Somebody tells the new plant manager that the company has BOI promotion. The next question is usually a shipping question: does this change how we move the goods, do we need a special carrier, is there paperwork the driver has to carry.
The honest answer is that BOI changes almost nothing about the truck, and quite a lot about the day before it loads and the two years after it unloads. Getting that the wrong way round is expensive, because the things it does change are all deadlines, and a deadline that passes quietly is the most expensive kind.
BOI is an account, not a place
A bonded warehouse or a customs free zone is a piece of ground with a boundary around it. Goods inside it have not entered the country yet in the eyes of customs law, so the movements in and out of that boundary are controlled: declarations before the wheels turn, seals on the vehicle, a route, an officer. If that is the world you are picturing, the customs status of the load is a separate subject and it does control the truck.
BOI promotion is the opposite shape. The privilege attaches to the promoted company and to an approved list of items, and it is discharged later by proving that the goods did what you said they would. The document that gets your container out of the port is a release letter from the Office, and what it releases the goods from is customs custody. The moment it does, the goods are ordinary goods on an ordinary road.
They are also a line in a ledger that has to be closed. Everything below follows from that.
Read the certificate, not the word "BOI"
"We are BOI" is not an answer to a shipping question, because promotion is a bundle and the bundle varies by activity group. The Office's own incentives table lists corporate income tax, machinery duty, materials for research and development, and materials for production for export as four separate lines, granted separately.
The ones that touch goods movement are:
- Section 28 and 29 β machinery. Section 28 exempts the import duty on machinery the Board approves, and only on machinery not produced or assembled in Thailand to a comparable standard in sufficient quantity. Section 29 lets the Board give half the reduction, or none.
- Section 30 β raw or essential materials for production inside Thailand. A reduction of not more than ninety per cent of the normal rate, granted for periods of not more than one year at a time. Note the shape: a reduction, renewed annually, not an exemption.
- Section 36(1) β raw and essential materials imported specifically for making products for export. Full exemption of import duty, and the one with the machinery underneath it.
- Section 36(2) β goods imported in order to be sent back out again.
- Section 36(3) β exemption of export duty on what you produce.
Before planning anything, find out which of these your certificate actually carries and until when. A project with Section 28 and no Section 36(1) has a very different set of clocks from one with both.
Before the first container: what sits on the critical path
The approvals are not fast, and they run in series with the shipping schedule rather than alongside it.
Machinery. The master list has to be approved before a release order can be issued against it. The Office's published handling time for approving a machinery master list is sixty working days. Adding, cancelling or amending a line on that list is thirty working days. The release order itself is one working day.
Sixty working days is about three months. Read that against your equipment lead times: the order date and the list approval date are two separate tasks, and only one of them is under your supplier's control.
The window itself. The machinery import period is thirty months from the date the promotion certificate is issued, and operation start-up is due six months after that period ends, which is where the familiar thirty-six month figure comes from. The import period can be extended by not more than one year at a time and not more than three times, with the start-up deadline moving six months past each new end date. A start-up extension on its own can be had once, for not more than a year. Projects of five hundred million baht or more excluding land and working capital sit outside the standard thirty months, as do activity types the Board gives a special period. Machinery for research and development, and machinery used to remove or prevent pollution, can be imported for as long as the promotion runs.
Raw materials. Nothing can be released under Section 36(1) until the production formula and the maximum stock account are approved. The formula lists what goes into one unit of product and how much is lost making it. The maximum stock is the ceiling on how much you may import duty-free.
That ceiling has a number in it worth knowing before you write a purchase policy: revolving maximum stock is approved at not more than four months of the production capacity written on your promotion certificate. If your supply chain wants six months of cover on a long-lead import, the last two months are not exempt material. That is a legal ceiling on order quantity that has nothing to do with the size of your warehouse.
When the ship arrives before the approval does. Two routes exist. Section 38 lets the Board direct Customs to release the goods against the guarantee of a commercial bank in Thailand instead of a cash deposit for the duty, and that permission runs for not more than one year at a time. Or you pay the duty and reclaim it: the release for a refund must be claimed within two years of the import date, or within one year of the end of the privileges if those have expired, and once the Office approves it you have one year to pursue the refund at the Customs Department.
Both routes work. Neither is free, and both are slower than having the approval already.
What the truck does not get
Nothing. That is the useful part.
There is no seal, no customs escort, no prescribed route, no supervising officer, no transit declaration. Once the release letter has taken the goods out of customs custody, the load moves under exactly the rules that govern any other domestic load: the weight limits, the driver's hours, the carrier's licence class, and the liability the Civil and Commercial Code puts on a carrier. Domestic road freight is a VAT-exempt service whether the shipper is promoted or not, and the withholding on it does not change either, so the invoice you receive looks identical to a non-promoted company's.
The practical consequence is that a carrier does not need "BOI experience" to run your road leg, and a quotation that prices some in should be asked what specifically it covers. What you do need from a carrier is documents back on time and correctly, because every clock below runs on a document rather than on a delivery.
The moves that are exports without leaving Thailand
This is the one that catches people, and it is the reason the routing question now has a tax answer as well as a distance answer.
Announcement Por. 4/2564 defines the export declaration that clears your raw material account to include, beyond the ordinary one, three more: the domestic transfer export declaration, the export declaration into a free zone, and the transfer of rights certificate known as Report V.
So a thirty-kilometre delivery to another promoted company, or into a free zone, discharges the account exactly as a ship does. A delivery to an ordinary domestic buyer does not.
Two identical trucks can leave the same yard on the same morning down the same road. One of them closes a line in your ledger and one of them does not, and the whole difference is a form filed before the goods moved.
The form has to say the right things. The export declaration must be marked as using BOI privileges, and must carry the exporter's thirteen digit tax identification number in the licence number field, the date the declaration was created, the Office's own thirteen digit number in the authorising agency field, and, where the export runs through a trader, the thirteen digit number of the promoted transferee in the remarks-to-Customs field.
Miss the field and the goods still leave. Your customer still receives them. Your account does not move, and the material sits on your books until you pay duty on it.
The clocks
| What | How long | Counting from |
|---|---|---|
| Machinery import period | 30 months | Date the promotion certificate is issued |
| Extensions of it | 1 year each, 3 times | The existing end date |
| Operation start-up | 6 months | End of the machinery import period |
| Machinery restriction under Section 40 | The Board's period, not less than 5 and not more than 15 years; BOI runs machinery at 5 years | Import date of the machine |
| Claiming a duty refund on material | 2 years | Import date |
| Pursuing that refund at Customs | 1 year | Date the Office approved it |
| Applying to extend the material period | Within 6 months of the end; granted up to 2 years at a time | End of the Section 36(1) privileges |
| After the material privileges end | Produce, export and write off within 2 years | The end date |
| Account inactivity before release orders freeze | 4 consecutive months | The last write-off |
The two permissions people trip over
Storing goods away from the promoted site
Raw materials, finished product and scrap that are still inside the privilege cannot simply be trucked to a warehouse you rented down the road. Clause 11 of Por. 4/2564 requires a written application to the Office before they are stored outside the promoted place of business.
Peak-season overflow storage is therefore an application, not a phone call. If your December volume routinely needs outside space, the application belongs in the plan in October. If you take a third-party warehouse on a rolling basis, know which of the pallets in it are promoted material and which are not.
Moving the plant, or lending a machine
Section 40 prohibits the promoted person, for a period the Board sets at not less than five and not more than fifteen years, from two things: using duty-exempted machinery for anything other than the promoted activity or letting another person use it, and moving the factory or place of business to a locality other than the one on the promotion certificate. Section 41 gives the Board the power to permit both, along with mortgage, sale, transfer and lease of that machinery.
BOI runs the machinery period at five years from the machine's import date. Its own procedures show it plainly: disposing of a machine held more than five years is a one-working-day formality, while disposing of one held five years or less is a duty payment.
Two consequences worth planning around.
A plant relocation is a permission first and a moving job second. The location on the certificate is one of the things checked at operation start-up, so a site that quietly changed is not a small administrative matter.
And the duty follows the machine, not the company. Under Section 42, if you mortgage exempted machinery and a mortgagee who is not the promoted person enforces before the Section 40 period runs out, the customs tariff law applies to the mortgagee, who is treated as the importer whose exemption ended on the day of transfer. The leasing rules run the same way: seize a machine inside those five years and the lessor pays the duty, and both sides have one month to report the seizure.
What it costs when a clock runs out
Duty on material that was not made into an exported product is charged according to the condition of the goods on the day they were imported β the tariff, the rate and the value on the entry that used the privilege. Not today's value of a component that has sat in your store for two years. That cuts both ways, and for most materials it means the bill is larger than the depreciated stock value in your accounts.
On top of the duty sits the VAT, its penalty, and the surcharge under Section 89/1 of the Revenue Code: 1.5 per cent per month or part of a month on the tax, excluding the penalty, running from the end of the filing period to the day it is paid, and capped at the amount of the tax itself.
Then there is the quiet one. If any single raw material account has no write-off movement for more than four consecutive months, or if you fail to apply for operation start-up when it falls due, the Office suspends raw material release orders across every project you hold until you explain, with fifteen days to answer. A slow quarter in one product line therefore stops the next container of a different product line at the port, and the cause sits in a ledger rather than anywhere near the port.
There is a matching trap on renewals. An extension of the material import period will not be granted until write-offs for that project's export declarations older than a year are finished, and if they are not finished within six months of filing the extension request, the extension is refused.
What to actually do
- Read the certificate first. List which sections you hold, the machinery import end date, the Section 36(1) end date, and the location written on it. Put all four in the project plan as dates, not as facts.
- Put the sixty working days for the machinery master list ahead of the shipping date, not after it. It is the longest single approval in the set and the easiest to discover too late.
- Set the purchasing ceiling from the certificate, not the warehouse. Revolving maximum stock is four months of certificate capacity, and material above it is not exempt.
- Decide per outbound load whether it needs an export declaration to clear the account. Foreign export, another promoted company, a free zone: yes. An ordinary domestic customer: no, and that material will need paying for.
- Do not let anything move to off-site storage without the written permission, and know which pallets in a third-party warehouse are promoted material.
- Watch account movement monthly, not annually. Four idle months on one account freezes release orders on all of them.
- Treat a relocation or a machine loan as a BOI application with a moving job attached, and check where the machine sits against the five years from its import date before anyone quotes for the lift.
None of this asks anything of the vehicle. The run to the port from a promoted factory is the same run it would be from any other factory. What promotion buys you is duty you did not pay, and what it costs is a set of dates that somebody in your building has to own.