Benefit on tax in Additional Value Zone

1. N S P The Importance of Loading Plan Cancellation of Unused Export Entry Benefit on tax in Additional Value Zone MD Says

2. One of the problems of machinery or disassembly machinery industry is the lack of precision in the calculation of the container space. Accordingly the machinery parts sometimes cannot fit into the container causing the increase in cost. This problem can cause inconvenience in transportation, damage to products and higher cost. To avoid this problem as best as possible, the entrepreneur should calculate the space of products to properly match with the size of the container. Last week, one of our customers would like to export 10 large machineries with different size and asked us to provide him with a suitable container. We advised him for 5x40’ OPEN TOP containers and 1x20’ FLAT RACK (every sides open) container. It seemed this trader thought that this could cause higher cost, so he managed to book the container himself for 6x40’ containers and finally found out that the size of products and containers are unmatched and could contain only some of his products. From news above the trader should not consider only the price of the container, but should be careful of choosing the specific container that match to their products to avoid damage or unnecessary cost. Therefore, any trader who would like to have consultation about how to choose or book the appropriate container, please contact Mr. Thawatchai Thaiprasert, Tel : 02-333-1199 Ext 501 during office hours. S N P Main Page

3. In practice if there is no export procedure within 21 days after the approval of export entry, the export entry will automatically expire. If you let the export entry expire by itself without proper cancellation, there will be damages which should not be overlooked. • Damage caused due to no cancellation of proper exported entries. • We regard the export entry issued the entries number as the document of government which according to customs acts of B.E. 2469 code 99 mentioned “those who do not take well care of document of government having been issued will be convicted of and fined or imprisoned for not more than 6 months.” • The Approved export entries will be recorded into the system by Customs Department for annual incoming calculation. If there is no cancellation of export entry, Customs department will use this information to calculate your annual tax fee. • - As mentioned above, in case of no cancellation of export entries, after having issued the entry number, the accurate process of cancellation should be in action by sending the letter along with the real export entry that need to be cancelled, Invoice and Packing List to Customs Department to avoid consequent problems and retroactive call for tax fee. S N P Main Page

4. Additional Value Zone or Free Zone means the area that the Director of Customs approves to organize for State Enterprises, public company or company limited. This purpose is for industrial, commercial activity or any other activities that make benefit to the economic of country. The imported products will have a tax benefit according to the tax law. For this week, we would like show the benefit from using the Additional Value Zone. 1. Products imported from foreign country into Additional Value Zone and exported from this Zone will receive Tax exception. 2. Products imported from foreign country into Additional Value Zone and exported from this Zone will receive Vat exception. 3. There is an exception even though underthe law of standard or quality. 4. There is an exception for Excise tax, alcohol tax and tax fee from law of alcohol cigarette and card. 5. The length of time to store the products in Additional Value Zone is more than other tax benefits. Benefit of tax mentioned above is one important example from many benefits of tax. For further information on tax benefit, you can log on through www.customs.go.th or can find more information about the right of benefit from export and import products by contacting 02-333-1199 ext. 602 Ms. Sumalee Paritadpaisal within office hours. S N P Main Page

5. S Last week, one of our suppliers would like to purchase new machinery from foreign country because the old one has been broken. After going through the Letter of Credit process with foreign country, this supplier’s agent advised him to send old broken machinery to be repaired and had new machinery returned instead so as to avoid import tax.        That supplier did not feel confident to follow this instruction, so he consulted with me if this was appropriate to do. I straightforwardly answered that this would do him more damages than benefits and gave him 4 reasons to support my answer. 1. To send any machinery out of country and to have it returned with tax exception the shipper needs to have a certificate of returning goods first. This process requires the serial number of the machinery. It means that the new one imported will have a different number. 2. To receive tax exception from sending broken machinery to be repaired in foreign country will need repaired fee for tax calculation, but in this case, the machinery was not really sent to be repaired, so there was no repair fee to calculate for tax. N P Next

6. Page 2  3. To receive this tax exception, there must be no expense, but this in case the supplier has already done the LC which insists that there is purchase happening, not repair fee. 4. Presently, import tax of machinery into Thailand is calculated only 3 % ofCIF price. So, there is no need to take the risk of avoiding tax. Therefore, to follow the right process of Department of Customs is even easier and costs cheaper than trying to avoid tax because import tax tends to reduce nowadays (only average at 8.7 % from more than 8000 lists.) Due to more role of FTA towards international trade, any recommendation from those who do not have real and enough information can turn out to have “bad intention behind good will” I would like to take this chance to inform every supplier of this change Mr. Sitthichai Chawaranggoon Managing Director S N P Main Page