Thailand’s 2026 tax reform: Strategic implications for business leaders

Piyanat Suanapai
PwC Thailand Spotlight, insights on business and industry trends in Thailand and beyond.

Hello everyone. I’m Piyanat Suanapai, your podcast host.

At the beginning of every year, PwC Thailand shares updates on key trends that may have an impact on Thai businesses. In this episode of our podcast, we have invited our expert to discuss legal and tax measures in Thailand, where we have started to see clear and tangible reforms since last year; particularly as Thailand prepares for its accession to the Organisation for Economic Co-operation and Development, or the OECD.

Today, I’m joined by Niphan Srisukhumbowornchai, Tax and Legal Leader, PwC Thailand. He will be sharing updates on the progress of Thailand’s legal and tax reforms, what we can expect in 2026, and how business operators and taxpayers should prepare for the changes ahead.

Hello Niphan.

Niphan Srisukhumbowornchai
Hello.

Piyanat
Before we dive into the 2026 tax outlook, could you briefly recap for us the key tax developments in 2025 that you previously discussed on our podcast? What has progressed since then?

Niphan
If you recall, when we spoke last year, I highlighted two to three key areas that taxpayers should closely monitor in 2025.

The first was the Thai Revenue Department’s revival and implementation of the Risk-Based Audit system, or RBA, for selecting taxpayers for audit. Over the past year, from cases where PwC, and I personally, have assisted taxpayers undergoing tax audits, it has become clear that most audit cases were selected through the RBA system, and specific audit issues were identified using that system.

This clearly demonstrates how much more advanced the Revenue Department’s backend data systems have become. In many cases, we found ourselves asking, ‘How did they identify this?’ And from a taxpayer defence perspective, there are situations where there is very little room to challenge the findings. That’s one clear example of how much has changed.

The second topic we discussed last year was Pillar Two, or the Global Minimum Tax. This is not a measure that affects businesses broadly, as it applies only to large multinational enterprise groups with consolidated revenues exceeding EUR750 million in the last three years.

Over the past year, the Revenue Department issued four to five pieces of legislation to fully align Thailand with this new global standard. Everything has progressed according to plan and within the expected timeline. From a legislative perspective, there is little cause for concern. What comes next is implementation.

In terms of compliance, we will start to see filing and reporting obligations to the Revenue Department from 2027 onward, followed by audits in subsequent years. The past two to three years have therefore been a preparation phase of self-assessment and evaluating whether Thailand’s rules would align with OECD guidance. And in practice, they have.

Another measure I did not mention last year and, candidly, did not anticipate, but which I see as a very positive development, is the Fast Track refund scheme. The Fast Track measure was introduced towards the end of the year to accelerate tax refunds for eligible businesses. The Revenue Department set out certain conditions: the taxpayer must be registered with PromptPay, and the taxpayer must not have a high-risk profile under the RBA system. If the RBA assessment indicates that the taxpayer’s risk level isn’t high, the Revenue Department will process the refund immediately.

That, in summary, is what we saw over the past year.

Piyanat
This year, following the formation of a new government, how do you think this will influence the direction of Thailand’s tax reform? Are there any specific tax issues that businesses should be monitoring more closely, particularly the potential adjustment of VAT (value-added tax)? Is there a realistic possibility that we could see a VAT increase this year?

Niphan
For 2026, I remain confident that we’ll see a number of additional tax measures, largely building on what was implemented in 2025. The objectives are twofold: to enhance the efficiency of the Revenue Department, and at the same time, to improve convenience for taxpayers.

With respect to VAT, I believe an increase is likely. VAT is one of the government’s primary revenue sources, and the incoming administration will likely need to accelerate fiscal spending and economic stimulus, particularly given that Thailand’s GDP growth has been relatively low compared with other ASEAN countries. So, I do expect VAT to increase. It’s just a question of timing and pace, which will depend on government policy priorities.

Another aspect of VAT is whether Thailand would increase VAT in isolation. In fact, Thailand’s VAT rate is currently among the lowest globally. Across Asia, most countries impose VAT at 10% or higher, with some as high as 18%. From a macroeconomic perspective, a gradual increase, for example, by 0.5%, 1%, or 1.5% increments, would likely have a limited impact on consumers and investors.

Piyanat
So, in your view, is VAT more likely to increase in steps, rather than jumping directly from 7% to 10%?

Niphan
Yes, I don’t believe it will be a sudden jump. Even last year, when the Minister of Finance mentioned a potential VAT increase, the messaging was about a step-by-step approach. That kind of roadmap is beneficial. It allows businesses and consumers to plan for spending without imposing a sudden burden all at once. A single jump from 7% to 10% would be a significant leap. A gradual increase helps reduce resistance and friction in the economy.

Piyanat
Beyond VAT, are there other tax measures in 2026 that businesses should be paying close attention to?

Niphan
I would still place strong emphasis on the Revenue Department’s roadmap towards becoming a Digital Revenue Department. This year, I expect the RBA system to remain in place as the core platform used by the Revenue Department, potentially upgraded to version 2 or 3 to assist officers with more efficient taxpayer selection and issue identification, reduce reliance on manpower, and promote fairer tax collection.

Another area where we are already seeing change, starting in late 2025 but becoming more evident in 2026, is the expansion of the audit scope. Previously, audits focused on general business operations. Now, the Revenue Department is increasingly scrutinising transfer pricing in related-party transactions. Taxpayers are receiving information requests and documentation demands related to transfer pricing compliance, and I’m quite confident that enforcement in this area will intensify, especially in the second half of the year.

Another critical topic is e-Tax. In this region, Thailand has been one of the slowest adopters of e-Tax systems. E-Tax allows the Revenue Department to obtain near real-time electronic transaction data, enabling end-to-end visibility across the supply chain.

In countries that have implemented e-Tax successfully, there’s often no need to introduce additional audit measures, as tax revenue automatically increases by approximately 15–20% simply due to improved efficacy.

E-Tax also delivers two major additional benefits. First, it helps bring informal or non-registered businesses into the tax system. When e-Tax data reveals a break in the supply chain, the Revenue Department can identify who is still outside the system and bring them in. Second, it’s highly effective in preventing VAT fraud, as demonstrated in many other jurisdictions.

I therefore expect e-Tax to be a core element of the Revenue Department’s roadmap, although we’ll have to see whether implementation is accelerated or phased.

Another initiative to watch is the receipt lottery. This encourages consumers to request receipts when making purchases or dining out. I expect the system to be designed to be simple, accessible and cost-neutral, especially for small businesses. If small operators can issue e-Tax invoices, and consumers can use those invoice numbers to participate in a lottery, it further incentivises compliance and broadens the tax base.

When e-Tax, or informal sector inclusion, and the receipt lottery all work together, the Revenue Department will have a clean, high-quality dataset. At that point, I believe we’ll see AI integrated into tax administration; not just for RBA, but as an ‘AI officer’ supporting compliance monitoring and analysis.

Piyanat
From what you’ve described, e-Tax, enhanced RBA, Pillar Two and transfer pricing seem inevitable in 2026. Do these measures effectively raise Thailand’s tax standards to OECD levels? And will this result in increased international tax information exchange?

Niphan
Thailand has formally expressed its intention to join the OECD, and the roadmap remains on track. In the near future, representatives from OECD member countries will conduct physical audits or onsite reviews, not just reviewing laws on paper, but assessing whether Thailand truly complies in practice. These reviews cover not only taxation, but also human rights, environmental standards and other dimensions.

That said, OECD accession is a long journey. Even today, while Thailand isn’t yet a full member, we already participate in several international tax information exchange frameworks, including:

First, Country-by-Country Reporting (CbCR) for large MNE groups with parent-level revenues of at least EUR 750 million. This report shows where a group invests, operates, employs people and pays tax. These reports are already exchanged internationally, allowing the Thai Revenue Department to see a comprehensive picture of MNEs operating in Thailand.

Second, Global Minimum Tax or Pillar Two, which provides visibility into whether a group is taxed at the 15% minimum rate in each jurisdiction.

Third, Common Reporting Standard (CRS) at the individual level, covering financial information of foreign nationals. For example, how are individuals residing in Thailand but holding other nationalities taxed in Thailand? This information can then be exchanged and reported back to their country of origin.

Fourth, in the future, the Crypto Asset Reporting Framework will require reporting of crypto holdings and transfers, though details are still forthcoming.

These three to four initiatives are not concepts that Thailand has developed independently; rather, they’re being implemented in line with OECD standards. Therefore, even though Thailand is not yet a full member of the OECD, we’re making a concerted effort to become part of this community and to elevate our tax collection standards, as well as our tax information exchange frameworks, to be consistent with international standards.

Piyanat
Given all these changes, how will they impact Thai businesses? Both in terms of operating costs and internal processes.

Niphan
I’m glad you used the word ‘cost’, because many people assume that tax itself is a cost. In reality, tax is a legal obligation, whether for individuals or corporations.

Tax becomes a cost only when we get it wrong. Non-compliance leads to penalties, surcharges and back taxes. Those are the real and expensive costs.

I have consistently emphasised this point: today, we’re no longer operating in a world where everything related to tax exists only on paper. Everything is becoming increasingly digital. When we look ahead to a future where all data will be in electronic form, we – as individuals, small and medium‑sized businesses, and large enterprises alike – can’t avoid this digital world. One day, this data will inevitably be used to analyse whether a particular taxpayer has complied correctly with tax laws. Once we clearly see that future state, the result is always going to look like this.

Piyanat
With tax enforcement becoming more stringent and more global, what advice would you give businesses when it comes to tax planning and strategy?

Niphan
For SMEs, mindset is critical. Tax is a duty, and compliance means: business owners must have basic tax knowledge; and accounting staff must understand tax regulations. If you don’t know about it, seek training or consult the Revenue Department to ensure compliance.

Getting tax right starts with every single transaction they undertake. Businesses need to understand the tax implications of each type of transaction – for example, whether VAT is being charged correctly on the sale of goods, whether withholding tax applies to the provision of services, and whether stamp duty has been properly affixed to contracts where required.

When all transaction‑level tax matters are handled correctly at every step, the calculation of profits or losses for mid‑year and year‑end corporate income tax purposes, as well as the preparation of monthly VAT filings, are far less likely to contain errors.

Therefore, I believe the time has come for business owners to take tax knowledge seriously and actively prepare themselves in this area. And let’s not forget: the RBA system is capable of detecting everything.

For large businesses, particularly Thai companies investing overseas, as well as foreign companies investing in Thailand, based on our experience, the approach we see as best practice is as follows:

First, the tax function must have an appropriate tax governance structure or operating model in place. This includes having personnel with strong tax technical knowledge and a dedicated tax team that understands the tax regimes of each country in which the group operates. As such, the tax operating model must clearly define who is responsible for tax matters in Thailand and who serves as the Head of Tax at the group level.

Thai companies that invest overseas must also have clear reporting on how tax compliance is managed, including how each subsidiary submits information to the relevant government authorities in each jurisdiction.

Beyond having a structure in place, there must be ongoing oversight and control over what is happening in practice, specifically, what types of transactions subsidiaries in each country are undertaking, how those transactions are being managed, where information is being submitted, and whether information is being shared or exchanged across jurisdictions.

All of this relates to governance, which is a key area where large enterprises differ from smaller businesses. Large organisations must be able to see the bigger picture: how changes in tax laws at both the OECD level and individual country level impact their business. From my observations, many Thai companies have not yet fully developed this capability, and this remains a journey that requires continued focus and commitment.

Another point I would like to emphasise is that business operators must understand that tax compliance has consequences and downstream impacts. Information that we provide to the Revenue Department, regardless of the jurisdiction, can potentially have implications for the parent company in Thailand. I refer to this as ‘understanding the impact’. This level of understanding can only be achieved if we have personnel with strong tax expertise, particularly knowledge of the tax laws in the countries where we invest. These individuals must also continuously refresh their knowledge and upskill on an ongoing basis.

It’s clear that international taxation has changed significantly, with a substantial increase in the exchange of information between tax authorities. If tax matters are managed comprehensively and holistically, paying tax in accordance with legal obligations won’t become a cost. However, if governance is incomplete, even where a business believes it has complied, errors can lead to retrospective tax assessments, penalties and additional tax charges. And that is where tax becomes the true cost to the business.

Piyanat
Thank you very much, Niphan, for joining us today and for sharing valuable insights and perspectives on the latest tax developments.

Niphan
Thank you.

Piyanat
We hope our listeners have gained valuable insights and practical guidance on how to prepare for the changes currently taking place, whether in relation to tax law reforms, the adoption of new technologies in tax audits, or new tax measures that businesses can build upon for future tax planning.

For listeners who are interested in learning more, have additional questions, or would like to follow other developments around the economy and investment, you’re welcome to share your comments or feedback through our social media channels – LinkedIn, X, and Facebook. You can also find further information on the PwC Thailand website at www.pwc.com/th.

And don’t forget to like and follow PwC Thailand Spotlight so you don’t miss our upcoming episodes.

In our next episode, we’ll be joined by another guest and will be exploring new and interesting topics, so please stay tuned.

That’s all for today. Goodbye.

Back to top