Key Takeaways
- Section 9: Directs that customs value must be calculated in accordance with the international GATT Valuation rules.
- Transaction Value: The price actually paid or payable, adjusted to include statutory items (e.g. royalties, freight, and insurance).
- Sequential Order of 6 Methods: Evaluation must proceed step-by-step. Jumping directly to the Fallback Method is illegal.
- Related Party Transactions: Importers must prove that relationships in related party sales did not influence the transaction price.
Legal Framework of Customs Valuation Under Section 9
Section 9 of the Customs Act B.E. 2560 designates the GATT Valuation method as the standard for determining the customs value of imported goods. This method utilizes the Transaction Value of the goods as the core metric. To calculate this value, importers must make adjustments to add specific costs if not already included in the purchase price, such as royalties, packaging costs, engineering fees, and international freight and insurance incurred up to the port of entry (translating FOB values into CIF).
The 6 Sequential Valuation Methods
If customs officers doubt the accuracy of the declared price or if the transaction value is inapplicable (e.g., goods sent free of charge or in related party transfers), Section 9 mandates valuation using the following methods in strict hierarchy: 1. Transaction Value of Identical Goods 2. Transaction Value of Similar Goods 3. Deductive Value Method 4. Computed Value Method 5. Fallback Method (based on reasonable means compatible with GATT principles)
Looking for Hassle-Free Logistics? Choose LOGISTICS NO LIMIT CO., LTD.!
We specialize in cross-border trucking, customs clearance, and global supply chain management. Secure, compliant, and tracked in real-time.
Contact Our Experts NowRoyalties and License Fees: The Hidden Customs Liability
A frequent area of retroactive customs audit assessments involves royalties and license fees. Importers often pay for physical goods under a standard invoice while paying licensing fees to an overseas brand owner via a separate contract. Legally, if these royalties are a condition of sale for the imported goods, they must be included in the customs value. Omitting these fees at the time of declaration constitutes duty evasion.
Official Reference Agencies and Regulations
- Thai Customs Department: Statutory sections on importer liabilities and criminal penalties under the Customs Act B.E. 2560.
- Ministry of Finance & Appeals Committee: Ministerial decrees on customs valuation and formal tax appeal tribunal procedures.
Customs valuation for imports into Thailand must comply with the GATT Valuation Agreement implemented under Section 9 of the Customs Act B.E. 2560. The primary basis is the Transaction Value of the imported goods. If this value cannot be accepted, customs must apply the 5 alternative valuation methods in strict sequential order.
Frequently Asked Questions
Q: How should free samples be valued for customs clearance?
A: Free samples have no transaction value, but an import entry is still required. Customs will assess value based on the transaction value of identical or similar goods pursuant to Section 9.
Q: Which date is used to determine the exchange rate for duty calculation?
A: The exchange rate published weekly by the Customs Department, determined as of the date the import declaration is officially submitted.
