Bonded warehouse resale: the duty rate follows the release date

01Three regimes, and they do not sit under the same law

Bonded warehouses and free zones both fall under the Customs Act. IEAT free-trade zones do not — the terms "free-trade zone", "industrial operator" and "commercial operator" are all defined by the Industrial Estate Authority of Thailand (IEAT) Act, not by customs law. Eligibility and licensing run through IEAT; the customs notification only governs how the filing itself is handled. On entry, goods in all three are either not subject to import duty or exempt from it. On exit for export, a bonded warehouse gets both import and export duty waived regardless of whether the goods leave in their original state or after processing; a free zone and an IEAT zone are exempt from export duty, each with the same anti-arbitrage carve-out — goods that would otherwise owe export duty domestically cannot be routed through the zone and exported unchanged just to wash the duty away.

02Overlooked detail: the two free-zone licences are separate

A free zone runs on two distinct licences, each carrying its own annual fee under ministerial regulation: the establishment licence held by the zone developer, and the operating licence held by each business operating inside it. Clients often assume that operating inside the zone automatically covers the establishment side — it does not; they are two separate approvals and two separate fees.

03The first legal fiction: moving stock between bonded warehouses is not a domestic sale

The law treats "release from a bonded warehouse" as one act that is recognised twice: goods transferred into another bonded warehouse, or sold to a buyer with a legal exemption right (such as an importer applying for a Section 29 duty drawback), are deemed imported at the moment of release — and, in the same instant, deemed exported abroad. The same act is counted at both ends, which is exactly why it can be written off and exempted without the goods ever crossing a border.

What this means for our clients: a transfer between bonded warehouses is not a domestic sale, and taxing it as one is an overpayment. The fiction has a limit, though — two warehouses registered under the same tax ID cannot use a move between them to manufacture a reconciliation event; that is not a "transfer" in the legal sense.

04The second legal fiction: using zone goods for anything else counts as removing them

Free zones and IEAT zones use identical wording: using zone goods for consumption, or for any purpose outside the zone's licensed establishment purpose or business, is deemed to be moving the goods out of the zone. To do this lawfully requires the full process — the zone operator files a "transfer for duty-paid import from the zone" declaration, sends it electronically requesting full duty payment, inspection is handled as if the goods were physically leaving the zone, an officer records the inspection result and the release date in the system, and only after release can the goods be consumed or put to other use.

This is the single most common trap: pulling duty-free raw material out of inventory for samples, internal testing, gifts, or on-site consumables — if it falls outside the licensed business purpose, the law treats it exactly as if the goods had left the zone. Duty has to be paid and cleared through a fresh import declaration before it can be used. "The goods never physically left the site" is not a defence.

05The step most often miscalculated: three dates, three different elements

When goods come out of a bonded warehouse for domestic use or sale, tax liability attaches to the party taking delivery from the moment import was completed — not from the moment of release. What actually trips people up is that the elements used to calculate duty are taken from three different points in time, and the original import declaration cannot simply be copied over.

• Exchange rate: the rate in force on the day the goods entered the Kingdom.
• Condition of goods, dutiable value, tariff code: as at the moment import was completed.
• Duty rate: the rate in force on the day the goods are released from the warehouse, regardless of whether they leave in their original state or after processing.

This is the part that almost always gets it wrong: both clients and forwarders instinctively assume the rate is "whatever was charged on the original import" — but duty rates move, whether from a tariff schedule revision, an FTA rate drop, or a temporary rate. If the rate has changed while the goods sat in the warehouse, the domestic-sale duty bill changes with it, even though the price and tariff code are still locked to the import date. For clients holding long-term bonded stock, domestic-sale calculations cannot be copied from the original import declaration — at minimum, the current rate on the release date needs to be checked again.

06Section 29 raw-material drawback: register the formula first, and VAT cannot be guaranteed away

A fourth route — applying for a raw-material duty drawback under Section 29 — is open only to legal entities (limited companies, public limited companies, limited partnerships, registered ordinary partnerships); individuals cannot use it. Approval brings an importer code and a privilege registration number, but the sequencing matters more: the raw-material list and production formula, together with finished-product detail, must be filed with the customs privilege office before the import or export declaration is filed, and the formula code obtained from that filing must then be declared at export time. Shipping first and registering the formula afterwards leaves that shipment with no basis for calculating the drawback.

On the import side there is a cash-flow point that is easy to underestimate: choosing to post a guarantee under Section 30 (reducing the rate to half, or to 5%) instead of paying duty outright still requires excise and other taxes to be guaranteed in full, while VAT must be paid in full and cannot be guaranteed at all. Cash-flow planning should list these two items separately rather than assuming Section 29 means nothing needs to be paid up front.