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The OECD has played a leading role in multilateral cooperation to counter harmful tax competition. The OECD/G20 Base Erosion and Profit Shifting (BEPS) Inclusive Framework released model Global Anti-Base Erosion (GloBE) rules under Pillar Two. Pillar Two introduces a global minimum tax rate of 15%.
Who will be impacted?
An entity that is a member of a multinational entity group (MNE Group) that has a consolidated total income of not less than EUR 750 million.
On October 8, 2021, a meeting of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (Inclusive Framework on BEPS) committee, which has more than 140 members in economic zones including Thailand, resolved to approve a two-pillar approach in addressing tax challenges arising from the digital economy (Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalization of the Economy) as a guideline for tax collection in the digital economy era which includes:-
- Pillar 1 Profit allocation and taxation rights from large size Multinational Enterprises (MNEs) to be fairer, and;
- Pillar 2 Collecting a minimum corporate income tax (Global Minimum Tax) from large multinational corporate groups. To reduce international tax competition by requiring large multinational corporate groups to pay income tax at an effective tax rate (ETR) of not less than 15 percent.
On March 7, 2023, the Cabinet resolved to approve the Office of the Board of Investment's proposals for measures to support the Global Minimum Tax, which was assigned to the Ministry of Finance by the Revenue Department, to proceed with enacting laws or setting guidelines for action as appropriate, as follows:
- Collection of top-up taxes according to the principles of Pillar 2.
- Allocation of revenue from top-up taxation according to the principles of Pillar 2 to the National Competitiveness Enhancement Fund for target industries at a rate of at least 50 percent but not more than 70 percent of the said income.
- Submitting information on top-up taxpayers to the Office of the Board of investment.
On December 11, 2024, the Cabinet approved the adoption of the Global Minimum Tax (GMT) law. The effective date is 1 January 2025.
Reference/ Citation
Revenue Department news no. 6/2025
