Temporary measure to collect VAT on low-value goods through Thai Customs 

Pursuant to the cabinet meeting on 2 April 2024, the Revenue Department, which is responsible for collecting Value-Added Tax (VAT), has been directed by the former prime minister to issue a new measure to address the unfairness between foreign importers who are exempt from VAT and domestic importers who must register for VAT. This is in accordance with the Thai Revenue Code, which states that imported goods classified as duty-exempt under the law on customs tariffs shall be exempt from VAT.

Previously, the Notification of the Customs Department No. 191/2561 regarding the criteria for imported goods classified into the duty exemption category (category 12 part 4), by virtue of the Customs Tariffs Decree B.E. 2530 (1987), exempted duty for imports valued at less than 1,500 baht, which also resulted in a VAT exemption for those imports.

The Customs Department later issued Notification No. 116/2567 regarding the criteria for imported goods classified into the duty exemption category (category 12 part 4), by virtue of the Customs Tariffs Decree B.E. 2530 (1987). This new notification will exempt duty for imported goods with a value not exceeding 1 baht, resulting in VAT exemption for these items, meanwhile, the Revenue Department is in the process of preparing regulations to reduce the aforementioned unfairness.

Additionally, the Ministry of Finance has released a notification regarding the exemption of import duty for imported goods valued at less than 1,500 baht. This exempts import duties for goods valued between 1 baht and 1,500 baht to maintain the De Minimis Threshold, which allows low-valued imported goods to remain exempt from other taxes and import duties.

As a result of these two notifications:

1. Imported goods valued between 0 and 1 baht will be exempt from VAT and other taxes and duties.
2. Imported goods valued between 1 and 1,500 baht will remain subject to VAT but will be exempt from other taxes and duties.

These temporary measures outlined in both notifications will be effective until 31 December 2024.

Author: Panisa Suwanmatajarn, Managing Partner.

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