Ems Exporting Question

[psdone]

Hi,

I came to Thailand a few years ago to setup a small Thai electronics factory. I finally got it setup and want to start exporting products to customers in small orders of a box or two. My Thai office manager says that if we use EMS we must take the box to the Hua Lamphong customs office and pay a broker 800-1000 baht to walk in and get us an airway bill. This Thai document is needed to get our VAT tax back. I understand why the revenue department would require something like this, but the part of paying a broker 800 baht to walk into the office really pisses me off (plus the taxi ride is 2 hours round trip for us) !

Has anyone here gone to Hua Lamphong and did this WITHOUT using a broker and successfully got their VAT refunded ?

I have checked the customs website and there appears to be no such requirement. In fact their customs website says an employee of a company doing import or export can fill out an application to get access to their e-customs website to do the paperwork, but my manager's friend told her she needs to take a month long 8000 baht class to get a broker's license ....

Thanks,

Phil

[Flex2791]

Better to simply forget about your VAT refund. It is a well know fact that any company that requests VAT refunds will be audited monthly and its really not worth the hastles. You will be better off to simply fill out the EMS slip and ship it directly. Skip the customs office. I have been exporting from Thailand for over 6 years and have yet to get my first VAT refund. There are also other threads on here about this same issue.

[dave111223]

Better to simply forget about your VAT refund. It is a well know fact that any company that requests VAT refunds will be audited monthly and its really not worth the hastles. You will be better off to simply fill out the EMS slip and ship it directly. Skip the customs office. I have been exporting from Thailand for over 6 years and have yet to get my first VAT refund. There are also other threads on here about this same issue.

It's not just about the refund of VAT paid to your suppliers, but with out the airway bill you'd have to pay additional VAT on the total sale.

Example:

Purchased materials: 100THB

VAT on materials: 7THB

Sold Products for export: 500THB

If you get an airway bill you should get a 7THB refund.

If you don't get an airway bill you'd owe the taxman additional 28THB

So even if you don't claim the 7THB refund you'd still save yourself 28THB with an airway bill.

Edited September 2, 2011 by dave111223

[psdone]

Thanks for the replies.

We have been getting a VAT refund, though it takes 5 months after applying some grease to the wheels of the local tax office. And yes, we do get audited a lot. The VAT tax is around 3500 baht an order, so it is worth pursing IMHO ...

My question is simply this:

Is it possible to send an EMS from Hua Lamphong and get the airwaybill without using a customs broker ? Has anyone done this ?

The Thai Customs website says import/export companies can use the e-customs system, but this is Thailand so I will not believe anything until I hear from one you guys ...

Thanks Again,

Phil

[psdone]

I agree with you completely. But it is also a matter of principle. Exports are not taxed PERIOD If I have to pay a smiling tick 800 baht for nothing then I am being taxed.

Better to simply forget about your VAT refund. It is a well know fact that any company that requests VAT refunds will be audited monthly and its really not worth the hastles. You will be better off to simply fill out the EMS slip and ship it directly. Skip the customs office. I have been exporting from Thailand for over 6 years and have yet to get my first VAT refund. There are also other threads on here about this same issue.

It's not just about the refund of VAT paid to your suppliers, but with out the airway bill you'd have to pay additional VAT on the total sale.

Example:

Purchased materials: 100THB

VAT on materials: 7THB

Sold Products for export: 500THB

If you get an airway bill you should get a 7THB refund.

If you don't get an airway bill you'd owe the taxman additional 28THB

So even if you don't claim the 7THB refund you'd still save yourself 28THB with an airway bill.

[Flex2791]

Better to simply forget about your VAT refund. It is a well know fact that any company that requests VAT refunds will be audited monthly and its really not worth the hastles. You will be better off to simply fill out the EMS slip and ship it directly. Skip the customs office. I have been exporting from Thailand for over 6 years and have yet to get my first VAT refund. There are also other threads on here about this same issue.

It's not just about the refund of VAT paid to your suppliers, but with out the airway bill you'd have to pay additional VAT on the total sale.

Example:

Purchased materials: 100THB

VAT on materials: 7THB

Sold Products for export: 500THB

If you get an airway bill you should get a 7THB refund.

If you don't get an airway bill you'd owe the taxman additional 28THB

So even if you don't claim the 7THB refund you'd still save yourself 28THB with an airway bill.

VAT is not collected on Exports. VAT only applies on goods sold in Thailand. I've actually never heard of a airway bill for EMS shipments. You simply need to prove your goods were exported and not sold in Thailand. The EMS slip/receipt is proof enough for Thai tax/VAT refund purposes. The obvious question is, how would a Thai customs issue a Airway bill? An airway bill is only issued by cargo carriers or their agents.

[psdone]

Better to simply forget about your VAT refund. It is a well know fact that any company that requests VAT refunds will be audited monthly and its really not worth the hastles. You will be better off to simply fill out the EMS slip and ship it directly. Skip the customs office. I have been exporting from Thailand for over 6 years and have yet to get my first VAT refund. There are also other threads on here about this same issue.

It's not just about the refund of VAT paid to your suppliers, but with out the airway bill you'd have to pay additional VAT on the total sale.

Example:

Purchased materials: 100THB

VAT on materials: 7THB

Sold Products for export: 500THB

If you get an airway bill you should get a 7THB refund.

If you don't get an airway bill you'd owe the taxman additional 28THB

So even if you don't claim the 7THB refund you'd still save yourself 28THB with an airway bill.

VAT is not collected on Exports. VAT only applies on goods sold in Thailand. I've actually never heard of a airway bill for EMS shipments. You simply need to prove your goods were exported and not sold in Thailand. The EMS slip/receipt is proof enough for Thai tax/VAT refund purposes. The obvious question is, how would a Thai customs issue a Airway bill? An airway bill is only issued by cargo carriers or their agents.

Yes, the whole problem resolves around what is an acceptable proof of an export. Our auditor told us this paper document that I called an airway bill is frowned upon by the revenue department and is only good for orders less than 40,000 baht. If we use it we will probably have problems, plus my stuff usually costs more than that anyway.

The proper export paperwork must be done now using the e-customs system. After fighting a bit with my manager I finally got her to call the customs office and she found out that she can get access to this system without a broker's license. Her broker friend lied to her (gee I wonder why?). So it is possible for an export company to do this, but it is not easy because someone on your staff needs to know all the codes on the form and type them in to generate the e-paperless statement you will need to include in your monthly VAT report.

So I am thinking I will pay 800 baht to a broker for the first shipment so I can get all the codes we will need and we should be good to go for the next order ...

Phil

[dave111223]

VAT is not collected on Exports. VAT only applies on goods sold in Thailand. I've actually never heard of a airway bill for EMS shipments. You simply need to prove your goods were exported and not sold in Thailand. The EMS slip/receipt is proof enough for Thai tax/VAT refund purposes. The obvious question is, how would a Thai customs issue a Airway bill? An airway bill is only issued by cargo carriers or their agents.

The information i've been given by several accountants is that airway bill (that is the OP is referring to) is an acceptable proof of export; whereas the EMS or Airmail slip/receipt will not be accepted as "proof" by the revenue department.

Something to do with EMS packages not being inspected by Thai customs so not been officially exported, whereas the Airway bill requires a customs agent to sign off on the package as inspected.

Do you have any first hand experience of EMS slips being accepted by the revenue department as "proof of export"? (This would be welcome news to me)

If the revenue department audited you and decided that the EMS slips were not valid proof of export that would leave you on the hook for 7% of gross sales (less VAT paid to suppliers) which is a scary thought.

Edited September 2, 2011 by dave111223

[dave111223]

The proper export paperwork must be done now using the e-customs system. After fighting a bit with my manager I finally got her to call the customs office and she found out that she can get access to this system without a broker's license. Her broker friend lied to her (gee I wonder why?). So it is possible for an export company to do this, but it is not easy because someone on your staff needs to know all the codes on the form and type them in to generate the e-paperless statement you will need to include in your monthly VAT report.

So I am thinking I will pay 800 baht to a broker for the first shipment so I can get all the codes we will need and we should be good to go for the next order ...

Do you know if you still have to ship at Hua Lamphong if you do the e-customs stuff yourself?

[psdone]

The proper export paperwork must be done now using the e-customs system. After fighting a bit with my manager I finally got her to call the customs office and she found out that she can get access to this system without a broker's license. Her broker friend lied to her (gee I wonder why?). So it is possible for an export company to do this, but it is not easy because someone on your staff needs to know all the codes on the form and type them in to generate the e-paperless statement you will need to include in your monthly VAT report.

So I am thinking I will pay 800 baht to a broker for the first shipment so I can get all the codes we will need and we should be good to go for the next order ...

Do you know if you still have to ship at Hua Lamphong if you do the e-customs stuff yourself?

Hi Dave,

We haven't done it yet, but I am 99.94% sure you must have it inspected there by a customs officer. If they did not require this, then companies could ship some dirty underwear in an EMS box, claim a VAT export credit, and pocket the tax they collected on a local sale

From what I know this is the only customs office that does EMS. We are about 90 minutes away so this sucks for us too, but I want to offer this service to my customers who don't want to pay for a Fedex ...

Phil

[CharlieH]

Just one other point to throw into the mix, IF your customer returns the item for some reason you are going to get hit hard for import duty etc on your own product without the airway bill proof that you sent it to start with.

Otherwise you could show an EMS slip for a box with a tissue in it and the recipient sends back a laptop, you see the point ?

[dave111223]

Just one other point to throw into the mix, IF your customer returns the item for some reason you are going to get hit hard for import duty etc on your own product without the airway bill proof that you sent it to start with.

Otherwise you could show an EMS slip for a box with a tissue in it and the recipient sends back a laptop, you see the point ?

I've actually had this situation happen and was able to get the post office to waive the import tax. I gave them an EMS receipt showing that i shipped to the person and an invoice i printed out showing the products, but no airway bill, and they were (surprisingly) pretty understanding and charged no import tax.

Note that package was re-shipped to us in a different box by the receiver (it wasn't a rejected/non-deliverable package). Which makes it even more surprising that we were able to get no tax on it.

Edited September 2, 2011 by dave111223

[Khun Jean]

Ah, the joys of living and working in Thailand. When i read this i have to reconsider doing small items export.

Maybe i just let my wifes, sister's son do it completely under the radar, which seems the norm for little businesses.

I got hit with import duty because Microchip factory (in Thailand) send me some items and Fedex screwed up like so many times by sending it to Singapore, their the recipient refused the shipment and told them can you not read!. Of course then it came from singapore and i have to pay duty. Fortunately it was just 90 baht. But it is sometimes completely insane.

Edited September 21, 2012 by Khun Jean