I have been in contact with various shipping agents - but feel maybe this is also a question that Thailand accountants or lawyers would shed some better light on

A) I have a friend whom has imported commercial items in the past via air Freight -

They were charged at Thai customs 20% import tax and 7% VAT

But this was calculated based on not only the price of the goods, but the cost of his shipping too.

So basically 27% of his total cost - and his payment sent overseas etc.

Friend number 2 also imported commercial items, the same products and tax codes - except they used a Thai shipping agent to clear items

The Tax was calculated at 20% + VAT based on ONLY the cost of the items - and not the cost of shipping combined.

So they paid a total of 27% TAXES on only items excluding shipping

But is friend 2 breaking any law?

or is friend one being over charged?

Is friend 2 liable for problems - as the tax calculation will no longer be 27% of the total bank payment sent?

Or is Friend one in better standing for paying 27% tax on his total payment sent?

Whilst i am aware that CIF and FOB rates apply under different shipment circumstances -

both of the above were using the exact same air freight courriers

So what is Thailands import tax laws and what is the right way of avoiding problems?

Thai laws require that duty and VAT must be a percentage of the TOTAL Cargo value + Freight cost + Insurance.

Hence, if the invoice shows CIF invoice, then that means this invoice already included freight and insurance, and thus, when we calculate 20% & 7% Duty and tax, we take just this invoice value.

For FOB invoice, we have to add in freight charges as well as insurance charges, since FOB invoice only has cargo value. Thus when we calculate 20% and 7% VAT, we have to take invoice value + freight + insurance. If there the shipping agent doesn't know the freight and insurance price, typically they have to assume 10% freight and 1 % insurance value based on cargo value (FOB invoice value).

Robin from Dawn Shipping has been extremely helpful and provided us with this answer since aren't in the shipping business. For those interested in a freight forwarder, Dawn Shipping can be found at 184/162 , 25th Fl, Forum Tower, Ratchadapisek Road,Huaykwang, Bangkok 10310, Thailand

662-645 2218-9, 662-938 0846, fax: 662-645 2217

www.dawn-group.com.sg

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