Thailand’s Pillar Two Rules: What Thai Subsidiaries Need to Prepare for Now

Thailand’s Pillar Two regime generally applies to MNE groups with consolidated revenue of at least €750 million in at least two of the four fiscal years immediately preceding the relevant fiscal year.

For in-scope groups, Thailand’s framework can give rise to Top-up Tax obligations under the applicable Pillar Two rules.

For Thai subsidiaries within an in-scope group, however, the immediate challenge may be less about performing the group-level Pillar Two calculations locally and more about understanding their Thai compliance obligations and obtaining the information required from the wider group.

This may involve notification and reporting requirements, coordination between multiple Thai entities and access to GloBE information and calculations prepared by the Ultimate Parent Entity (UPE), global tax team or another designated party.

The GloBE MCAA provides a framework for participating tax authorities to exchange GIR information.

The TRD expects Thailand to begin its first exchanges with partner jurisdictions by December 2027.

Where the GIR is prepared and filed overseas by the group’s UPE or a Designated Filing Entity (DFE), a Thai entity may be relieved from local GIR filing where the relevant requirements are satisfied and Thailand has an effective information exchange relationship with the filing jurisdiction for the relevant period.

The development can therefore facilitate centralised reporting and reduce duplicate GIR filings across jurisdictions.

It does not, however, remove the need for Thai entities to understand and manage their local Pillar Two responsibilities.

For in-scope groups, Thai Constituent entities should consider four key areas.

1. Pillar Two Notification

Thai Constituent Entities are expected to submit a Pillar Two Notification to the TRD.

Where a group has multiple Thai entities, one Thai Constituent Entity may act as the representative filing entity and submit the notification on behalf of the relevant Thai entities, subject to applicable requirements.

2. Representative Entity Nomination

Where one Thai entity is appointed to act on behalf of other in-scope entities, the relevant nomination or authorisation documentation may be required.

Groups with several entities in Thailand should therefore establish which entity will coordinate the relevant local compliance requirements before filing deadlines approach.

3. Top-up Tax Return

A Top-up Tax Return is generally required where a Top-up Tax liability arises.

Where multiple taxpayers within the group are located in Thailand, one or more entities may be designated to file the return and pay the Top-up Tax on behalf of the group, subject to the applicable rules. The relevant taxpayers may nevertheless remain jointly liable for the Top-up Tax liability.

4. GloBE Information Return

The GIR is typically prepared and filed centrally by the UPE or a DFE.

A Thai entity may be relieved from filing the GIR locally where the GIR is filed overseas by the appropriate group entity and Thailand has the necessary information exchange relationship with that jurisdiction for the relevant reporting period.

Thai entities should therefore establish where the GIR will be filed, who is responsible for preparing it and whether the relevant information exchange arrangements with Thailand apply.

For many Thai subsidiaries, one of the biggest practical Pillar Two challenges will be accessing the information needed for local compliance, rather than performing the underlying group-level calculations themselves.

Key information may sit with the UPE, regional headquarters, global tax team or an external Pillar Two adviser rather than with the local Thai finance team.

Depending on the group and its circumstances, this may include:

• Group structure and UPE information
• GloBE Effective Tax Rate calculations
• Top-up Tax calculations
• Safe harbour assessments
• GIR filing arrangements
• Relevant filing entity information

This creates an important operational dependency. Even where the underlying GloBE work is undertaken centrally, Thai entities need sufficient information to support their applicable local requirements.

The key question for Thai subsidiaries is therefore not simply:

“Does our group fall within Pillar Two?”

It is also:

“Do we know what our local responsibilities are, who holds the information we need, and how we will obtain it in time?”

In-scope multinational groups should consider taking the following steps.

1. Confirm Whether the Group Is in Scope

Coordinate with headquarters or the global tax team to confirm whether the group meets the Pillar Two revenue threshold and whether the Thai entities. are Constituent Entities within the scope of the regime.

2. Establish Group and Local Responsibilities

Identify who is responsible for the GloBE calculations, GIR preparation and wider Pillar Two requirements at group level, and who will manage the applicable compliance activities in Thailand.

3. Review the Thai Entity Structure

Where there are multiple entities in Thailand, determine how local responsibilities will be coordinated and whether a representative entity should be appointed where applicable.

4. Establish the Information Flow With Headquarters

Identify what information and Pillar Two calculations will need to come from the UPE, global tax team or designated adviser, and establish how and when these will be provided to the Thai entities.

5. Assess Potential Thai Top-up Tax

Work with the relevant group tax team or Pillar Two adviser to determine whether a Top-up Tax liability could arise in Thailand and whether a Thai Top-up Tax Return will therefore be required.

6. Confirm GIR Filing Arrangements

Establish where the group’s GIR will be filed, who will be responsible for preparing it,  and whether the filing jurisdiction has the necessary information exchange relationship with Thailand for the relevant reporting period. 

7. Monitor Further Guidance

Thailand’s Pillar Two compliance framework continues to evolve. Businesses should monitor further regulations, prescribed forms and administrative guidance that may refine procedural requirements.

Pillar Two is increasingly moving from a tax policy discussion to an operational compliance requirement.

Thai subsidiaries  may depend on information, calculations and decisions made elsewhere in the group, while still being responsible for managing applicable compliance requirements in Thailand. 

This makes coordination, ownership and information flow critical. Businesses that establish these processes early will be better positioned to manage their local obligations as Thailand’s Pillar Two reporting and information exchange framework continues to evolve.

For multinational groups within the scope of Thailand’s Pillar Two rules, local compliance requires effective coordination between Thai entities and the group teams responsible for Pillar Two at a global level.

Vistra can support businesses in navigating their Thailand Pillar Two compliance requirements, including:

• Pillar Two notification and filing requirements
• Thai Top-up Tax Return preparation and filing, where applicable
• Coordination of information required to support local compliance
• Filing arrangements for groups with multiple in-scope entities in Thailand
• Ongoing monitoring of Thailand’s Pillar Two compliance requirements as the framework develops

Working alongside your headquarters, global tax team or Pillar Two adviser, Vistra can help translate group-level Pillar Two information into the actions required locally in Thailand.

With Thailand’s Pillar Two regime already in effect and its international information exchange framework taking shape, Thai subsidiaries should ensure they understand their local responsibilities and have the information and processes needed to meet them.

Speak to Vistra about preparing your Thai entities for Pillar Two compliance.