Công văn 5529/TCHQ-TXNK 2021 xử lý vướng mắc Nghị định 18/2021/NĐ-CP

To: Customs Departments of provinces and cities.

In response to issues of Customs Departments of provinces, cities, and enterprises regarding implementation of Decree No. 18/2021/ND-CP dated March 11, 2021 of the Government on amendments to Decree No. 134/2016/ND-CP dated September 1, 2016 on elaborating to the Law on Import, Export Duties (coming into effect from April 25, 2021), the General Department of Customs remarks:

The General Department of Customs resolves issues regarding Decree No. 18/2021/ND-CP dated March 11, 2021 of the Government under the Appendix attached hereto.

Customs Departments of provinces and cities are hereby requested to review and adequately comply with the guidance herein. Further issues that arise during implementation must be reported to the General Department of Customs together with proposed resolutions.

For your acknowledgement and implementation./.

PP. DIRECTOR GENERAL
DEPUTY DIRECTOR GENERAL




Luu Manh Tuong

...

...

...

LIST OF ENTERPRISES HAVING ISSUES RELATING TO TAX POLICIES UNDER DECREE NO. 18/2021/ND-CP DATED MARCH 11, 2021

(Attached to Official Dispatch No. 5529/TCHQ-TXNK dated November 24, 2021 of the General Department of Customs)

No.

Enterprise

Address

1

Taipei Economic and Cultural Office in Vietnam

20A floor - PVI Building, No. 1 Pham Van Bach Road, Cau Giay District, Hanoi

2

...

...

...

No. 47 Nguyen Cu Trinh Road, Nguyen Cu Trinh Ward, District 1, Ho Chi Minh City

3

Vietnam Business Association

No. 9 Dao Duy Anh, Dong Da District, Ha Noi

4

Vietnam Textile and Apparel Association

15^th Floor, VP Section of C1 Thanh Cong Building, Thanh Cong Ward, Ba Dinh District, Ha Noi

5

Vietnam Footwear and Handbag Association

...

...

...

6

SPG Vina Company Limited

My Phuoc Industrial Park, Ben Cat District, Binh Duong Province

7

Vietnam Psy Technology Company Limited

CN6 Block, Thuan Thanh II Industrial Park, Mao Dien Commune, Thuan Thanh District, Bac Ninh

8

 Lac Ty Company Limited

No. 3-5 Ten Lua Road, An Lac A Ward, Binh Tan District, Ho Chi Minh City

...

...

...

Chitwing Precision Tech Vietnam Company Limited

CN2-2 Block and CN9-4 Block of Yen Phong Industrial Block (expanded section), Yen Trung Commune, Yen Phong District, Bac Ninh

10

Mami Hanoi Company Limited

Tan Huong Commune, Pho Yen District-level Town, Thai Nguyen Province

11

TCE Jean Single-member Company Limited

Le Loi 1 Hamlet, Hoang Dong Commune, Hoang Hoa District, Thanh Hoa Province

12

...

...

...

8^th Floor, SUDICO Building, Me Tri Road, My Dinh 1 Ward, Nam Tu Liem District, Ha Noi

13

Pouyuen Vietnam Company Limited

No. D10/89Q, 1A National Highway, Tan Tao Ward, Binh Tan District, Ho Chi Minh City

14

Pacific Crystal Textiles Company Limited

Lai Vu Industrial Park, Lai Vu Commune, Kim Thanh District, Hai Duong

15

Vina Sanematsu Company Limited

...

...

...

16

Brother Industries Company Limited

Phuc Dien Industrial Park, Cam Phuc Commune, Cam Gian District, Hai Duong Province

17

Shishedo Vietnam Company Limited

Blocks 213-233-235-237, Amata Industrial Park, Bien Hoa, Dong Nai

18

Vietnam Toyota Motor Vehicle Company

Phuc Thang Ward, Phuc Yen Town, Vinh Phuc Province

...

...

...

Takazono Vietnam Single-member Company Limited

F.04A Block, Long Hau Road, Long Hau Industrial Park, Long Hau Commune, Can Giuoc District, Long An Province

20

Vietnam HTMP Joint Stock Company

43 D3 Block, Quang Minh Industrial Park, Chi Dong Town, Me Linh District, Hanoi

21

ASSA ABLOY Smart Product Vietnam Company Limited

 A10 block, Ba Thien II Industrial Park, Thien Ke Commune, Binh Xuyen District, Vinh Phuc Province

22

...

...

...

516 Block Road No. 13, Amata Industrial Park, Long Binh Ward, Bien Hoa District-level Town, Dong Nai Province

23

Mr. Khuu Thanh Quy

B09.01, Hung Phat Silver Star Apartment building, No. 156A Nguyen Huu Tho Road, Hamlet 5, Phuoc Kien Commune, Nha Be District, Ho Chi Minh City

24

Nitto Denko Tape Materials Vietnam Company Limited

Block C, Maple tree Storage, No. 1 Road No. 10 of Vietnam - Singapore Industrial Park, Binh Hoa Ward, Thuan An District-level Town, Binh Duong Province

25

Sonion Vietnam II Company Limited

...

...

...

26

Voltronic Power Technology Vietnam Company Limited

Workshops B1A, B1B, B1C, No. 5 Road No. 21A, Bac Ninh VSIP Industrial Park, Dai Dong Commune, Tien Du District, Bac Ninh Province

27

Vietnam Pys Technology Company Limited

CN6 Block, Thuan Thanh II Industrial Park, Mao Dien Commune, Thuan Thanh District, Bac Ninh Province

28

Thuan Phuong Embroideries Garments Company Limited

No. 275 Nguyen Van Luong, Ward 12, District 6, Ho Chi Minh City

...

...

...

Phong Phu International Joint Stock Company

No. 48 Tang Nhon Phu Road, Tang Nhon Phu B Ward, Thu Duc District-level Town, Ho Chi Minh City

SCHEDULE ON PROBLEM RESOLUTIONS

DECREE NO. 18/2021/ND-CP DATED MARCH 11, 2021 OF THE GOVERNMENT
(Attached to Official Dispatch No. 5529/TCHQ-TXNK dated November 24, 2021 of the General Department of Customs)

No.

Article, Clause

Problem details

Answers

...

...

...

1

Clause 3 Article 3

In order to encourage domestic production and assist domestic enterprises especially Vietnamese enterprises seeking domestic output, tax policies should remain flexible towards application of tax exemption, 0% tax rate, or preferential tax treatment equal to goods imported from a foreign country or from a free trade zone without violating international commitments and agreements to which Vietnam is a signatory. (Binh Duong Tax Department under Point 1 of Official Dispatch No. 756/HQBD-TXNK dated April 15, 2021 and Point 1 of Official Dispatch No. 821/HQBD-TXNK dated April 23, 2021)

Pursuant to Point b Clause 3 Article 3 of Decree No. 134/2016/ND-CP amended by Clause 1 Article 1 of Decree No. 18/2021/ND-CP: “In-country imports (except goods imported from free trade zones prescribed in Point c of this Clause) shall apply the preferential import tariff rates specified in Decree No. 125/2017/ND-CP , Decree No. 57/2020/ND-CP , their amendments and replacements (if any)”. According to the regulations above, goods imported from a domestic enterprise (except goods imported from a domestic free trade zone, apply the preferential import duty rate specified under Decree No. 125/2017/ND-CP, Decree No. 57/2020/ND-CP, and amending documents (if any). For your consideration and compliance.

Article 10. Tax exemption for goods imported for processing and processed exports

2

Point a Clause 2 Article 10

The fact that an enterprise must declare any change of the contract to the customs authority under an appendix leads to multiple appendices attached to a contract while the license number section in the declaration only contains 5 fields. If the enterprise produces more than 5 appendices, the enterprise’s declaration of contract appendix receipt number on the declaration form will be met with difficulty.

(Dong Nai Customs Department under Point 2 of Official Dispatch No. 0926/HQDNa-TXNK dated May 21, 2021, Point 2 of Official Dispatch No. 1071/HQDNa-TXNK dated June 9, 2021)

...

...

...

3

Point b Clause 2 Article 10

1. In case the taxpayer fails to announce reprocessing facility and/or reprocessing contract (in case of expired reprocessing contract). How will the matter be resolved? Are the goods still eligible for tax exemption?

 (Tay Ninh Customs Department under Official Dispatch No. 620/HQTN-NV dated April 15, 2021; Binh Duong Customs Department under Point 4 of Official Dispatch No. 821/HQBD-TXNK dated April 23, 2021, Point 4 of Official Dispatch No. 756/HQBD-TXNK dated April 15, 2021)

2. Will the case where the taxpayer announces after the date on which the customs authority inspects finalization report and conducts post-clearance inspection be understood as “failure to announce in a timely manner according to customs laws”?

Proposition: Such failure will only be met with penalties for administrative violations while imports remain eligible for tax exemption if requirements under Article 10 are fulfilled.

 (Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

1. Pursuant to Point b Clause 2 Article 10 mentioned under Clause 4 Article 1 of Decree No. 18/2021/ND-CP, the taxpayer who fails to announce reprocessing facility and reprocessing contract in a timely manner according to customs laws shall only be met with penalties for administrative violations and customs authority still grants tax exemption for goods imported for processing if all requirements under Article 10 of Decree No. 134/2016/ND-CP amended under Clause 4 Article 1 of Decree No. 18/2021/ND-CP are fulfilled. These regulations apply to processing contracts made from April 25, 2021 (the effective date of Decree No. 18/2021/ND-CP). In case the taxpayer fails to announce reprocessing facility, reprocessing contract or expired reprocessing contract, customs authority shall rely on case file of the violation and Article 17 of Decree No. 126/2020/ND-CP to impose tax and impose penalties as per applicable laws.

2. In case the taxpayer announces after the date on which customs authority inspects finalization report and conducts post-clearance inspection, the taxpayer shall be deemed failing to announce in a timely manner according to customs laws (the General Department of Customs promulgated Official Dispatch No. 18/TCHQ-TXNK dated January 4, 2021, entities shall rely on the Official Dispatch above to implement).

...

...

...

Point c Clause 2 Article 10 (Point a.4 and Point b Clause 2 Article 12)

1. Ho Chi Minh City Customs Department proposes:

In case of goods imported for processing, manufacturing and export, and later reprocessed by an export-processing enterprise which is hired by a domestic enterprise, will tax of the export materials, supplies, and parts that create the processed products be exempt in accordance with Point d Clause 1 Article 11 or will the tax be fully incurred for processed imports?

Will import duty of products processed in a free trade zone, later imported to a domestic enterprise, and satisfying requirements under Clause 1 Article 22 of Decree No. 134/2016/ND-CP be exempt or will the import duty be incurred in accordance with Clause 2 Article 22 of Decree No. 134/2016/ND-CP?

Pursuant to Clause 1 Article 22 of Decree No. 134/2016/ND-CP: “Goods manufactured, processed, recycled or assembled in a free trade zone without using imported raw materials or components are exempt from import duties when they are imported into the domestic market as prescribed in Clause 8 Article 16 of the Law on Export and import duties”.

Thus, does the phrase “imported raw materials or components” only include raw materials and components imported to a free trade zone from a foreign country or include even raw materials and components imported from a foreign country by a domestic enterprise and transferred to a free trade zone?

 (Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

2. Vietnam Pys Technology Company Limited requests guidance on:

If the Company transfers materials imported for manufacturing and export to an export-processing enterprise for reprocessing, later receives and exports the finished products in form of domestic export, will the Company be eligible for tax exemption? Are there any regulations on the percentage allowed to be transferred for processing? (Vietnam Pys Technology Company Limited under Official Dispatch No. 0406/PYS-HQ/CV-2021).

...

...

...

The General Department of Customs promulgated Official Dispatch No. 3634/TCHQ-TXNK dated July 19, 2021: If a domestic enterprise imports goods for processing, domestic export and later hires an export-processing enterprise to manufacture or process imports and semi-finished products, the domestic enterprise must declare and submit import duty as per the law for processed products imported to domestic market in accordance with Clause 2 Article 22 of Decree No. 134/2016/ND-CP. Value serving calculation of import duty is processing rate, value of materials used during processing provided by the export-processing enterprise, and adjustable (if any) in accordance with Clause 3 Article 17 of Circular No. 39/2015/TT-BTC dated March 25, 2015. Do not include value of materials and supplies sent to the export-processing enterprise by the domestic enterprise for processing in the taxable value. For your implementation.

2. Regarding remarks of Vietnam Pys Technology Company Limited requesting guidance on the percentage transferred for processing:

Pursuant to Clause 6 Article 1 of Decree No. 18/2021/ND-CP, the percentage is not restricted when transferring goods imported for domestic export to an export-processing enterprise for preprocessing.

Pursuant to Article 12 of Decree No. 134/2016/ND-CP amended under Clause 6 Article 1 of Decree No. 18/2021/ND-CP, if the Company (a domestic enterprise) imports goods for manufacturing and export, transfers imports and semi-finished products manufactured from imports to an export-processing enterprise for manufacturing and reprocessing in a free trade zone in any of the cases under Points a.1, a.2, a.3 of Clause 2 Article 12 mentioned under Clause 6 Article 1 of Decree No. 18/2021/ND-CP, import duties of all imports and semi-finished products manufactured from all imports transferred for manufacturing and reprocessing shall be exempt if the domestic enterprise satisfies regulations under Clause 2 Article 12 of Decree No. 134/2016/ND-CP mentioned under Clause 6 Article 1 of Decree No. 18/2021/ND-CP. Import duty of products manufactured and processed in a free trade zone and later imported to a domestic enterprise must be incurred in accordance with Clause 2 Article 22 of Decree No. 134/2016/ND-CP and guidance under Official Dispatch No. 3634/TCHQ-TXNK dated July 19, 2021 of the General Department of Customs mentioned above.

Pursuant to Clause 6 Article 1 of Decree No. 18/2021/ND-CP, the percentage is not restricted when the domestic enterprise transfers goods imported for domestic export to an export-processing enterprise for reprocessing.

5

Point e Clause 2 Article 10 (Point dd Clause 2 Article 12)

1. For goods imported for processing and export whose products are not exported or residual imports that remain in storage and have not been repurposed, is the taxpayer required to produce new declaration, declare and submit tax to the customs authority? When will the taxpayer declare? Which code will the taxpayer declare under?

In case of residual materials or unexported products of processing and domestic export, there should be specific regulations on the time limit in which repurposing must be declared depending on the nature of the line of business. Otherwise the customs authority will face difficulty managing and monitoring in case of residual materials or unexported products of processing and domestic export retained in storage for multiple years.

...

...

...

- Meaning 1: Due to the exception of gifts, in case of gifts, the taxpayer is not required to produce a new declaration or declare and submit tax to customs authority or adopt customs procedures and tax policies for the gifts.

- Meaning 2: In case of gifts, the taxpayer is not required to produce a new customs declaration or declare and submit tax to customs authority according to this document while is required to adopt customs authority and tax policies applicable to gifts under Article 8 of Decree.

We hereby request guidance on implementation in 2 meanings mentioned above.

 (Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

1. Pursuant to Article 25 of Decree No. 08/2015/ND-CP dated January 21, 2015 amended under Clause 12 Article 1 of Decree No. 59/2018/ND-CP dated April 20, 2018, if goods which are imported for processing and export whose products are not exported or goods that are residual materials and supplies and retained in storage by the enterprise have not been repurposed, the enterprise is not required to produce a new customs declaration and submit tax.

In case of residual materials or unexported products of processing and domestic export, the enterprise must include in the import-export-inventory report in accordance with Clause 2 Article 60 of Circular No. 38/2015/TT-BTC amended under Clause 39 Article 1 of Circular No. 39/2018/TT-BTC.

Residual materials and supplies, processed products, and domestic export products are not restricted by applicable tax laws in terms of maximum storage time and/or maximum time limit before declaration for repurposing must be performed. Should any sign of fraud or tax evasion or any violation that causes a deficit to the state budget is found by the customs authority, the customs authority shall conduct post-clearance inspection in order to impose tax in accordance with Article 17 of Decree No. 126/2020/ND-CP dated October 19, 2020.

2. In case goods are imported for processing and later used as gifts by the taxpayer, the taxpayer shall produce a new customs declaration in accordance with Article 25 of Decree No. 08/2015/ND-CP amended under Clause 12 Article 1 of Decree No. 59/2018/ND-CP, and the handling of tax on the new declaration of gifts must rely on tax exemption rate of gifts mentioned under Clause 2 Article 8 of Decree No. 134/2016/ND-CP amended by Clause 3 Article 1 of Decree No. 18/2021/ND-CP (applicable to 2 cases: A foreign organization, individual gifts a Vietnamese organization, individual; A Vietnamese organization, individual gifts a foreign organization, individual).

In case goods imported for processing and/or domestic import and used as gifts exceed the tax exemption rate or are ineligible for tax exemption, individuals who send the gifts (goods imported for manufacturing and domestic export) must declare and submit tax on the new customs declaration for the quantity of gifts exceeding the tax exemption rate or ineligible for tax exemption in accordance with Article 25 of Decree No. 08/2015/ND-CP amended by Clause 12 Article 1 of Decree No. 59/2018/ND-CP.

...

...

...

Point g Clause 2 Article 10 (Point e Clause 2 Article 12)

1. Regarding review of documents designating goods delivery in Vietnam issued by foreign organizations and individuals

Pursuant to Point III of Official Dispatch No. 2687/TCHQ-TXNK dated June 1, 2021, once the procedures for in-country export have been implemented, individuals performing in-country export must attach documents issued by foreign organizations and individuals designating goods delivery in Vietnam to the declaration on the E-Customs V5 system for cases under Points a and c Clause 1 Article 35 of Decree No. 08/2015/ND-CP. However, since the tab that allows the declaration of “documents designating goods delivery” is still unavailable on the E-Customs V5 system, an enterprise must make the declaration under the “Other attachments” section. At the same time, the E-Customs V5 system does not facilitate extraction or production of statistical report of data relating to attachments of the declaration.

Since the section “IX. System connection/I. Consolidated data extraction/1. Declaration extraction” does not contain data on attachments, the inspection of documents designating goods delivery in each declaration will take a lot of time and human resources given how many green line declarations there are

Will the customs authority receive Form No. 22 mentioned above via the online public service portal and via email?

Propositions:

The General Department of Customs should implement tabs for separate declaration of “documents designating goods delivery” in the E-Customs V5 system.

2. Regarding monitor and management of Notice on completion of customs procedures of import declaration (Form No. 22)

Will the notification of information regarding customs declaration of in-country export products under Form No. 22 of Appendix VII be performed in physical form or electronic form? In case of submission in person, how will the green line declaration be managed?

...

...

...

We hereby request guidance on monitor and management of Form No. 22 Appendix VII.

Propositions:

- The customs authority shall receive notice of the enterprise sent via email. Add receipt procedures to the online public service system.

- Develop the function that allows electronic receipt and monitor.- Or request the enterprise to attach Form No. 22 on the V5 system. Add the tab that allows separate declaration of “Form No. 22” and function that allows extraction and production of statistical data of attachments to the E-Customs V5 system.

Currently, the V5 system already provides support for handling residual declarations, the customs authority is only required to review and notify the enterprise about residual declarations that lack the respective in-country export declaration necessary for tax handling.

Proposition: if the customs authority finds the lack of respective declaration past 15 days from the date of import, the customs authority shall request the enterprise to provide Form No. 22 and resolve tax.

 (Binh Duong Customs Department under Point 2.1 of Official Dispatch No. 921/HQBD-TXNK dated May 10, 2021, Official Dispatch No. 1095/HQBD-TXNK dated June 2, 2021, Official Dispatch No. 1251/HQBD-TXNK dated June 17, 2021; Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

1. Regarding review of documents designating goods delivery in Vietnam issued by foreign organizations and individuals

The General Department of Customs acknowledges the issue and conducts research to add more functions to the E-Customs V5 system.

...

...

...

2. Regarding monitor and management of Notice on completion of customs procedures of import declaration (Form No. 22)

The General Department of Customs already provides guidance under Section IV of Official Dispatch No. 2687/TCHQ-TXNK dated June 1, 2021 as follows: Customs Departments of provinces and cities shall direct Customs Sub-departments where in-country import declaration is produced to produce logbooks of export declarations of processed, domestic export goods. In order to facilitate the production of logbooks, entities shall extract data on the E-Customs V5 under the “IX. System connection/I. Consolidated data extraction/1. Declaration extraction” functions. Customs Sub-departments shall list all export declarations and in-country export declarations under 2 functions of the E-Customs V5, including: “I. Consolidated data extraction” function and “H. In-country import and export declarations/1. Managing declarations that exceed the deadline by more than 15 days” functions. On the basis of the 2 functions above, the Customs Sub-departments can identify in-country export declarations that have exceeded the deadline and are without respective in-country import declarations. Customs Sub-departments must regularly monitor export declarations of processed, domestic export goods whose notification (Form No. 22) has not been issued in order to detect cases where the exporter fails to declare and submit tax past the deadline.

3. Request the General Department of Customs to guide implementation for the following 2 cases:

a) Case 1: Individuals performing in-country export has notified customs authority using Form No. 22 of Appendix VII attached to Decree No. 18/2021/ND-CP within 15 days from the date on which in-country export products have been granted customs clearance. However, the notice prepared using Form No. 22 reaches the customs authority after the deadline when sent via postal service.

b) Case 2: Customs procedures of declaration of in-country import products have been completed within 15 days from the date on which in-country export products are granted customs clearance. However, the individuals performing in-country export fail to submit the notice prepared using Form No. 22 under Appendix VII attached to Decree No. 18/2021/ND-CP to customs authority in a timely fashion.

 (Ha Nam Ninh Customs Department under Point 3 Official Dispatch No. 1703/HQHNN-NV dated June 18, 2021)

3. Guidance on handling late submission of Form No. 22:

a) In case individuals performing in-country export already send notice to custom authority using Form No. 22 (Appendix VII attached to Decree No. 18/2021/ND-CP) within 15 days from the date on which in-country export products have been granted customs clearance via postal service and the notice arrives at the customs authority after 15 days, the customs authority shall rely on the postage stamp of departure to verify the submission date.

b) In case the notice is submitted after 15 days

...

...

...

4. Regarding monitoring of in-country import declarations of processed and domestic export goods:

Given the great quantity of in-country export, import declarations at Customs Sub-departments affiliated to Dong Nai Customs Department, the preparation of logbooks for export declaration will cost a lot of time while some criteria are already present on the V5 system (except for actual date of submitting notification on corresponding in-country import declarations).

(Dong Nai Customs Department under Point 12 of Official Dispatch No. 1071/HQDNa-TXNK dated June 9, 2021)

4. Regarding monitoring of in-country import declarations of processed, domestic export goods under Point b Section IV of Official Dispatch No. 2687/TCHQ-TXNK dated June 1, 2021: Customs Departments of provinces and cities shall direct Customs Sub-departments where the in-country export declarations are registered to produce logbooks of in-country export declarations of processed, domestic export products.

For entities that receive a large quantity of in-country import, export declarations, on the basis of criteria under Point b Section IV of Official Dispatch No. 2687/TCHQ-TXNK mentioned above, entities shall produce logbooks after extracting data from the E-Customs V5 in order to determine in-country export declarations that lack corresponding in-country import declarations within the deadline and store documents serving investigation, inspection, and audit.

7

Point g Clause 2 Article 10 (Point e Clause 2 Article 12)

We hereby request the General Department to provide guidance:

a) How should the notification using Form No. 22 be performed?

...

...

...

c) When producing a new declaration, the original in-country export declaration will remain suspended on the system due to the lack of corresponding in-country import declaration. Request guidance in order to avoid suspension of declarations on the system.

In case individuals performing in-country export notify customs authority of the corresponding in-country import declaration whose import procedures have been completed after the tax has been submitted, which declaration will the in-country import declaration be connected with in order to keep the in-country export declarations from being suspended on the system? Will the in-country import declaration be connected with in-country export declarations or the declaration produced by the individuals performing in-country export once the 15-day period from the day on which the in-country export declarations is completed expires?

d) In case the individuals performing in-country export fail to produce new customs declarations, how will the situation be resolved? Will penalties for administrative violations be imposed? Will the customs authority impose tax? Once the customs authority imposes tax and the taxpayer produces in-country import declaration, will the paid tax be resolved in accordance with regulations and law on handling overpaid tax?

dd) What is the basis for customs authority to determine appropriate taxable value? In case materials and supplies that create the products are imported at different times and under different prices, will the price declared by the enterprise be temporarily acceptable?

 (Ba Ria Vung Tau Customs Department under Official Dispatch No. 1371/HQBRVT-TXNK dated May 28, 2021; Tay Ninh Customs Department under Point 3 of Official Dispatch No. 620/HQTN-NV dated April 15, 2021; Binh Duong Customs Department under Point 2.3 of Official Dispatch No. 921/HQBD-TXNK dated May 10, 2021, Official Dispatch No. 821/HQBD-TXNK dated April 23, 2021, Official Dispatch No. 756/HQBD-TXNK dated April 15, 2021; Ho Chi Minh Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

Regarding issues under Point a: Conform to Point 1 of No. 16 hereof.

Regarding issues under Points b, c, and d: General Department of Customs already provides guidelines under Point 3 Section I and Point 3 Section II of Official Dispatch No. 2687/TCHQ-TXNK dated June 1, 2021. For your implementation. If the taxpayer notifies customs authority of the corresponding in-country import declarations whose import procedures have been completed after paying tax, the paid tax shall be handled in accordance with guidance of the General Department of Customs under Point 3 Section I and Point 3 Section II of Official Dispatch No. 2687/TCHQ-TXNK.

Regarding issues Point dd: The enterprise may declare and determine taxable value in case materials and supplies that create products are imported at different times and under different prices. In case of any suspicion, customs authority shall inspect and determine taxable value in accordance with applicable laws. If the enterprise is found to be committing fraud, tax evasion, or other violations that cause a deficit to the state budget, customs authority shall conduct post-clearance inspection at head office of the taxpayer to take actions as per the law.

8

...

...

...

Regarding notification of in-country export declaration:

Pursuant to Point g Clause 2 Article 10, Point e Clause 2 Article 12 of Decree No. 134 amended by Clause 4 and Clause 6 Article 1 of Decree No. 18/2021/ND-CP, goods imported for processing and manufacturing of in-country export products eligible for tax exemption shall be goods that are used in processing and manufacturing of products that have been exported within the country if individuals performing in-country export notify customs authority of the corresponding in-country import declaration whose import procedures have been completed within 15 days from the date on which in-country export products are granted customs clearance using Form No. 22 of Appendix VII attached hereto. Pursuant to Article 58 of Circular No. 38/2015/TT-BTC, with respect to processed goods and manufactured and exported goods, the enterprise may choose to adopt import, export procedures at different Customs Sub-departments affiliated to different Customs Departments.

According to the regulations above, which Customs Sub-department will the individuals performing in-country export submit the notification on corresponding in-country import to? Propositions: Individuals performing in-country export shall notify customs authority where the import declarations of products that serve processing of in-country export products are produced.

(Binh Phuoc Customs Department under Official Dispatch No. 709/HQBP-NV dated May 11, 2021)

Pursuant to Point g Clause 2 Article 10, Point e Clause 2 Article 12 mentioned under Clause 4 and Clause 6 Article 1 of Decree No. 18/2021/ND-CP, enterprises that perform in-country export shall notify Customs Sub-departments where import declarations of products that serve processing of in-country export products are produced of corresponding in-country import products whose import procedures have been completed within 15 days from the date on which in-country export products are granted customs clearance.

9

Point g Clause 2 Article 10 (Point e Clause 2 Article 12 regarding production of new customs declaration and tax submission past the 15-day deadline)

Pursuant to Clause 58 of Article 1 of Circular No. 39/2018/TT-BTC on amendments to Article 86 of Circular No. 38/2015/TT-BTC: “Within 15 working days from the date on which exports are granted customs clearance, individuals performing in-country import must adopt customs procedures”

According to which, the regulation on 15 days under Decree No. 18/2021/ND-CP is inconsistent with 15 working days under Clause 58 Article 1 of Circular No. 39/2018/TT-BTC on amendment to Article 86 of Circular No. 38/2015/TT-BTC. Entities propose:

...

...

...

 (Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021; Dong Nai Customs Department under Article 14 of Official Dispatch No. 927/HQDN-TXNK dated May 21, 2021)

Pursuant to Point g Clause 2 Article 10 (for processed goods) and Point e Clause 2 Article 12 (for export goods) mentioned under Clause 4 and Clause 6 Article 1 of Decree No. 18/2021/ND-CP: “The quantity of imported goods that are used for processing in-country exports in reality will be exempt from import duties if the in-country exporter has sent the customs authority a notification (Form No. 22 in Appendix VII hereof) of the customs declaration of the in-country imports within 15 days from the day on which customs clearance is granted to the in-country exports”.

According to which, the Decree regulates within 15 days from the date on which in-country export products are granted customs clearance, individuals performing in-country export must notify customs authority of the corresponding in-country import declarations whose import procedures have been completed using Form No. 22 under Appendix VII attached to this Decree (do not rely on the phrase “15 working days” under Clause 58 Article 1 of Circular No. 39/2018/TT-BTC amending Article 86 of Circular No. 38/2015/TT-BTC). For your implementation in accordance with Clause 4 and Clause 6 Article 1 of Decree No. 18/2021/ND-CP.

10

Point g Clause 2 Article 10 (Point e Clause 2 Article 12)

What is the deadline for the exporter to produce new declaration, declare, and submit tax for materials and supplies for manufacturing in-country export products? What is the deadline for the importer to complete in-country import procedures for the products exported by individuals performing in-country export in order to benefit from tax refund?

(Tay Ninh Customs Department under Official Dispatch No. 620/HQTN-NV dated April 15, 2021, Lac Ty Company Limited under Point IV of Official Dispatch No. 59/XNK-LT dated April 26, 2021)

Regarding production of new customs declaration and tax submission for materials and supplies for manufacturing of in-country export products

Pursuant to Point g Clause 2 Article 10 (for processed goods) and Point e Clause 2 Article 12 (for export goods) mentioned under Clause 4 and Clause 6 Article 1 of Decree No. 18/2021/ND-CP: The quantity of imported goods that are used for processing in-country exports in reality will be exempt from import duties if the in-country exporter has sent the customs authority a notification (Form No. 22 in Appendix VII hereof) of the customs declaration of the in-country imports within 15 days from the day on which customs clearance is granted to the in-country exports.

...

...

...

The time limit for the individuals performing in-country export to register new declarations, declare, and submit tax for materials and supplies serving manufacturing of in-country exports shall be the date on which the 15-day period from the date on which in-country export products are granted customs clearance expires and the individuals performing in-country export fail to notify customs authority of the corresponding in-country import declaration whose import procedures have been completed.

Regarding tax refund

In-country import procedures must be completed within 15 days from the date on which in-country export declarations are granted customs clearance; failure to complete in-country import procedures within the time limit mentioned above will cause the individuals performing in-country export to produce a new declaration under A42 code, declare, and submit tax. When the individuals performing in-country export notify customs authority of the corresponding in-country import declarations whose import procedures have been completed after 15 days, their paid tax shall be resolved in accordance with regulations and law on tax administration and handling of overpaid tax.

11

Point g Clause 2 Article 10; Point e Clause 2 Article 12

Pursuant to Point g Clause 2 Article 10; Point e Clause 2 Article 12 of Decree No. 134/2016/ND-CP dated September 1, 2016 (amended by Decree No. 18/2021/ND-CP dated March 11, 2021) of the Government guiding products exported in form of processing and manufacturing of exports, since multiple enterprises perform in-country export under B11 code, are the enterprises required to produce Form No. 22 containing information on the in-country import declaration? Request guidance from General Department of Customs.

(Dong Nai Customs Department under Point 13 of Official Dispatch No. 1071/HQDNa-TXNK dated June 9, 2021)

The regulations that require individuals performing in-country export to notify in-country import declarations using Form No. 22 mentioned under Point g Clause 2 Article 10, Point e Clause 2 Article 12 mentioned under Clause 4, Clause 6 Article 1 of Decree No. 18/2021/ND-CP dated March 11, 2021 only apply to goods that are imported for processing, domestic export and granted import duty exemption but are exported to another domestic enterprise as designated by the foreign trader instead of being exported overseas or to a free trade zone.

Thus, goods exported within the country under B11 code are not eligible for tax exemption as stated under Article 10, Article 12 of Decree No. 134/2016/ND-CP and are not required to be notified using Form No. 22 in accordance with Point g Clause 2 Article 10 mentioned under Clause 4 Article 1 of Decree No. 18/2021/ND-CP; Point e Clause 2 Article 12 mentioned under Clause 6 Article 1 of Decree No. 18/2021/ND-CP.

...

...

...

Point g Clause 2 Article 10 (Point e Clause 2 Article 12)

Declarations placed in red line will result in the following issues:

1. In-country exporting enterprises that have produced declaration for materials and supplies and fail to fulfill the 15-day time limit prescribed by Decree No. 18/2021/ND-CP will be unable to present the goods to customs authority at export location for inspection since the goods have been sold to the in-country importing party. Since goods available at the in-country importing party are in form of finished products and are no longer in the original state, will the inspection results be well-grounded?

2. Will these declarations be physically inspected by the other customs authority?

3. Which customs authority will impose penalties upon discovering the sale of goods conducted by in-country importing enterprises prior to clearance?

4. How will the goods be inspected when the in-country exporting enterprise fails to provide accurate address of the in-country importing enterprise?

 (Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

1. In this case, the customs authority is not required to conduct physical inspection (calculation of tax based on import materials and supplies while goods are already manufactured into finished goods and potentially shipped to in-country importing party). The General Department of Customs issues Official Dispatch No. 3509/TCHQ-QLRR dated July 12, 2021 guiding resolution: If goods are placed under red line and the enterprises lack the goods for physical inspection, transfer the goods from red line to yellow line to facilitate document inspection.

2. Physical inspection shall not be conducted by any customs authority (since the goods have been transferred to yellow line as mentioned above).

...

...

...

4. In case the in-country exporting enterprise fails to provide accurate address of in-country importing enterprise, the regulations under Point g Clause 2 Article 10, Point e Clause 2 Article 12 mentioned under Clause 4 and Clause 6 Article 1 of Decree No. 18/2021/ND-CP requiring individuals performing in-country export to provide information on in-country import declarations within 15 days from the date on which in-country export products are granted customs clearance are not met. In this case, the in-country exporting enterprise must declare and submit tax in accordance with Point g Clause 2 Article 10, Point e Clause 2 Article 12 mentioned under Clause 4, Clause 6 Article 1 of Decree No. 18/2021/ND-CP.

13

Point g Clause 2 Article 10 (Point e Clause 2 Article 12)

In case in-country importing party has not produced in-country import declaration within 15 days from the date on which the in-country exporting party produces in-country export declaration and the in-country exporting party requests cancellation of the in-country export declaration, will the customs authority cancel the in-country export declaration? Propositions: If the enterprise can prove the cancellation of in-country import and export, the customs authority shall cancel as requested.

(Binh Duong Customs Department under Official Dispatch No. 921/HQBD-TXNK dated May 10, 2021; Point 2 Official Dispatch No. 756/HQBD-TXNK dated April 15, 2021, Point 2 Official Dispatch No. 821/HQBD-TXNK dated April 23, 2021)

Cases where declarations are cancelled at request of customs declarant have been provided for under Point d2 Clause 1 and Point b3 Clause 2 Article 22 of Circular No. 38/2015/TT-BTC amended by Clause 11 Article 1 of Circular No. 39/2018/TT-BTC dated April 20, 2018; cases where the exporter or importer cancels the export or import whose in-country declaration has been granted customs clearance or release shall be considered cancellation of the declaration. In this case, customs authority is responsible for verifying the cause and eligibility for declaration cancellation.

Other cases that are not considered cancellation of declaration as mentioned under Article 22 of Circular No. 38/2015/TT-BTC amended by Clause 11 Article 1 of Circular No. 39/2018/TT-BTC dated April 20, 2018 are not eligible for cancellation of the declaration.

For your implementation.

14

...

...

...

Issues regarding resolution to in-country export declarations produced before the effective date of Decree No. 18/2021/ND-CP:

Due to a multitude of reasons such as in-country importing enterprise has not received documents from in-country exporters, in-country importing enterprise has not received the goods hence does not produce import declaration, in-country importing/exporting enterprise dissolves or go missing, etc. the in-country export declarations remain without their corresponding in-country import declarations. The resolutions to these in-country export declarations are still unavailable. Propositions: Pursuant to Point g Clause 2 Article 10 and Point e Clause 2 Article 12 of Decree No. 18/2021/ND-CP.

- For type E export declarations (processing, domestic export) that remain before the effective date of Decree No. 18/2021/ND-CP, request the presence of in-country exporting enterprises to verify the in-country import declarations If the in-country exporting enterprise fails to verify, they must produce a new declaration and submit tax in accordance with Point g Clause 2 Article 10 and Point e Clause 2 Article 12 of Decree No. 18/2021/ND-CP.

- For export declarations of other types that remain before the effective date of Decree No. 18/2021/ND-CP, request the presence of in-country exporting enterprises to verify the in-country import declarations If the in-country exporting enterprise fails to verify, they must cancel the in-country export declaration.

(Dong Nai Customs Department under Point 7 and Point 8 of Official Dispatch No. 1071/HQDNa-TXNK dated September 6, 2021, Official Dispatch No. 712/HQDN-TXNK dated April 19, 2021, Point 10 and Point 11 of Official Dispatch No. 927/HQDN-TXNK dated May 21, 2021)

Pursuant to Point g Clause 2 Article 10, Point e Clause 2 Article 12 mentioned under Clause 4 Clause 6 Article 1 of Decree No. 18/2021/ND-CP.

Decree No. 18/2021/ND-CP does not regulate the transition of tax resolution of declarations of processed products and domestic exports that are produced before the effective date thereof but the enterprise has not issued notification of corresponding in-country import declarations in accordance with Point g Clause 2 Article 10 and Point e Clause 2 Article 12 of Decree No. 18/2021/ND-CP.

For in-country export declarations that are produced before April 25, 2021, the General Department of Customs already provided guidance under Official Dispatch No. 2411/TCHQ-GSQL dated April 24, 2019 and Official Dispatch No. 346/TCHQ-GSQL dated January 15, 2020.

The General Department of Customs hereby requests entities to rely on regulations on customs procedures and tax policies applicable at the time of producing in-country import declarations and relevant documents to handle as per the law.

...

...

...

Point h Clause 2 Article 10 (Point h Clause 2 Article 12)

We hereby request the General Department of Customs to provide guidance on policies on import duty and VAT for goods imported within the country for domestic export.

(Ba Ria Vung Tau Customs Department under Point 2 Section I and Section II of Official Dispatch No. 1371/HQBRVT-TXNK dated May 28, 2021; Binh Duong Customs Department under Point 6 of Official Dispatch No. 821/HQBD-TXNK dated April 23, 2021, Point 1.1 of Official Dispatch No. 921/HQBD-TXNK dated May 10 ,2021; Lac Ty Company Limited under Point I of Official Dispatch No. 59/XNK-LT dated April 26, 2021; Taipei Economic and Cultural Office in Vietnam under Official Dispatch No. VN130 dated May 12, 2021)

Policies on import duty and VAT for goods imported within the country for domestic export are provided for under No. 16 hereof.

16

Point h Clause 2 Article 10 (Point h Clause 2 Article 12)

Request the General Department of Customs to provide guidance on code of declarations, tax policies for in-country import goods serving domestic export in the following 4 cases:

1. If a domestic enterprise imports goods directly from an export-processing enterprise or an enterprise in a free trade zone or a bonded warehouse for domestic export via sale agreement, which declaration code will be used? How are policies on import duty and VAT applied in this case?

2. If a domestic enterprise signs a contract for purchasing goods for domestic export with a foreign enterprise whose commercial present in Vietnam is non-existent and is designated by a foreign organization or individual to receive goods from an export-processing enterprise or an enterprise in a free trade zone, which declaration code will be used? How are policies on import duty and VAT applied in this case?

...

...

...

4. A domestic enterprise signs contract for sale of goods for domestic export with a foreign trader and is designated by the foreign trader to receive goods from an export-processing enterprise or a free trade zone. The goods are previously imported for processing and domestic export by the domestic enterprise, have been granted exemption from import duty in accordance with Article 10 and Article 123 of Decree No. 134/2016/ND-CP, and exported to an export-processing enterprise or a free trade zone. In this case, which declaration code will be used when reimporting? How are policies on import duty and VAT applied in this case?

 (Binh Duong Customs Department under Point 1.5, Point 1.7, Point 1.7.2, Point 1.8 of Official Dispatch No. 921/HQBD-TXNK dated May 10, 2021, Point 2 of Official Dispatch No. 1095/HQBD-TXNK dated June 2, 2021, Official Dispatch No. 1393/HQBD-GSQL dated July 2, 2021 2/7/2021; Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021; Dong Nai Customs Department under Point 3 of Official Dispatch No. 1071/HQDNa-TXNK dated June 9, 2021, Official Dispatch No. 926/HQDNa-TXNK dated May 21, 2021, Official Dispatch No. 927/HQDNa-TXNK dated May 21, 2021, Official Dispatch No. 712/HQDNa-TXNK dated April 19, 2021; Ha Nam Ninh Customs Department under Point 1 of Official Dispatch No. 1703/HQHNN-NV dated June 18, 2021; Ba Ria Vung Tau Customs Department under Official Dispatch No. 1371/HQBRVT-TXNK dated May 28, 2021; Can Tho Customs Department under Official Dispatch No. 751/HQCT-NV dated May 12, 2021 and Official Dispatch No. 1426/HQCT-NV dated August 9, 2021; Thua Thien Hue Customs Department under Official Dispatch No. 546/HQTTH-NV dated May 28, 2021, Official Dispatch No. 1088/HQTTH-NV dated October 27, 2021; Quang Ngai Customs Department under Official Dispatch No. 1224/HQQNg-NV dated October 1, 2021; Korean Chamber of Commerce and Industry in Ho Chi Minh City under Official Dispatch No. 2110/HHTMHQ dated June 1, 2021; SPG Vina Company Limited under Official Dispatch No. SPG21/NKTC dated June 4, 2021; Vietnam Business Association under Official Dispatch No. 060721/CV/DN-XSSK dated July 6, 2021, Vietnam Pys Technology Company Limited under Official Dispatch No. CV-PYS/2021/0720 dated July 20, 2021; Takazono Vietnam Single-member Company Limited under Official Dispatch No. CV/TVN-2107201044001 dated July 20, 2021; Vietnam HTMP Joint Stock Company under Official Dispatch No. 28721/CV/DN-XSSK dated July 28, 2021, Official Dispatch No. 2709/CV/DN-XSSK dated September 27, 2021; CASSA ABLOY Smart Product Vietnam Company Limited under Official Dispatch No. 160821/CV/DN-SXXK dated August 16, 2021; Schaeffler Vietnam Company Limited under Official Dispatch No. 2307-01/SVC-TCHQ dated July 26, 2021; Nitto Denko Tape Materials Vietnam Company Limited under Official Dispatch No. 01/21/KNQ-Nitto dated September 24, 2021; Sonion Vietnam II Company Limited under Official Dispatch No. 20210825 dated August 25, 2021; Voltronic Power Technology Vietnam Company Limited under Official Dispatch No. 280821/CV-Vol dated August 28, 2021; Thuan Phuong Embroideries Garments Company Limited under Official Dispatch No. 136/2021/TP-XNK dated October 20, 2021; Phong Phu International Joint Stock Company  under Official Dispatch No. 29/CV-XNK dated July 14, 2021)

Pursuant to Clause 2 and Clause 3 Article 2 of the Law on Import, Export Duties No. 107/2016/QH13: “2. Goods exported from the domestic market into free trade zones; goods imported from free trade zones into the domestic market; 3. Goods imported or exported within the country” are eligible for import, export duties.

Pursuant to Clause 1 Article 4 of the Law on Import, Export Duties No. 107/2016/QH13: “1. Free trade zone means an economic zone located within Vietnam’s territory, established in accordance with law, having a definite geographic boundary, and separated from the outer area by hard fences in order to facilitate customs inspection and customs control by the customs authority and relevant agencies with regard to exports and imports, inbound and outbound vehicles and passengers; the trading relationship between the free trade zone and the outside area is consider export and import”

Pursuant to Clause 10 Article 4 of the Law on Customs No. 54/2014/QH13: “Bonded warehouse means a depot for storing goods for which customs formalities have been completed and which are stored pending their export; goods sent from abroad and stored pending their re-export or their import into Vietnam”.

Pursuant to Clause 1 Article 35 of Decree No. 08/2015/ND-CP dated January 21, 2015: “1. In-country export and import goods include:

a) Those produced in Vietnam under contract manufacturing arrangements and sold to Vietnamese organizations or individuals by overseas ones;

b) Those traded under the sale and purchase contract between domestic enterprises and exporting and processing enterprises or enterprises located in free trade zones;

c) Those traded under the sale or purchase contract between Vietnamese enterprises and overseas organizations or individuals that have no representative in Vietnam, and delivered or received under the designation arrangement between foreign merchants with other enterprises in Vietnam”.

...

...

...

In case the in-country importer has paid import duties, used the in-country imports for manufacture of goods for export and exported the goods to a foreign country or a free trade zone in reality, paid import duties will be refunded in accordance with Article 36 of this Decree.”

According to the regulations above, the tax resolution in the 4 proposed cases is:

1. If a domestic enterprise imports goods directly from an export-processing enterprise or an enterprise in a free trade zone or a bonded warehouse (goods sent to the bonded warehouse must be goods imported from a foreign country ort from a free trade zone, not goods previously sent to the bonded warehouse by a domestic enterprise) for manufacturing of exports under sale contract, the enterprise shall benefit from import duty if all requirements under Clause 2 Article 12 of Decree no. 134/2016/ND-CP and Clause 6 Article 1 of Decree No. 18/2021/ND-CP. Declaration shall use E31 code - importing materials for domestic export and the importer shall be eligible for import duty exemption and not be subject to VAT.

2. In case a domestic enterprise signs a contract for purchasing goods for domestic export with a foreign organization or individual whose commercial presence in Vietnam is non-existent and is designated by the foreign organization or individual to receive goods from an export-processing enterprise or an enterprise in the free trade zone (satisfactory to Clause 1 Article 4 of the Law on Import, Export Duties No. 107/2016/QH13), goods imported in-country between the domestic enterprise and the export-processing enterprise or the enterprise in a free trade zone shall be eligible for import duty exemption if regulations on duty-free goods under Clause 2 Article 12 of Decree No. 134/2016/ND-CP and Clause 6 Article 1 of Decree No. 18/2021/ND-CP. Declaration for in-country import shall use E31 code - importing materials for domestic export and taxpayer shall be eligible for import duty exemption and not be subject to VAT.

3. In case a domestic enterprise signs a sale contract for goods for domestic export with a foreign organization or individual whose commercial presence in Vietnam is non-existent and is designated by the foreign organization or individual to receive goods from another domestic enterprise, goods imported in-country between 2 domestic enterprises shall use A11 code or A12 code and must have their import duties declared and paid in accordance with Official Dispatch No. 2687/TCHQ-TXNK dated June 1, 2021. With respect to VAT and other taxes, the enterprise must declare and pay tax corresponding to A11, A12 declaration.

Once in-country import goods are used in manufacturing and have been exported to a foreign country or to a free trade zone, the enterprise may apply for import duty refund corresponding to quantity of in-country imported materials and supplies that form the products that have been exported in accordance with Article 36 of Decree No. 134/2016/ND-CP.

4. In case a domestic enterprise signs a purchase agreement for goods of a foreign trader and is designated by the foreign trader to receive goods from an export-processing enterprise or a bonded warehouse. However, since these goods are previously imported by the domestic enterprise for processing and domestic export and benefiting from import duty exemption in accordance with Article 10 and Article 12 of Decree No. 134/2016/ND-CP, exported to an export-processing enterprise or an enterprise in a free trade zone or a bonded warehouse by the domestic enterprise, and later imported to domestic market as designated by the foreign trader after being manufactured, the in-country import products of the Vietnamese enterprise registered under A12 or A11 import declaration must have their import duties declared and paid in accordance with guidance under Official Dispatch No. 2687/TCHQ-TXNK dated June 1, 2021. With respect to VAT and other taxes, the enterprise must declare and submit tax corresponding to A11, A12 declaration.

Once in-country import products are used for manufacturing and have been exported to a foreign country or to a free trade zone, the enterprise shall receive import duty refund corresponding to the quantity of in-country import materials and supplies that create the products that have been exported in accordance with Article 36 of Decree No. 134/2016/ND-CP (Regarding Points a, b, and c mentioned above, the General Department of Customs already dealt with under Official Dispatch No. 3487/TCHQ-TXNK dated July 12, 2021, Official Dispatch No. 6471/TXNK-CST dated July 14, 2021, Official Dispatch No. 6744/TXNK-CST dated July 30, 2021, and Official Dispatch No. 7074/TXNK-CST dated September 15, 2021).

17

...

...

...

If an enterprise imports goods for purposes other than processing, which declaration code will the enterprise use? Is the enterprise subject to VAT? Will the tax be submitted to the budget or the temporary collection account?

 (Ba Ria Vung Tau Customs Department under Official Dispatch No. 1371/HQBRVT-TXNK dated May 28, 2021 and Official Dispatch No. 1671/HQBRVT-TXNK dated June 25, 2021, Tay Ninh Customs Department under Official Dispatch No. 1090/HQTN-NV dated June 18, 2021 and Official Dispatch No. 1337/HQTN-NV dated July 15, 2021; Thua Thien Hue Customs Department under Official Dispatch No. 546/HQTTH-NV dated May 28, 2021, Official Dispatch No. 622/HTTTH-NV dated June 11, 2021, and Official Dispatch No. 801/HQTTH-NV dated July 20, 2021; Can Tho Customs Department under Official Dispatch No. 751/HQCT-NV dated May 12, 2021 and Official Dispatch No. 1109/HQCT-NV dated June 24, 2021; Dong Thap Customs Department under Official Dispatch No. 752/HQDT-NV dated May 17, 2021; Binh Duong Customs Department under Official Dispatch No. 921/HQBD-TXNK dated May 10, 2021; Ho Chi Minh Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

The declaration of import code of goods imported in-country for purposes other than processing has been prescribed by the General Department of Customs under Point 4 Section I and Point 4 Section II of Official Dispatch No. 2687/TCHQ-TXNK dated June 1, 2021.

Products imported in-country for purposes other than processing must be registered under A11 or A12 declaration. The declaration, submission of import duty, VAT, and other taxes shall be conducted corresponding to A11, A12 declaration. The tax shall be submitted to the state budget.

Detail guidance on cases of in-country import is specified under No. 16 hereof.

18

Point h Clause 2 Article 10 (Point h Clause 2 Article 12)

Regarding application of import duty rate to in-country import commodities that is not regulated Request the General Department of Customs to provide guidelines on consistent implementation.

(The Binh Duong Customs Department under Point 1 Official Dispatch No. 921/HQBD-TXNK).

...

...

...

19

Point h Clause 2 Article 10 (Point h Clause 2 Article 12)

Tax submission deadline for cases of in-country import that have not been elaborated in accordance with Clause 4 Article 55 of the Law on Tax Administration in 2019 or in accordance with Article 9 of the Law on Import, Export Duties in 2016. (The Binh Duong Customs Department under Point 1 of Official Dispatch No. 921/HQBD-TXNK)

Pursuant to Article 9 of the Law on Import, Export Duties No. 107/2016/QH13, duties of taxable import, export commodities must be finalized prior to customs clearance or goods release in accordance with the Law on Customs or guaranteed by a credit institution, in which case a late payment interest must still be incurred unless the taxpayer is eligible for privileges.

Pursuant to Point h Clause 2 Article 10, Point h Clause 2 Article 12 specified under Clause 4 and Clause 6 Article 1 of Decree No. 18/2021/ND-CP; pursuant to Clause 3 Article 3 specified under Clause 1 Article 1 of Decree No. 18/2021/ND-CP; pursuant to Point 4 Section I and Point 4 Section II of Official Dispatch No. 2687/TCHQ-TXNK, in-country import products registered under customs declaration codes other than toll manufacturing also require tax declaration (customs declaration code A11 or A12).

Tax submission deadline shall conform to Article 9 of the Law on Import, Export Duties No. 107/2016/QH13.

20

The case where export-processing enterprises hire domestic enterprises to conduct toll manufacturing

Request guidance on tax policies for the case where export-processing enterprises hire domestic enterprises to conduct toll manufacturing in the following cases:

...

...

...

Is the Company eligible for hiring a domestic enterprise to reprocess every stage of production? (Chitwing Precision Tech Vietnam Company Limited under Official Dispatch No. 20210621-01 dated June 21, 2021)

Pursuant to Point c Clause 4 Article 2 of the Law on Import, Export Duties No. 107/2016/QH13: “Goods exported overseas from a free trade zone; goods imported to a free trade zone from overseas for use in the free trade zone; goods transported from one free trade zone to another” are not subject to import, export duties;

Pursuant to Clause 1 Article 76 of Circular No. 38/2015/TT-BTC and amendments thereto under Clause 52 of Article 1 of Circular No. 39/2018/TT-BTC on goods processed by a domestic enterprise which is hired by an export-processing enterprise: “a) The domestic enterprise shall adopt customs procedures in accordance with regulations on processing goods on behalf of foreign traders under Section 1 and Section 2 of Chapter III hereof. Regarding location for customs procedures, the domestic enterprise is allowed to choose to perform customs declarations at the Customs Sub-department that oversees the export-processing enterprise. When filling in the field “internal enterprise management number” on the customs declaration form, the domestic enterprise shall specify: #&GCPTQ;

b) The export-processing enterprise is not required to adopt customs procedures when bringing goods into the country for processing and receiving domestically processed goods.

When bringing goods from an export-processing enterprise into domestic market for processing, maintenance, and/or repair without receiving the goods, the processing party (a domestic enterprise must produce a new customs declaration in order to repurpose in accordance with Chapter II hereof”.

Tax policies applicable to the hiring export-processing enterprise and the hired domestic enterprise are as follows:

a) Regarding export-processing enterprise

The export-processing enterprise may hire a domestic enterprise to reprocess goods imported to the export-processing enterprise The export-processing enterprise is not required to adopt customs procedures when bringing goods into the country for processing and receiving processed goods from the domestic enterprise in accordance with Clause 1 Article 76 of Circular No. 38/2015/TT-BTC and amendments thereto under Clause 52 Article 1 of Circular No. 39/2018/TT-BTC. Goods sent by the export-processing enterprise for domestic processing are not subject to import duties and VAT.

b) Regarding domestic enterprise

...

...

...

21

1. The case where the processing of A42 declaration of declarant enterprise for the imported constituents of export products must rely on export goods consumption rates but the enterprise is not required to submit export consumption rates at the time of adopting customs procedures Therefore, customs authority lacks the required basis for carrying out physical inspection of documents and goods.

2. If the enterprise fails to issue a notice using Form No. 22 within 15 days from the date on which customs clearance is granted, either the enterprise must produce an A42 customs declaration or the tax authority shall impose tax liability. However, the date after which the enterprise is no longer allowed to issue the aforementioned notice still has not been formally regulated. Thus, the completion of form A42 or the tax imposition followed by the revision made by the enterprise for tax reduction will be time-consuming during the adoption of customs clearance procedures for imports and exports

(Dong Nai Customs Department under Point 14 of Official Dispatch No. 1071/HQDNa-TXNK dated June 9, 2021)

1. Pursuant to Clause 2 Article 55 of Circular No. 38/2015/TT-BTC and amendments thereto under Clause 33 Article 1 of Circular No. 39/2018/TT-BTC: “data and documents about determination of consumption rates must be retained. Consumption rates applied to the products exported in the fiscal year must be notified to the customs when submitting the statement mentioned in Clause 2 Article 60 of this Circular”.

If the enterprise declares payable tax for the imported constituents of export products on Form A42, the enterprise is not required to submit consumption rates along with Form A42. The enterprise shall, on their part, declare and calculate import duties on the declaration form after which point customs authority shall approve the declaration of the enterprise. During the adoption of customs procedures, customs authority is not required to perform detail calculation for each article on Form A42.

If any sign of tax fraud, tax evasion, or any other violation that causes deficit to the state budget is found, the customs authority shall conduct post-clearance inspection in order to impose tax in accordance with Article 17 of Decree No. 126/2020/ND-CP and take actions as per applicable laws.

(Regarding transfer of Form A.42, the General Department of Customs has provided guidelines under Official Dispatch No. 3509/TCHQ-QLRR dated July 12, 2021).

...

...

...

22

Clause 4 Article 10

In case the enterprise wishes to sell scraps domestically while producing processed goods on behalf of foreign traders, is the enterprise only required to issue VAT invoice for scraps buyers, declare, submit VAT, submit excise tax, and submit environmental protection tax (if any) to the Sub-Department of Taxation overseeing the enterprise starting from April 25, 2021? Is the enterprise required to produce reports or ask customs authority for permission?

Hereby request General Department of Taxation to provide guidelines on selling scraps and wastes domestically while producing processed goods on behalf of foreign traders.

(Mami Hanoi Company Limited under Official Dispatch No. 496/NHC-XNK dated May 12, 2021)

The sale of scraps collected during processing is prescribed as follows:

1. Regarding domestic enterprise:

With respect to scraps of goods imported for processing and domestic consumption, the General Department of Taxation already provided guidelines under Point 5 Section I of Official Dispatch No. 2687/TCHQ-TXNK dated June 1, 2021. According to the Official Dispatch, starting from the effective date of Decree No. 18/2021/ND-CP (which is April 25, 2021), scraps created during the processing shall be exempted from import duties when repurposed to domestic consumption and taxpayer is not required to adopt customs procedures except for submitting VAT, excise tax, and/or environmental protection tax (if any) to tax authority under Clause 4 Article 10 of Decree No. 134/2016/ND-CP and amendments thereto under Clause 4 Article 1 of Decree No. 18/2021/ND-CP. With respect to wastes, the enterprise shall conform to regulations and law on environment under Article 64 of Circular No. 38/2015/TT-BTC and amendments thereto under Clause 42 Article 1 of Circular No. 39/2018/TT-BTC.

2. Regarding export-processing enterprise:

...

...

...

23

Clause 5 Article 10

As per applicable regulations and law, documents designating goods delivery in Vietnam of foreign organizations, individuals, or enterprises must be submitted to customs authority during adoption of in-country export procedures. If the enterprise did not submit the green line declaration at the time of declaration until customs clearance was granted, will the enterprise be eligible for tax exemption?

(Binh Duong Customs Department under Point 5 of Official Dispatch No. 756/HQBD-TXNK dated April 15, 2021, Point 5 of Official Dispatch No. 23/4/2021, Dong Nai Customs Department under Point 1 of Official Dispatch No. 1071/HQDNa-TXNK dated June 9, 2021)

Pursuant to Clause 1 Article 18 of Circular No. 38/2015/TT-BTC and amendments thereto under Clause 7 Article 1 of Circular No. 39/2018/TT-BTC, customs declarants must fill in the customs declaration according to Form No. 1 or Form No. 2 under Appendix II attached hereto (including the “internal enterprise management number" for in-country import export goods) and send customs documents under Article 16 of this Circular depending on fields under Form No. 3 Appendix II attached to this Circular to customs authority via Electronic customs data processing system.

Pursuant to Clause 5 Article 10, Clause 3 Article 12 under Clause 4, Clause 6 Article 1 of Decree No. 18/2021/ND-CP: “upon adopting in-country export procedures for goods under this Article, in addition to tax exemption documents under Article 31 of this Decree, in-country exporters must submit documents designating goods delivery in Vietnam issued by foreign organizations and individuals (1 photocopy)”.

Section III of Official Dispatch No. 2687/TCHQ-TXNK dated June 1, 2021 of the General Department of Taxation already provides guidelines on documents designating goods delivery in Vietnam of foreign organizations and individuals. According to which, the case where in-country exporters fail to provide documents designating goods delivery in Vietnam issued by foreign organizations or individuals (except for cases under Point b Clause 1 Article 35 of Decree No. 08/2015/ND-CP) shall not be considered in-country export and thus shall not be eligible for in-country import, export procedures.

In case of green line declaration, if the enterprise possesses the designating documents but fail to submit when filling in the declaration until customs clearance has been granted, the enterprise shall not be eligible for import duty exemption in accordance with Clause 5 Article 10, Clause 3 Article 12 under Clause 4 and Clause 6 Article 1 of Decree No. 18/2021/ND-CP.

Article 11. Tax exemption for goods exported for processing and processed products imported

...

...

...

Point a Clause 1 Article 11

Guiding documents only mention scraps eligible for tax exemption such as scraps produced during toll manufacturing and/or manufacturing for export. With respect to taxable business models, the case where natural resources and minerals are imported from overseas for manufacturing process which creates scraps, will the scraps be eligible for export duty exemption? (Binh Duong Tax Department under Point 3 of Official Dispatch No. 756/HQBD-TXNK dated April 15, 2021 and Point 3 of Official Dispatch No. 821/HQBD-TXNK dated April 23, 2021)

Pursuant to Point a Clause 1 Article 11 of Decree No. 134/2016/ND-CP and amendments thereto under Clause 5 Article 1 of Decree No. 18/2021/ND-CP on tax exemption applicable to goods exported for processing and compensating products: “Where goods exported for processing are natural resources, minerals or products in which the value of natural resources or minerals plus (+) energy cost makes up at least 51% of the product price and the goods are subject to export duties (except scraps produced during the manufacture or processing of the imports for export), duty exemption shall not be granted

According to which, if scraps are created as a result of toll manufacturing, domestic export and later exporting overseas for processing, the scraps shall be eligible for export duty exemption. With respect to scraps that are produced in the process of business models A11 or A12 and exported overseas for processing by enterprises, the scraps shall not be eligible for export duty exemption.

(Regarding resolution of tax-related affairs for export scraps, the General Department of Customs issued Official Dispatch No. 3112/TCHQ-TXNK dated June 21, 2021 guiding

Article 12. Tax exemption for goods imported for manufacturing exports

25

Point b Clause 1 Article 12

The export process of our Company is as follows: Place order for processing and purchase motor vehicle parts from Vietnamese suppliers (including export-processing enterprises) for processing, packing, labeling, and exporting. We hereby request the General Department to provide guidance:

...

...

...

2. In case our operation is eligible for tax exemption, we hereby request guidelines on respective import and export codes that we must declare during customs procedures.

(Vietnam Toyota Motor Vehicle Company under Official Dispatch No. 20210706 dated July 6, 2021)

Pursuant to Point b Clause 1 Article 12 of Decree No. 134/2016/ND-CP and amendments thereto under Clause 6 Article 1 of Decree No. 18/2021/ND-CP, imports serving manufacturing of exports and eligible for import duty exemption in accordance with Clause 7 Article 16 of the Law on Import and Export Duties include: “Finished products that are imported for packaging, labeling or attaching to exports or packaging with exports as a whole”.

According to the regulations above, if the enterprise imports goods for domestic export which include finished products imported for packaging, labeling, attaching to exports, or packaging with exports as a whole and is satisfactory to Clause 2 Article 12 of Decree No. 134/2016/ND-CP which is mentioned under Clause 6 Article 1 of Decree No. 18/2021/ND-CP, the imports shall be eligible for import duty exemption in accordance with Article 12 of Decree No. 134/2016/ND-CP and amendments thereto under Clause 6 Article of Decree No. 18/2021/ND-CP.

Application and procedures for applying for duty exemption shall conform to Article 12 of Decree No. 134/2016/ND-CP and amendments thereto under Clause 6 Article 1 of Decree No. 18/2021/ND-CP.

Taxpayer(s) must finalize the “Finished products that are imported for packaging, labeling or attaching to exports or packaging with exports as a whole” in a manner similar to supplies and materials imported for manufacturing exports.

The case where the Company purchases the aforementioned goods from a domestic enterprise which produces a VAT invoice for the sale instead of importing the goods shall not be eligible for import duty exemption and/or refund.

In case the Company purchases from a domestic enterprise or from a free trade zone in form of in-country import, comply with guidelines under No. 16 hereof.

26

...

...

...

If, via either post-customs clearance inspection or finalization report inspection, an enterprise is found to have disposed imported materials, finished products of goods manufactured for export before the effective date No. 18/2021/ND-CP (April 25, 2021) without declaring and submitting tax to customs authority, will the customs authority impose tax and impose penalties for administrative violations?

(Dong Nai Customs Department under Point 6 of Official Dispatch No. 1071/HQDNa-TXNK dated June 9, 2021)

If, via either post-customs clearance inspection or finalization report inspection, an enterprise is found to have disposed imported materials, finished products of goods manufactured for export before the effective date No. 18/2021/ND-CP (April 25, 2021) without declaring and submitting tax to customs authority, the customs authority shall impose import duties (without imposing VAT). The General Department of Customs already provided guidelines under Official Dispatch No. 8127/TCHQ-TXNK dated December 13, 2017 (attached).

Penalties shall be imposed in accordance with regulations and law on imposing penalties for administrative violations in customs.

27

Clause 2 Article 12

Clause 2 Article 12 which prescribes manufacturing facilities consists of Points a through h where some specific cases mentioned under this Article do not require fulfillment of other provisions under this Article which can lead to inconsistent application. Does the application of regulations under Clause 2 Article 12 mean simultaneous fulfillment of regulations under Points a through h or does the application of regulations under Clause 2 Article 12 mean fulfillment of any of the Points a through h?

E.g.

In order for cases under Points a.1, a.2, a.3, and a.4 to be eligible for duty exemption, must provisions under Point c, d, dd, and e also be met?

...

...

...

 (Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

Pursuant to Clause 2 Article 12 of Decree No. 134/2016/ND-CP and amendments thereto under Clause 6 Article 1 of Decree No. 18/2021/ND-CP, the basis for determining imports for manufacturing and export eligible for duty exemption is as follows:

a) For cases under Point a (including a.1, a.2, a.3, and a.4) Clause 2 Article 12 mentioned above, requirements under Points c, d, dd, e, g, and h must be met.

b) For cases under Point b Clause 2 Article 12 mentioned above, requirements under Points b, c, d, dd, e, g, and h must be met.

28

Points a1 and a2 Clause 2 Article 12. Point a3 Clause 2 Article 12

1.a) If an enterprise which imports goods for domestic export performs one or multiple basic stages of the process (For example, only the packing stage) and later exports goods, are the goods eligible for duty exemption?

1.b) In reality, the manufacturing for export model consists of 2 separate contracts (supply purchase agreement, product sale contract). If an enterprise imports a type of supply and later reprocesses the supply, will the decision on whether the imports are transferred be determined for each import declaration or will the decision on whether the imports are transferred be determined based on all import supplies necessary for manufacturing 1 type of product. The Dong Nai Customs Department proposes: the decision on whether the imports are transferred be determined based on import supplies; if the enterprise does not participate in any manufacturing process of the supply, the enterprise will be considered to be processing the supply and eligible for import duty exemption. Hereby request the General Department of Customs to issue consistent guidelines for implementation.

(Dong Nai Customs Department under Point 4 of Official Dispatch No. 1071/HQDNa-TXNK dated June 9, 2021)

...

...

...

When determining a part of imports based on the declaration, customs authority will have difficulty managing, inspecting, and determining whether the enterprise transfers a part or all of the imports based on the declaration because imports from multiple declarations are stored together and the imports part transferred for reprocessing may come from more than one declaration.

 (Ho Chi Minh Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021; Binh Duong Customs Department under Point 4 Official Dispatch No. 921/HQBD-TXNK dated May 10, 2021, Mr. Khuu Thanh Quy under Official Dispatch No. PAKN.20210709.0011)

1a) Pursuant to Points a.1, a.2, and a Clause 2 Article 12 under Clause 6 Article 1 of Decree No. 18/2021/ND-CP, the taxpayer must perform at least one manufacturing step and satisfy other regulations under Clause 2 Article 12 mentioned under Clause 6 Article 1 of Decree No. 18/2021/ND-CP in order to benefit from import duty exemption with respect to goods imported for manufacturing, reprocessing.

Departments of Customs of provinces and cities shall rely on specific case files and refer to regulations mentioned above to apply duty exemption to goods imported for domestic export as per the law.

1b) Regarding determination of “partial transfer” of imports for domestic reprocessing:

Pursuant to Clause 1 Article 59 of the Law on Customs prescribing responsibilities of customs authority in customs inspection and supervision for goods imported for processing and manufacturing exports, goods that are supplies and materials imported for processing and manufacturing exports must be subject to customs inspection and supervision at import, during manufacturing process, and until the date on which products are exported or repurposed.

Pursuant to Points a1, a2, and a3 Clause 2 Article 12 mentioned under Clause 6 Article 1 of Decree No. 18/2021/ND-CP:

a1) The taxpayer that assigns part or all of the imports to a third party within Vietnam’s territory for manufacture or processing through one or some stages, then receives the semi-finished products for further processing into finished exports will be exempt from import duties on the assigned imports.

...

...

...

a3) The taxpayer that assigns part of the imports to a third party in Vietnam for processing every stage of the product, then receives the finished products for export will be exempt from import duties on the imports assigned to the third party.

According to the aforementioned regulations, each type of import material is determined for each fiscal year (not import declaration, import bill, or import agreement).

The partial transfer of each type of supply and material is not limited in terms of percentage.

The partial transfer of imports (supplies, materials) to have other organizations and individuals reprocess one or multiple stages of product shall be implemented when finalizing with the customs authority (finalization report must be submitted within 90 days from the date on which a fiscal year ends in accordance with Clause 39 of Article 1 of Circular No. 39/2018/TT-BTC).

Please note:

The percentage above does not apply to the case where a domestic enterprise imports goods for sale and later manufacturing for export and the case where the taxpayer is allowed to hire an organization over 50% of charter capital or common shares of which is held by the taxpayer to reprocess imports in accordance with Point b Clause 2 Article 12 mentioned under Clause 6 Article 1 of Decree No. 18/2021/ND-CP.

29

Point g Clause 2 Article 12

Pursuant to Point g Clause 2 Article 12, in-country exporting and importing enterprises and customs authority where in-country exporting enterprises will have to input data manually using Form No. 22 Appendix VII to update with copious amounts of declarations to be made daily. The Company proposes:

...

...

...

2. If an in-country exporting enterprise fails to provide declaration of the in-country imported products whose customs procedures have been completed within 15 days, the in-country exporting enterprise will have to produce a new declaration and submit tax. In this case, what declaration form must the enterprise use and will the enterprise incur VAT?

(Lac Hy Company Limited under Point IV of Official Dispatch No. 59/XNK-LT dated April 26, 2021)

1. Regarding the proposition made by the enterprise: The General Department of Customs shall acknowledge the proposition and improve the system.

2. If an in-country exporting enterprise fails to provide customs declaration of the in-country exports within 15 days, the enterprise must produce a new declaration as guided under Point a Clause 3 Section II of Official Dispatch No. 2687/TCHQ-TXNK dated June 1, 2021 of the General Director of Customs as follows: If the exporter fails to inform customs authority about the customs declarations which contain the corresponding in-country imports whose import procedures have been completed, the enterprise must produces a new declaration under Form A42 (and submit import duties, VAT, and other taxes corresponding to Form A42).

30

Point h Clause 2 Article 12

Pursuant to Point h Clause 2 Article 12 and amendments thereto under Clause 6 Article 1 of Decree No. 18/2021/ND-CP, in-country importers must declare and submit tax for products imported within the country under customs declaration of a different form.

a) In this case, when importing within the country for manufacturing exports, will an enterprise declare using E31 code without using any tax exemption/reduction code or will the enterprise use A12 code and incur tax? If a product is imported within the country under E31 code and later manufactured and exported overseas or exported to a free trade zone, is the taxpayer eligible for tax refund? Will the finalization report include this detail?

b) If a product is imported within the country under E31 code and later manufactured and exported within the country instead of being exported overseas or exported to a free trade zone, is the taxpayer eligible for tax refund? The case where the taxpayer is not eligible for tax refund will contradict guidance of General Department of Customs under Official Dispatch No. 4138/TCHQ-TXNK dated June 25, 2019: “…shall be granted exemption from import duties on supplies and materials imported for processing and manufacturing of goods for in-country export.”

...

...

...

a) When importing goods from another domestic enterprises for manufacturing exports, the enterprise shall make declarations under A11, A12 codes (details on tax resolution for 4 cases are prescribed under No. 16 hereof).

If an enterprise makes declaration using A11, A12 code (including E31 code after submitting import duties) for goods imported within the country for domestic export, once the products are manufactured and exported overseas or exported into free trade zones, taxpayers shall receive a refund for the incurred tax in accordance with Article 36 of Decree No. 134/2016/ND-CP.

Application for tax refund shall conform to Clause 5 Article 36 of Decree No. 134/2016/ND-CP. Enterprise must use Form 10 under Appendix VII attached to Decree No. 134/2016/ND-CP which is amended by Appendix VII under Decree No. 18/2021/ND-CP for report on calculation of tax of import supplies, materials, and parts.

Note: Quantity of import supplies and materials under the E31 declaration whose tax has been incurred and included in the report prepared using Form No. 10 must not be included in the finalization report on input-output-inventory since figures included in the finalization report shall only be used for import materials, supplies, and parts eligible for tax exemption. Failure to comply with the provisions above will lead to a situation where the quantity of materials and supplies actually in store at the enterprise exceeds that in the report submitted to customs authority.

b) In case products are imported within the country under E31 declaration and later manufactured, imported, and exported within the country between 2 domestic enterprises (instead of exporting overseas or exporting to free trade zone), the taxpayer shall not be eligible for tax refund; in case products are exported overseas or exported to free trade zone, the taxpayer shall be eligible for tax refund in accordance with Article 36 of Decree No. 134/2016/ND-CP (this does not contradict Official Dispatch No. 4138/TCHQ-TXNK dated June 25, 2019 of the General Department of Customs guiding tax exemption since regulations on tax exemption and tax refund are 2 different entities). For your adequate implementation.

31

Point h Clause 2 Article 10 (Point h Clause 2 Article 12)

1) Request specific guidelines on which case of in-country import that enterprises should choose A12 code and which case that enterprises should choose E31 code.

a) In case an enterprise declares E31 code, submits import duties, VAT, and is determined to be eligible for import duty exemption and VAT exemption, how will the import duty and VAT be refunded?

...

...

...

c) In case an enterprise declares E31 code, submits import duty, has not submitted VAT, and is later determined to be required to declare A11 and/or A12 code, how will the situation be resolved?

((Thua Thien Hue Customs Department under Official Dispatch No. 622/HQTTH-NV dated June 1, 2021; Binh Duong Customs Department under Point 3 of Official Dispatch No. 1095/HQBD-TXNK dated June 2, 2021 and Official Dispatch No. 1671/HQBRVT-TXNK dated June 25, 2021; Dong Nai Customs Department under Point 11 of Official Dispatch No. 1071/HQDNa-TXNK dated June 9, 2021 and Official Dispatch No. 1337/HQDNa-TXNK dated July 14, 2021; Tay Ninh Customs Department under Official Dispatch No. 1090/HQTN-NV dated June 18, 2021; Long An Customs Department under Official Dispatch No. 1812/HQLA-NV dated October 28, 2021; Schaeffler Vietnam Company Limited under Official Dispatch No. 2307-01/SVC-TCHQ dated July 26, 2021)

2. SPG Vina Company Limited request guidance on whether an enterprise is eligible for import duty refund when that enterprise declares A12 code, hires domestic enterprises to process parts of materials, supplies, and parts, receives semi-finished products, and manufactures for export overseas.

(SPG Vina Company Limited under Official Dispatch No. SPG21/NKTC dated June 4, 2021)

3. Shinhan Customs Vietnam Company Limited

An enterprise that manufactures for domestic export (FDI enterprise, domestic enterprise) imports goods from all 3 sources: importing from overseas sources (E31 code); importing from other domestic enterprises as designated by foreign sellers (A12); purchasing from domestic sources, utilizing VAT invoices, not producing declarations. In this case, the enterprise imports the same material code from all 3 sources.

Should the enterprise include the materials purchased via A12 sources and domestic purchase when calculating actual consumption rates of products? While finalization report on goods manufactured for domestic exports does not require report on materials and supplies imported under A12 code and domestically purchased.

(Shinhan Customs Vietnam Company Limited under Official Dispatch No. 03/TCHQ/2021 dated July 8, 2021)

1. Methods of determining goods imported within the country for domestic exports exempt from import duty and not subject to VAT (E31 code) and goods imported within the country for domestic exports subject to import duty and VAT (A12 code) have been regulated under No. 16 hereof.

...

...

...

Pursuant to Point d4 Clause 1 Article 20 of Circular No. 38/2015/TT-BTC and amendments thereto under Clause 9 Article 1 of Circular No. 39/2018/TT-BTC dated April 20, 2018 regarding cases of additional declaration: “Except for entries of customs declaration that cannot be changed according to Section 3 of Appendix II hereof, the declarant may make an additional declaration in the following cases”.

Pursuant to Point d4 Clause 1 Article 22 of Circular No. 38/2015/TT-BTC and amendments thereto under Clause 11 Article 1 of Circular No. 39/2018/TT-BTC dated April 20, 2018 on cases where a declaration is cancelled: “The declarant provides incorrect information on the declaration according to Section 3 of Appendix II hereof, unless the import declaration has been granted customs clearance or conditional customs clearance and goods have been released from the CCA; the export declaration has been granted customs clearance or conditional customs clearance and the goods have been exported in reality”.

a) In case a domestic enterprise which imports goods from export-processing enterprises, enterprises in free trade zones, and/or bonded warehouses (except for processed goods, goods for domestic exports sent to bonded warehouses from domestic market) for manufacturing of exports via purchase agreement according to cases under Points 1 and 2 under No. 16 hereof has made the E31 declaration, satisfied the requirements for being exempt from import duty and not subject to VAT in accordance with Clause 2 Article 12 of Decree No. 134/2016/ND-CP and Clause 6 Article 1 of Decree No. 18/2021/ND-CP but has submitted import duty and VAT on the E31 declaration form, the enterprise shall make additional declarations for entries relating to import duty and VAT in accordance with Article 20 of Circular No. 38/2015/TT-BTC amended under Clause 9 Article 1 of Circular No. 39/2018/TT-BTC.

The submitted import duty and VAT shall be handled in conformity with regulations on handling overpaid taxes under Article 10 of Circular No. 06/2021/TT-BTC dated January 22, 2021.

b) In case an enterprise which is eligible for importing under E31 code in accordance with guidance under Points 1 and 2 of No. 16 hereof (exempt from import duty and not subject to VAT) declares goods imported within the country under A11, A12 code (has submitted import duty and VAT) and imports that have been granted clearance, and is not eligible for revising, adding, and cancelling declarations as per the law, once the enterprise produces and exports products overseas or exports to free trade zones, the enterprise shall receive a refund for the submitted import duty in accordance with Article 36 of Decree No. 134/2016/ND-CP. Regarding VAT, the enterprise shall declare a deduction with domestic tax authority in accordance with tax laws.

Application for import duty refund shall conform to Clause 5 Article 36 of Decree No. 134/2016/ND-CP.

The enterprise must produce report on calculation of import duties of materials, supplies, and parts using Form No. 10 under Appendix VII attached to Decree No. 134/2016/ND-CP which is amended by Appendix VII of Decree No. 18/2021/ND-CP (These items must not be included in finalization report on input-output-inventory since the report only covers import materials, supplies, and parts eligible for tax exemption).

c) In case goods imported within the country for domestic exports are subject to import duties, VAT, and have been declared under A11, A12 code but individual performing in-country exports produces declarations under E31 code and has only submitted import duty but not VAT, the taxpayer shall make additional declaration for VAT in accordance with Article 20 of Circular No. 38/2015/TT-BTC which is amended under Clause 9 Article 1 of Circular No. 39/2018/TT-BTC.

In case import duties and VAT of domestically imported goods under E31 declarations have been submitted after the goods are utilized for producing exports and have been exported overseas or exported to free trade zones, the import duties shall be refunded in accordance with Article 36 of Decree No. 134/2016/ND-CP in a manner similar to goods imported under A11, A12 declaration.

...

...

...

2. Pursuant to Clause 1 Article 36 of Decree No. 134/2016/ND-CP, paid import duties on goods that are initially imported for business operation but eventually used for manufacture of goods that have been exported into a foreign country or a free trade zone shall be refunded (tax refund for cases of assigning reprocessing and manufacturing is not regulated).

The case where an enterprise makes A12 declaration (has submitted import duties), hires a domestic enterprise to process a part of materials, supplies, and parts, receives semi-finished products, and manufactures for exporting into a foreign country or a free trade zones shall not be eligible for tax refund in accordance with Article 36 of Decree No. 134/2016/ND-CP and thus the submitted import duties shall not be refunded.

3. Pursuant to Clause 1 Article 59 of the Law on Customs, “goods that are materials and supplies imported for manufacturing exports must be subject to customs inspection and supervision from the date of import, during product manufacturing process, and until the date on which products are exported or repurposed”.

Pursuant to Clause 2 Article 55 of Circular No. 38/2015/TT-BTC and amendments thereto under Clause 33 Article 1 of Circular No. 39/2018/TT-BTC: “data and documents about determination of consumption rates must be retained. Consumption rates applied to the products exported in the fiscal year must be notified to the customs when submitting the statement mentioned in Clause 2 Article 60 of this Circular”.

According to which, in case a product is manufactured using materials and supplies from all 3 sources (Importing from foreign countries (E31 code), importing from other domestic enterprises according to designation of foreign sellers (A12 code), and purchasing from domestic sellers, producing VAT invoice without producing declarations), the enterprise shall declare consumption rates of only materials and supplies that have been granted tax exemption under E31 code to the customs authority.

The enterprise shall develop and govern consumption rates of supplies purchased domestically and imported from other domestic enterprises according to designation of foreign sellers (A12 code) for manufacturing.

32

Points g and h Clause 2 Article 12

1. A domestic enterprise that exports products domestically to a manufacturing for export enterprise must submit export duties for the exported products. At the same time, the enterprise that imports products within the country must also submit import duties for domestically imported products. In this case, both enterprises must submit taxes for the same commodity. While in reality, domestically imported goods for domestic exports will eventually be exported to a foreign country and thereby should be exempt from taxes in accordance with the Law on Import and Export Duties.

...

...

...

(Taipei Economic and Cultural Office in Vietnam under Official Dispatch No. VN 130 dated May 12, 2021; Vietnam Textile and Apparel Association under Official Dispatch No. 75/2021/Vitas-CSTM dated May 13, 2021; Korean Chamber of Commerce and Industry in Ho Chi Minh City under Official Dispatch No. 2110/HHTMHQ dated June 1, 2021; Pouyuen Vietnam Company Limited under Official Dispatch No. 20210506/XNK-PYV dated May 6, 2021 and Official Dispatch No. 20210521/XNK-PYV; Council of Taiwanese Chamber of Commerce under Official Dispatch No. 22021/HHDL dated May 10, 2021; Vietnam Leather, Footwear and Handbag Association under Official Dispatch No. 79/CV-HHDG dated May 14, 2021; Lac Ty Company Limited under Official Dispatch No. 59/XNK-LT dated April 26, 2021; Pacific Crystal Textiles Company Limited under unnamed Official Dispatch dated May 31, 2021; Quang Ngai Customs Department under Official Dispatch No. 614/HQQNg-NV dated May 31, 2021)

1. Regarding payment of import duties of goods that are manufactured for domestic exports but are eventually exported to a domestic enterprise:

Pursuant to Clause 3 Article 2 of Law on Import, Export Duties No. 107/2016/QH13, “goods imported, exported within the country” are subject to import, export duties.

Pursuant to Clause 7 Article 16 of the Law on Import, Export Duties No. 107/2016/QH13, “Materials, supplies, and parts imported to manufacture exports” are exempt from import duty (This means that the Law on Import, Export Duties only regulates tax exemption for materials, supplies, and parts imported in order to be manufactured and exported but not exports. Thus, exports manufactured from imported materials, supplies, and parts must be liable to import duties (if any). Goods manufactured from imported materials, supplies, and parts and later exported within the country must also be liable to import duties).

Clause 24 Article 16 of the Law on Import, Export Duties No. 107/2016/QH13 dictates that “the Government shall elaborate on this Article”.

Clause 6 Article 1 Decree No. 18/2021/ND-CP prescribes: “Products exported within the country are not eligible for export duty exemption”.

For all regulations mentioned above, the applicable tax policies do not regulate tax exemption for products manufactured and exported. Thus, products manufactured and exported (to a foreign country, to a free trade zone, to a domestic party) must be liable to export duty in accordance with the Law on Import, Export Duties No. 107/QH13 dated September 1, 2016, Decree No. 134/2016/ND-CP dated September 1, 2016, Decree No. 18/2021/ND-CP dated March 11, 2021. These regulations have been consistently implemented from September 1, 2016 which is the effective date of the Law on Import, Export Duties No. 107/2016/QH13 and Decree No. 134/2016/ND-CP. Hereby request adequate compliance with the aforementioned regulations.

2. Payment of tax of goods imported within the country for manufacturing and export has been guided under No. 16 hereof. According to which, not all products imported within the country for manufacturing and export must have their import duty incurred. For your acknowledgement and application.

33 

...

...

...

TCE Corporation Limited (Party A-The Seller which is a Korean enterprise) purchases denim from a supplier named TCE Vina Denim Joint Stock Company (Party C-The Carrier which is an export-processing enterprise), Party C produces a declaration for Party A under E62 code and delivers goods to a bonded warehouse, after which point Party A sells this denim to TCE Jean Single-member Company Limited (Party B-The Buyer which is a domestic Vietnamese enterprise), Party B produces a declaration under E31 code to import from a bonded warehouse for manufacturing and domestic export according to contract(s) signed between Party A and Party B. In this case, is Party B eligible for import duty exemption according to E31 code in order to manufacture exports?

(TCE Jean Single-member Company Limited under Official Dispatch No. 10-XNKTCE/CV2021 dated May 12, 2021, Official Dispatch No. 11-XNKTCE/CV202 dated May 19, 2021)

 This question has been answered under No. 16 hereof. For your implementation.

Article 28. Tax exemption for goods exported, imported to serve social security, remediate natural disasters, catastrophes, epidemic, and other special cases

 34

 Point d Clause 1 Article 28

Point d Clause 1 Article 28 amended by Clause 9 Article 1 of Decree No. 18/2021/ND-CP regulates procedures for applying for tax exemption for unprocessed agricultural products invested, planted by Vietnamese enterprises, households, business households, and individuals in Cambodian provinces adjoining the Cambodia-Vietnam border, imported to be used as materials for manufacturing in Vietnam, and eligible for import duty exemption.

According to which, documents notifying the duty-free list consist of:

“In addition to the documents notifying the duty-free list specified in Clause 3 Article 30 of this Decree, the taxpayer shall also submit the following documents:

...

...

...

The contract or agreement with the Cambodian party on investment assistance, farming and receiving agricultural products which specifies the amount of money and goods invested in each field, corresponding quantities, categories and value of the agricultural products to be harvested: 01 photocopy with the original copy presented for comparison;

Documents relevant to the investment assistance, farming in the Cambodia’s province that borders Vietnam (if any): 01 photocopy, which must be with the original copy presented for comparison during the first import shipment.”

1. Thus, documents notifying the duty-free list under Clause 9 Article 28 apply to enterprise taxpayer. Do the documents notifying the duty-free list apply to “households, business households, and individuals” in accordance with Clause 9 Article 28?

2. According to Clause 9 Article 28, enterprise taxpayer shall also submit: A certification of investment permission issued by a competent authority in Cambodia where the Vietnamese enterprise makes investment.

In which, how is competent authority defined? What are competent administrative divisions (commune, district-level town, or province)?

3. Are cases of tax exemption mentioned under Point d Clause 1 Article 28 required to submit reports on the use of imports in accordance with Article 31a of the Decree? If yes, we hereby request guidance on finalization of duty-free list for cases where the taxpayer runs out of granted duty-free list or has not used up all slots on the duty-free list before the crop year or contracts signed with the Cambodian party for financing investment, plantation, and receipt of agricultural products end.

4. Point a Clause 9 Article 28 regulates Customs Departments of provinces adjoining the Cambodian-Vietnam border as the recipients of documents notifying duty-free list. While in reality, the import of duty-free goods is still performed in Customs Sub-departments in different checkpoints. Thus, can Customs Departments of provinces, after taking into account practical situations and management requirements, authorize Customs Sub-departments of border checkpoints to receive documents notifying duty-free list?

5. Pursuant to Clause 3 Article 2 of Decree No. 18/2021/ND-CP regulating the transfer of preferential import duty treatment to entities that are eligible for import duty exemption under Clause 9 Article 1 with respect to projects on investing, planting agricultural products under the duty-free list under Appendix VIII attached hereto and benefiting from preferential tax policies as per import, export duty laws before the effective date hereof, entities that are eligible for import duty exemption shall continue to benefit from the import duty exemption in accordance with Clause 9 Article 1 of this Decree for the remaining duration of the Certificate of Overseas Investment issued by competent regulatory authority.

The majority of entities eligible for import duty exemption in accordance with Circular No. 201/2012/TT-BTC dated November 16, 2012 amended by Circular No. 81/2013/TT-BTC dated June 19, 2013 at Tay Ninh Customs Sub-department are organizations and individuals not issued with the Certificate of Overseas Investment. Will the transfer of preferential import duty treatment apply to the case mentioned above in accordance with Clause 3 Article 2 of Decree No. 18/2021/ND-CP?

...

...

...

1. Pursuant to Point a Clause 9 Article 28 of Decree No. 134/2016/ND-CP amended by Clause 9 Article 1 of Decree No. 18/2021/ND-CP on notifying duty-free list for unprocessed agricultural products financed for investment by the Vietnam party, planted in Cambodia, and imported to Vietnam. In addition to documents under Clause 3 Article 30 of Decree No. 134/2016/ND-CP, enterprise taxpayers must submit additional documents.

Pursuant to Clause 3 Article 30 of Decree No. 134/2016/ND-CP on documents notifying duty-free list applicable to cases where notification of duty-free list is required.

Documents notifying duty-free list for taxpayers who are households, business households, and Vietnamese individuals shall comply with Clause 3 Article 30 of Decree No. 134/2016/ND-CP.

2. According to regulations on documents notifying duty-free list applicable to enterprise taxpayers, enterprise taxpayers must submit: “A certification of investment permission issued by a competent authority in Cambodia where the Vietnamese enterprise makes investment: 1 photocopy enclosed with 1 Vietnamese translation bearing the enterprise’s sea”. This regulation inherits previous procedures for applying for tax exemption under Circular No. 61/2006/TT-BTC dated June 29, 2006, Circular No. 201/2012/TT-BTC dated November 16, 2012 of Ministry of Finance guiding tax policies for unprocessed agricultural products financed for investment by the Vietnam party, planted in Cambodia, and imported to Vietnam. Those procedures have been introduced prior to Decree No. 18/2021/ND-CP.

In addition, the identification of “A certification of investment permission issued by a competent authority in Cambodia where the Vietnamese enterprise makes investment” has been prescribed under Official Dispatch No. 3229/BTC-CST dated March 13, 2013. According to which, in case Vietnamese enterprises, business households, and individuals rent land, finance investment, and plant in Cambodian provinces adjoining the Cambodia-Vietnam border, the written permission of a competent authority in Cambodia includes:

- With respect to enterprises: the competent authority of Cambodia that grants Vietnamese enterprises permission to invest in Cambodia shall be:

+ Permission of central authority:

Pursuant to the Law on Investment of Cambodia, the Council for Development of Cambodia (CDC) shall grant permission for investment projects whose investment exceeds USD 2 million/project. If a Vietnamese enterprise invests, finances investment, or rents land in a Cambodian province adjoining the Cambodia-Vietnam border with investment exceeding USD 2 million/project, the CDC shall be the competent authority to grant permission.

+ Permission of local authority:

...

...

...

- With respect to business households and individuals: the competent authority of Cambodia to grant permission for business households and individuals to invest, finance investment, or rent land in Cambodia shall be district-level authority or higher (pursuant to Article 6 Clause a of Treaty on the Principle for Border Issues Resolution signed by the Socialist Republic of Vietnam and the People Republic of Kampuchea in 1983).

Customs Departments of provinces and cities adjoining the Cambodian border are requested to cooperate and discuss with the Cambodia party in order to stay updated and comply with regulations and law.

3. Pursuant to Point d Clause 1 Article 28, Point a Clause 9 Article 28 of Decree No. 134/2016/ND-CP (amended under Clause 9 Article 1 of Decree No. 18/2021/ND-CP), unprocessed agricultural products financed for investment and planted in Cambodian provinces adjoining the Cambodia-Vietnam border by Vietnamese enterprises, households, business households, and individuals to be imported via border checkpoints customs control and used as materials for goods manufacturing in Vietnam shall be eligible for import duty exemption. On an annual basis, the taxpayer shall inform Customs Departments of provinces adjoining the Cambodian border.

Pursuant to Clause 1 Article 31 a of Decree No. 134/2016/ND-CP (amended under Clause 15 Article 1 of Decree No. 18/2021/ND-CP), project owners are responsible for informing customs authority that receives the duty-free list on the use of duty-free goods for taxpayers who are required to inform customs authority about the duty-free list. On an annual basis, within 90 days from the date on which a fiscal year ends, organizations and individuals shall inform the customs authority that receives the duty-free list about the use of duty-free goods in the previous fiscal year.

Pursuant to all regulations mentioned above, duty-free goods under Point d Clause 1 Article 28 of Decree No. 134/2016/ND-CP (amended under Clause 9 Article 1 of Decree No. 18/2021/ND-CP) are required to have their use notified.

On an annual basis, the taxpayer shall notify the duty-free list for the agricultural products harvested via investment and cultivation in Cambodian provinces adjoining the Cambodia-Vietnam border. Estimated deadline for importing goods on the duty-free list shall rely on crop year or the date on which contracts for financing investment, cultivating, and receiving agricultural products signed with Cambodia party expire. Duty-free list whose estimated import date has expired shall no longer be used for customs procedures.

4. Pursuant to Point a Clause 9 Article 28 of Decree No. 134/2016/ND-CP amended under Clause 9 Article 1 of Decree No. 18/2021/ND-CP, taxpayers shall submit documents notifying duty-free list via the electronic system for processing data to Customs Departments of provinces adjoining Cambodia border (with no regulations on authorizing Customs Sub-departments).

5. Pursuant to Clause 3 Article 2 of Decree No. 18/2021/ND-CP, the case where projects on investing, cultivating agricultural products specified in the duty-free list under Appendix VIII attached to Decree No. 18/2021/ND-CP and receiving import duty exemption in accordance with Circular No. 201/2012/TT-BTC dated November 16, 2012 amended by Circular NO. 81/2013/TT-BTC dated June 19, 2013 but lacking certificates of overseas investment issued by competent authority, the transfer of preferential import duty treatment for the remainder of the project in accordance with Clause 3 Article 2 of Decree No. 18/2021/ND-CP shall not be applied.

Regarding this matter, Ministry of Finance previously promulgated Official Dispatch No. 8035/BTC-CST dated July 21, 2021 that guides implementation as follows:

...

...

...

With respect to the case of importing “unprocessed tobacco and tobacco refuse” from Cambodia, according to the Agreement promoting bilateral trade between Vietnam and Cambodia in the period of 2019-2020 extended by governments of both nations and remaining in effect from January 1, 2021 until December 31, 2022 inclusive, the “unprocessed tobacco and tobacco refuse” originating from Cambodia, listed under C/O form S issued by competent authority of Cambodia and granted customs clearance at border checkpoints mentioned under the Appendix attached to this Agreement shall receive 0% import duty for the import quota of 3,000 tonne/year. Thus, enterprises may exploit this Agreement during import of “unprocessed tobacco and tobacco refuse” from Cambodia within the quota regulated under the Agreement in order to benefit from preferential tax treatment as per the law (attached to Official Dispatch No. 8035/BTC-CST dated July 21, 2021).

On September 13, 2021, the Government promulgated Decree No. 83/2021/ND-CP on Preferential Import Tariff Schedule to serve implementation of the Agreement promoting bilateral trade between Vietnam and Cambodia in the period of 2019-2020 (coming into force from the date of signing until December 31, 2022 inclusive). Thus, Tay Ninh Customs Department hereby is requested to rely on regulations above to guide enterprises.

In addition, the General Department of Customs promulgated Official Dispatch No. 5313/TCHQ-TXNK dated November 9, 2021 guiding implementation.

Article 28b. Requirements for conducting customs inspection, supervision and applying tax policies for export-processing enterprises that are free trade zones

35

Clause 1 Article 28a

1. Pursuant to guidance under Official Dispatch No. 2687/TCHQ-TXNK dated June 1, 2021, areas in an export-processing enterprise used for storing goods such as storage, stockpile for duty-free materials, supplies, semi-finished products, finished products, machinery, equipment, and other goods must be equipped with surveillance camera; other areas in an export-processing enterprise where goods are manufactured and consumed such as workshops, offices, cafeterias, etc. are not required to be equipped with surveillance camera in accordance with Point b Clause 1 Article 28a of Decree No. 134/2016/ND-CP amended under Clause 10 Article 1 of Decree No. 18/2021/ND-CP. Pursuant to Clause 6 Article 4 of the Law on Customs No. 54/2014/QH13: “Goods include movable assets with headings and subheadings according to the Vietnamese list of imports and exports which may be imported, exported, transited or retained in customs operating locations”.

Are storage areas where goods that an export-enterprise chooses not to adopt customs procedures for in accordance with Clause 1 Article 74 of Circular No. 38/2015/TT-BTC amended by Circular No. 39/2018/TT-BTC are kept required to be equipped with surveillance camera?

Request General Department of Customs to confirm areas in an export-processing enterprise where goods are manufactured and handled but not stored (such as areas for receiving materials and supplies from trucks, areas for transferring finished products from manufacturing section to finished product storage, areas for loading finished products onto transport of exports) which are not required to be installed with surveillance camera in accordance with Point b Clause 1 Article 28a of Decree No. 134/2016/ND-CP amended by Clause 10 Article 1 of Decree No. 18/2021/ND-CP.

...

...

...

3. Is the online connection between the surveillance camera of the export-processing enterprise and the customs authority real-time or recording?

How can customs authority ensure security for video recording data of the export-processing enterprise when connecting with the system of customs authority?

Prior to connecting to the system for exchanging surveillance recording data, do customs authority agree to sign information security agreement with the export-processing enterprise?

4. When conducting experimental production for assessing and inspecting quality for new and undistributed product lines, we store these products in the finished product storage of the factory. For the purpose of protecting trade secret, can images on these products be withheld from the customs authority?

5. When will the General Department of Customs regulate the format of surveillance recording data exchanged between the customs authority and the export-processing enterprise?

(Brother Industries Company Limited under Official Dispatch No. 585/2021/SH-BIVN dated June 28, 2021)

6. For the majority of the export-processing enterprises, the online connection of surveillance recording data with enterprise presiding agencies will be complicated due to camera installation at every storage location;

Currently, the General Department of Customs has not promulgated format of surveillance recording data to be exchanged between customs authority and enterprises for implementation of Point b Clause 1 Article 28a. Propositions made include:

a) Only require surveillance recording data to be stored at an export-processing enterprise for at least 12 months and to be sent to customs authority for inspection when necessary;

...

...

...

c) Request General Department of Customs to provide guidelines on format of surveillance recording data to be exchanged between customs authority and enterprises

(Binh Duong Customs Department under Point 7 of Official Dispatch No. 821/HQBD-TXNK dated April 23, 2021, Point 3 of Official Dispatch No. 921/HQBD-TXNK dated May 10, 2021; Bac Ninh Customs Department under Official Dispatch No. 751/HQBN-NV dated June 2, 2021; Quang Ngai Customs Department under Official Dispatch No. 614/HQQNg-NV dated May 31, 2021)

1. Pursuant to Clause 1 Article 4 of the Law on Import, Export Duties No. 107/2016/QH13: “Free trade zone means an economic zone located within Vietnam’s territory, established in accordance with law, having a definite geographic boundary, and separated from the outer area by hard fences in order to facilitate customs inspection and customs control by the customs authority and relevant agencies with regard to exports and imports, inbound and outbound vehicles and passengers; the trading relationship between the free trade zone and the outside area is consider export and import”.

Pursuant to Point c Clause 4 Article 2 of the Law on Import, Export Duties No. 107/2016/QH13: “c) Goods exported from a free trade zone to a foreign country; goods imported from a foreign country to a free trade zone and used within such free trade zone; goods transported from one free trade zone to another” are not subject to tax.

Pursuant to Clause 1 Article 59 of the Law on Customs 2014: “Goods that are materials and supplies imported for manufacturing exports must be subject to customs inspection and supervision from the date of import, during product manufacturing process, and until the date on which products are exported or repurposed”.

Pursuant to Clause 1 Article 28a of Decree No. 134/2016/ND-CP specified under Clause 10 Article 1 of Decree No. 18/2021/ND-CP: “conditions for customs supervision and inspection of an export-processing enterprise that is a free trade zone include:

a) There are hard fences that separate the export-processing enterprise from the outside; there are gates/doors that are the only ways for goods to enter and leave the export-processing enterprise.

b) There are surveillance cameras at the entrances and exits where goods are stored throughout the day (24/24 hours, including days off and holidays); images recorded by these cameras shall be transmitted to the supervisory customs authority of the export-processing enterprise and retained at the export-processing enterprise for at least 12 months.

c) There software for management of duty-free goods of the export-processing enterprise serving preparation of reports on receipt, discharge, inventory and use of imports required by customs laws”.

...

...

...

2. Pursuant to Clause 1 Article 28a of Decree No. 134/2016/ND-CP mentioned under Clause 10 Article 1 of Decree No. 18/2021/ND-CP the surveillance camera system must be able to monitor entrances, exits, and storage areas without being able to observe pLU code of each product and article.

3. Regarding security of surveillance recording data of export-processing enterprise:

In order to secure information while sharing surveillance recording, a multitude of techniques are employed. Currently, Ministry of Finance and General Department of Customs have no regulations or specific guidelines on methods and standards of connection, information security in exchanging video recording. In this case, the enterprise should cooperate with customs authority in agreeing on security measures. In the long run, the General Department of Customs will develop and promulgate regulations, guidelines on information security measures during exchange of surveillance camera recording.

With respect to real-time connection or recording:

The online connection of surveillance footage must be able to record and allow customs authority to promptly acknowledge movement of materials and finished products in and out of export-processing enterprise in real time.

4. Regarding security for sample products that are not released, request the Company to impose appropriate security measures. Surveillance cameras at storage area are not required to monitor pLU code as stated by the Company.

5+6. Since conditions of surveillance cameras under Point b Clause 1 Article 28a mentioned under Clause 10 Article 1 of Decree No. 18/2021/ND-CP and surveillance cameras installed at storage areas have been guided under Point 2 Section V of Official Dispatch No. 2687/TCHQ-TXNK dated June 1, 2021, entities shall rely on regulations and Official Dispatch above to implement.

Regarding surveillance recording data of export-processing enterprise, export-processing enterprises shall provide IP address, account, and password to allow Customs Sub-departments to supervise as per the law.

Regarding format of data exchanged customs authority and enterprises regarding the surveillance camera system: The General Department of Customs is finalizing procedures, technical and professional requirements for surveillance camera system and will issue documents guiding implementation.

...

...

...

36

Point a Clause 1 Article 28a

With respect to industrial parks in Bac Ninh province, Bac Giang province, and Thai Nguyen province, investors have already built workshops for hire on a plot. Each workshop consists of a front, 2 sides which are separated from the outside by fences, one side which is built with bricks and shared with another company, and separate entrances, exits. Do these workshops conform to Point a Clause 1 Article 28?

Propositions: Based on physical inspection result, if a workshop shares a wall with another company and has separate entrances/exits that provide entrance, exit for goods, Customs authority shall verify fulfillment of customs supervision in accordance with Point b Clause 4 Article 28a.

(Bac Ninh Customs Department under Official Dispatch No. 751/HQBN-NV dated June 2, 2021)

Pursuant to Clause 1 Article 28a mentioned under Clause 10 Article 1 of Decree No. 18/2021/ND-CP dated March 11, 2021, Customs Departments of provinces and cities shall conduct physical inspection for customs inspection and supervision requirements in accordance with Clause 4 Article 28a mentioned under Clause 10 Article 1 of Decree No. 18/2021/ND-CP. On the basis of physical inspection, customs authority shall rely on regulations above to reach a conclusion.

37

Point d Clause 5 Article 28a

If an export-processing enterprise fails to satisfy regulations above within 1 year, are the customs authority required to request competent authority capable of issuing Certificates of investment registration to change regulated entities from export-processing enterprises to non-export-processing enterprises? Is compliance with Article 78 of Circular No. 38/2015/TT-BTC amended by Circular No. 39/2018/TT-BTC required?

...

...

...

Pursuant to Point d Clause Article 28a mentioned under Clause 10 Article 10 of Decree No. 18/2021/ND-CP: “If the export-processing enterprise fails to submit the notification Form No. 25 in Appendix VII hereof within 01 year from the effective date of this Decree or fails to fulfill the conditions for customs supervision and inspection specified in Clause 1 of this Article, it will not be eligible for free trade zone tax policies from the expiration date of this 1-year time limit.

In case the export-processing enterprise fulfills the conditions for customs supervision and inspection specified in Clause 1 of this Article after 01 year and submits the notification to its supervisory Sub-department of Customs in accordance with Point c of this Clause, free trade zone tax policies shall be applied from the day on which the Sub-department of Customs issues the confirmation of fulfillment of the conditions for customs supervision and inspection specified in Clause 1 of this Article

If the export-processing enterprise fails to satisfy the regulations above within 1 year, Customs Departments of provinces and cities shall list all enterprises that fail to satisfy the conditions for customs supervision and inspection and report to General Department of Customs for submission to Ministry of Finance and communication with relevant ministries and central governments. After receiving remarks of ministries and central governments, the General Department of Customs shall inform Customs Departments of provinces and cities. On the basis of notice of the General Department of Customs, Customs Departments of provinces and cities shall request competent authority capable of issuing Certificates of investment registration to revoke certificates of investment registration of export-processing enterprises that fail to satisfy the conditions of customs inspection and supervision.

Once competent authority capable of issuing Certificates of investment registration confirm the exclusion of export-processing enterprises from tax policies, customs authority shall guide enterprises to adopt customs procedures to convert export-processing enterprises to domestic enterprises in accordance with Article 78 of Circular No. 38/2015/TT-BTC amended by Clause 54 of Article 1 of Circular No. 39/2018/TT-BTC.

38

Clause 7 Article 28a

The enterprise shall declare and submit tax according to the declaration at the time of adopting customs procedures. Thus, when settling overpaid tax based on the new declaration, the paid tax will exceed the payable tax and therefore there is no overpaid tax by nature. Refunding overpaid tax will leave tax notice on the accounting system. The Dong Nai Customs Department proposes: Export processing enterprise shall declare code of eligibility for not being subject to tax on the additional declaration in order to reduce the payable tax and then adopt procedures for refunding overpaid amount as per the law.

(Dong Nai Customs Department under Point 5 of Official Dispatch No. 1071/HQDNa-TXNK dated June 9, 2021, Point c Official Dispatch No. 712/HQDNa-TXNK dated April 19, 2021)

Pursuant to Clause 7 Article 28a mentioned under Clause 10 Article 1 of Decree No. 18/2021/ND-CP: With respect to the cases specified in Clause 5 and Clause 6 of this Article where free trade zone tax policies are not applied for the period from the effective date of the Certificate of Investment Registration, the revised Certificate of Investment Registration (if any), or the investment registration authority’s written confirmation if the Certificate of Investment Registration is not required, to the date before the issuance date of the customs authority’s confirmation of fulfillment of conditions for customs supervision and inspection as prescribed in Clause 1 Article 30 of Decree No. 82/2018/ND-CP and regulations of this Decree, the paid duties shall be settled in accordance with regulations of tax laws on settlement of overpaid tax after the enterprise has fulfilled the conditions for customs supervision and inspection specified in Clause 1 Article 28a mentioned under Clause 10 Article 1 of Decree No. 18/2021/ND-CP. Procedures for settling overpaid tax:

...

...

...

b) If customs authority imposes tax after the enterprise satisfies conditions for customs supervision, customs officials shall process tax imposition documents based on the A42 declaration whose tax has been paid, send written request to Customs Sub-department to approve revision of decision on tax imposition, revise import duty and VAT on the decision on tax imposition, and update on the Concentrated Accounting System.

Procedures for settling tax and late payment for overpaid tax mentioned under Point a and Point b of this Section conform to Article 10 of Circular No. 06/2021/TT-BTC dated January 22, 2021 of Ministry of Finance (Similar to settling tax of goods exported within the country, processed goods, goods manufactured for export under A42 code which are prescribed under Point b Clause 3 Section I, Point b Clause 3 Section II of Official Dispatch NO. 2687/TCHQ-TXNK dated June 1, 2021).

39

Clause 4 Article 28a

Clause 7 Article 28a only guides refund of overpaid tax for export-processing enterprises under Clause 5 and Clause 6 Article 28a of the Decree but not processing of tax refund for export-processing enterprises under Point d Clause 4 Article 28a (Tay Ninh Customs Department under Official Dispatch No. 620/HQTN-NV dated April 15, 2021).

Pursuant to Clause 4 Article 28a mentioned under Clause 10 Article 1 of Decree No. 18/2021/ND-CP, if an export-processing enterprise fails to notify the supervisory Customs Sub-department or fails to satisfy conditions for customs supervision and inspection under Clause 1 Article 28a which is mentioned under Clause 10 Article 1 of Decree No. 18/2021/ND-CP within 1 year from the date on which the first written confirmation is issued by the Customs Sub-department, the enterprise must declare and submit tax, late payment fine, and fine for administrative violations for imports on which tax policies have been imposed from the date on which certificate of investment registration or document of competent investment registration authority has been issued. In case the enterprise then fulfills conditions of customs supervision and inspection and informs the customs authority under Clause 1 Article 28a, the enterprise shall benefit from tax policies applicable to free trade zones from the date on which the supervisory Customs Sub-department confirms fulfillment of conditions of customs supervision and inspection in writing (without refunding the tax previously paid by the enterprise).

Request entities to rely on Clause 4 Article 28a mentioned under Clause 10 Article 1 of Decree No. 18/2021/ND-CP in order to comply with regulations and law.

Article 30. Notification of duty-free list of goods to be imported and cases where notification of the duty-free list is required

40

...

...

...

In reality, there are duty-free lists consisting of both machinery, equipment which must be exported, imported over multiple shipments where quantity deduction is not feasible at the time of import and export and machinery, equipment which must be exported, imported in a single shipment or over multiple shipments where quantity deduction is feasible at the time of import, export. Propositions:

In this case, allow the project owners to submit 2 master registers of the physical copy of duty-free list using Form No. 6 and 1 master register of monitoring sheet prepared using Form No. 7 of Appendix VII attached hereto (Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

Pursuant to Clause 4 Article 29a of Decree No. 134/2016/ND-CP mentioned under Clause 12 Article 1 of Decree No. 18/2021/ND-CP on notifying duty-free list of goods imported under international agreement;

Pursuant to Point c Clause 2 Article 30 of Decree No. 134/2016/ND-CP;

Pursuant to Point b Clause 3 Article 30 of Decree No. 134/2016/ND-CP mentioned under Clause 13 of Article 1 of Decree No. 18/2021/ND-CP on documents notifying duty-free list.

Duty-free lists shall be notified via the VNACCS. In case the system experiences errors and in case machinery and equipment are to be imported over multiple shipments where quantity deduction is not feasible at the time of import (hereinafter referred to as “combination or assembly line"”), issue physical copy of the duty-free list. Regarding this matter, the General Department of Customs promulgated Official Dispatch No. 3245/TCHQ-TXNK dated June 28, 2021 guiding implementation of Customs Departments of provinces and cities.

Article 31. Application and procedures for tax exemption when adopting customs procedures

41

Point c Clause 3 Article 31

...

...

...

 (Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

Pursuant to Point c Clause 3 Article 31 of Decree No. 134/2016/ND-CP amended under Clause 14 Article 1 of Decree No. 18/2021/ND-CP on procedures for applying for tax exemption when adopting customs procedures: “In case of import of a duty-free combination or assembly line, the taxpayer shall follow customs procedures at the customs authority responsible for the area where the equipment is installed”. This regulation applies to goods that are machinery and equipment of projects benefitting from investment incentives which must be imported over multiple shipments where quantity deduction is not feasible at the time of import.

In case the area where machinery and equipment are installed is under management of a checkpoint Customs Sub-department, the physical inspection shall conform to Clause 2 Article 29 of Circular No. 38/2015/TT-BTC amended under Clause 18 Article 1 of Circular No. 39/2018/TT-BTC; in case the area where machinery and equipment are installed is under management of a non-checkpoint Customs Sub-department, the physical inspection shall conform to Clause 3 Article 29 of Circular No. 38/2015/TT-BTC amended under Clause 18 Article 1 of Circular No. 39/2018/TT-BTC. If imported combination and assembly line are in form of bulk cargo, based on propositions of the Customs Sub-department where the customs declaration is produced, the Customs Sub-department where goods are retained shall conduct physical inspection in accordance with Clause 9 Article 29 of Circular No. 38/2015/TT-BTC amended by Clause 18 Article 1 of Circular No. 39/2018/TT-BTC.

42

Point c Clause 3 Article 31

Decree No. 18/2021/ND-CP does not regulate the case where the taxpayer revises manifest of imports using Form No. 4 of Appendix VIIa or Form 15 of the Appendix. In this case, how should declaration be performed?

 (Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

Point c Clause 3 Article 31 of Decree No. 134/2016/ND-CP amended under Clause 14 of Article 1 of Decree No. 18/2021/ND-CP regulating the case where the taxpayer imports duty-free goods in combination or assembly line without being able to declare in detail, the taxpayer shall produce manifest of imports containing information under Form No. 4 of the Appendix VIIa or using Form No. 15 of Appendix VII attached to Decree No. 18/2021/ND-CP and include customs declarations.

Thus, the case where revision to manifest of imports is made using Form No. 4 of Appendix VIIa or Form No. 15 of the Appendix VII, the taxpayer and customs authority shall adopt procedures for making additional declaration for imports and exports mentioned under Article 20 of Circular No. 38/2015/TT-BTC amended under Clause 9 Article 1 of Circular No. 39/2018/TT-BTC.

...

...

...

With respect to goods that are combined machines and combination of machines under Chapter 84, Chapter 85, and Chapter 90 of the List of Vietnam imports and exports, the classification and procedures thereof shall conform to Article 78 of Circular No. 14/2015/TT-BTC dated January 30, 2015. Will the regulations under Clause 14 Article 1 of Decree No. 18/2021/ND-CP replace or take place simultaneously with the procedures under Article 7 of Circular No. 14/2015/TT-BTC on amendments to Circular No. 17/2021/TT-BTC dated February 26, 2021 of Ministry of Finance?

 (Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

Pursuant to Point c Clause 3 Article 31 of Decree No. 134/2016/ND-CP mentioned under Clause 14 of Article 1 of Decree No. 18/2021/ND-CP on procedures for tax exemption;

Article 7 of Circular No. 14/2015/TT-BTC dated January 30, 2015 of Ministry of Finance mentioned under Circular No. 17/2021/TT-BTC dated February 26, 2021 regulates classification of combined machines or combination of machines under Chapter 84, Chapter 85, or Chapter 90 of the List of Vietnam imports and exports.

Thus, the enterprise must adopt 2 procedures simultaneously as per the law.

Article 31b. Notification and inspection of the use of duty-free imports

44

Clause 3 Article 31a

...

...

...

If not, we hereby request the General Department of Customs to guide the procedures, sequences, and schedules applied to inspection under Point b Clause 3 Article 31a; or request the General Department of Customs to guide customs declarants to submit certificate of synchronization for imported machinery and equipment issued by an organization designated by competent authority.

(Tay Ninh Customs Department under Official Dispatch No.620/HQTN-NV dated April 15, 2021)

Pursuant to Point b Clause 2, Point b Clause 3 Article 31a of Decree No. 134/2016/ND-CP amended under Clause 15 Article 1 of Decree No. 18/2021/ND-CP.

Pursuant to Point b Clause 4 Article 31a of Decree No. 134/2016/ND-CP amended under Clause 15 of Article 1 of Decree No. 18/2021/ND-CP.

According to the regulations mentioned above, the inspection of the use of duty-free goods mentioned under Clause 2 and Clause 3 Article 31a of Decree No. 134/2016/ND-CP amended under Clause 15 of Article 1 of Decree No. 18/2021/ND-CP shall conform to procedures on post-customs clearance inspection.

45

Point b Clause 1 Article 31a

Pursuant to Clause 15 Article 1 of Decree No. 18/2021/ND-CP adding Article 31a:

“1. Notification of use of duty-free imports

...

...

...

Every year within 90 days from the end of the fiscal year, the project owner shall submit the notification of use of duty-free goods in the fiscal year to the customs authority that receives the duty-free list until the entire project is shut down or all goods have been exported from Vietnam or when the duty-free imports are repurposed and sold domestically, or disposed.

3. In case of duty-free import of a combination or assembly line over multiple shipments and quota deduction is not possible as prescribed in Clause 1 of this Article:

c) The project owner shall submit the notification of use of imports for installation of the combination or assembly line prescribed in Clause 1 of this Article. From the year in which the installation is completed, the project owner shall submit notifications of use of the installed products.”

Are duty-free lists which are issued before April 25, 2021 (the effective date of Decree No. 18/2021/ND-CP) required to be notified in accordance with Point b Clause 1 and Point c Clause 3 of this Article?

 (Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

Reporting and inspection of the use of duty-free imports conducted before April 25, 2021 shall conform to Article 106 of Circular No. 38/2015/TT-BTC and Point dd Clause 7 Article 30 of Decree No. 134/2016/ND-CP which is now Article 31a of Decree No. 134/2016/ND-CP amended by Clause 15 Article 1 of Decree No. 18/2021/ND-CP. Therefore, the regulations under Article 31a mentioned above apply to cases where it is required to notify customs authority of the duty-free lists before April 25, 2021 and submit report reports, conduct inspection of the use of duty-free imports to customs authority.

Request entities to rely on regulations for cases where notification of duty-free list is required under documents mentioned above in for implementation.

Article 37a. Cancellation of import, export duties

46

...

...

...

Pursuant to Clause 2 Article 37a, the enterprise is only required to issue an Official Dispatch requesting tax cancellation using premade form.

Pursuant to Clause 1 Article 13 of Circular No. 06/2021/TT-BTC, the Official Dispatch requesting tax cancellation is accompanied by other documents.

Therefore, discrepancies among the documents above are present. Propositions:

Comply with Circular No. 06/2021/TT-BTC elaborating Article 78 of the Law on Tax Administration No. 38/2019/QH14 of the Minister of Finance regulating procedures for tax cancellation.

 (Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

Pursuant to Clause 19 Article 1 of Decree No. 18/2021/ND-CP on cases where import, export duties are cancelled:

“1. Cases of duty cancellation:

a) Unpaid duties on goods that are eligible for duty refund prescribed under Article 33, Article 34, Article 35, Article 36, and Article 37 of this Decree shall be cancelled.

b) Duties on goods that are exempt from export and import duties prescribed in Article 33 and Article 34 of this Decree shall be cancelled”.

...

...

...

Pursuant to Article 13 of Circular No. 06/2021/TT-BTC dated January 22, 2021 on procedures for tax cancellation for cases where submission of import, export duties is not required.

According to all regulations above, cases of tax cancellation for goods that are not required to have import, export duties paid mentioned under Point b Clause 1 Article 37a mentioned under Clause 19 Article 1o f Decree No. 18/2021/ND-CP shall conform to Article 13 of Decree No. 06/2021/TT-BTC dated January 22, 2021.

Organization for implementation

47

Pursuant to Point d Clause 20 Article 1 of Decree No. 18/2021/ND-CP, the phrase “01 bản chụp có đóng dấu sao y bản chính của cơ quan” (1 certified true copy) is replaced with “01 bản chụp” (1 photocopy).

Pursuant to Clause 2 Article 1 of Circular No. 39/2018/TT-BTC on requirements for photocopies in customs and tax documents: “Regarding photocopies or…, taxpayer shall make certification, append the signature, seal, and take responsibility…”

Request guidance on requirements for “photocopies” in tax refund documents/tax cancellation documents.

 (Ho Chi Minh City Customs Department under Official Dispatch No. 1172/HQTPHCM-TXNK dated May 12, 2021)

...

...

...

 “In case of submission of a physical customs declaration or a photocopy of a document in the customs dossier, the declarant or taxpayer may submit the original copy or photocopy. Regarding documents issued by foreign entities in the form of electronic documents, emails, fax, telex, or documents issued by the declarant or taxpayer, the declarant or taxpayer shall make certification, append the signature, seal, and take responsibility for the accuracy, truthfulness, and legitimacy of such documents. If the photocopy consists of multiple pages, the declarant or taxpayer shall make certification, append the signature and seal on the first page as well as other sheets”.

According to the regulations above, in case documents in tax documents are photocopies issued by the taxpayer or customs declarant, the taxpayer shall submit the “photocopies bearing seal of agency receiving application for tax exemption/tax reduction/tax refund/tax cancellation” and not the “1 certified true copy” since the taxpayer are not entitled to issue the seal of “certified true copy” (Regulations on “photocopy” have been mentioned under Article 13, Article 14, and Article 15 of Circular No. 06/2021/TT-BTC dated January 22, 2021 of Ministry of Finance).

48

Code of declaration

- Pursuant to Decision No. 1357/QD-TCHQ: A11 Code: …c) In-country import. Note: With respect to foreign-invested enterprises, the enterprises shall import according to certificates for import right registration using A41 code to adopt import procedures. A12 Code: …c) In-country import (except for processing, domestic export, export-processing enterprises, and enterprises in free trade zones). - E31 Code: …c) In-country import under designation of foreign traders.

- Pursuant to Official Dispatch No. 2687/TCHQ-TXNK: With respect to products imported within the country registered under other form (other than processing), the taxpayer shall use A11 code (import for sale), A12 (import for manufacturing and sale) code, declare, and submit import duties.

Difficulty: Guidance on code under Decision No. 1357/QD-TCHQ differs from guidance under Official Dispatch No. 2687/TCHQ-TXNK.

Request the General Department of Customs to provide guidelines on consistent form of in-country import.

 (Dong Nai Customs Department under Point 10 of Official Dispatch No. 1071/HQDNa-TXNK dated June 9, 2021; Ba Ria - Vung Tau Customs Department under Official Dispatch No. 1671/HQBRVT-TXNK dated June 25, 2021)

...

...

...

49

Pursuant to Clause 3 Part I and Clause 3 Part II of Official Dispatch No. 2687/TCHQ-TXNK dated June 1, 2021 guiding declaration using A42 code for goods that are materials, supplies, and parts imported for processing and manufacturing goods for in-country export, there are situations where the individual who performs in-country import fails to inform customs authority about customs declaration of the imported products within 15 days from the date on which customs clearance is granted. If the taxpayer does not declare tax, the customs authority shall impose tax.

According to the Ho Chi Minh City Customs Department, Decision No. 1357/QD-TCHQ dated May 18, 2021 did not regulate the use of A42 code for this case.

Propositions: Amend Decision No. 1357/QD-TCHQ to apply consistently in all cases above.

 (Ho Chi Minh City Customs Department under Point 2 of Official Dispatch No. 1605/HQHCM-TXNK dated June 22, 2021)

Under Point 6 Section II of the Schedule on customs procedures code and use instruction attached to Decision No. 1357/QD-TCHQ dated May 18, 2021 of the General Department of Customs on the use of A42 code in the case “enterprises export commodities to domestic enterprise for more than 15 days from the date on which customs clearance is granted to in-country export declarations but fail to inform customs authorities about completion of customs procedures of customs declarations for respective in-country import”. Request Ho Chi Minh City Customs Department to consider and implement.

50

...

...

...

After manufacturing, Vina Sanematsu Company Limited exports the finished products (E42 Code - Exporting products of an export-processing enterprise) to a domestic client which is AM Industries Vietnam Company Limited. AM Industries Vietnam Company Limited produces a declaration under A12 Code (Importing for sale) and incurs import duties.

Pursuant to Decree No. 18/2021/ND-CP and Official Dispatch No. 2687/TCHQ-TXNK dated June 1, 2021, if products are imported within the country in other form (other than processing), the taxpayer shall use A11 Code (Importing for sale), A12 Code (Importing for manufacturing and sale) and declare, submit import duty.

Pursuant to Clause 8 Article 16 of the Law on Import, Export Duties No. 107/2016/QH13, Clause 1 Article 22 of Decree No. 134/2016/ND-CP: “Goods manufactured, processed, recycled or assembled in a free trade zone without using imported raw materials or components are exempt from import duties when they are imported into the domestic market as prescribed in Clause 8 Article 16 of the Law on Export and import duties.”

Request the General Department of Customs to provide guidelines on:

1. In case will AM Industries Vietnam Company Limited and other domestic companies benefit from import duty exemption when purchasing products produced from domestically purchased materials of Vina Sanematsu Company Limited?

2. Will tax refund be granted to enterprises importing for manufacturing and sale (A12) and exporting under B11 and B13?

(Vina Sanematsu Company Limited under Official Dispatch No. 001Sane/CV-2021 dated May 4, 2021)

1. Pursuant to Clause 2 Article 1 of the Law on Import, Export Duties No. 107/2016/QH13: “goods exported from the domestic market into free trade zones; goods imported from free trade zones into the domestic market” are subject to tax.

Pursuant to Clause 1 Article 4 of the Law on Import, Export Duties No. 107/2016/QH13: “the trading relationship between the free trade zone and the outside area is considered export and import”.

...

...

...

2. Regarding tax processing for cases where a domestic enterprise imports goods from an export-processing enterprise for manufacturing (A12 Code) and later exports under B11, B13 Codes:

Pursuant to Point c Clause 1, Clause 2 Article 19 of the Law on Import, Export Duties No. 107/2016/QH13; Article 34 of Decree No. 134/2016/ND-CP amended under Clause 17 Article 1 of Decree No. 18/2021/ND-CP, in case a domestic enterprise imports goods from an export-processing enterprise for manufacturing (A12 Code) and has paid import duties, if the domestic enterprise exports the goods, they shall benefit from refund of paid import duty and are not required to submit import duty if the imports have not been used or processed. The re-export of goods must be implemented by the original importer or an individual authorized by the original importer.

Application and procedures for applying for tax refund shall conform to Article 34 of Decree No. 134/2016/ND-CP amended under Clause 17 Article 1 of Decree No. 18/2021/ND-CP.

In case of goods imported for sale (A12 Code) and later exported for sale (B11 Code) and export of unprocessed imports (B13 Code), the General Department of Customs already provided guidelines on this matter under Official Dispatch No. 4032/TCHQ-GSQL dated August 16, 2021. According to which, when exporting goods made from unprocessed imports back to goods owners, overseas, or into free trade zones, export-processing enterprise and customs declarants shall:

a) In case the exporter is the original importer or authorized by the original importer and satisfies eligibility for not being subject to import duty or benefitting from import duty refund, use B13 Code - exporting imports.

When filling in the “Note” section of the electronic export declaration or the “Other remarks” of the physical export declaration, write the accurate number of import declaration of the imports and specify the phrase “Hàng hóa thuộc đối tượng không thu thuế xuất khẩu, hoàn thuế nhập khẩu theo quy định” (Goods eligible for not being subject to import duties, benefitting from import duty refund as per the law).

b) In case the exporter does not wish to adopt procedures for not being subject to export duty or benefiting from import duty refund or the exporter is not the original importer or not authorized by the original importer as per the law, use B11 Code - exporting for sale.

In case the exporter does not wish to adopt procedures for not being subject to import duty or benefitting from import duty refund, write “Tờ khai này không sử dụng để thực hiện các thủ tục không thu thuế xuất khẩu, hoàn thuế nhập khẩu” (This declaration does not serve procedures for not being subject to import duty or benefiting from import duty refund) under the “Note” section of the electronic export declaration or the “Other remarks” of the physical export declaration.

51

...

...

...

Re-import goods exported under the model for exporting processed product exporting, exporting manufactured goods which are returned for domestic consumption or disposal

Pursuant to Decision No. 1357/QD-TCHQ, re-imported products shall utilize A31 Code (previously)

- In case of domestic consumption: When transferring for domestic consumption, is the enterprise required to produce A42 declaration? During tax calculation, will tax value and tax rate be calculated based on re-imported product or exported product?

- In case of disposal: Will the Customs Sub-department issue Decision on not collecting tax in case of tax exemption or tax calculation?

Propositions:

- In case of domestic consumption: When transferring towards domestic consumption, the enterprise shall produce A42 declaration. When calculating tax, calculate tax and tax rate of materials of exported goods. On the basis of domestic sale price, the enterprise is responsible for allocating trade price of corresponding materials in order to declare taxable value.

- In case of disposal: The enterprise must request the Customs Sub-department to supervise the disposal; goods eligible for tax exemption.

 (Ha Nam Customs Department under Point 2 Official Dispatch No. 1703/HQHNN-NV dated June 18, 2021)

Pursuant to Point b Clause 1, Clause 2 Article 19 of the Law on Import, Export Duties No. 107/2016/QH13; Article 33 of Decree No. 134/2016/ND-CP amended under Clause 18 Article 1 of Decree No. 18/2021/ND-CP, exports which must be re-imported shall have the paid export duty refunded and not be required to have import duty paid if the exports have not been used or processed and satisfy requirements for documents and applications under Article 33 of Decree No. 134/2016/ND-CP amended under Clause 18 Article 1 of Decree No. 18/2021/ND-CP.

...

...

...

Pursuant to Clause 1 Article 3 of Circular No. 119/2014/TT-BTC dated August 25, 2014 amending to Point g Clause 7 Article 5 of Circular No. 219/2013/TT-BTC dated December 31, 2013: “g) The business establishment is not required to pay VAT on re-import of exported goods returned by the foreign buyer. VAT on returned domestic goods shall still be declared and paid as prescribed”.

Pursuant to Point e Clause 2 Article 10, Point dd Clause 2 Article 12 mentioned under Clause 4, Clause 6 Article 1 of Decree No. 18/2021/ND-CP, goods that are imported for processing, processed goods and goods imported for manufacturing and export, products manufactured for export allowed to be disposed and have been disposed as per customs laws shall benefit from import duty exemption.

Pursuant to Clause 5 Article 25 of Decree No. 08/2015/ND-CP dated January 1, 2015 amended under Clause 12 Article 1 of Decree No. 59/2018/ND-CP dated April 20, 20189, Article 21 of Circular No. 38/2015/TT-BTC dated March 25, 2015 amended by Clause 10 Article 1 of Circular No. 39/2018/TT-BTC dated April 20, 2018 imports and exports that are eligible for not being subject to import, export duties, excise tax, VAT, environmental protection tax or being exempt from import, export duties and have been granted release or clearance and followed by changes to eligibility for not being subject to tax or tax exemption purposes; goods that are materials, supplies, and parts imported for processing and manufacturing exports which have been granted clearance or customs clearance and followed by changes to use purposes, or transfer for domestic consumption, a new declaration is required.

According to the regulations above, the case where goods imported for processing and goods imported for manufacturing and export are exported to free trade zones after which point they are re-imported shall not be subject to import duty in accordance with Point b Clause 1, Clause 2 Article 19 of the Law on Import, Export Duties No. 107/2016/QH13, Article 33 of Decree No. 134/2016/ND-CP amended by Clause 18 Article 1 of Decree No. 18/2021/ND-CP, Clause 4 Article 47 of Decree No. 08/2015/ND-CP and exempt from VAT during import in accordance with Clause 1 Article 3 of Circular No. 119/2014/TT-BTC.

In case goods are re-imported for domestic consumption, declare tax on a separate declaration for the original imported materials and supplies.

In case goods are re-imported for disposal:

- From April 25, 2021 (the effective date of Decree No. 18/2021/ND-CP), goods that are exported under the model of exporting for processing, exporting manufactured goods and must re-imported for disposal shall benefit from import duty exemption in accordance with Point e Clause 1, Point e Clause 2 Article 10, Point dd Clause 1, Point dd Clause 2 Article 12 mentioned under Clause 4 and Clause 6 Article 1 of Decree No. 18/2021/ND-CP;

- Before April 25, 2021:

+ Goods that are imported under the model of processing and re-importing for disposal and have been disposed shall benefit from import duty exemption in accordance with Point e Clause 1 Article 10 of Decree No. 134/2016/ND-CP.

...

...

...

52

We are an export-processing enterprise specializing in producing sample skincare products, hair products, and cosmetics for import (sample chemical components, sample packaging) via express delivery, without payment, for experimental purposes and testing of physical, chemical properties for laboratories and not for manufacturing.

Pursuant to Decision No. 1357/QD-TCHQ dated May 18, 2021, when importing the sample products mentioned above, will the enterprise declare under E13 or H11 declaration? And in case the enterprise declares under H11 declaration mentioned above, is the enterprise required to submit import duty and VAT in accordance with Article 2 of Decree No. 134/2016/ND-CP and Article 29 of Decree No. 18/2021/ND-CP.

(Shisedo Vietnam Company Limited under Official Dispatch No. 43/2021/ADM-OUT dated June 22, 2021)

Pursuant to Point c Clause 2 Article 2 of the Law on Import, Export Duties No. 107/2016/QH13, goods imported into a free trade zone and used only in said free trade zone shall not be subject to import duty.

Pursuant to Clause 1 Article 4 of the Law on Import, Export Duties No. 107/2016/QH13: “Free trade zone means an economic zone located within Vietnam’s territory, established in accordance with law, having a definite geographic boundary, and separated from the outer area by hard fences in order to facilitate customs inspection and customs control by the customs authority and relevant agencies with regard to exports and imports, inbound and outbound vehicles and passengers; the trading relationship between the free trade zone and the outside area is consider export and import”

According to the regulations above, if the enterprise satisfying the eligibility of an export-processing enterprise mentioned under Clause 1 Article 4 of the Law on Import, Export Duties No. 107/2016/QH13 imports goods for experimental and testing purposes and use in a free trade zone, the goods shall not be subject to import duty. Code of import declaration must match the corresponding code applicable to an export-processing enterprise.

53

...

...

...

Regarding regulations on notifying processing, reprocessing facilities:

Since the customs system has not support automatic declaration using Form No. 23 and Form No. 24 so far, the fact that the enterprise must declare using Form No. 18a/TB-HDGCL-GSQL manually and wait for receipt number based on the arrival date of the Official Dispatch lead to dramatic impact on processing and manufacturing operation of the enterprise.

Propositions:

The enterprise is required to announce information on reprocessing entity only once, including: TIN of the entity, name of manufacturing facility of the processing entity, initial date of processing, date of delivering materials and ingredients for processing, processing stages, estimated number of finished products transferred to processing.

The customs authority should develop the system satisfactory to the requirements under the Circular in order to allow notification via automatic receipt system (Vietnam Textile and Apparel Association No. 75/2021/VITAS-CSTM dated May 13, 2021)

Regarding the notification of processing/reprocessing contracts and appendices thereof using Form No. 23 and Form No. 24 of Appendix I attached to Circular No. 39/2018/TT-BTC, the General Department of Customs promulgated Official Dispatch No. 1891/TCHQ-GSQL dated April 22, 2021 (attachment) guiding Customs Departments of provinces and cities to implement. According to which, the enterprise shall notify the supervisory Customs Sub-department of processing/reprocessing contracts and appendices thereof via email address publicized by the Customs Sub-department at their head office or on websites of Customs Departments of provinces and cities or on websites of the General Department of Customs. Thus, the enterprise is not required to submit written notification of processing/reprocessing contracts and appendices thereof at the Customs Sub-department. For your implementation and compliance.