Thailand implements VAT collection on imported goods

Thailand's Ministry of Finance has introduced a new policy from July 5 to December 31, 2024 for collecting value-added tax (VAT) on imported goods. The measure aims to create a fair market environment by ensuring that foreign and domestic sellers face the same tax responsibilities.

The Royal Thai Government Gazette published this declaration on June 24. It focuses on exempting customs duties for goods valued at 1,500 baht or less, aligning with international standards for customs duty exemptions.

The policy addresses three main points based on the Customs Tariff Act of 1987:

1. Imported goods valued between one baht and 1,500 baht (including shipping and insurance) will be exempt from customs duties.

2. Importers must follow specific procedures outlined by the Director-General of the Customs Department.

3. This policy will take effect 15 days after publication in the gazette and will remain valid until December 31, 2024.

Initially, the Customs Department will manage VAT collection for goods valued at less than 1,500 baht and transfer it to the Revenue Department, similar to procedures for higher-value goods. Future plans include amending the Revenue Code and collaborating with online retail platforms to collect and remit VAT directly.

This initiative aims to ensure fairness in tax compliance across all vendors and generate revenue to support national services and infrastructure projects. While importers will face stricter customs procedures, consumers may face slightly higher prices due to the additional VAT on imported goods.

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