22-6-2024 (BANGKOK) The Royal Gazette has announced that the Finance Ministry will commence collecting value-added tax (VAT) on all imported goods, including those priced below 1,500 baht, effective from July 5. This measure is aimed at ensuring fairness for domestic entrepreneurs who are subject to VAT, and is intended to comply with international agreements.
The ruling will remain in effect until December 31, 2024, according to the announcement published on the Royal Gazette’s website on June 20. The ministry cited the exemption of customs duties for items valued less than 1,500 baht as the reason for enforcing VAT collection on such imported items starting from July 5.
The government’s decision to collect VAT on imported goods priced from 1 baht to 1,500 baht is driven by the policy to address unfair competition from cheap imported consumer goods, which are currently not subject to VAT. Domestic sellers, on the other hand, are required to pay VAT on their products.
Additionally, Thailand must abide by international agreements that set minimum values for each imported item to ensure that the collection of customs duties is worthwhile. Importers will be required to follow the procedures specified by the director-general of the Customs Department.
The announcement was signed by Finance Minister Pichai Chunhavajira, and the Customs Department will collect the VAT until December 31, 2024, after which the Revenue Department will take over the collection. The Revenue Department is currently amending the Revenue Code to accommodate this change.
The cabinet approved in principle a plan proposed by the Finance Ministry to collect VAT on imported goods valued at more than one baht on June 4. This measure aims to prevent an influx of cheap imported goods, particularly from China, from flooding the domestic market and undermining local businesses.
Under the current VAT regime, which has been in effect since 2018, only imported goods valued at more than 1,500 baht are subject to VAT collection. This initiative is part of the government’s effort to create a level playing field for importers and local producers, and is in response to complaints from local businesses reporting that the influx of cheap products sold online is negatively affecting their income.
