Joint Circular No. 06/1999/TTLT-BTC-TCHQ guiding the handling of overdue tax arrears, recovery of taxes, and late payment penalties for export duties, import duties, and special consumption taxes on imported goods.

CIRCULAR

JOINT CIRCULAR OF THE MINISTRY OF FINANCE AND GENERAL DEPARTMENT OF CUSTOMS
NUMBER 06/1998/TTLT-BTC-TCHQ DATED JANUARY 15, 1998
GUIDELINES FOR HANDLING OVERDUE TAXES, COLLECTION AND LATE PAYMENT PENALTIES
FOR EXPORT DUTIES, IMPORT DUTIES, AND SPECIAL CONSUMPTION TAX ON IMPORTED GOODS

To implement the directives of the Prime Minister in Circulars No. 1150/CP-KTTH dated September 28, 1998, and No. 6430/KTTH dated December 15, 1997, regarding the handling of tax collection and overdue taxes on import and export; the Ministry of Finance and General Department of Customs provide specific guidelines as follows:

I - HANDLING COLLECTION OF OVERDUE IMPORT AND EXPORT TAXES:

Amounts of taxes and penalties that must be collected for declarations of goods for import and export registered with customs authorities before October 15, 1998 shall be handled as follows:

1- In cases where the violations are due to the enterprise's fault (including cases where the customs authority has inspected exported and imported goods, calculated and collected taxes, and the enterprise has sold all goods and settled profits and losses...), the customs authority where the enterprise handles import and export procedures must collect the full amount of taxes and penalties according to current laws. Specifically as follows:

- Misreporting the price of exported or imported goods.

- Reporting incorrect names of exported or imported goods.

- Reporting incorrect quantities, types, grades, origins...of exported or imported goods.

- Not providing complete documents related to exported or imported goods as a basis for customs inspection or taxation.

- Other violations of enterprises leading to the need for tax collection.

2- In cases where the reasons are objective and not due to the enterprise's fault such as unclear regulations, lack of detailed guidance documents, or errors by customs officers... shall be handled as follows:

- The General Department of Customs directs local customs offices to check each specific case, analyze the reasons for the need to collect taxes, and compile all relevant documents to report to the General Department of Customs.

- Based on the results of the inspection and reports from local customs offices, the General Department of Customs will compile and propose the Ministry of Finance to consider and handle each specific case.

Customs officers who violate and cause loss to the State budget will be dealt with according to the level of violation as stipulated by law.

II - HANDLING OF OVERDUE IMPORT AND EXPORT TAXES:

Overdue taxes on imports and exports declared and reported by customs authorities before October 15, 1998 shall be handled as follows:

1. For enterprises currently operating but still owing import and export taxes, the customs authority where the enterprise owes taxes shall require the enterprise to come forward to verify and confirm the amount of overdue import and export taxes. (For enterprises that have been merged into other enterprises or split into multiple new enterprises, the receiving enterprise or the direct superior authority of the split enterprise must verify and confirm the import and export taxes with the customs authority. For cases where enterprises are split into multiple new enterprises, the verification document must clearly state the names of the new enterprises responsible for paying off the old debts and the specific payment amounts according to each declaration of exported or imported goods). Based on the verification and confirmation of the debt, the customs authority shall urge the enterprise to pay the overdue taxes into the State budget according to the prescribed regulations.

For enterprises that owe taxes but due to objective reasons have been allowed by the Government and the Ministry of Finance to defer or freeze payments, and whose deferral or freezing period has expired, the enterprise must also verify the remaining debt and pay it into the State budget according to the prescribed regulations.

Any failure to pay taxes according to the prescribed regulations will be enforced according to the current laws.

2. For enterprises that have been dissolved or declared bankrupt and are no longer operating, the superior authority or the authority issuing the dissolution decision shall instruct the liquidation committee of the dissolved enterprise or the asset settlement team (for bankrupt enterprises) to settle the enterprise's debts according to the priority order specified in Article 39 of the Enterprise Bankruptcy Law dated December 30, 1993 and Point 6, Section III of Circular No. 25 TC/TCDN dated May 15, 1997 of the Ministry of Finance guiding the procedures, formalities, and principles for financial settlement when dissolving state-owned enterprises.

If the remaining value of the enterprise's assets is insufficient to cover the overdue import and export taxes, the local customs office shall cooperate with the liquidation committee of the dissolved enterprise, the State Capital Management and Asset Administration Department at enterprises, inspect and issue a document (with attached files) to the General Department of Customs before March 31, 1999 for the General Department of Customs to propose the Ministry of Finance to report to the Prime Minister.

For enterprises that are still operating but have overdue import and export taxes that cannot be recovered due to force majeure, the People's Committee of the province (for provincial enterprises) or the central ministry in charge (for central enterprises) shall conduct a specific review of each case, issue a document (with attached files) to the General Department of Customs before March 31, 1999 for the General Department of Customs to propose the Ministry of Finance to report to the Prime Minister.

3. For enterprises that still owe taxes on consigned imported and exported goods for other enterprises, they shall be handled as follows:

3.1 In cases where enterprises still owe taxes on consigned imported and exported goods for other enterprises, the customs authority where the enterprise still owes taxes shall transfer the tax debt to the enterprise that consigned the goods for import and export for monitoring and urging payment, provided there is a confirmed debt statement between the two enterprises according to each consignment declaration and the consignee enterprise must be a directly licensed import and export enterprise.

The consignee enterprise must also pay the taxes and will be subject to enforcement if violated, as stipulated in Section 1, Part II of this Circular.

3.2 In cases where the enterprise still owes taxes for consignment import and export shipments for other enterprises, and the consignor enterprise has been dissolved or declared bankrupt, with the remaining assets of the consignor enterprise not being sufficient to pay off the tax debts for the consignment import and export shipments, such cases shall be handled according to the provisions set forth in Section 2, Part II of this Circular.

4. For the amount of tax debt for temporary importation-reexportation shipments; imported raw materials for production of export goods that have been re-exported beyond the permitted tax payment deadline, the customs authority shall handle the cancellation of the corresponding tax debt based on the quantity of goods that have been re-exported. The procedures for considering the cancellation of tax debt shall be carried out in accordance with the regulations on procedures for non-payment of tax for temporary importation-reexportation goods and imported goods for production of export goods that have been re-exported within the tax payment deadline.

III- PENALTY FOR DELAYED TAX PAYMENT

By October 15, 1998, if an enterprise has fully paid off overdue tax arrears for each declaration of import and export goods, the enterprise shall be exempt from penalties for delayed tax payment corresponding to the amount of tax paid for each declaration of import and export goods.

The General Department of Customs shall instruct and guide local Customs Bureaus to process the procedures for exemption from penalties as stipulated above and compile reports to submit to the General Department of Customs and the Ministry of Finance.

IV- OTHER PROVISIONS

1. Local Customs Bureaus shall continue to process customs procedures for enterprises subject to compulsory measures in the following situations:

- Enterprises exporting goods to foreign countries

- Enterprises importing raw materials and supplies for the production of export goods or processing for foreign countries under signed contracts (except in cases where all products under the contract have been exported, the contract period has expired, and despite urging by the Customs Authority, the enterprise has not come to complete the tax settlement procedures); enterprises engaged in temporary importation-reexportation; transshipment.

- Enterprises with outstanding tax arrears (including tax arrears subject to recovery) who have registered a repayment plan to settle all tax arrears (the deadline for settling all tax arrears before December 31, 1998. For enterprises with tax arrears exceeding 2 billion VND, the maximum deadline shall not exceed June 30, 1999) on a monthly basis with the Customs Authority where the tax arrears remain, and who comply with the tax repayment plan they have registered.

2. During the implementation of the recovery of import and export tax arrears and the collection of overdue import and export taxes, if any enterprise is found to deliberately delay or take actions to obstruct the enforcement officers with the aim of misappropriating state budget funds, the local Customs Bureaus shall prepare reports to submit to the General Department of Customs, which will then report to the Prime Minister. Depending on the severity of the violations by these enterprises, administrative penalties or criminal prosecution may be recommended.

3. The handling of overdue payments, recovery, and penalties for delayed special consumption tax on imported goods shall also be carried out in accordance with the provisions of this Circular.

4. This Circular shall take effect fifteen days from the date of issuance. Any provisions contrary to the spirit of this Circular shall be abolished.

The General Department of Customs shall direct local Customs Bureaus to uniformly implement the contents stipulated in this Circular.

During the implementation process, if there are any difficulties, units shall promptly reflect them to the Ministry of Finance and the General Department of Customs for timely research and resolution.