Boat import taxes demystified

PHUKET: Taxes for importing a yacht into Thailand have long been a matter of confusion, discussion, argument and speculation. Now, however, Gazette inquiries with the Customs Department, both in Phuket and in Bangkok, have uncloaked the way that the various taxes are applied. For a start, it has been confirmed that there is no such thing as a “luxury tax” on imported boats (or, for that matter, on tobacco and wine). Instead, the excise tax in the case of boats has been raised to a punishing rate of just over 111%. The Gazette understands that a proposed reduction in this rate – which has the backing of the Ministry of Finance – is now awaiting Prime Minister Thaksin Shinawatra’s approval. The application of duties and taxes currently works as follows: The boat is valued by the Customs Department. Though the value is to some extent ‘negotiable’, Customs officers base their figure on precedent. If they have handled a similar boat in Phuket before, that will be used as the basis for a valuation. If not, headquarters in Bangkok or the Customs Department in Laem Chabang are requested to provide a valuation. Once the value of the boat has been established, the first impost applied is the 30% import duty. Then the excise tax is applied to the value of the boat plus the import duty. The third impost is the Mahad Thai (Interior Ministry) tax, which is equivalent to 10% of the excise tax. Finally, value-added tax, currently 7%, is applied to the sum of the original value of the boat plus all three taxes. The total taxes applicable come to around 209%. Much of the confusion in the past arose from a table of charges that Customs officials use to calculate the excise tax. The first column in this table is headed “Percentage Tax”, and yachts are listed at 50. In fact, the 50 is not a percentage; it is a factor in an arcane formula used to calculate the tax rate. Jan Jacobs of Thai Marine Leisure told the Gazette, “Up to now we have not understood what this multiplying factor is based on, because newspapers have always published the excise tax as 50%.” Narong Srivanitchakorn, Head of the Phuket Provincial Excise Office, admitted that there was confusion even among officials. “Not very many understand well enough how the 111.111% is calculated,” he said, “even in Bangkok.” For owners wishing to see how much it will cost to import a boat, the Gazette Online has created a boat tax calculator, which can be accessed at https://thethaiger.com/boattax.asp.