Merger tax in Thailand is the set of Revenue Code rules that decides whether combining two Thai companies triggers corporate income tax, VAT, specific business tax or stamp duty. Since 2023, the Civil and Commercial Code allows one company to absorb another. Revenue Department rulings, most recently in April 2026, now explain how that new merger route is taxed.
Penalty and surcharge relief after an audit follows separate Revenue Department orders; see our guide to tax penalty relief in Thailand.
Section 1238(2) of the Civil and Commercial Code, in force since 7 February 2023, lets one company survive while the others cease to exist. The Revenue Department treats this merger as an entire business transfer under Section 74(1)(c) of the Revenue Code, not as an amalgamation under Section 73. A ruling of 22 April 2026 confirms that registering the merger in the relevant accounting period satisfies the dissolution and liquidation condition. Tax losses of the absorbed company do not pass to the survivor.
What Changed for Merger Tax in Thailand?
The Civil and Commercial Code (Amendment) Act (No. 23) B.E. 2565 rewrote Section 1238 with effect from 7 February 2023. Before that date, Thai companies could only amalgamate into a new company. Now, two or more companies may also merge so that one keeps its legal personality and the others cease to exist. The Revenue Code was not amended at the same time, so the tax treatment of the new route depended on rulings.
Three Revenue Department rulings address the gap. Ruling Gor Kor 0702/1112 of 21 February 2024 first classified the new merger for tax purposes. Ruling Gor Kor 0702/453 of 11 April 2025 confirmed entire business transfer treatment. Ruling Gor Kor 0702/462 of 22 April 2026 then resolved how the liquidation condition applies when the absorbed company disappears by operation of law.
Two Merger Routes Under Section 1238
Section 1238 requires a special resolution of each company and offers two routes. Under Section 1238(1), the companies form a new company and all of them cease to be juristic persons. Under Section 1238(2), one company remains a juristic person and the others cease to exist. The table compares the two for tax purposes.
| Route | Civil Code basis | Revenue Code treatment |
|---|---|---|
| Amalgamation into a new company | Section 1238(1) | Merger of limited companies under Section 73 |
| Merger by absorption (one company survives) | Section 1238(2) | Entire business transfer under Section 74(1)(c), per Ruling Gor Kor 0702/1112 |
The Civil Code consequences are the same in substance. Section 1243 provides that the company resulting from the merger takes over all the assets, debts, rights, duties and liabilities of the merging companies.
How Does the Revenue Department Classify a Merger by Absorption?
Ruling Gor Kor 0702/1112 states that a Section 1238(2) merger does not fall within Section 73 of the Revenue Code, which covers amalgamations under Section 1238(1). Instead, it qualifies as an entire business transfer under Section 74(1)(c). Each absorbed company is the transferor, and the surviving company is the transferee.
This classification matters because the entire business transfer rules carry their own conditions. Those conditions come from Royal Decree No. 10 B.E. 2500 and the Director-General’s Notification of 19 October 2012. As a result, the survivor must satisfy those conditions to obtain each exemption.
The April 2026 Ruling on Dissolution and Liquidation
Ruling Gor Kor 0702/462 of 22 April 2026 confirms that registering the merger by absorption within the relevant accounting period satisfies the requirement that the transferor dissolve and liquidate. A separate dissolution and liquidation procedure is therefore not needed to qualify for entire business transfer benefits.
The earlier rulings kept the liquidation requirement from the 2012 Notification. However, they did not explain how a company could liquidate when Section 1238(2) ends its existence by law. The 2026 ruling closes that gap. Other entire business transfer conditions remain unchanged.
Corporate Income Tax and Merger Tax in Thailand
The absorbed company values its assets at market value on the registration date under Section 74(1)(c). Applying Section 74(1)(b) by analogy, that revaluation is neither income nor an expense when the absorbed company computes its net profit. The registration date also closes its final accounting period.
Obligations of the surviving company
- It files the absorbed company’s final corporate income tax return and pays any tax due.
- It includes in that final return any reserves or retained profits of the absorbed company that were not previously taxed.
- It records the transferred assets at the absorbed company’s book value until disposal.
- It depreciates those assets only over their remaining period and remaining cost.
Tax losses do not transfer
Ruling Gor Kor 0702/1112 states that the transferee may not deduct the net losses of the transferor. Accordingly, accumulated losses of the absorbed company are lost on the merger. This rule weighs on the choice of which company should survive.
Are Shareholders Taxed on the Share Exchange?
Corporate shareholders of the absorbed company may be exempt from corporate income tax on the gain from exchanging their shares for shares in the survivor. The exemption rests on Section 5(17) of Royal Decree No. 10 B.E. 2500. It covers only the gain above the capital invested and excludes profits and reserves earned before the transfer.
Two further conditions apply. The share exchange must take place in the same accounting period as the business transfer. In addition, the transfer must follow the Director-General’s Notification of 19 October 2012.
Merger Tax in Thailand: VAT, Specific Business Tax and Stamp Duty
An entire business transfer that meets the conditions is relieved from the three transaction taxes. The table sets out each relief and its legal basis as stated in Ruling Gor Kor 0702/1112.
| Tax | Relief | Basis |
|---|---|---|
| VAT | Inventory and business assets transferred are not treated as a sale, provided the survivor is VAT-registered | Revenue Code Sections 77/1(8)(f) and 82/3 |
| Specific business tax | Exemption on immovable property used in the business and transferred with it | Royal Decree No. 10, Section 5(16) |
| Stamp duty | Exemption on instruments for the transfer | Royal Decree No. 10, Section 6(31) |
For specific business tax and stamp duty, the transferor had to dissolve and liquidate within the same accounting period. Under the April 2026 ruling, registering the merger in that period meets this condition.
Key Dates for Merger Tax in Thailand
The registration date of the merger is the reference point for the tax conditions. It fixes the asset valuation, closes the absorbed company’s final accounting period and starts the filing deadlines.
- Special resolution. Each company resolves to merge by special resolution under Section 1238.
- Creditor notice. Under Section 1240, each company notifies its creditors and publishes the resolution in a daily newspaper within 14 days. Creditors have one month from notice to object.
- Merger registration. Registration ends the absorbed company’s existence and its final accounting period.
- Revenue Department filing. Shareholder and shareholding information goes to the Revenue Department within 30 days of registration, under the entire business transfer conditions.
- Final return. The survivor files the absorbed company’s final corporate income tax return.
What Merger Tax in Thailand Means for Group Restructuring
The merger by absorption now offers a tax path close to the entire business transfer, without a separate liquidation. The survivor keeps its own registration, and the absorbed company’s assets and liabilities pass to it by law under Section 1243. Nevertheless, the loss of tax losses, the inclusion of untaxed reserves and the 30-day filing make the choice of survivor and timing decisive. For a broader view of the routes, see our Thailand corporate restructuring guide and our note on share transfer in Thailand.
Frequently Asked Questions
Is a merger by absorption taxed like an amalgamation in Thailand?
Does the absorbed company still need to liquidate?
Can the surviving company use the absorbed company’s tax losses?
Is VAT due on assets transferred in the merger?
What filing deadline follows registration?
Conclusion
Merger tax in Thailand now follows a clear line: a Section 1238(2) merger is an entire business transfer, and registration within the accounting period stands in for liquidation. Relief from corporate income tax on the share exchange, VAT, specific business tax and stamp duty remains conditional. Therefore, structuring the survivor, the accounting period and the filings in advance protects the relief. Our mergers and acquisitions lawyers advise on group combinations. The 2024 ruling is published by the Revenue Department, and the Code text by the Office of the Council of State.
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