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Thailand: Notification of the Ministry of Finance exempting import duties for major BEV parts

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In brief

On 25 May 2023, the Notification of the Ministry of Finance on Duty Exemption for Parts of Electric Vehicle or Battery-powered Electric Boats (“Notification“) was published in the Royal Gazette. The Notification became effective on 26 May 2023.

In depth

This Notification is to further promote the domestic production of electric vehicles (EV) in Thailand as well as to develop and strengthen the domestic EV supply chain.

The Notification exempts import duties of the following nine main parts, which will be used in domestic manufacturing or assembly of battery EVs (BEVs) or battery-powered electric boats (excluding modified BEVs or electric boats).

  1. Battery
  2. Traction motor
  3. Compressor for BEV
  4. Battery Management System (BMS)
  5. Driving control system
  6. On-board charger
  7. DC/DC converter
  8. Inverter (including PCU inverter)
  9. Reduction gear

In addition, this Notification also covers the situation where one of these nine main parts is assembled with other parts in the above nine main parts at the time of importation.

The tax incentives apply to the importation of the parts made between 26 May 2023 to 31 December 2025. The imported parts must be completely used within one year from the importation (extendable for up to six months upon approval from the Director-General of the Customs Department) and must be certified by Thailand Automotive Institute as the parts for the manufacturing or assembly of BEVs or battery-powered electric boats. The importer is also required to obtain an approval in principle of the duty exemption privilege prior to the importation. The details of the customs procedures are to be further prescribed in the Customs Department’s notification.

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Noriko Sakamoto joined Baker McKenzie in 2008. She is active in the Mergers & Acquisitions Practice Group and Pharmaceuticals & Healthcare Industry Group. She also actively assists Japanese clients as a core member of the Japan Advisory Group.

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Keerati is a partner in Baker McKenzie's Bangkok office. He joined Baker McKenzie in 2013 and is currently active in the Tax Practice Group and the International Commercial & Trade Practice Group. Prior to joining the Firm, he worked as an in-house lawyer at a leading automotive company, at which his areas of practice were general corporate matters, labour law, intellectual property law and customs law.
With 10 years of practice in tax, customs and trade controversies, Keerati helps clients with a comprehensive range of services, including post-reviews, post-clearance audits, negotiation, settlement with relevant authorities, appeals, and litigation. He has assisted clients during all stages of business, including planning, business structuring, implementation, investment, and dispute resolution.

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Bulin joined Baker McKenzie in 2000 and became a partner in 2012. He is active in the Corporate and M&A Practice Group and is a lead partner in the Healthcare & Life Sciences Industry Group, the Industrial Manufacturing and Transportation Industry Group, and the Sustainability Group.

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Suriyong Tungsuwan joined Baker McKenzie in 1982 and became a partner in 1993. He is active in the areas of corporate and commercial law, mergers and acquisitions, real estate and property development, labour, employment, executive transfers, and trade regulations and customs.

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Varutt Kittichungchit is a Legal Professional in Baker McKenzie, Bangkok office.

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