Release Before Duty

According to Article 18 and Article 44 of the Customs Act, Release Before Duty refers to the customs' deduction of duty, bond, late fee, etc. from the guarantee of the  importer and release the imports after the importer fills out the import declaration. The importer may pay all the duty within 14 days from the issuing of the declaration to recover the guarantee for further uses. In short, it refers to the deduction of duty from the guarantee and release of cargos. The mechanism allows importers to pay a number of duty bills within 14 days after the releasing date and to make import duty payment without the restriction of banking hours, rendering cargos clearance more convenient.

II. How to apply for Release Before Duty?

1. Required documents

(1) application form;

(2) power of attorney for customs agent to use the guarantee for release before duty (the importer authorize customs agent to use the guarantee of Release Before Duty);

(3) photocopies of legally concerning registered certificate and importer/ exporter registration card with seals of the company and its statutory representative; and

(4) Types of guarantees:

a. Cash.

b. Bonds issued by the government.

c. Time deposit certificates issued by a bank.

d. Time deposit certificates issued by a credit cooperative.

e. A one-year or more common trust certificate issued by a trust and investment company.

f. A guarantee provided by a financial institution.

g. Any other property approved by the Ministry of Finance which is easy for sale and custody, and free from any dispute over proprietary rights.

The applicant may select the type of guarantees and credit line best suited its demand. Applications for change of credit line are allowed. Guarantees provided for taxpayers by clearance brokers shall be limited to bank guarantee only.

(5) Letter of mortgage commitment, mortgage assignment registration notice, blank mortgage cancellation, and exercise notice should be provided by the companies applying for Release Before Duty. Guarantee provided by time deposit certificate, trust certificate or government bond should be mortgaged to the customs.

2. Application forms, declarations, letter of commitments, bank guarantee certifications are available from the customs. Applicants should collect mortgage registration, cancellation and exercise notices from banks.

III. How to conduct the policy

1. Fill in '3' in item 11 of the import customs declaration and the account number of  “Release Before Duty” in item 12.

2. Duty, fees, late declaration fee, and late payment fee will be calculated automatically by computer and deducted from the guarantee of the company concerned. Then a duty payment notice will be issued to the taxpayer to make the payment with 14 days and in the mean time, the cargos will be released. (A late payment fee at 0.05% of the total duty will be charged daily for overdue payment). When the duty is over the credit limit of the guarantee, the taxpayer is demanded to pay the duty before the cargo can be released.

3. The policy is also applicable to the bonds defined in Articles 18, 38 and 52 of the Customs Law. In the case of a deduction of the duty from the guarantee, a treasury paying-in slip of the “Release Before Duty” will be issued to the applicant which shall then make the payment. When the bond is over the credit limit of the guarantee, the taxpayer will be issued a treasury paying-in slip and should pay the bond before the cargo is released.

4. After the taxpayer pays all the duty concerned, the computer system will automatically recover the original credit line of the guarantee for further uses. When a taxpayer fails to make the payment by the deadline or make up the payments as instructed, the customs will deduct the compensation from the guarantee, suspend the taxpayer's right to use the policy for a year, and demand the taxpayer to reimburse all duty and fees according to related regulations.

5. The account shall be automatically terminated by computer on the day following the expiration of the guarantee. The customs will check if there is any due balance of the account. When there is no due balance, the customs will notify the bank in writing to terminate the guarantee or return the collateral or terminate the mortgage.

6. When the collaterals are expired, the taxpayer shall submit new collaterals and apply for a renewal of the account about one month before the expiration to prevent the interruption of the account.

IV. Notes

1. A taxpayer may apply for Release Before Duty through one of the following ways:

(1) To make the payment at the bank inside a local customs.

(2) Remittance: transfer the sum to the banking accounts of the Treasury or Customs as instructed.

(3) Online payment: open an account at appointed banks to proceed online transfer to the banking accounts as instructed. The customs will print and deliver the receipt for online payment.(4) Internet payment: inquire all taxes information from relative website of internet, and pay the tax by the Customs ePayment System.

2. Neither will the remittance nor online payment be used for overdue payment. A taxpayer shall only make the payment in cash at the bank.

3. In general, the computer will recover the credit line of the guarantee after the payment. When applying for a correction or change of the original import declaration, the taxpayer may apply for a manual recovery of credit line to the customs. When the payment has been made, a taxpayer may apply for a refund according to general duty refund procedures.

4. A taxpayer may inquire the status of credit line; the customs will print the “Details of Guarantee Credit Line” for the taxpayer's reference.

5. The policy offers 24-hour clearance services. For C1 imports, importers may apply for clearance anytime and the customs computer will release the cargos immediately

Contact Point: Duty Collection Section , Clearance Division I

TEL: +886-3-383-4265 ext.231, 233, 268