Japanese - Thai Trade Agreement - JTEPA - Effects on Motorcycle Prices

[ll2]

I really appreciate if someone fully explains how this effect the price of motorcycles imported from Japan?

I am trying to do some research but found nothing about motorcycles. Have noticed a thread about i too but no clear info in it.

All i know, it has to be in full effect this year but some sources says 2017.

This agreement decrease custom tariffs between two countries and that is the reason why we can see some motorcycles imported from Japan cheaper recent years which is good for us - for example cbr1000rr, suzuki v strom etc..

Bigwing told me before, they will adjust the prices again in 2015 but don't know how much they decrease or if they really will adjust.

So, any information? How much this agreement decrease the custom tariffs?

How much decrease we can expect on motorcycles prices imported from Japan? - based on displacement, price etc

Thanks a lot in advance.

[bramds]

The price of the CB1100 will go down middle of the year.

Couldn't tell me how much it will drop.

[DILLIGAD]

The price of the CB1100 will go down middle of the year.

Couldn't tell me how much it will drop.

Nice looking bike that.

[eddiev]

I hope this helps,page 309, 87.11 of the attached.

[eddiev]

I've got the agreement on my computer but can't attach,sorry about that.

[Ozgur]

Can you copy and paste the section?

[taichiplanet]

Can you copy and paste the section?

this is the best i could do with it

mc.pdf

Page 503 link to full doc is

http://www.mofa.go.jp/region/asia-paci/thailand/epa0704/annex1.pdf

there may have been amendments since this doc

Edited February 1, 2015 by taichiplanet

[seedy]

Thanks for info.

[Hili]

so which year of this agreement is it now?

[Ozgur]

I just saw an article saying that the agreement came into force on Nov 1, 2007. We are either in 8th or 9th year now. Seems like in the 11th year there is no customs duty on motorcycles, if I read it correctly.

What is the current customs duty on bikes that have 500 and over cc engine size? Anybod knows? We can guess from there..

Edited February 2, 2015 by Ozgur

[ll2]

I just saw an article saying that the agreement came into force on Nov 1, 2007. We are either in 8th or 9th year now. Seems like in the 11th year there is no customs duty on motorcycles, if I read it correctly.

What is the current customs duty on bikes that have 500 and over cc engine size? Anybod knows? We can guess from there..

taxes go down gradually after 2007 to 2015 (or 2017??) so not right away in 2007.

[seedy]

What is the current customs duty on bikes that have 500 and over cc engine size? Anybod knows? We can guess from there..

According to the links above -

If started in 2007, then 2015 is the eighth year, so 16.36%, or ninth year 10.91% for all cc's - less than 50cc to over 800cc

But 16% or 10% of what - this I do not know

[seedy]

The price of the CB1100 will go down middle of the year.

Couldn't tell me how much it will drop.

Nice looking bike that.

Agree.

Looks Great !

Shades of the 70's.

But 605K is steep - it better drop a goodly amount to remain competitive.

[Ozgur]

I just saw an article saying that the agreement came into force on Nov 1, 2007. We are either in 8th or 9th year now. Seems like in the 11th year there is no customs duty on motorcycles, if I read it correctly.

What is the current customs duty on bikes that have 500 and over cc engine size? Anybod knows? We can guess from there..

taxes go down gradually after 2007 to 2015 (or 2017??) so not right away in 2007.

Based on taichiplanet's post and the article I read, this is for sure not instant drop. The question is when 11 years peridod has started?

So, if we know the current customs duty rate on 500cc and above we can have better picture.

Anybody knows the rate now?

[Ozgur]

I found this info on customs.go.th.

Seems like the bikes are exposed to 16.36% duty which says we are in the 8th year. I assume that this list might not have been updated so what we can hope is about 6% duty reduction this year.

[taichiplanet]

Reading the notes at the start (see extract below), my interpretation is the agreement started Nov 2007 so

2nd year starts April 1 2008 49.09%

3rd year starts April 1 2009 43.64%

4th year starts April 1 2010 38.18%

5th year starts April 1 2011 32.73%

6th year starts April 1 2012 27.27%

7th year starts April 1 2013 21.82%

8th year starts April 1 2014 16.38%

9th year starts April 1 2015 10.91%

10th year starts April 1 2016 5.45%

11th year starts April 1 2017 0%

So, on April 1st 2015 custom's duty rate will be 10.91%

Of course that doesn't necessarily mean the price will drop if the dealer decides to increase their profit!

"General Notes
1.(Customs duties on originating goods classified under the tariff items indicated with “B” shall be eliminated in annual installments as provided
for in Column 5 in each Party’s Schedule;
5. For the purposes of implementing annual installments for this Annex, the following shall apply:
(a) The reduction for the first year shall take place on the date of entry into force of this Agreement; and
(The subsequent annual reductions shall take place on 1 April of each following year.
6. (a) For the purposes of this Annex, the term “year” means, with respect to the first year, the period from the date of entry into force of this Agreement until the coming 31 March and, with respect to each subsequent year, the twelve-month period which starts on 1 April of that year."

Edited February 2, 2015 by taichiplanet

[Ozgur]

I guess 16.36% is not the only tax on the bikes.

I checked Yamaha website in Japan and they listed the prices. (See below link)

For example;

FZ-09 is 235,000 baht in japan and 435k in Thailand

Tmax is 292k there and 530 here

Bolt is 262k there and 465k here

The price in Thailand is almost double. Ok, there is shipping, vat or etc but prices shouldnt differ much if there is no other hardcore tax applies.

I assume from this info that Tracer will be priced probably at 520-530k in LOS which is extremely high IMO.

http://www.yamaha-motor.co.jp/mc/sportsbike/

Edited February 2, 2015 by Ozgur

[ll2]

so, this means, are they screwing us or years?

[taichiplanet]

looking at the thai customs website there seems to be the duty + excise tax + interior tax + VAT

not sure if all these taxes apply to a company imported new bike (as opposed to a personal import - obviously the duty is different) but looking at the austrade site seems to be so (at least for cars).

http://www.austrade.gov.au/export/export-markets/countries/thailand/industries/automotive#.VM9PBywsCfI

above table from

http://www.customs.go.th/wps/wcm/connect/custen/individuals/importing+personal+vehicle/importingpersonalvehicle+

Edited February 2, 2015 by taichiplanet

[Briggsy]

taichiplanet is absolutely correct.

There are 4 taxes applied to imported bikes.

The rate of VAT is 7% whatever.

Ministry of Interior tax is directly linked to excise duty.

So that leaves import tax and excise duty. Which of these or both are affected by the FTA? I am sorry I don't know. But this is the key question.

Beware also, that excise duty is calculated not as a straight percentage but as an exponential.

Perhaps, this is why Suzuki have started to sell its made in Japan bikes here. (V-Strom Gladius GSX, etc.)

[seedy]

The Thai Customs page linked above is dated 2009

[Ozgur]

While there are many types of taxes, having cheaper bikes in LOS is a quite dream even if one type tax on the menu is taken off.

Well, let's hope more domestically manufactured bikes then.

[nikster]

taichiplanet is absolutely correct.

There are 4 taxes applied to imported bikes.

The rate of VAT is 7% whatever.

Ministry of Interior tax is directly linked to excise duty.

So that leaves import tax and excise duty. Which of these or both are affected by the FTA? I am sorry I don't know. But this is the key question.

Beware also, that excise duty is calculated not as a straight percentage but as an exponential.

Perhaps, this is why Suzuki have started to sell its made in Japan bikes here. (V-Strom Gladius GSX, etc.)

Import tax = tax on imports; that's the one to go down to 0 in 2017

VAT = sales tax. Won't go down.

Excise tax = This is levied on all vehicles, made in Thailand or not. So you can bet your a** this won't go down.

There's also the big bike tax - I am not sure if that's the excise tax on bikes - I believe it is. It's 20% for bikes > 1000cc, 15% for > 500cc, 10% for smaller, something like that.

[ll2]

i am sure Richard know this.

Richard where are you when we need you?

[Briggsy]

taichiplanet is absolutely correct.

There are 4 taxes applied to imported bikes.

The rate of VAT is 7% whatever.

Ministry of Interior tax is directly linked to excise duty.

So that leaves import tax and excise duty. Which of these or both are affected by the FTA? I am sorry I don't know. But this is the key question.

Beware also, that excise duty is calculated not as a straight percentage but as an exponential.

Perhaps, this is why Suzuki have started to sell its made in Japan bikes here. (V-Strom Gladius GSX, etc.)

Import tax = tax on imports; that's the one to go down to 0 in 2017

VAT = sales tax. Won't go down.

Excise tax = This is levied on all vehicles, made in Thailand or not. So you can bet your a** this won't go down.

There's also the big bike tax - I am not sure if that's the excise tax on bikes - I believe it is. It's 20% for bikes > 1000cc, 15% for > 500cc, 10% for smaller, something like that.

The tax you call "big bike tax" is excise duty. This is levied on all vehicles, as you stated, either upon importation or on leaving the factory. There are numerous different rates depending on the type of vehicle, the cc, whether it came from a Thai factory or was imported. The rates are progressive, i.e. the bigger the vehicle, the higher the coefficient. (note I am not saying percentage because it is calculated in an exponential manner not a straight percentage). The yellow column gives the "percentage" which is not a percentage but can be used as an approximate guide. These are for domestically produced bikes.

So, with regards to excise duty, there are 2 questions.

1. Are the rates for imported bikes the same?

2. If so, will they come down as a result of the FTA?

[nikster]

^ Excise duty has nothing to do with import / non import, so it won't be affected by the FTA. It'll be the same for imports.

[Briggsy]

^ Excise duty has nothing to do with import / non import, so it won't be affected by the FTA. It'll be the same for imports.

It is a good job you are not my shipping agent, you would get me locked up. Here is where you have gone wrong.

Importers have a legal obligation to hand over excise duty on a wide range of goods including motorcycles.

Excise duty is assessed on the factory gate value (for domestic products) and on the import value (for imported goods).

Excise duty is calculated after adding in import tax, a separate tax. Therefore any change in import tax, would automatically have an effect of the amount of excise duty levied. This point is not related to the rate of excise duty though.

Excise duty on identical products, particularly vehicles, one imported, one made in Thailand can be charged at different rates. For cars there are a number of excise duty rates depending on cc, emissions, fuel, size of cab and whether the vehicle is imported or not.

For the 4 reasons above and the fact that no-one on this thread is sure what is actually stated in the Thai-Japanese FTA and how it is being implemented and understood, your statement could easily lead people to make a false assumption.

[ll2]

so, lets come to the point guys.

lets say, X bike with 999 cc is 300 k thb in Japan so during 2015, 2016 and 2017, how much is it sold in Thailand as an imported bike?

[Briggsy]

Ok here is a good link showing a worked calculation.

http://www.motorcycle.in.th/page.php/Table_of_Tax_and_Duty_Rates

However the first 2 taxes, import duty and excise duty, have had their rates changed due to FTA (lower import tax) and increase in excise duty on bigger bikes (higher excise duty).

Gimme the current rates for these 2 taxes and you can work out the imported price.

There are some other variables too.

1. You would need to take off any domestic taxes specific to Japan

2. You would need to add in cost of freighting as this is added in before adding all the taxes on.

3. You would need to bear in mind the Excise Dept decides the CIF value (cost, insurance and freight) and there is little arguing with them.

As a rough guide expect somewhere in the range of 100% increase and then the final figure will be not too disappointing. A VFR 1200 F retails for 810,000 Baht here, in the UK the DCT version is £13,599.

[ll2]

Ok here is a good link showing a worked calculation.

http://www.motorcycle.in.th/page.php/Table_of_Tax_and_Duty_Rates

However the first 2 taxes, import duty and excise duty, have had their rates changed due to FTA (lower import tax) and increase in excise duty on bigger bikes (higher excise duty).

Gimme the current rates for these 2 taxes and you can work out the imported price.

There are some other variables too.

1. You would need to take off any domestic taxes specific to Japan

2. You would need to add in cost of freighting as this is added in before adding all the taxes on.

3. You would need to bear in mind the Excise Dept decides the CIF value (cost, insurance and freight) and there is little arguing with them.

As a rough guide expect somewhere in the range of 100% increase and then the final figure will be not too disappointing. A VFR 1200 F retails for 810,000 Baht here, in the UK the DCT version is £13,599.

These are the tax rates of Japanese Thai trade agreement from 2008 to 2017 where the agreement will be in full effect.

2nd year starts April 1 2008 49.09%

3rd year starts April 1 2009 43.64%

4th year starts April 1 2010 38.18%

5th year starts April 1 2011 32.73%

6th year starts April 1 2012 27.27%

7th year starts April 1 2013 21.82%

8th year starts April 1 2014 16.38%

9th year starts April 1 2015 10.91%

10th year starts April 1 2016 5.45%

11th year starts April 1 2017 0%

so lets take 1,468,800 japanese yen honda cbr1000rr which is making around 400,000 thb there in Japan.

and it is 643,000 thb now as 2015 new repsol model at Honda Bigwing - down 12 k thb from 2014 model price possibly bc tax rates with japan are down? Just checked it last Saturday.

So, for 2015, 10.91 % import duty of 400 k thb is lest say 45 k thb, 30 percent excise tax of 445 k thb is 135 k thb add 10 percent interior tax to excise tax so it makes around 150 k thb so total makes 595 k thb and add 10 percent vat bc it is 999 cc so we reach something around 650 k thb, the price Bigwing is selling the cbr1000rr now. So, bigwing sells Honda cbr1000rr for a fair price and they deducted the tax for 2015 already for this bike it looks like and same for all their exports i think.

​but others like suzuki and yamaha and Ducati - by Ducatis imported from japan - are screwing us as mostly japanese liter bikes are around the same prices. yamaha sells r1 and suzuki sells gixxer 1000 for 799 k thb but r1 is not for sale in Japan now by Yamaha same as Suzuki.

Of course bike's price in Japan cannot be a basis as it is the sales price, not out of the factory price for export. Normal retail price and factory prices can vary a good deal depending on agreements between parties etc.

also did not add shipping etc but they are not very high.

So, calculations i made are just rough ones but possibly OK to give us some idea.

and please correct me if i am wrong.