The Industrial Estate Authority of Thailand (IEAT) law states that the free zone is designated for the operation of industrial activities, commercial activities or other business relating thereto, for the purpose of economics, national security, public well-being, environmental management or other necessities as prescribed by the Board of the IEAT, whereby goods taken into the area will be entitled to additional rights and privileges on tax and duty as well as special fees as provided in the law.
Moreover, industrial operators in an IEAT free zone will be granted additional privileges as follows:
- Exemption from import duties, VAT and excise tax on machinery, equipment, tools and supplies (including components) which are essential for the production of goods or for commercial purposes and on materials to be used in the construction, assembly or installation of factories or buildings in the IEAT free zone. Consumer products or vehicles are not exempt.
- Exemption from import duties, VAT and excise tax on raw materials imported and taken into an IEAT free zone for use in the production of goods or for commercial purposes. Exempt imported materials taken into an IEAT free zone for use in production include items from another IEAT free zone, promoted persons under BOI for export, bonded warehouse, items imported under bank guarantee for re-export of finished goods and items exempt under other laws.
- Importation of goods in an IEAT free zone for producing, mixing, assembling, packing or processing of the goods for export out of Thailand are not subject to the law in relation to the control of importation or exportation, the control of standards or quality, affixing of mark or any sign to those goods other than those goods other than those required under the Customs law in accordance with the rules prescribed by the Board of Directors of the IEAT.
- Goods manufactured in an IEAT free zone and sold in Thailand will be deemed as imported goods (possibly eligible for customs duty privileges subject to certain conditions), and subject to VAT at the normal rate or at the zero rate if sold between operators located in the IEAT free zones.
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