Chapter 2 - Introduction and Regulations

  • Thailand imported 196t of gold and exported 113t in 2024, highlighting its significance as a regional hub for bullion trade.
  • Thailand imposes no import or export custom duty and VAT on gold bullion.
  • A 7% VAT is imposed on the full value of imported gold jewellery to support domestic manufacturing.

Thailand has a vibrant and well-established precious metals market, shaped by a unique set of economic and social factors. Historically, the limited reach of traditional financial products and relatively low levels of financial literacy across both urban and rural areas led many Thai consumers to view gold as a key savings instrument. This preference became even more significant during the 1997 East Asian financial crisis. At the time, the collapse of the Thai baht severely impacted household finances, and gold emerged as a reliable means of safeguarding wealth. Its liquidity also provided a lifeline, as consumers were able to easily convert their gold holdings into cash to meet urgent financial obligations. This experience reinforced the role of gold in the Thai economy and prompted the government to adopt a broadly liberal stance toward the metal.

This supportive policy environment has facilitated the free flow of gold in and out of the country. Today, Thailand stands out as one of the most open markets for precious metals. Each year, Thai consumers purchase between 50 to 60t of gold in the form of jewellery and investment bars, with retail investment making up around 80% of the total. However, this activity has fallen over the years due to a shift towards online trading, with gold also facing competition from other investment products like cryptocurrencies and equities.

Traditional 965 gold chains by Iris Gold (an Ausiris Gold company)

Most gold sold in Thailand is of 965 purity. This differs from other major gold-consuming countries like India, China or Turkey, where varying purities are sold and there is a clearer distinction between jewellery and investment products. In Thailand, jewellery and investment bars are often sold as a combination, one common example being a gold chain paired with a pendant in bar form.

Thai Gold Bullion Imports/Exports

Source: S&P Global

Thailand’s gold imports routinely exceed its domestic consumption. This is because there are no restrictions on gold exports, which allows bullion traders to freely re-export gold. For instance, in 2024, Thailand imported 196t of gold but exported 113t, highlighting its role as a regional bullion trading hub.

On the regulatory front, the Bank of Thailand (BoT) issues licences for gold trading. The requirements to obtain such a licence are relatively straightforward. The applicant must be a company registered in Thailand, have a credible track record in gold trading, and be in operation for a reasonable period of time. While there is no fixed duration, the BoT assesses applications on a case-by-case basis. Additionally, the applicant must be a member of a recognised Thai trade association. Thailand grants a single, unified licence that permits the import of gold in any form, bullion, doré, or jewellery.

Thailand’s tax structure is equally liberal. There is no import or export duty on gold bullion, making it an attractive location for both domestic and international trade. However, Value Added Tax (VAT) does apply in certain cases. Specifically, 7% VAT is levied on the full value of imported gold jewellery, a measure designed to protect local manufacturers. As a result, most gold jewellery purchased in Thailand is fabricated locally.

The VAT treatment of domestically produced jewellery is more nuanced. For plain gold jewellery, the VAT is levied only on the value added component, in other words the making charges and the price spread.

For example, if a piece is sold at THB 51,640 and bought at THB 51,590 with making charges of THB 1,100, the VAT would be calculated on THB 1,150 resulting in just THB 81 of VAT, equivalent to around 0.2% of the total value. However, studded jewellery attracts the full VAT on the sale price. For instance, a THB 100,000 studded gold item would incur THB 7,500 in VAT, making it considerably more expensive. This explains the stronger consumer preference for plain, locally made gold jewellery.