As an eCommerce merchant looking to expand internationally, familiarising yourself with your destination country’s rules and regulations is one of the many steps you’ll need to do in order to make your entrance effective.
One of these regulations to look out for are the country’s import duties and taxes, along with their de minimis rate. If you’re looking to expand your online shop into Thailand, knowing Thailand’s de minimis rate will help your shipments clear customs while saving on duties and taxes.
While Thailand’s de minimis rate isn’t as high as other countries like Singapore and Malaysia, Thailand’s eCommerce industry is a thriving one. The country enjoys a 75% internet penetration rate, and 82% of these internet users have bought an item online.1
To ship your products into some 52 million internet users in the land of smiles, you first need to know what de minimis rate means, along with the relevant import duties and taxes for customs clearance.
Thailand’s de minimis rate is 1,500 Baht, or USD 46 as of the time of this writing.2 De Minimis rate is the price threshold for shipments entering the country in which fewer or no taxes are charged. This threshold takes into account the goods’ value, shipping fees, and insurance.
The longer Latin phrase where ‘de minimis’ came from translates to ‘the law does not concern itself with trifles’.3 When shipping internationally into Thailand, the de minimis threshold only applies to B2C shipments via air freight. This means that shipments entering Thailand via road or sea will not be exempted from import duties and taxes.
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If your shipment’s CIF value, meaning your good’s value, shipping fees, and insurance costs if any, exceed the de minimis rate of THB 1,500, then you’ll need to pay import duties ranging from 5% to 30%, and a value-added tax (VAT) of 7%.
Import duties are a means for the local government to raise income and level the playing field for locally made products against global competition.4 Thailand also has a value-added tax (VAT), which is a type of tax levied on the sales of goods or the provision of services.5 This is also known as the goods and services tax (GST) for places like Singapore and the Philippines.
The import duties for your goods depends on the product category as identified by the harmonised systems code (HS code). The HS code is a classification system developed by the World Customs Organization to classify over 5,000 product categories. You can check out the rate on your specific goods on Thailand’s National Trade Repository.6
To stay on top of the dynamic customs environment in Southeast Asia, you can grab your copy of the Customs Clearance Guide to learn how to navigate the differing rules and regulations easily.
Once you’re familiar with how much the de minimis rate, import duties and taxes are in Thailand, you’ll need to ensure that your shipments are prepared with the necessary labels and documents needed to clear Thailand’s customs. We’ve previously covered the topic of the B2C customs clearance process in a previous article.
A reliable shipping partner can help to ensure that your customs documentation is accurate and complete. However, you’ll also need to ensure that your shipping labels are accessible and the information provided is accurate, such as ensuring that the end-consumer’s address is correct.
The payment of import duties and taxes for parcels above Thailand’s de minimis threshold can be determined by two incoterms: DDU and DDP. DDU and DDP are incoterms that determine which party in the transaction pays for import duties and taxes, and our recommendation is to opt for DDP to ensure a seamless eCommerce experience. You could seek out a shipping partner who can arrange to pay for your import duties and taxes prior to the shipment arriving in Thailand so that you can take the burden of handling an extra step off your shoulders.
Learning about Thailand’s de minimis value and its import duties and GST is one step closer to ensuring that your international shipments can be shipped to your Philippine customers easily. Not only that, having a trusted shipping partner with customs clearance expertise can help to ensure your deliveries reach your customers in a timely manner. Seamless international deliveries are one way to impress your customers in the Philippines, and by having this base covered, you’re on your way to having your slice of the Philippines’ eCommerce pie.
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You may also want to check out our other articles on customs clearance in Southeast Asia:
Get an overview on how international shipping from Malaysia to Thailand works. Includes steps B2B and B2C shipping from the first to the last mile.
Get an overview on how international shipping from Singapore to Thailand works. Includes steps B2B and B2C shipping from the first to the last mile.
Getting accurate data on the shipping label is crucial in the cross-border shipping process. Find out how you can ensure data integrity for a smooth eCommerce delivery.
With different import duty and tax rates for every country and every type of item, customs payments may appear daunting. Read on to find out how customs clearance can be made smoother with delivered-duties paid (DDP) so that you can expand into the Southeast Asian market with a peace of mind!
Customs Clearance requires your shipment to gain official permission to enter a country and for the required duties and taxes to be paid. That's the gist of it, but there's more, click here to find out more!