Reexport

[~G~]

I have imported 1,000 units of a certain product from country X to Thailand.

I have paid 10% custom duty + VAT.

I will export 200 units to country Y.

I was told by my custom agent that the custom duty cannot be refunded in that case. This cannot be handled as a "reexport". It can only be refunded if I export the goods back to country X.

Comments?

[xbusman]

It can be, I import parts and materials from China, work them in Thailand and export to the US. I can draw back my VAT and supposedly even the duty. If you dont collect VAT here, i.e. have a retail business or sell products, drawing back your VAT in the form of cash is a nightmare. Generally takes about a year and probably hundreds of hours of filing papers, getting the right stamps, and a string of nonsense that defeats most applicants. Personally I would say that if its under 50,000 baht dont mess with it.

The duties are even worse. At least revenue has a process to draw back VAT. With duties you end up dealing with the most creative in additional charges. I just write the duties off and add it as a cost of my product.

Bunch of other things to know. If you apply for drawback on VAT, you are going to have to submit a certified audited account for your business. If the invoices for outgoing goods dont match the invoices for incoming goods you better be able to explain why or you might get fined for failing to collect and report VAT on the items staying in Thailand. Then they start with examining every expense wanting to know why this was bought, why this person is on staff, hours and hours of things that are simply none of their business and not at all relevant to VAT.

Next come the searches of the business address for the remaining product to make sure you have not retailed it without paying VAT. They have simply nothing to do so they go through everything, checking stocks, inventory, purchase orders, invoices. I manufacture a lot of aluminum parts for motorcycles and in the process many of them are rejected somewhere along the line. I have to keep documented records on the scrapped parts, where they went, how many kilos were salvaged, etc. Even then we always argue over the value and if I can draw back the VAT on lost product.

If you get through all that, it can take up to a year to get paid. Interest free of course.

So if your talking 200 cars or A380s, probably worth the effort. Less than that based on my experience consider it a write off and a cost of doing business.

You could open a warehouse in a duty free zone, there are a few in Bangkok. Then you could be exempt from duties and Vat for what is exported. You still have to pay if you bring those items into Thailand from your warehouse.

Good luck.

[~G~]

Thanks for the informative reply. Sounds like a nightmare.

You could open a warehouse in a duty free zone, there are a few in Bangkok. Then you could be exempt from duties and Vat for what is exported. You still have to pay if you bring those items into Thailand from your warehouse.

Problem is that I sell some of the imported goods in Thailand, and some I re-export, so we are looking at multiple deliveries from that warehouse, multiple custom processing, etc. Add the cost of keeping the products there and I don't think I'll end up saving anything.

[xbusman]

If you sell your products in Thailand you must collect VAT. If you collect VAT, you can drawback your refund on the amount you re-export with no problems at all on your monthly reports. Be advised however, that they will scrutinize your books to make sure it is all on the up and up.

If you dont collect VAT for what you sell in Thailand, just forget completely about any taxes and duties. Consider it a small donation to the support of this wonderful infrastructure and keep well below their radar. They get quite upset about that kind of thing.

[~G~]

If you sell your products in Thailand you must collect VAT. If you collect VAT, you can drawback your refund on the amount you re-export with no problems at all on your monthly reports. Be advised however, that they will scrutinize your books to make sure it is all on the up and up.

If you dont collect VAT for what you sell in Thailand, just forget completely about any taxes and duties. Consider it a small donation to the support of this wonderful infrastructure and keep well below their radar. They get quite upset about that kind of thing.

<{POST_SNAPBACK}>

I go by the book regarding VAT and any other taxes. Every movement of products in or out is recorded in the stock book, every item is accounted for. Every sale is invoiced. It's the 10% custom duty I wish to save.

[Wekhin]

It is a reexport. You are entitled to get a refund on imported custom duty and VAT. But the merchandise must be intact. Import and export documents must be presented to get the refund. It will take 1-2 months to receive the money.

[~G~]

OK, trying to check this option -

If I leave the goods in a duty free zone -

1. What is the daily/monthly cost? What about insurance?

2. We will need to do some repacking; actually we also need to add a box with brochures (one for each item). Can that be done?

3. I assume I can use the duty free zone in the airport?

4. Any potential complications or "contributions" to the custom welfare fund expected in this process?