Customs Valuation of Imported Goods for Customs Procedures (Part 4)

As mentioned in Part 3, Part 4 of this customs valuation article will discuss specific categories of imported goods for which the transaction value method of appraisal is inapplicable. In these cases, the customs value must be established through alternative valuation methods, in accordance with applicable regulations. These alternative methods apply to imports of the following goods:

• Goods provided free of charge, whether in the form of gifts, samples, or promotional items;
• Goods imported on consignment;
• Goods imported by a branch office of the same legal entity as the exporter;
• Goods imported under a lease or lending agreement;
• Goods imported for purposes of destruction, where the importer receives a service fee;
• Goods imported through an intermediary who is not the actual purchaser.

Method 2: Transaction Value of Identical Goods

Where it is not possible to determine the customs value of goods using Method 1 (Transaction Value of Imported Goods), the customs value must be determined using Method 2, based on the transaction value of identical goods.

For purposes of this method, "identical goods" refers to goods that are the same as the imported goods in all respects, including without limitation physical characteristics, quality, and commercial reputation, and which are produced in the same country as the imported goods.

When determining the customs value under this method, the transaction value of the identical goods must be taken into account, and the following criteria apply:

1. Where it is not possible to determine the customs value using Method 1, the Customs Department must determine the customs value using Method 2, based on the transaction value of identical goods. The applicable transaction value is that of goods that are identical to the imported goods in all respects and that originate from the same country as the imported goods. The value must include insurance, freight to the customs port of import, and any loading, unloading, or other handling charges associated with transporting the goods to the customs port of import, as well as any other relevant elements.
2. Customs Value of Identical Goods: Criteria, Methods, and Conditions
   1. The customs value of identical goods must be determined based on goods sold for export to Thailand and exported at the same time, or at approximately the same time, as the imported goods.
      “Approximately the same time” means within thirty (30) days before or after the export date of the imported goods. The bill of lading issuance date is used to determine the relevant date.
   2. The customs value must be that of identical imported goods, where the value of those goods previously was accepted by the Customs Department as their customs value.
   3. The customs value must reflect sales at the same commercial level and in the same quantity (volume) as the imported goods.
   • “Same commercial level” refers to transactions carried out at the same level of trade—for instance, wholesale or retail. Where the imported goods are sold on a wholesale basis, the identical goods also must have been sold on a wholesale basis; similarly, retail-to-retail comparisons must apply.
   • “Same volume” means sales made in quantities ordinarily comparable under standard trade practices for the same class or type of goods.
     1. Exclusion of Certain Domestic Services

        The customs value must not include the price of goods that incorporate or reflect the value of services, such as engineering, development, artwork, design, plans, or sketches, performed within the Kingdom of Thailand.

     2. Adjustment of Customs Value for Identical Goods

        If no customs value for identical goods is available pursuant to Clause 2.3, the customs value must be determined based on the value of identical goods sold:

        • at the same commercial level as the imported goods but in different quantities;
        • in the same quantities but at a different commercial level; or
        • at both a different commercial level or in a different quantity;

        provided that the relevant value(s) previously have been accepted as customs values.

        The relevant customs values must be adjusted to take into account differences in commercial level or quantity, insurance, freight to the port or place of import, loading, unloading, and other handling charges related to transportation of the goods to the customs entry point. The adjustment must be made on the basic of evidence submitted by the importer. Illustrative examples include:

        • Where sales occur at the same commercial level but in different quantities, adjustments must be made only for differences in quantity.
        • Where sales occur at different commercial levels and in different quantities, adjustments must be made only for the difference in commercial level.
        • Where sales occur at different commercial levels and in different quantities, adjustments must be made for differences in both commercial level and quantity.
        • If the imported goods are exported from Singapore, while the identical goods were exported from the United States, adjustments must be made for the difference in distance.
        • Where imported goods are exported from the western United States, and identical goods are exported from the eastern U.S., adjustments must be made for the difference in the relevant distances.
        • Where imported goods are exported from Japan by air, and identical goods are exported from Japan by sea, adjustments must be made for the differences in the modes of transport.
     3. Use of the Lowest Customs Value

        Where more than one customs value exists for identical goods, the lowest customs value must be applied, provided that the goods are produced by the same manufacturer and that the time of export, commercial level, quantity, payment and delivery terms, mode of transport, and other circumstances relating to the sales are closely comparable to those of the imported goods, in accordance with the criteria established by the Director-General.

This article is intended to provide 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)

Authors