Thailand moves forward with Pillar Two: cabinet approves draft secondary legislations for Top-up Tax implementation

The Thai Cabinet approved in principle four core draft secondary legislations covering the following areas:  

• A Royal Decree prescribing criteria for determining whether multinational enterprise (MNE) groups with organizational restructuring fall within the scope of the Top-up Tax. 
• A Royal Decree prescribing rules relating to entities that are not constituent of an MNE group.  
• A Ministerial Regulation prescribing rules for allocating residual Top-up Tax revenue to Thailand under the Undertaxed Payments Rule (UTPR) mechanism in cases where no constituent entity located in Thailand generates profit.  
• A Ministerial Regulation prescribing rules on the adjustment of income, expenses, and covered taxes for Top-up Tax computation, as well as the calculation of domestic Top-up Tax (QDMTT) in Thailand.  

In addition to the four core secondary legislations above, the draft rules are expected to address key components of the GloBE Rules, including:  

• Computation of GloBE Income/Loss and Adjusted Covered Taxes  
• QDMTT deviation rules  
• Revenue threshold provisions for merger and demerger scenarios  
• Scope of Excluded Entities under Articles 1.5.2 and 1.5.3 of the GloBE Rules  
• Rules governing the allocation of UTPR Top-up Tax among entities located in Thailand  

The draft secondary legislation has been developed in line with the OECD GloBE Model Rules, Commentary, and Administrative Guidance, to ensure that Thailand’s Pillar 2 framework aligns with the OECD/G20 Inclusive Framework on BEPS and is internationally accepted.  

Please note that all of the above draft legislation is not yet in force and must still proceed through the formal legislative process. Once enacted, the rules are intended to apply to MNE Groups for accounting periods beginning on or after 1 January 2025.  

Looking ahead, the Thai Revenue Department is expected to roll out the remaining components of the Pillar Two framework in subsequent phases, including guidance on Excess Negative Tax Expense carryforwards, the De Minimis rule, Safe Harbours, tax administration provisions, and other technical details. 

How Forvis Mazars helps you? 

At Forvis Mazars, our Pillar Two advisory and compliance team provides targeted technical support on GloBE Income, Covered Taxes, QDMTT exposure, and UTPR implications to help MNE Groups manage their Pillar Two obligations with confidence. Complementing our advisory services, we offer a Pillar Two centralised software solution that delivers calculations and reporting to ensure that your organization is properly prepared as Thailand moves forward with Pillar Two implementation.  

Reference:  

• The Revenue Department News No. 5/2026. Retrieved from the Revenue Department.