Customs Valuation of Imported Goods for Customs Procedures (Part 2)

The calculation of import duties on goods generally is governed by Section 14 of the Customs Act B.E. 2560 (2017) (“Customs Act”), which can be summarized as follows:

The assessment of import duties on goods brought into Thailand shall be determined based on the characteristics of the goods, their customs value, the applicable customs tariff classification, and the corresponding duty rate at the time importation is complete. 
However, in some specific circumstances, the declared value of the goods at the time of import is not used for purposes of duty calculation. These exceptions include:

(1) Where Goods Are Released from a Bonded Warehouse for Domestic Use, Other Than for Export. 

The bonded warehouse zone is an officially established area that allows for temporary deferral of import duties (on goods brought into the zone). The system is intended to facilitate activities like production, blending, or assembly of goods, where the finished products are exported. The primary objective of the bonded warehouse zone is to ease the tax burden on entrepreneurs who import goods for purposes of manufacturing and subsequent export.

Entrepreneurs may apply for establishment of a bonded warehouse and, upon importing goods to the warehouse zone, provide a financial guarantee in lieu of immediate duty payments, in accordance with applicable laws and regulations.  When the goods are exported, they are deemed not to have been imported into Thailand, allowing the entrepreneurs to reclaim or withdraw the financial guarantee.
However, if the original intent, at the time of import, was to produce goods for export, but the goods subsequently are removed from the bonded warehouse  for domestic use (instead of being exported as originally planned), import duties must be paid on the goods immediately at the time of removal. The applicable duties are assessed and paid as follows:

(1.1)    The applicable duties are based on the nature of the goods, the customs value, and the applicable customs tariffs as of the time import of the goods is deemed complete.

(1.2)    However, the applicable duty rate is the rate in effect at the time the goods are released from the bonded warehouse, whether or not the goods are still in the same condition as at the time of import. 

(2) Where Goods Stored in a Bonded Warehouse Are Lost or Destroyed

As mentioned earlier, when goods are imported into a bonded warehouse for purposes of production and export, the importer is not required to pay import duties if a duty guarantee has been provided. However, if the imported goods are subsequently lost or destroyed, the importer is liable to pay the relevant import duties. The duties are calculated based on the condition of the goods, their customs value, and the applicable customs tariff at the time the goods originally were brought into the bonded warehouse.

(3) Where Goods Are Brought Into Thailand as Goods in Transit or Transshipment

When goods are brought into the Kingdom as transit or transshipment cargo, and within 30 days thereafter a request is made to change the customs status to “importation” (pursuant to Section 102, paragraph two of the Customs Act), the applicable duties shall be calculated based on the nature of the goods, the customs value, the applicable customs tariff, and the duty rate in effect on the date the  goods entered Thailand.

This article is intended as merely a regulatory overview, and is not intended to be comprehensive or to constitute legal advice. If you have any questions on this or on other areas of tax law, please do not hesitate to contact our Tax Team at SCL Nishimura & Asahi Limited.

Budhima Kerdsiri
Counsel

Hatairat Sukprasert
Associate

We provide the full range of legal services related Thai and international taxation and customs. Our team consists of highly experienced and capable tax lawyers and consultants with  knowledge and expertise in Thai tax matters. Our services include, but are not limited to, tax advice, tax planning and restructuring, tax compliance, tax audit support, tax health checks, tax due diligence, tax refund requests, tax appeal and litigation as well as customs advice and appeals.

Authors