Types of Duties and Taxes
There are 3 types of duties and taxes levied on imported goods into Thailand.
Customs Duties
In Thailand, Customs Duties are determined using specific values or ad valorem rates, ranging from 0% to 80%, with the higher rate being applied. Since both Malaysia and Thailand are WTO members, they share the benefit of enjoying the most favorable tariff rates available under the MFN principle.
The MFN rate varies by product. In 2020, the average of MFN rate applied on Malaysia imports was 10.2%.
Here's the average rate of MFN for 2 different categories of products:
- Agricultural products: The average MFN applied tariff rate for agricultural products was 29.3%.
- Non-agricultural products: The average MFN applied tariff rate for non-agricultural products was 7.1%.
Additionally, Thailand has made a tariff commitment in the World Trade Organization (WTO). 75.2% of products' tarriff are bound, which means the tariff rate for these products will not exceed the rate agreed. The average bound tariff rate in the WTO is 28%.
Value Added Tax (VAT)
Thailand imposes a 7% VAT on all imported goods, including those valued at THB 1,500 or less, effective from 5th July 2024 until 31st December 2024.
Previously, imported goods under THB 1,500 were exempt from VAT, giving foreign sellers an advantage over domestic Thai businesses who had to charge VAT.
The new policy ensures all purchases in Thailand, local or imported, are subject to the same 7% VAT.
Excise Tax
Thailand levies Excise Tax on imported goods considered ‘luxuries’. Excise Tax is calculated based on an ad valorem basis. A percentage of the suggested retail price (SRP) and/or specific rates based on the quantity or weight of goods. Here's the table of the the taxable goods and services: