Circular No. 117/2000/TT-BTC supplements and amends certain points of Circular No. 40/2000/TT-BTC dated May 15, 2000, of the Ministry of Finance guiding the implementation of Decision No. 176/1999/QD-TTg dated August 26, 1999, of the Prime Minister on exemption from import tax for raw materials.

After exchanging opinions with the Ministry of Planning and Investment, the Ministry of Trade, the Ministry of Industry, and the General Department of Customs, the Ministry of Finance guides the amendment and supplementation of some points of Circular No. 40/2000/TT-BTC dated May 15, 2000 of the Ministry of Finance guiding the implementation of Decision No. 176/1999/QD-TTg dated August 26, 1999 of the Prime Minister on exemption from import tax for raw materials, as follows:

I. Supplement Section I - Object and Scope of Application for Exemption, as follows:

Amend and supplement Point 1 as follows:

1. Investment projects included in the list of particularly encouraged investment projects, the list of encouraged investment projects, and investment projects in mountainous, remote, and disadvantaged areas as stipulated in Appendix I attached to Decree No. 10/1998/NĐ-CP dated January 23, 1998 of the Government on certain measures to encourage and ensure foreign direct investment in Vietnam and according to Article 11 of Decision No. 53/1999/QD-TTg dated March 26, 1999 of the Prime Minister on certain measures to encourage foreign direct investment in Vietnam.

Encouraged investment projects in industries and businesses listed in Category A or investment projects in areas with difficult economic and social conditions listed in Category C of the Appendix issued together with Decree No. 51/1999/NĐ-CP dated July 8, 1999 of the Government detailing the implementation of the Law on Encouraging Domestic Investment (amended) No. 03/1998/QH10.

II. Amend Section II - Procedures and Documents for Exemption from Import Tax, as follows:

1. Delete the fourth bullet point under Point 1 and Point 2 of Section II:

Replace with the following provision:For domestic enterprises, the Business Registration Certificate issued by the competent authority, indicating the industry and business activities consistent with Category A or investment projects in areas with difficult economic and social conditions listed in Category C of the Appendix issued together with Decree No. 51/1999/NĐ-CP dated July 8, 1999 of the Government detailing the implementation of the Law on Encouraging Domestic Investment (amended) No. 03/1998/QH10."

2. For projects enjoying incentives subject to additional conditions such as export product ratio, domestic raw material and component usage ratio, and high labor utilization, enterprises must report annually (no later than February 15) to the Ministry of Trade on the previous year's implementation of export product ratios, domestic raw material and component usage ratios, and high labor utilization to serve as the basis for reviewing the list of raw materials and semi-finished products eligible for import tax exemption for the following year. At the same time, the report must be submitted to the Customs Office of the province or city where the enterprise imports goods and the Tax Authority directly managing the enterprise for settlement of imported raw materials and semi-finished products that have been exempted from import tax; If the enterprise fails to meet the required export product ratio, domestic raw material and component usage ratio, and high labor utilization, it will be subject to back payment of import tax corresponding to the quantity of products not exported.

This Circular takes effect from the date when Circular No. 40/2000/TT-BTC dated May 15, 2000 of the Ministry of Finance comes into effect. All previous regulations contrary to this Circular are hereby abolished./.

2. For projects enjoying incentives subject to conditions such as export product ratio, domestic material and component usage ratio, and extensive labor utilization, enterprises must annually report (no later than February 15) to the Ministry of Trade on the implementation of the previous year's export product ratio, domestic material and component usage ratio, and extensive labor utilization for the basis of considering the list of raw materials and semi-finished products exempt from import tax for the following year. At the same time, the report shall be sent to the Customs Department of the province or city where the enterprise handles import procedures and the direct managing tax authority of the enterprise for the purpose of settling the raw materials and semi-finished products that have been exempted from import tax. In case the enterprise fails to meet the export product ratio, domestic material and component usage ratio, and extensive labor utilization as prescribed, it will be required to pay back the corresponding import tax exemption amounting to the quantity of products not exported.

This Circular takes effect from the date when Circular No. 40/2000/TT-BTC dated May 15, 2000 of the Ministry of Finance ceases to be effective. All previous regulations contrary to this Circular are hereby abolished./.