Thailand is set to introduce a minimum corporate tax rate of 15% on large international firms commencing in 2025, according to an announcement by Finance Minister Pichai Chunhavajira.

His declaration, made during an interview with MCOT channel, follows the cabinet's endorsement of legislative measures necessary for this taxation policy, which now awaits publication in the Royal Gazette to become effective.

This strategic move represents a significant step in Thailand’s ambition to synchronize its fiscal policies with global standards as ASEAN’s second-largest economy eyes entry into the Organisation for Economic Co-operation and Development (OECD) within the coming years.

The shift underscores Thailand's efforts to adapt to the evolving international tax landscape, characterized by global consensus on the need for a more equitable system for taxing multinational corporations.

Currently, Thailand’s standard corporate income tax is set at 20%; however, various exemptions and reduced rates are offered to attract substantial foreign investments.

“These corporations are liable for tax payment in their home countries regardless of any exemptions or reduced rates they enjoy here,” Mr. Pichai noted.

“Hence, we have agreed to a system returning a portion of the collected tax to those companies.”

In a bid to soften the tax restructuring for foreign entities, the Thai government has proposed incentives to mitigate potential financial burdens.

Among the proposed conditions, companies can qualify for compensation if they relocate research activities to Thailand, enhance their operations' environmental sustainability, or provide skill development initiatives for their local workforce.

Merging these adjustments, the Thai fiscal authorities aim to foster a business environment that is both competitive and conducive to sustainable economic growth, encouraging multinationals to invest in initiatives of enduring benefit to the local economy.