As the second biggest economy in Southeast Asia behind Indonesia, Thailand has traditionally been appealing to investors and businesses worldwide. The country’s appeal is further strengthened by the various investor-friendly policies and initiatives introduced by the Thai government. These include plans to establish a free trade zone in the Eastern Economic Corridor (EEC) and ongoing development of the local logistics system. With these projects set in motion, it creates a more attractive business climate with numerous exciting opportunities for organisations looking to expand the market for their products. To help your company capitalise on these opportunities and export your goods to Thailand smoothly, DHL Express covers the essential customs regulations, tariffs and declaration procedures that you should be mindful of in this article.
Categories of goods taxable by customs in Thailand
When you send a parcel to your customer in Thailand, various things need to be taken into account to ensure a smooth transaction. One of the most critical considerations is the import tax and customs duties in Thailand. Failure to pay the correct amount of tax or duty can result in delays in customs clearance, penalties, or even the seizure of goods. Given the potential complications, it is vital to have a good understanding of taxes and customs duties to avoid unwarranted surprises. Imports can be classified under three categories, of which two are subjected to customs duties and import tax.
1. Category 1: imports and samples valued below THB1,500.
Category 1 covers:
- Commodities imported by post with a total custom value, freight and insurance charges not exceeding THB1,500.
- Samples with no commercial value that will only be used for exhibition.
2. Category 2: imports valued below THB40,000
Category 2 comprises commodities that consignors send via international post. These goods have a free on board (FOB) value below THB40,000, regardless of the number of packages. The recipient will have to pay the customs duty and import taxes for these goods to the Thailand regulatory authorities.
3. Category 3: all other imports
All other imports that do not belong to the first two categories will fall under Category 3, which is further segmented into two classes:
- Goods with a total FOB value exceeding THB40,000: An electronic import declaration has to be submitted to the Thai Customs Electronic System.
- Goods with FOB value below THB40,000: The electronic import declaration is not required, and the customs value, duty and taxes will be calculated by the customs.
Import tax and customs duties in Thailand
Importers are subjected to a value-added tax (VAT) of 7% in Thailand, which will be collected by Thai customs at the time of import. Import tariffs charged adhere to the Association of Southeast Asian Nations (ASEAN) Harmonised Tariff Nomenclature (AHTN) 2022. Meanwhile, duties levied are based on either a specific or ad valorem rate, depending on which is higher, and it can range between 0% and 80%. However, these import duties are exempted for certain items stipulated in the Customs Tariff Decree. For selected goods and services that fall under luxuries, an excise tax will be imposed. These include perfume and cosmetics, cigarettes or motorcycles, which have an ad valorem rate of up to 42%.
Fortunately, merchants have an additional option of getting customers to pay for these duties and taxes. There are also multiple trade agreements that your company can take advantage of. For instance, your organisation may benefit from the Regional Comprehensive Economic Partnership (RCEP), which aims to remove 92% of tariffs on commodities traded among its member countries. Some other initiatives your business can gain from include the Free Trade Area of the Asia Pacific (FTAAP) agreement. Thus, it is always good to check against the customs website before you ship items to Thailand.
Thailand’s customs rules
To ensure a smooth customs clearance experience, businesses will also gain from checking their products against the list of items prohibited by Thai customs. This helps prevent the situation where the authorities confiscate goods. Apart from this, companies should also note the special requirements and mandatory permits for shipping restricted goods from Indonesia to Thailand. For example, should you be shipping alcohol, the maximum volume that can be imported is one litre, and a permit from the Excise Department of Thailand is required. Meanwhile, cigarette imports are limited to 200 sticks, 250g of tobacco or 250g of all variants combined. If you intend to send a parcel containing liquids to Thailand, there are also strict guidelines on the packing requirements and shipping methods. By ensuring you adhere to these customs regulations and shipping requirements, you can minimise the chances of shipment delay or costly penalties.
Documents required by Thai customs
Perhaps most importantly, companies should ensure that all documents required by Thai customs are filled out accurately and filed with the authorities. Typically, these documents include:
- Customs import entry form
- Commercial invoice
- Bill of lading
- Packing list
Similarly, there are several export documents required by Indonesian authorities, and the authorities in both countries may require specific forms and letters for certain products. Thus, it is always good practice to check the requirements before shipping.
