Thailand - Australia Free Trade (tafta)

[merscher]

We do regularly import goods from Australia. Does anybody has experience with the TAFA agreement? There are some information in the internet, and even a website. But these information are either pure theory or confusing (especially the "country of origin" requirements). I need the practical steps. What I have to do (step1...) to get tax exemption for a particular good imported from Australia.

Thanks!!!

[TPI]

We do regularly import goods from Australia. Does anybody has experience with the TAFA agreement? There are some information in the internet, and even a website. But these information are either pure theory or confusing (especially the "country of origin" requirements). I need the practical steps. What I have to do (step1...) to get tax exemption for a particular good imported from Australia.

Thanks!!!

I would help if I could but....there's only conflicting information out there! Whatever you do, do not, I repeat do not use the Thai Embassy in Australia for information. In the 3 times I've used them (fool me) the information has been dead wrong and caused me no end of problems with Customs this end. Best of luck with your search!

[raro]

In order to import under TAFTA benefits, your shipper must issue you a TAFTA C/O stating that the country of origin is Australia. Failing to do so you are subject to duties as if the goods would come from any other country.

Also note, that not all products are part of the TAFTA, wine and cars for instance are excluded.

"made in Australia" means that a vast part of the value creation was made in Australia. How much, I am also not sure of...your shipper can check this with his his local chamber of commerce. Also the AusThai chamber might be of help, guess you have to become member to access their information.

[merscher]

Thanks for your help! It really seems that it seems quite difficult. And the customs brokers don't want to go into this. Some charge you extra in case of "tax exemption". I really wonder whether there are companies out there who can enjoy the TAFTA....

[raro]

It is in practice not as difficult as it sounds. The exporter in Australia must arrange the C/O with his local chamber of commerce and that's it. Whether or not he is eligible to do so he must advise you - preferably prior to your order.

Charging extra for duty free imports? Nice concept, didn't come to my mind yet and thanks for the heads up

[CWMcMurray]

I have to agree with Raro on this one.. its not really that difficult in practice.

1. Check with customs broker in Thailand to see if a reduced Duty amount is available under TAFTA (based upon commodity)

2. If no... then the process stops here... just import under general tariff

3. If yes, then check with your supplier to see if they can provide C/O

4. if they can not... they find a new supplier who can

5. If they can provide C/O, then just ensure that the original is put in the airline's consol pouch with the rest of the shipping Docs

6. Goods arrive, have your customs broker clear under TAFTA rate

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

You should definately look into alternative customs brokers.... cost of customs clearance does not increase if the goods are duty free

Edited October 22, 2009 by CWMcMurray

[raro]

You should definately look into alternative customs brokers.... cost of customs clearance does not increase if the goods are duty free

Shhhhhh.....I just found a new source of income

[monty]

Well, importing medical equipment (electrical hospital bed) from Australia sure as heck ain't a tax free import

[CWMcMurray]

Monty all of the FTAs are commodity based, so every agreement with every country only covers some commodities... the rest will all nedd to apply the general rate.

Even if the item is covered, it does not mean that it will be Duty exempt, but may just be reduced

For example if a certain commodity has a General rate = 20% , the TAFTA rate may only be = 5%.

In some cases, the Rate shown in the FTA might actually be higher than the general rate...in that case, you would not want to request the C/O from your supplier and you would want to clear under the General rate.

[monty]

In some cases, the Rate shown in the FTA might actually be higher than the general rate...in that case, you would not want to request the C/O from your supplier and you would want to clear under the General rate.

Can that happen everywhere in the world, or is that one of the "only in Thailand" things?

[CWMcMurray]

This is an everywhere thing...

The FTA agreements are negotiated by the two nations (or group of nations) and it is possible for this to happen; especially in the group FTAs where all members agree to a "special rate", each of the individual member states "general duty rates" for that particular commodity may differ and it is possible that a member state may actually have a general rate lower than the FTA.

For Bi-Lateral agreements it is also possible that the general rate was higher at the time the agreement was signed but has since been lowered. They will not renegotiate or amend the FTA, but then for that particular commodity it really makes no sense to "ask to clear under the FTA stated rate" anymore.

[someoneelse]

Don't forget about the Australia - ASEAN FTA either - it was just recently signed into force in Australia. Not sure when it comes into effect in Thailand, but it'll be worth keeping an eye on.

[raro]

In some cases, the Rate shown in the FTA might actually be higher than the general rate...in that case, you would not want to request the C/O from your supplier and you would want to clear under the General rate.

Can that happen everywhere in the world, or is that one of the "only in Thailand" things?

I saw that one happen before with an import from China. Cleared under the FTA procedure the duties would have even been higher. Couldn't believe it myself...and that is a 1:1 agreement, not involving any other nation. TIT indeed...

[lioness]

Country of origin, Is not awhere the items are sent from.

as an example only, say the items you were importing were only made up in Australia, but the materials used were from elsewhere, the free trade agreement only applies to the Australian component.

[CWMcMurray]

The above is only partly true...

It is true that in order to qualify, the goods do need to be "Australian made", but that does not mean 100% Australian made.

The shipper would need to apply for a Certificate of Origin, if a C/O is issued then the goods would qualify...

In Thailand for example, in order to qualify for a C/O only 35% of the components making up the final good needs to be manufactured in Thailand to qualify. If you meet the 35% requirement the C/O can be issued...

Example: Textile manufacturer buys shirts from China brings them to Thailand, manufactures the buttons in Thailand and sews the buttons on the shirts in Thailand. Meets the min requirement and applys for C/O ... goods are qualified as "Made in Thailand"