Thailand – Introduction of VAT on the Imports of Low-Value Goods

To solve the problem of unfairness in selling products to consumers between foreign sellers who are not required to pay VAT and sellers in Thailand who are required to pay VAT, the Thailand Ministry of Finance (MoF), through the Customs Department, issued measures to allow the collection of Value Added Tax (VAT) on low-value imported goods.

Timeline

New rules will take effect on July 4, 2024, and will remain in effect until December 31,  2024.

Impact of the Measures

One of the main reasons for implementing these measures is that the low-valued goods imported from China aren’t taxed at the import point. Under the current VAT regime, in effect since 2018, only imported goods valued at more than 1,500 baht are subject to VAT collection.

The Royal Gazette's announcement regarding enforcing the Customs Department announcement No. 116/2024 and MoFs measures states that products with a value of 0 to 1 baht are exempt from customs duties, excise tax, and VAT. 

In contrast, products worth 1 to 1,500 baht will be exempt from customs duty only. However, importers are responsible for paying excise taxes and VAT at a 7% rate and submitting a monthly declaration to the Revenue Department.

Additionally, the Revenue Department will work towards changing the Revenue Code to allow continuous VAT collection on these products after December, when the measures cease to be in force.

Conclusion

As the MoF states, amending laws takes time, and these measures aim to temporarily help businesses within the country affected by the rapid expansion of e-commerce. The decision made by the MoF, especially the Customs and Revenue Departments, shows Thailand's dedication to implementing internationally accepted rules and regulations related to the VAT treatment of imported low-value goods.

Source: Thai Customs, The Government Public Relations Department