Transfer pricing and its implementation in Thailand
1University of Oulu, Oulu Business School, Department of Finance, Finance
|Online Access:||PDF Full Text (PDF, 0.5 MB)|
|Persistent link:|| http://urn.fi/URN:NBN:fi:oulu-201309251718
|Publish Date:|| 2013-09-30
|Thesis type:||Master's thesis
This paper studies how transfer pricing practice is actually taken in Thailand. Though there has been researched on transfer pricing in Thailand, we have found that such research are focused on related law and regulation not on its practice, itself. Therefore, this research aims to focus on the practice of transfer pricing and its related facts. Our research finds that many taxpayers are still unaware of transfer pricing as the result of no legal enforcement on such practice. Furthermore, we find that businesses with persistent loss and profit margin lower than industry average, assuming there is substantial related-party transaction, will catch the tax officers’ attention. Similar to other researches, we find that TNMM is mainly used to test the arm’s length price when it comes to transfer pricing audit. Not surprisingly, we find that compliance risk is biggest concern when implementing transfer pricing as the result of stiff penalty imposed by tax authorities. Such penalty can be greatly affect shareholders’ value; therefore, to mitigate such risk, it is recommended that MNEs shall have a good transfer pricing documentation on hand or enter APA program when necessary.
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