Formual For Calculating Customs Import Tax

[Nio]

Check this out from the Thailand Customs Website in English

http://www.customs.go.th/Customs-Eng/indexEng.jsp

THIS IS AN EXAMPLE!

Company "A" imports goods into Thailand.

The CIF value of the imported goods and applicable taxes and duties are as follows:

• CIF value of imports=US $200

• Import duty=60 %

• Surcharge/Special duty=US $10

• Fee=US $ 50

• Interior tax=10 %

• Excise tax=30 %

• VAT=7 %

How much should total import duties and taxes be imposed on this import?

Calculation Method:

1. Import duty=(CIF value * rate of import duty) + surcharge =

(200 * 0.6) + 10 =

120 + 10 =

130

(Note: The amount 130 is to be used for calculation of excise tax and VAT.)

2. Fee = $50

3. Excise tax=(CIF value + import duty + Fee) * {Rate of excise tax/1-(1.1 * Rate of excise tax)} =

(200 + 130 + 50) * {0.3/1-(1.1*0.3)} =

380 * 0.4477612 =

170

Note: (0.3 is 30% excise tax)

4. Interior tax=Excise tax * Rate of interior tax =

170 * 0.1 =

17

(Note: 0.1 is the 10% interior tax)

5. Base VAT=CIF value + Import duty + Fee + Excise tax + Interior tax =

200 + 130 + 50 + 170 + 17 =

567

6. VAT=Base VAT * Rate of VAT =

567 * 0.07 =

40

(Note: 0.07 is the 7% VAT rate)

Total taxes and duties = 1 + 2 + 3 + 4 + 6 =

130 + 50 + 170 + 17 + 40=

US $407

So your $200 product would end up costing $200 + $407 = $607 to bring into Thailand

dam_n that sounds quite unreasonably high?

If that is indeed the case it would be hard to make a go of importing anything

The main issue I have heard of is what exactly customs perceives the real CIF value to be, even if you have an invoice?

Edited February 2, 2010 by Nio

[monty]

3. Excise tax=(CIF value + import duty + Fee) * {Rate of excise tax/1-(1.1 * Rate of excise tax)} =

(200 + 130 + 50) * {0.3/1-(1.1*0.3)} =

380 * 0.4477612 =

170

The above is what makes import stuff carrying excise tax expensive. The formula applies the tax exponentially!

So the 30% excise tax works out to 44% (170 Baht is 44% of 380 Baht).

If you use the same formula with 50% excise tax you end up paying 422 Baht or a whopping 111%...

(200 + 130 + 50) * {0.5/1-(1.1*0.5)}

380 * 1.111 = 422 Baht...

This already once generated loads of discussions on Thaivisa, when they upped the excise on beer by a certain percentage, but the pricehike ended up much more, thanks to that above formula!

[JUDAS]

I'm aware of the formulas in the OP but in my experience the reality is somewhat different. I regularly import spare parts for my motorcycles through a third party and the total duty charged has never been more than 30% of the CIF.

Basically a part costing 100USD including freight will cost me an additional 20-30 USD plus of course, a reasonable mark up for the guy importing for me.

[monty]

I'm aware of the formulas in the OP but in my experience the reality is somewhat different. I regularly import spare parts for my motorcycles through a third party and the total duty charged has never been more than 30% of the CIF.

Basically a part costing 100USD including freight will cost me an additional 20-30 USD plus of course, a reasonable mark up for the guy importing for me.

That is because spare parts do not carry excise duty.

Excise is levied on alcohol, cigarettes, built up vehicles and petrol products. Maybe a few other items as well.

[JUDAS]

Thanks for the clarification Monty.

[p_brownstone]

No idea why that calculation is on the Website but it's totally incorrect.

Please note Excise Duty is not the same as Customs Duty. Spare Parts are subject to Customs Duty at a rate depending on what it is a Spare Part for.

Very few items Imported into Thailand now attract a Customs Duty of more than 10% because of various Free Trade agreements etc. – when I first started Importing equipment over 15 years ago one particular item was charged at 30% Import Duty – it has been reviewed several times over the years and now attracts 0% Duty.

On Import your Forwarding Agent will discuss with you what Tariff Code applies to the item, this Tariff Code determines the percentage of Duty. The C.I.F. price will be slightly adjusted for a notional “Insurance Charge” – less that .5% as I recall, the final total will be subject to the Import Duty. VAT at 7% will be calculated on the C.I.F. price plus the Customs Duty.

That's it, Customs Duty and VAT - nothing else.

I have been Importing for over 15 years and once I found a Forwarding Agent I could rely on I have had no problems with the Customs Department – no bribes required, nothing except the occasional Charge of Baht 500.- (with receipt) if I needed something cleared urgently and the Customs Officer had to work “overtime”.

Patrick

[skybluestu]

I just had a parcel delivered and had to pay 37% of the declared customs value, 30% was import duty and 7% tax. The things that were posted were some clothes (used) and a motorbike helmet. Does this sound correct for these items, if not is there any way I can appeal?

Thanks