The Regulation of Transfer Pricing in Thailand
Transfer pricing determines the market price or tax valuation for cross-border or domestic transactions between related entities. According to section 71 bis (2) a ‘related entity’ means an entity (or a shareholder or partner of an entity) that holds directly or indirectly a minimum of 50% of the total share capital of another entity. A ‘related entity’ is also defined to include, an entity that is related to another by way of capital, management, or power to control, and that cannot perform independently from the other entity. The market price (or the arm’s length principle/price) is the fee which independent contracting parties would charge in a commercial manner for the same types of property or service provided, on the date in which the transaction is made.