Taxes On Cars In Thailand

[MoonRiverOasis]

Thailand's taxation system for cars is a bit confusing, so for the value oriented buyer it's important to understand how much of your new car's price is tax, and how much of it is car and profit.

If you've ever wondered why Thai car prices just don't align with the same vehicles in foreign countries, why a double cab pickup costs so much more than the same spec in an extra cab, why pickups are so comparatively cheap compared to passenger cars, or why relatively small increments in engine capacity make so much difference to the price of a car here in Thailand, this article is for you

How tax is calculated on Thai market cars

For domestically produced cars, or cars that are import-duty-free under a free-trade-agreement, there are three taxes that apply:

* Excise tax (See table below)

* Interior tax (which is 10% of the calculated excise tax value)

* VAT (7%)

Calculations:

Excise Tax: Factory Cost * Excise Tax Rate / (1-(1.1 * Excise Tax Rate))

Interior Tax: Excise Tax * 0.1

VAT: (Factory Price + Excise Tax + Interior Tax + Profit) * 0.07

Total Taxes: Excise + Interior Tax + VAT

For imported (new) cars, there are 4 taxes that apply:

* Import Duty (80%)

* Excise tax (See table below)

* Interior tax (which is 10% of the calculated excise tax value)

* VAT (7%)

Import Duty: (Cost + Insurance + Freight) * 0.8

Excise Tax: (CIF + Import Duty) * Excise Tax Rate / (1-(1.1 * Excise Tax Rate))

Interior Tax: Excise Tax * 0.1

VAT: (CIF + Import Duty + Excise Tax + Interior Tax + Profit) * 0.07

Total Taxes: Import Duty + Excise Tax + Interior Tax + VAT

Thai Excise Taxes

As you can see from the above calculations, the official excise tax is not applied directly - as a result the effective tax rate is substantially higher than what the published numbers suggest.

In the listings below I have calculated the effective excise tax rate and put it in brackets after the published rate.

Pickups :

Single and extended cab (inludes 'smartcab', 'opencab' and 'freestyle') < 3250cc: 3% (effectively 3.1%)

Double cab < 3250cc: 12% (effectively 13.8%)

3250cc or greater: 50% (effectively 111.1%)

Note: Tax brackets are defined by cubic capacity only, there are no HP limits on pickups.

Passenger Cars:

Hybrid, fuel cell and electric vehicles: 10% (11.2%)

Cars < 1300cc gasoline powered, approved under the eco-car program: 17% (20.9%)

Cars powered by motorcycles engines < 250cc: 5% (5.3%)

Cars powered by NGV: 20% (25.6%)

E20 Compatible Cars < 2000cc and < 220HP: 25% (34.5%)

E20 Compatible Cars < 2500cc and < 220HP: 30% (44.8%)

E20 Compatible Cars < 3000cc and < 220HP: 35% (56.9%)

E20 Compatible Cars > 3000cc OR >= 220HP: 50% (111.1%)

Other Cars < 2000cc and < 220HP: 30% (44.8%)

Other Cars < 2500cc and < 220HP: 35% (56.9%)

Other Cars < 3000cc and < 220HP: 40% (71.4%)

Other Cars > 3000cc OR >= 220HP: 50% (111.1%)

Notes:

Hybrid, Fuel cell and electric vehicles have no limits on HP.

Different tax brackets have been defined for Hybrids < 3000c and 3000cc+, but at present both share the same tax rate.

A tax bracket for diesel powered eco-cars < 1300cc has been defined, but no tax rate has been applied to it yet.

Vehicles used as offical ambulances are excise tax exempt.

Passenger Pickup Vehicles (PPV):

PPV's < 3250cc: 20% (25.6%)

PPV's >= 3250cc: 50% (111.1%)

Note: Tax brackets are defined by cubic capacity only, there are no HP limits on PPV's.

In order to compare the relative value of cars in different tax brackets accurately, we would need to know the profit margins applied before VAT is added, and of course that's going to be difficult to get

Some basic calcs will get you close enough to understand relative value though, and you will be surprised at how much (or indeed little) car you're getting for your money as you compare the difference excise tax brackets.

References/Further reading:

http://www.excise.go...ndex.php?id=136

http://www.excise.go...ndex.php?id=137

http://www.customs.g...Nme=PersonalPer

Edited January 20, 2011 by MoonRiverOasis

[katabeachbum]

Wow, impressive work MRO. Thanks :jap:

[transam]

When you consider the world is meant to be a huge free market to help countries prosper l feel that Thailand really is lagging behind with their import policies. They want it all one way.

Imagine if UK or any country wacked 80% on LOS rice or chicken imports, or motors made in LOS and exported to neighbouring countries those countries wacked on 80% tax, who would be in trouble.

[ignis]

Just happened yesterday to go to the wrong website..

So looked anyway, Honda Motorbikes UK

The Honda PCX is 115,000 baht in the UK !! [70,000 here] + that is one of the cheapest 125 scooter by Honda in the UK..

The New Honda CBR 125 is 149,000 baht [100,000 here for the CBR 150]

The New Honda CBR 250 is 198,000 baht [120,000 here]

So a lot of tax added..?

Edit:

Includes 12 months Road Tax, plus 2 years manufacturers warranty and AA cover, on UK website, [here 3 to 5 years depends on model]

Edited January 20, 2011 by ignis

[MoonRiverOasis]

As noted, we don't know how much profit is made on each type of car (which varies by segment, manufacturer and model) so it's not possible to work out exactly what the true factory value of each car is.

However, there's nothing stopping us from creating our own ficticious car company with a range similar to popular models in the Kingdom, and work out the factory prices we need to hit in order to be competitive against other makes

So here I give you the proposed MRO range of vehicles (E20 comaptible if running petrol)

Edited January 20, 2011 by MoonRiverOasis

[transam]

Just happened yesterday to go to the wrong website..

So looked anyway, Honda Motorbikes UK

The Honda PCX is 115,000 baht in the UK !! [70,000 here] + that is one of the cheapest 125 scooter by Honda in the UK..

The New Honda CBR 125 is 149,000 baht [100,000 here for the CBR 150]

The New Honda CBR 250 is 198,000 baht [120,000 here]

So a lot of tax added..?

Edit:

Includes 12 months Road Tax, plus 2 years manufacturers warranty and AA cover, on UK website, [here 3 to 5 years depends on model]

Bikes lower in price here cos production costs are lower etc,and also taxes as it's the masses main transport mode. Now look at the price of a Merc in UK and what it will cost in LOS, perhaps double..

[MoonRiverOasis]

Just happened yesterday to go to the wrong website..

So looked anyway, Honda Motorbikes UK

The Honda PCX is 115,000 baht in the UK !! [70,000 here] + that is one of the cheapest 125 scooter by Honda in the UK..

The New Honda CBR 125 is 149,000 baht [100,000 here for the CBR 150]

The New Honda CBR 250 is 198,000 baht [120,000 here]

So a lot of tax added..?

Edit:

Includes 12 months Road Tax, plus 2 years manufacturers warranty and AA cover, on UK website, [here 3 to 5 years depends on model]

Excise tax on Motorcycles is 5% for 2-stroke, or 3% for 4-stroke:

http://www.excise.go.th/index.php?id=199&L=emvsfgolhmskvu

[FarangBuddha]

Depressing

[MoonRiverOasis]

Depressing

Only if you bought a double-cab when an Extracab/Smartcab would have done the job, or if you bought a big-engined softroader instead of a PPV, or bought a import that wasn't hybrid

[FarangBuddha]

I'm probably going for that THAI made new Mitsubishi Pajero!

[JimShortz]

Great work Moonriver.

It really is shocking that overly large pickups get taxed at a much lower rate than "eco" cars. It really is no wonder that the roads are filled with giant pickups that are never used for the job they were intended. In many ways it is also a safety issue - for those pedestrians who are hit by the giant bumpers or huge slab-like fronts of some of these pickups, but also for the drivers; pickups just don't handle well with the back empty, as they are designed to carry loads... there is just no weight over the back wheels.

I understand why they have low tax as they are intended to be work vehicles, but this just isn't the case with most of them. in other countries a tax break would only be given where they are genuinely used for work, but i guess this is too difficult to administer here. At the very least the double cab should surely be taxed at the same rate as a car with a similar engine IMHO...

[MoonRiverOasis]

Addendum:

Excise Taxes for FFV's (Flex Fuel Vehicles - vehicles that can run on E85)

• 1,780cc - 2,000cc: 22%
• 2,001cc - 2,500cc: 27%
• 2,501cc - 3,000cc: 32%

[MoonRiverOasis]

Great work Moonriver.

It really is shocking that overly large pickups get taxed at a much lower rate than "eco" cars. It really is no wonder that the roads are filled with giant pickups that are never used for the job they were intended. In many ways it is also a safety issue - for those pedestrians who are hit by the giant bumpers or huge slab-like fronts of some of these pickups, but also for the drivers; pickups just don't handle well with the back empty, as they are designed to carry loads... there is just no weight over the back wheels.

I understand why they have low tax as they are intended to be work vehicles, but this just isn't the case with most of them. in other countries a tax break would only be given where they are genuinely used for work, but i guess this is too difficult to administer here. At the very least the double cab should surely be taxed at the same rate as a car with a similar engine IMHO...

The problem in Thailand is creating a definition of 'commercial use' that's accurate.

The good news is that the market share of passenger vehicles is increasing rapidly, so the playing field is levelling itself.

More tax incentives for FFV's were recently approved (see post above) and the government has agreed to introduce new tax incentives for FFV's < 1780cc as well (which would bring them close to eco-car rates). While FFV's use substantially more L/KM on E85 than benzene or E20, they still have emit less overall NOx, CO and CO2 for each KM travelled.

The biggest problem with E85 is buying it - it's currently only available at a total of 8 stations nationwide

[wgdanson]

Very informative thank you. Does this mean that you pay VAT on the Excise and Interior Duties? I am just trying to work out how much profit the dealer makes on my upcoming Vigo Champ so I can negotiate more goodies easier.

[wgdanson]

Hi MoonRiver again. How do you get 12% of 632000 to be 87373 in your imaginary prices, please. On my calculator it is much less.

[stevenl]

Hi MoonRiver again. How do you get 12% of 632000 to be 87373 in your imaginary prices, please. On my calculator it is much less.

See this part in the OP:

"Thai Excise Taxes

As you can see from the above calculations, the official excise tax is not applied directly - as a result the effective tax rate is substantially higher than what the published numbers suggest.

In the listings below I have calculated the effective excise tax rate and put it in brackets after the published rate."

[Naam]

Thailand's taxation system for cars is a bit confusing, so for the value oriented buyer it's important to understand how much of your new car's price is tax, and how much of it is car and profit

using that logic it would also be important to know what taxes/excise duties are levied and what profit is made on wine and then, as a value orientated buyer, arrive at the conclusion that it is advisable to drink water.

please give me a break!

[wgdanson]

Hi StevenL. Does that mean we pay VAT on the Excise and Interior Duty? Taxed on a tax !!! Bet we don't get that back when the rebate comes next year.

[VocalNeal]

so for the value oriented buyer it's important to understand how much of your new car's price is tax

Come on MRO. It doesn't matter a rats arse how much the tax is. One decides how much one can afford and then buy a car to suit. More or less

Seems this week is complain-about-tax-on-cars-week or maybe it is the Motor Show.

[cronus]

Very informative thank you. Does this mean that you pay VAT on the Excise and Interior Duties? I am just trying to work out how much profit the dealer makes on my upcoming Vigo Champ so I can negotiate more goodies easier.

The salesperson gets 7-8% comission from the sales price...

[jingjoke]

Thanks for that MoonRiverOasis; good work as usual.

Appreciate your time.

[wgdanson]

To Cronus. You mean the guy that I went to talk to off my own back, gets 60000Bht of my dosh? I'll be wanting more than floor mats and a licence plate holder !

[watcharacters]

Very informative thank you. Does this mean that you pay VAT on the Excise and Interior Duties? I am just trying to work out how much profit the dealer makes on my upcoming Vigo Champ so I can negotiate more goodies easier.

The salesperson gets 7-8% comission from the sales price...

Are you pretty sure about this? They hardly seem enthusiastic when a customer enters the showroom. I've wondered about their compensation.

[anon210]

Very informative thank you. Does this mean that you pay VAT on the Excise and Interior Duties? I am just trying to work out how much profit the dealer makes on my upcoming Vigo Champ so I can negotiate more goodies easier.

The salesperson gets 7-8% comission from the sales price...

Are you pretty sure about this? They hardly seem enthusiastic when a customer enters the showroom. I've wondered about their compensation.

Maybe hardly enthusiastic when it comes to using English with a farang customer who is 10x more difficult to sell to than a Thai. They get that sort of commission on the sales + 8 % on finance.

[Woodsie888]

Very informative thank you. Does this mean that you pay VAT on the Excise and Interior Duties? I am just trying to work out how much profit the dealer makes on my upcoming Vigo Champ so I can negotiate more goodies easier.

The salesperson gets 7-8% comission from the sales price...

Are you pretty sure about this? They hardly seem enthusiastic when a customer enters the showroom. I've wondered about their compensation.

I can assure you the salesperson receives nothing like 7-8% of the sales price. A few thousand baht if they're very good at their job.

Franchised dealers in Thailand enjoy some of the lowest margins in the world. However they do receive many other benefits which are 'most helpful'.

Cheers

[scotinsiam]

Very informative thank you. Does this mean that you pay VAT on the Excise and Interior Duties? I am just trying to work out how much profit the dealer makes on my upcoming Vigo Champ so I can negotiate more goodies easier.

The salesperson gets 7-8% comission from the sales price...

no they don't ... do you really believe that? lol

[IMHO]

Very informative thank you. Does this mean that you pay VAT on the Excise and Interior Duties? I am just trying to work out how much profit the dealer makes on my upcoming Vigo Champ so I can negotiate more goodies easier.

The salesperson gets 7-8% comission from the sales price...

Are you pretty sure about this? They hardly seem enthusiastic when a customer enters the showroom. I've wondered about their compensation.

I can assure you the salesperson receives nothing like 7-8% of the sales price. A few thousand baht if they're very good at their job.

Franchised dealers in Thailand enjoy some of the lowest margins in the world. However they do receive many other benefits which are 'most helpful'.

Cheers

Yep. A 'gun' Toyota sales rep selling 10-15 cars/month only gets around 25-35K/month in salary+commission.

The dealer principal gets a lot more than that though

Edited February 8, 2013 by IMHO