alternative measure for MNEs affected by the Emergency Decree, not to replace the offering of incentives. This means that investors who are not subject to the Emergency Decree can continuously benefit from the BOI-granted incentives as in the past.
Furthermore, on December 30, 2025, Thailand’s Cabinet approved four draft secondary legislations issued in pursuance to the Emergency Decree, which were developed in accordance with the OECD’s GloBE Model Rules and Commentaries, with the objectives of ensuring consistency with the international practices. The approved drafts address the detailed rules, including but not limited to the determination of in-scope MNEs and the approach for calculating Top-up Tax liabilities that such taxpayers are subject to under the Emergency Decree. The four draft laws are as follows:
- Royal Decree prescribing the criteria for determining whether multinational enterprise groups that have undergone organizational restructuring are subject to the Top-up Tax;
- Ministerial Regulation prescribing the criteria concerning entities that are not constituent entities;
- Ministerial Regulation prescribing the criteria for allocating Top-up Tax to Thailand under the Undertaxed Payments Rule (UTPR) mechanism in cases where no constituent enterprise group located in Thailand has GloBE income; and
- Ministerial Regulation prescribing the criteria for adjusting income, expenses, and covered taxes for the calculation of the Top-up Tax, including the criteria for calculating the Domestic Top-up Tax in Thailand.
Overall, these developments signal Thailand’s progress toward implementing the global minimum tax framework. However, further updates on their key aspects will be provided once the detailed rules become available.
Article by Senior Partner Sumet Mingmongkolmitr