Circular No. 06/2000/TT-TCHQ of the General Department of Customs guiding customs procedures for goods imported and exported by foreign-invested enterprises.

CIRCULAR

Guidelines for customs procedures for exported and imported goods of foreign-invested enterprises

of foreign-invested enterprises

 

Pursuant to the Customs Law dated February 20, 1990;

Pursuant to the Decree No. 16/1999/NĐ-CP dated March 27, 1999 of the Government on customs procedures, customs supervision, and customs fees;

Pursuant to the Decree No. 24/2000/NĐ-CP dated July 31, 2000 of the Government detailing the implementation of the Law on Foreign Investment in Vietnam;

The General Department of Customs hereby provides specific guidelines for customs procedures for exported and imported goods of foreign-invested enterprises as follows,

 

I. GENERAL PROVISIONS

1All exported and imported goods of joint ventures, wholly foreign-owned enterprises, and cooperative business organizations (hereinafter referred to collectively as foreign-invested enterprises) must go through customs procedures and be subject to inspection and supervision by customs authorities in accordance with the relevant laws of Vietnam.

2In accordance with Article 71, Article 76 of the Decree No. 24/2000/NĐ-CP dated July 31, 2000 of the Government detailing the implementation of the Law on Foreign Investment in Vietnam (hereinafter referred to as Decree No. 24/2000/NĐ-CP):

When handling customs procedures for imported goods (including equipment, machinery, materials, transportation means imported to form fixed assets; raw materials, materials imported for production, and other imported goods), foreign-invested enterprises must submit to the customs authority a certified copy of the import plan (to be submitted when handling the first batch of imports. For subsequent batches, the original must be presented along with a tracking sheet) approved by the Ministry of Trade or authorized agencies of the Ministry of Trade, except for spare parts imports, enterprises can directly handle import customs procedures with customs authorities without needing an import approval document.

Exported goods handled by enterprises at customs authorities do not require an approval document from the Ministry of Trade (except for goods listed in the prohibited export list or conditional export list).

3. Customs procedures for exported and imported goods of foreign-invested enterprises shall be carried out according to the general customs procedures for exported and imported goods (except for goods of export processing enterprises and enterprises located in concentrated industrial zones which have specific regulations). Where there are differences between the general customs procedure regulations and the provisions of this Circular, the provisions of this Circular shall apply.

4Imported goods for forming fixed assets may be inspected at the factory, construction site, or warehouse of the enterprise.

For imported raw materials for production and exported goods, if the enterprise's factory is located in an export processing zone or industrial park, they may be inspected at the factory.

For other cases, based on the specific conditions of each enterprise and the customs management capacity, the Director of the Provincial or City Customs Office decides to apply the above provisions to each factory.

5Except for imported goods exempted from import tax as stipulated in Article 57 of Decree No. 24/2000/NĐ-CP, all other exported and imported goods of foreign-invested enterprises must pay export tax, import tax, and related taxes in accordance with the law.

According to Article 57 of Decree No. 24/2000/NĐ-CP and guiding documents of the Ministry of Trade, when approving the import plan, the Ministry of Trade clearly specifies the list and value of goods that can be imported duty-free, the list and value of goods that must be imported but subject to import tax and related taxes.

Customs authorities base their customs procedures on the above regulations.

Procedures for tax exemption and refund are implemented in accordance with current regulations.

 

II. SOME SPECIFIC GUIDELINES

1. Import:

1.1. Regarding inspection for imported equipment and machinery to implement investment projects as stipulated in Article 73 of Decree No. 24/2000/NĐ-CP: The licensing agency bears responsibility for reviewing this matter. When handling customs procedures, customs authorities rely on the import plan approved by the Ministry of Trade or authorized agencies, without requiring enterprises to submit or present inspection certificates.

Equipment, machinery, and materials mentioned in this article refer to those imported to form fixed assets (including cases where equipment, machinery, and materials are for expanding project scale, replacing, or updating technology). Raw materials and materials imported for production do not fall under the scope regulated by Article 73.

1.2. Place for customs procedures:

For goods exempted from import tax as stipulated in Article 57 of Decree No. 24/2000/NĐ-CP: Enterprises handle import procedures for these goods at the customs unit where the main office or branch, factory of the enterprise is located.

If there is no customs authority at those locations, enterprises may choose the most convenient location, but once procedures are handled at a particular location, they must continue to handle them there until the importation of such goods is completed. In special cases and with the approval of the General Department of Customs, enterprises may choose another customs unit different from the main office, branch, or factory.

Goods exempted from import tax as stipulated herein do not need to pay tax when handling import procedures. For goods exempted from import tax but subject to VAT, taxes must still be calculated as prescribed.

For goods not exempted from import tax, enterprises may handle import procedures at the port customs or at the customs where the enterprise's factory is located, except for consumer goods imported under trading activities, which must be handled at the port customs.

Goods imported for producing exported goods or for processing must handle import procedures at one customs unit until the import plan is completed or the processing contract ends.

2. Export:

2.1. Issues regarding the export ratio specified in the investment license:

Enterprises are directly responsible for reporting the export ratio to the authorized agency of the Ministry of Trade and the Ministry of Planning and Investment.

These agencies are responsible for inspecting, monitoring the implementation, reviewing and adjusting the export ratio, and handling violations. Specifically, for businesses with bonded warehouses, customs authorities have the responsibility to monitor this ratio to address tax issues.

2.2. Regarding exported goods:

Businesses shall handle export procedures according to regulations on export goods for each type of export: business export; production export; re-export; processing export...

For temporarily exported goods with a deadline for repair or warranty, the enterprise must submit a written request to be allowed to export for repair or warranty. The request must clearly state the time period and the re-import customs gate and must be accepted by the head of the exporting customs gate. In case of valid reasons, the enterprise may be granted an extension of up to one additional time not exceeding three months by the head of the exporting customs gate. If the deadline is exceeded without re-import, the customs authority must prepare a violation record for handling.

2.3. For production export goods, when exporting products, enterprises can implement one of the following two methods:

2.3.a) Enterprises open an export declaration at the customs unit handling the import of raw materials. Customs seals the file and sample of the main raw material, which is handed over to the exporting customs gate for inspection and export procedures. After completing the export procedures, the exporting customs gate seals the sample again and hands it back to the exporter to present to the customs unit handling the import of raw materials. The customs unit handling the import of raw materials seals the sample again, handing it over to the enterprise for storage to process the next batch. Or:

2.3.b) Enterprises do not open an export declaration at the customs unit handling the import of raw materials but send a letter to the customs unit handling the import of raw materials requesting the exporting customs gate to handle the export procedures at the exporting gate.

In addition to the contents regarding goods (name of goods, quantity of goods...), it must clearly specify that the exported goods belong to the declaration of imported raw materials number..., date..., exporting customs gate. Following the format of the letter, it should be a standard raw material quota for producing that product.

The customs unit handling the import of raw materials checks the sample and content of the letter, proposing that the exporting customs gate open an export declaration according to the production export form at the customs unit handling the export procedures.

In cases where the imported raw materials change in shape or nature after production (for example: imported raw materials are plastic pellets, finished products are bags, nylon bags...; imported raw materials are medicinal herbs, finished products are medicines... cannot be compared), sealing samples is not necessarily required, and the enterprise bears full responsibility for the quota and the exported product produced from previously imported raw materials.

The transfer of files between two customs units is carried out as follows:

After completing the export procedures for the batch of goods, the exporting customs gate transfers one set of files to the customs unit handling the import of raw materials, returns one set to the consignor, and retains one set.

2.3.c) The place of payment for taxes is the customs unit handling the import of raw materials.

3Concerning foreign-invested enterprises selling their products directly to other enterprises for the production of export goods, as stipulated in Clause 2, Article 58 of Decree No. 24/2000/NĐ-CP:

Transactions between these enterprises are conducted in accordance with the provisions of the law on economic contracts. Customs does not handle such transactions.

When the enterprise (buyer) exports the product abroad, customs handles the procedures as for a regular export shipment, without requiring the consignor to prove the origin of the raw materials or the sale of the product produced from those raw materials, nor requiring explanations of quotas, and has no responsibility to confirm actual quotas.

4Customs procedures for the situation where a foreign-invested enterprise exports to a foreign trader, but the goods do not leave Vietnam and are delivered within the country according to the instructions of the foreign trader (in-country export):

4.1. Export procedures (delivery procedures).

4.1.a) Exporting enterprise (delivery enterprise):

Based on the export contract signed with the foreign enterprise, the enterprise goes to the customs office where it handles the import of raw materials to open a declaration and handle the export procedures as for a regular export shipment, consistent with the type. The contract must include a clause specifying delivery in Vietnam, clearly stating the name and address of the importing enterprise (receiving enterprise).

After the export declaration has been registered, the enterprise organizes the delivery of goods to the importing enterprise according to the buyer's instructions as stipulated in the contract.

4.1.b) Tasks of the customs office handling the export:

Handle the registration of the export declaration and implement tax policies for the shipment like other export shipments, seal the customs file and hand it over to the exporting enterprise to present together with the goods to the customs office handling the import at the point of delivery between the two enterprises. After receiving the declaration already marked with the inspection results transferred back by the customs office handling the import, the leader signs to confirm the completion of customs procedures.

4.2. Import procedures (receiving procedures):

4.2.a) Importing enterprise (receiving enterprise):

Based on the import contract signed with the foreign party, the importing enterprise opens an import declaration according to the correct type of import and current import policies. If the imported goods fall under the processing trade category or imported raw materials for production and export, they must register the declaration and handle the procedures at the customs unit managing the processing contract or managing the imported raw materials and exported products (input-output).

The contract must include a clause specifying receipt in Vietnam, the name and address of the delivering enterprise.

4.2.b) Tasks of the customs office handling the import:

Process the import declaration according to the type of transaction, check and compare the import documents with the export documents processed by customs (through the enterprise delivering the goods), inspect the actual goods, record the inspection results, sign and stamp the confirmation of actual export on the export declaration, and transfer the set of documents back to the customs office where the export procedures were carried out, confirming actual import on the import declaration; if the actual goods do not match the shipment documents, the customs office shall prepare a record for handling according to regulations.

The confirmation of actual export must clearly state the details of the import declaration at the place (number, date, month, year, location of declaration opening).

The confirmation of actual import must clearly state the details of the export declaration at the place (number, date, month, year, location of declaration opening).

Carry out other procedural steps and tax policies according to the prescribed regulations for each type of transaction.

5Regarding the liquidation issue stipulated in Article 102, it shall be implemented as follows:

Within thirty days from the date the investment license issuing authority issues the certificate of registration of the final settlement report of the project, the enterprise shall go to the customs office where the imported goods are handled to process the liquidation procedures.

The documents to be submitted include:

The final settlement report of the project already confirmed by the investment license issuing authority (original).

The approval document of the import plan issued by the Ministry of Trade, the agency authorized by the Ministry of Trade, along with the customs monitoring form for the entire project (original).

A list detailing the quantity and value of raw materials, machinery, and equipment imported.

The import goods declaration.

Within thirty days from the date all documents are received, the customs office responsible for the import procedures must complete the payment and confirm the payment in writing.

For imported goods intended to create fixed assets that are allowed to change their purpose or unused goods, customs will handle based on the permit of the Ministry of Trade.

6. Regarding processing and reprocessing by foreign-invested enterprises as stipulated in Article 75 of Decree No. 24/2000/NĐ-CP, the General Customs Department guides as follows:

The scope of processing activities is carried out as provided in the aforementioned Article 75.

Customs management of processed goods is conducted in accordance with Decree No. 57/1998/NĐ-CP dated July 31, 1998 of the Government detailing the implementation of the Law on Commerce regarding export, import, processing, and agency purchase and sale of goods with foreign countries, Circular No. 584/CP-KTTH dated June 7, 1999 of the Government, and other guiding documents of the Ministry of Trade, the General Customs Department, and related ministries and sectors.

 

III. CUSTOMS BONDED WAREHOUSE

1The bonded warehouse is defined in Article 79 of Decree No. 24/2000/NĐ-CP, the General Customs Department guides its implementation as follows:

Imported raw materials and materials for production by enterprises can be stored in a bonded warehouse without paying import duties and related taxes.

Imported raw materials and products stored in a bonded warehouse only include those used for production by the enterprise itself.

2The conditions for establishing a bonded warehouse are stipulated in Article 79 of Decree No. 24/2000/NĐ-CP.

To ensure customs management requirements, the enterprise must also meet the following requirements:

a) Comply with all legal provisions; business, financial, and credit relationships must be clear.

b) Use accounting books and documents to track exports, imports, stock-outs, and stock-ins fully and strictly in accordance with Vietnamese law, or use accounting books and documents approved by competent Vietnamese authorities.

c) The factory and warehouse must be located in areas convenient for customs supervision and monitoring.

3Procedure for applying to establish a bonded warehouse.

3.1: An enterprise wishing to establish a bonded warehouse must submit two sets of documents to the provincial or municipal customs office, including the following papers:

Application for establishment of a warehouse.

Investment license (certified copy).

Enterprise layout diagram and bonded warehouse layout diagram.

Business rules of the bonded warehouse of the enterprise.

3.2. At the latest ten days from the date of receiving complete and valid documents, the relevant provincial or municipal customs office must organize an inspection and if the conditions are met, prepare a proposal to the General Customs Department (with one set of documents). The proposal must contain comprehensive and specific comments on all conditions stipulated in Point 2, Part III of this Circular, about the applicant for the warehouse, the customs' ability to supervise, manage, and inspect the warehouse. The General Customs Department will issue a warehouse establishment permit or provide a written response to the enterprise within twenty days from the date of receipt of the application and the proposal from the provincial or municipal customs office.

The bonded warehouse establishment permit is valid for one (one) year. Upon expiration, if the enterprise still meets all conditions and submits a renewal request along with the proposal from the provincial or municipal customs office, the General Customs Department will consider annual renewals.

If the bonded warehouse expires and the enterprise does not apply for further extension, the remaining raw materials and materials in the warehouse will be handled as follows:

If the enterprise no longer needs to use them and submits a written request, customs will process the re-export or destruction.

If the enterprise submits a written request to convert to importing raw materials for export production or domestic consumption production, the enterprise registers a new customs declaration, customs calculates and issues a tax notice. The registration time for the declaration and tax calculation is the expiration date of the bonded warehouse. The extension period is implemented according to the Export Tax Law and Import Tax Law for each type of transaction.

3.3. To establish and extend a bonded warehouse, the enterprise must pay a fee as stipulated in Joint Circular No. 71/2000/TTLT-BTC-TCHQ dated July 19, 2000 of the Ministry of Finance - General Customs Department.

Customs procedures for goods entering and leaving a bonded warehouse.

4Customs procedures for imported raw materials entering a bonded warehouse and for exported products are similar to customs procedures for regular import and export shipments. Specifically, the tax calculation and payment procedures for imported raw materials are as follows:

4.1. The enterprise must open a separate declaration for the portion of imported raw materials subject to bonded storage.

4.1. The enterprise must file a separate declaration for imported raw materials and components that are duty-free.

Part on imported raw materials for production and domestic consumption shall declare separately.

The basis for determining the rate of imported raw materials eligible for tax exemption is the export ratio recorded in the investment permit (if the enterprise implements exports according to the prescribed ratio in the investment permit) or the ratio determined by the enterprise, but not less than 50% of the products produced. In both cases, the enterprise must submit a registration document to the customs authority managing the bonded warehouse and the General Department of Customs before January 1st each year.

Based on the ratio of products consumed in the domestic market registered by the enterprise as mentioned above, customs will handle declaration, taxation, and collection of import duties on raw materials for producing domestically consumed products.

For imported raw materials brought into the bonded warehouse for production of export goods, customs does not levy taxes on the declaration but must clearly specify the name, type, and quantity of these goods on the declaration form and record them in the monitoring ledger.

4.2. Goods brought into the bonded warehouse if damaged, deteriorated, and fail to meet production requirements may be processed for re-export or destruction. The destruction process is carried out as follows:

The enterprise submits a document to the customs authority managing the bonded warehouse, stating the reasons, name, type, quantity of raw materials to be destroyed, belonging to the import declaration number, date, month, year.

The enterprise organizes and bears responsibility for the destruction process. The destruction process is carried out under the supervision of the customs, tax, and environmental protection authorities.

The results of the destruction must be documented in a certificate. This certificate serves as a future settlement document.

4.3. Storage issues of raw materials in the bonded warehouse. Enterprises are allowed to store imported raw materials for producing export goods and domestic consumption in the bonded warehouse, but they must be kept separately by type, with customs managing each type separately. During production, enterprises can transfer part of the raw materials from one type to another, but they must submit a request document to the local customs authority and comply with the registered export ratio.

When importing raw materials, the consignor does not necessarily have to separate documents and goods into two types, but can send a single consignment for both types. However, when processing import procedures, a separate declaration must be made for each type.

4.4. By the end of the plan year (December 31 each year) at the latest by January 31 of the following year, the enterprise must prepare a summary table of declarations and total quantities of imported raw materials eligible for tax exemption, a summary of export declarations and total quantities of exported products, and submit them to the customs authority. After verifying the accuracy of the report, comparing it with the customs records, and based on the registered export product ratio, customs will handle as follows:

a) If the export ratio is lower than the exempted ratio, the enterprise must immediately pay taxes on the finished products that differ between the required export quantity and the actual exported quantity. Additionally, the enterprise will face late payment penalties as stipulated by law: If exporting below 50% of the products or after three consecutive years the enterprise still fails to comply with the committed ratio, the provincial or municipal customs authority will report to the General Department of Customs to revoke the bonded warehouse permit.

The tax rate applied shall be in accordance with the regulations of the Ministry of Finance at the time the customs authority decides to collect taxes.

b) If the export ratio is higher than the exempted ratio, the enterprise will be refunded the difference between the actual export and the amount already paid in taxes.

c) Enterprises with bonded warehouses are responsible for the accuracy and completeness of the summary reports referred to in this point.

4.5. Imported goods brought into the bonded warehouse may not be sold in the Vietnamese market. In case permission is granted by the Ministry of Trade to sell in the Vietnamese market, the enterprise must pay import duties and other taxes as prescribed by law.

5. Customs management of bonded warehouses.

Principle, the bonded warehouse at the enterprise is subject to regular inspection and supervision by the customs authority: Depending on specific conditions, the Provincial or Municipal Customs Bureau decides on organizing direct supervision or determining inspection and supervision rights through indirect regular supervision. Customs inspections and supervision mainly occur when goods are actually brought into or out of the bonded warehouse through: Processing customs procedures for the enterprise's imports and exports; settlement of consignment payments; reviewing their reports; conducting direct and surprise inspections (including checking books, documents, computer storage systems, inventory checks in the warehouse).

The enterprise is responsible for organizing warehouse management, creating favorable conditions, and closely coordinating with customs in implementing the inspection and supervision system mentioned above.

 

IV. IMPLEMENTATION

1. This Circular takes effect from the date of signature. All previous provisions contrary to this Circular are abolished.

2. Any violation of the provisions of this Circular and related provisions shall be handled in accordance with the law./.