Thai Import Duty: How 10% Becomes 85%

[auntyedna]

Another Amazing Thailand experience in which one pays a tax on a tax on a tax on a tax...

I recently imported some tractor parts from Italy and got an unexpectedly high bill for additional charges from the courier, UPS. Imagine my surprise to find from the very friendly and helpful UPS people that 10% duty is applied not only to the goods, but also to the courier charge. Imagine my further surprise to find that Customs stick on a per-kilogram charge BEFORE they calculate the 10% duty, and then imagine my diminishing surprise (by this time) to find that Revenue Department charges 7% VAT on the whole lot, including the duties.

And then imagine my complete lack of surprise to find that there was a further "taxable charge" payable to UPS (presumably for sorting out the above) and yet another 7% VAT on that. So I paid Thai VAT on a service to pay Thai VAT on a Thai duty on a Thai duty.

The figures (Thai Baht) worked out as follows:

a. cost of goods - 2,724.50

b. air freight charge - 4,301

c. Thai customs charge (300 per kilo) - 900

d. insurance (for something or other) - 70

e. Sub-total - 7,995.50

f. Thai customs duty (10%) on ALL of above - 799

g. VAT on both (e) AND (f) - 615

h. Taxable charge - 150

i. VAT on (h) - 10.50

j. Grand total - 9,570

From the above trouser-emptying experience, you can work out that the total import tariff comes to 85% of the value of the goods!! Riap Roi? Or Rip Off?

Not Really Amazed At All

Phang Nga

[thaihome]

I regularly send a low value package to India; the charges are calculated exactly the same way. Can never understand why the transportation cost is included in the value and then you pay VAT on the whole amount including the duties.

TH

[imaneggspurt]

I get this all the time, just imported a peice of plactic that cost $30, paid 1300 baht taxes,..they are all begining to charge this cif charge now as there is a recession !,.its the thai way, slow economy, put the price up,

[madjbs]

There really are some ignorant people here in Thailand.

This is how duty is paid everywhere in the world, not just Thailand. So the "Amazing Thailand" comments, just make you look silly and a member of the "everything in Thailand is rubbish or a scam" club.

Edited July 9, 2009 by madjbs

[imaneggspurt]

There really are some ignorant people here in Thailand.

This is how duty is paid everywhere in the world, not just Thailand. So the "Amazing Thailand" comments, just make you look silly and a member of the "everything in Thailand is rubbish or a scam" club.

You my friend are talking <deleted>, i was in business here for 9 years and part of that business was unfortunatly dealing with customs and excise, i suggest you get out more into the real world,in " the real world " as you put it there is set charge for goods, in thailand its who you get, and how much you are prepared to haggle, do that in the states/uk can you ? ,this applies for anything from being quoted 5000 baht on a pair of bike rims from china that cost $40, being told the rate was 30 per cent, ( postage was $45 ) to a bike i imported and went from 100.000 to 350.000, i changed nothing, they do, so, unless you came from laos or cambodia, i suggest this line wasnt thought out was it ?....."This is how duty is paid everywhere in the world "

[CWMcMurray]

This is how it is done and has been this way for as long as I can remeber...so this has nothing to do with the economic downturn.

Import Duty is based upon the CIF value of the goods.

VAT is calculated using the CIF value of the goods + the amount of Import Duty paid

You do realize that if your supplier issues their invoice stating that the invoice value is CIF value of goods, then for customs purposes the freight charges have already been included in the invoice value.

Another point, if the HAWB (House Air Way Bill) is rated, then the cost of freight that will be used for calculating Duty and Tax will be what is shown on the HAWB. If the HAWB shows "As Agreed", then the rate on the MAWB (Master Air Way Bill) will need tobe used when calculating taxes. So make sure your freight forwarder is using a "rated" HAWB.

But of course, if you are buying something with a cost of goods of 2,700 thb and the freight charge is +4,000 thb this really wouldn'tbe useful to you...

[samran]

I regularly send a low value package to India; the charges are calculated exactly the same way. Can never understand why the transportation cost is included in the value and then you pay VAT on the whole amount including the duties.

TH

think of it this way:

If a good was produced locally in thailand it would have transport costs as part of the overall price at the point of sale. The VAT is then added for the final consumer.

Same concept when something is produced overseas and imported into Thailand. If you are the Thai seller, you are going to mark up the cost to include the frieght cost and other handling costs, otherwise you'd be losing out on the sale. If it is fair for the seller to do that, then it is fair for the Thai government to apply the VAT to the final sales price in Thailand.

You can be sure that the VAT wasn't paid in Italy. The person who sold the good would have claimed a VAT exemption. In most countries, exports are usually exempted from VAT.

nb...there is a whole set of well debated literature on the application of VAT. The long and the short of it, it is much simpler and fairer to apply a VAT at the final point of sale, as it doesn't distort economic decisions (which, if you are an economist, in all but a few cases you want the market to behave freely, without taxes distorting the decision made by the consumer). I'm sure I've confused you by now, so I'll just shut it....

Edited July 9, 2009 by samran

[Norrad]

I know the feeling. I purchased some hobby parts from Hong Kong and I was charged nearly 80% import duty. Unfotunately, some of the parts were defective and I had to return them. Now I wonder if I will get charged again when they come back. I've got the original reciepts and payment proof, so hopefully they will just let it through.

[imaneggspurt]

This is how it is done and has been this way for as long as I can remeber...so this has nothing to do with the economic downturn.

Import Duty is based upon the CIF value of the goods.

VAT is calculated using the CIF value of the goods + the amount of Import Duty paid

You do realize that if your supplier issues their invoice stating that the invoice value is CIF value of goods, then for customs purposes the freight charges have already been included in the invoice value.

Another point, if the HAWB (House Air Way Bill) is rated, then the cost of freight that will be used for calculating Duty and Tax will be what is shown on the HAWB. If the HAWB shows "As Agreed", then the rate on the MAWB (Master Air Way Bill) will need tobe used when calculating taxes. So make sure your freight forwarder is using a "rated" HAWB.

But of course, if you are buying something with a cost of goods of 2,700 thb and the freight charge is +4,000 thb this really wouldn'tbe useful to you...

i had one today, goods value $35, shippind $30, ( cif $65 ? ) i paid 1223, baht,plastic part for a bike ,30 per cent i was told,

[imaneggspurt]

I know the feeling. I purchased some hobby parts from Hong Kong and I was charged nearly 80% import duty. Unfotunately, some of the parts were defective and I had to return them. Now I wonder if I will get charged again when they come back. I've got the original reciepts and payment proof, so hopefully they will just let it through.

i wouldnt bank on it, i sent a set of seat covers to the uk, they didnt fit and wouldnt fit anything else so i had them sent back here ( to country of origin ) they charged me 3000 baht duty, i tried to explain i sent them from thailand , it fell on deaf ears,

[glegolo]

Another Amazing Thailand experience in which one pays a tax on a tax on a tax on a tax...

I recently imported some tractor parts from Italy and got an unexpectedly high bill for additional charges from the courier, UPS. Imagine my surprise to find from the very friendly and helpful UPS people that 10% duty is applied not only to the goods, but also to the courier charge. Imagine my further surprise to find that Customs stick on a per-kilogram charge BEFORE they calculate the 10% duty, and then imagine my diminishing surprise (by this time) to find that Revenue Department charges 7% VAT on the whole lot, including the duties.

And then imagine my complete lack of surprise to find that there was a further "taxable charge" payable to UPS (presumably for sorting out the above) and yet another 7% VAT on that. So I paid Thai VAT on a service to pay Thai VAT on a Thai duty on a Thai duty.

The figures (Thai Baht) worked out as follows:

a. cost of goods - 2,724.50

b. air freight charge - 4,301

c. Thai customs charge (300 per kilo) - 900

d. insurance (for something or other) - 70

e. Sub-total - 7,995.50

f. Thai customs duty (10%) on ALL of above - 799

g. VAT on both (e) AND (f) - 615

h. Taxable charge - 150

i. VAT on (h) - 10.50

j. Grand total - 9,570

From the above trouser-emptying experience, you can work out that the total import tariff comes to 85% of the value of the goods!! Riap Roi? Or Rip Off?

Not Really Amazed At All

Phang Nga

---------------------------------------------

I am sorry to be honest to you. You import stuff and you do not calculate at all?? You buy stuff/services and you do not check up????

You are a fooll, my friend!

Normally when it concerns import the following equation is valid;

Purchase of goods .....................

Transportcharges............................

arrivelcharges in country of destination....................

customs duty..................'

other customs expensies.........................

VAT ...........................................

Oncarriage transport charges up to your premises..........................

So that is what you should deal with BEFORE you start to IMPORT and complain.

Glegolo

[Oberkommando]

There really are some ignorant people here in Thailand.

This is how duty is paid everywhere in the world, not just Thailand. So the "Amazing Thailand" comments, just make you look silly and a member of the "everything in Thailand is rubbish or a scam" club.

You my friend are talking <deleted>, i was in business here for 9 years and part of that business was unfortunatly dealing with customs and excise, i suggest you get out more into the real world,in " the real world " as you put it there is set charge for goods, in thailand its who you get, and how much you are prepared to haggle, do that in the states/uk can you ? ,this applies for anything from being quoted 5000 baht on a pair of bike rims from china that cost $40, being told the rate was 30 per cent, ( postage was $45 ) to a bike i imported and went from 100.000 to 350.000, i changed nothing, they do, so, unless you came from laos or cambodia, i suggest this line wasnt thought out was it ?....."This is how duty is paid everywhere in the world "

Agree with the above post, and I have also had similar dealings with Customs due to my business interests.

Thai Customs are a law unto themselves and thoroughly corrupt.

madjbs - sorry, but you don't understand how Thai Customs operates nor how bad they can actually be.

[imaneggspurt]

Another Amazing Thailand experience in which one pays a tax on a tax on a tax on a tax...

I recently imported some tractor parts from Italy and got an unexpectedly high bill for additional charges from the courier, UPS. Imagine my surprise to find from the very friendly and helpful UPS people that 10% duty is applied not only to the goods, but also to the courier charge. Imagine my further surprise to find that Customs stick on a per-kilogram charge BEFORE they calculate the 10% duty, and then imagine my diminishing surprise (by this time) to find that Revenue Department charges 7% VAT on the whole lot, including the duties.

And then imagine my complete lack of surprise to find that there was a further "taxable charge" payable to UPS (presumably for sorting out the above) and yet another 7% VAT on that. So I paid Thai VAT on a service to pay Thai VAT on a Thai duty on a Thai duty.

The figures (Thai Baht) worked out as follows:

a. cost of goods - 2,724.50

b. air freight charge - 4,301

c. Thai customs charge (300 per kilo) - 900

d. insurance (for something or other) - 70

e. Sub-total - 7,995.50

f. Thai customs duty (10%) on ALL of above - 799

g. VAT on both (e) AND (f) - 615

h. Taxable charge - 150

i. VAT on (h) - 10.50

j. Grand total - 9,570

From the above trouser-emptying experience, you can work out that the total import tariff comes to 85% of the value of the goods!! Riap Roi? Or Rip Off?

Not Really Amazed At All

Phang Nga

---------------------------------------------

I am sorry to be honest to you. You import stuff and you do not calculate at all?? You buy stuff/services and you do not check up????

You are a fooll, my friend!

Normally when it concerns import the following equation is valid;

Purchase of goods .....................

Transportcharges............................

arrivelcharges in country of destination....................

customs duty..................'

other customs expensies.........................

VAT ...........................................

Oncarriage transport charges up to your premises..........................

So that is what you should deal with BEFORE you start to IMPORT and complain.

Glegolo

So, heres another one that has probably never imported anything,. . little knowledge is dangerous my friend, IF you had any knowledge of the thai customs you would know they use musical customs charges, .no one, me included is complaining of paying import charges, its the rate they charge we are moaning about, quoting one price then charging more when you have had it sent in,

[Costas2008]

Can't understand all these figures!!!!!!

Last year I send a laptop to my wife from UK to Khon Kaen.

Purchase price 450GBP

Delivery charge 75GBP......DHL if I remember well.

Tax calculated by Thai customs and paid to DHL on delivery 900Baht.

Are you all doing something wrong??????

[thaicbr]

Yep. they are using UPS. The biggest Ripoff delivery company in Thailand. Stateside knows about the ongoing problems but does nothing. Also Costa's you sent a personal gift and were lucky. I had some stuff from the States via USPS, value $290 no duty. another $90 delivery and 900b customs. Its just the luck of the draw.

[imaneggspurt]

Can't understand all these figures!!!!!!

Last year I send a laptop to my wife from UK to Khon Kaen.

Purchase price 450GBP

Delivery charge 75GBP......DHL if I remember well.

Tax calculated by Thai customs and paid to DHL on delivery 900Baht.

Are you all doing something wrong??????

Well they probably saw it a 4.50, ,otherwise its impossible,.

[imaneggspurt]

Yep. they are using UPS. The biggest Ripoff delivery company in Thailand. Stateside knows about the ongoing problems but does nothing. Also Costa's you sent a personal gift and were lucky. I had some stuff from the States via USPS, value $290 no duty. another $90 delivery and 900b customs. Its just the luck of the draw.

My latest one was actually DHL,one is no better than the other i feel,.im sure its a combined business they ( the customs and the carriers ) have going,.

[madjbs]

When I said that is how duty is charged everywhere around the world, I was exactly right.

The difference in Thailand is that the customs office might try and charge you with a higher tariff code than the goods should have.

That doesn't change the way that the duties are calculated though, which is what the OP was complaining about, as he was only charged 10% duty.

[photojourn]

I just had a used computer part shipped EMS from Australia. It should arrive in the next day or so.

Value of part $A10. Shipping $A45. Sent as a gift. it will be interesting to see what the local charges are when the bag arrives.

[glegolo]

I just had a used computer part shipped EMS from Australia. It should arrive in the next day or so.

Value of part $A10. Shipping $A45. Sent as a gift. it will be interesting to see what the local charges are when the bag arrives.

-------------------------------

Have seen now many posts about EMS DHL and UPS all being courier-services. I was talking about shipping via sea per Boat/Vessel

bigger quantities than a small laptop. Come on..... read the posts were people know what they are talking about.

Glegolo

[BigSnake]

Another Amazing Thailand experience in which one pays a tax on a tax on a tax on a tax...

I recently imported some tractor parts from Italy and got an unexpectedly high bill for additional charges from the courier, UPS. Imagine my surprise to find from the very friendly and helpful UPS people that 10% duty is applied not only to the goods, but also to the courier charge. Imagine my further surprise to find that Customs stick on a per-kilogram charge BEFORE they calculate the 10% duty, and then imagine my diminishing surprise (by this time) to find that Revenue Department charges 7% VAT on the whole lot, including the duties.

And then imagine my complete lack of surprise to find that there was a further "taxable charge" payable to UPS (presumably for sorting out the above) and yet another 7% VAT on that. So I paid Thai VAT on a service to pay Thai VAT on a Thai duty on a Thai duty.

The figures (Thai Baht) worked out as follows:

a. cost of goods - 2,724.50

b. air freight charge - 4,301

c. Thai customs charge (300 per kilo) - 900

d. insurance (for something or other) - 70

e. Sub-total - 7,995.50

f. Thai customs duty (10%) on ALL of above - 799

g. VAT on both (e) AND (f) - 615

h. Taxable charge - 150

i. VAT on (h) - 10.50

j. Grand total - 9,570

From the above trouser-emptying experience, you can work out that the total import tariff comes to 85% of the value of the goods!! Riap Roi? Or Rip Off?

Not Really Amazed At All

Phang Nga

Tax paying anywhere SUCKS but something we must do.

[imaneggspurt]

I just had a used computer part shipped EMS from Australia. It should arrive in the next day or so.

Value of part $A10. Shipping $A45. Sent as a gift. it will be interesting to see what the local charges are when the bag arrives.

If a small box with $10 part you will have no problem, if it weighs 10kg be ready for a fight,.

[samran]

I went to import some silver bullion coins that have a face value, meaning, it can be used as currency, and as such, no duty or taxes can be applied. Took the said coins down to customs with TG and got her to confirm that there would be no duty and the reply was shocking. The customs official understood that each coin had a face value of $5 and can be used as currency, but said duty would still be charged because its also made of silver and we might try to sell it. So they recognized the fact that they are not suppose to charge duty on it, but will do so anyways. Sometimes, one can not help but shake their head at how things are done here.

hold on...

I know the customs department are probably the most corrupt part of the thai government, but it seems to me here that you were trying to scam them?

Just because it has a face value of $5, I'm guessing what you paid for the coin was more than $5, no? And you'd never use it as currency based on its face value I suspect?

If that is the case, customs is probably within its rights to at least define and base its charges on something other than the face value.

Sometimes, one can not help but shake their head at how things are done here.

Edited July 10, 2009 by samran

[mdechgan]

Congratulations,

You've figured out how Thai business people have been getting burned for over the years.

One gets charged tax on top of tax. I think airfreight charges are already taxed by UPS which is included in the airfreight. So one is actually getting charged VAT on the import duty and VAT on top of VAT. I guess that's why its called value added tax instead of sales tax.

[Marvo]

This thread is scary.

I have 12 cu m (1000kg?) of my UK-life household effects (racking up storage costs as I speak) that I would urgently like to bring into Thailand in a container and if I go through with it, I am starting to feel I will regret the idea once I hit customs.

How will they assess the dutiable value of 10 - 20 year-old household stuff (basically 90% crap!). There are no sales invoices etc. as it's old used personal stuff. As a guide for myself, I've estimated I could replace all "the 90% crap" buying second hand on ebay in the UK for around £6,000. The 10% "sentimental" stuff I can't replace (which unfortunately is inextricably mixed up with all the cr@p).

How on earth do customs decide a value and what rate of duty are they then likely to apply? Shipping alone is likely to be £2,000 (before duty and tax are added to THAT it would seem!)

I'm getting more depressed about the situation as I type, having no WP or annual ext of stay to ease the way through.

Anyone with experience able to tell me what I'm in for?

[Pib]

I regularly send a low value package to India; the charges are calculated exactly the same way. Can never understand why the transportation cost is included in the value and then you pay VAT on the whole amount including the duties.

TH

Preaching to the choir I know, but the answer is "more tax dollars flowing to the govt," as every thing associated with the sale/transportation/storage/etc., of an item is usually taxed. It's just amazing the kind of federal/local/etc., taxes that are applied during an item's movement from its beginning point to its end point. And of course some business like to charge extra fees while giving that fee a name that sounds like it was a government tax/fee, when in fact it just a fee going directly into the business' pocket....U.S. telephone companies are famous for these type of misleading/misnamed fees....and airline tickets and rent-a-car charges are another example. From my experience most countries tax the hel_l out of things (politicians are masters in figuring out more ways to bring in tax dollars)...hey, they need to money to keep giving us all our benefits!!!

[rkdrkd]

I regularly send a low value package to India; the charges are calculated exactly the same way. Can never understand why the transportation cost is included in the value and then you pay VAT on the whole amount including the duties.

TH

Did you pay the custom charge to Thai Custom or to India Custom?

Transportation charge will be different in shipping by sea or air, It means if you have to pay less custom charge if you have less transportation charge.

How the custom people calculate and add the transportation charge?

[CWMcMurray]

This thread is scary.

I have 12 cu m (1000kg?) of my UK-life household effects (racking up storage costs as I speak) that I would urgently like to bring into Thailand in a container and if I go through with it, I am starting to feel I will regret the idea once I hit customs.

How will they assess the dutiable value of 10 - 20 year-old household stuff (basically 90% crap!). There are no sales invoices etc. as it's old used personal stuff. As a guide for myself, I've estimated I could replace all "the 90% crap" buying second hand on ebay in the UK for around £6,000. The 10% "sentimental" stuff I can't replace (which unfortunately is inextricably mixed up with all the cr@p).

How on earth do customs decide a value and what rate of duty are they then likely to apply? Shipping alone is likely to be £2,000 (before duty and tax are added to THAT it would seem!)

I'm getting more depressed about the situation as I type, having no WP or annual ext of stay to ease the way through.

Anyone with experience able to tell me what I'm in for?

First thing you should be doing is getting in touch with a Thai Customs agent. Do you have a valid one year visa? If so, you may also be able to qualify for Duty free import of House Hold Goods even without a WP.

In either case you will need to give full invoice to your customs agent and let them advise estimated import Duty and Tax. Even House Hold goods shipments do not enjoy a "Blanket tax exemption".

The standard that Thai customs uses is "A Fair assesment of what is required to set up a houshold". This is subjective and can vary depending upon the customs officer.

Please also note that they determine this based upon the "Thai" standard of what is required, which may differ from what we feel is esential in the west. So to say you need 3 TVs, 2 gaming consols, 2 computers, 200 DVDs ect... will most assuredly not fly...

Many House Hold Goods shipments will have some import Duty and taxes owed...(unlessyou follow the advice of some and lie on the invoice and try to smuggle goods into Thailand, I do not recomend or advocate doing this).

--------------------------------------------

For everyone complaining about the way that courier companies calculate and charge for import Duty and Taxes... don't use them.

Get your self a customs agent to handle customs and delivery. Many companies in Thailand have items shipped via DHL/UPS (because the size of the package is vary small), but use the services of customs agent to do customs clearance.

[CWMcMurray]

Maybe many of you are unaware that the above is possible...

Once you have your "regular" customs agent. Any time you are shipping a package and have a copy of AWB (tracking number) forward to your customs agent and call UPS/DHL and inform them to release documents to your customs agent.

[thaihome]

I regularly send a low value package to India; the charges are calculated exactly the same way. Can never understand why the transportation cost is included in the value and then you pay VAT on the whole amount including the duties.

TH

Did you pay the custom charge to Thai Custom or to India Custom?

Transportation charge will be different in shipping by sea or air, It means if you have to pay less custom charge if you have less transportation charge.

How the custom people calculate and add the transportation charge?

I pay FedEx who has paid India Customs. The transportation charge is what FedEx charges me (they happen to know what that is when it arrives in India ).

I was not complaining, I was merely pointing out that the charges are calculated the same there. I realize taxes are taxes, just wish they did not charge so much.

TH