Circular No. 120/2009/TT-BTC guiding the Implementation of the Regulations on Duty-Free Sales Business issued together with Decision No. 24/2009/QĐ-TTg dated February 17, 2009 of the Prime Minister.

CIRCULAR

Guidelines for implementing the Regulations on Duty-Free Sales issued together with Decision No. 24/2009/QĐ-TTg dated February 17, 2009 of the Prime Minister

Decision No. 24/2009/QĐ-TTg dated February 17, 2009 of the Prime Minister

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Pursuant to the Customs Law No. 29/2001/QH10 dated June 29, 2001 and the Law Amending and Supplementing Certain Articles of the Customs Law No. 42/2005/QH11 dated June 14, 2005;

Pursuant to the Decree No. 154/2005/NĐ-CP dated December 15, 2005 of the Government detailing certain provisions of the Customs Law on customs procedures, inspection, and supervision;

Pursuant to the Law on Export Duties and Import Duties No. 45/2005/QH11 dated June 14, 2005;

Pursuant to Decree No. 149/2005/NĐ-CP dated December 8, 2005 of the Government detailing the implementation of the Law on Export Duties and Import Duties;

Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decision No. 24/2009/QĐ-TTg dated February 17, 2009 of the Prime Minister promulgating the Regulations on Duty-Free Sales;

The Ministry of Finance issues guidelines for implementing the Regulations on Duty-Free Sales issued together with Decision No. 24/2009/QĐ-TTg dated February 17, 2009 of the Prime Minister as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

Article 1. Scope of Regulation

These Circulars guide customs management for duty-free sales.

Article 2. Scope of Application

Business operators, organizations, and individuals related to the provisions of the Regulations on Duty-Free Sales issued together with Decision No. 24/2009/QĐ-TTg dated February 17, 2009 of the Prime Minister (hereinafter referred to as the Regulations).

Article 3. Goods sold at duty-free shops and certain special provisions

1. Goods sold at duty-free shops include:

- Imported goods that have not paid taxes and are permitted to circulate according to Vietnamese laws;

- Imported goods that have paid taxes, which are goods that have completed import procedures and are permitted to circulate according to Vietnamese laws;

- Goods produced in Vietnam.

2. Imported goods that have not paid taxes and are brought into sale at duty-free shops shall be managed under the temporary import regime and may be stored at the duty-free shop for up to 365 days from the date of completing customs procedures for the imported consignment. Import procedures shall be carried out at the Customs Branch managing duty-free sales.

3. Imported goods that have paid taxes and goods produced in Vietnam brought into sale at duty-free shops shall be considered as export goods and managed under the temporary export regime and may be stored at the duty-free shop for up to 365 days from the date of completing customs procedures for the exported consignment. Export procedures shall be carried out at the Customs Branch managing duty-free sales.

4. In cases where business operators need to extend the period of temporary import or temporary export as stipulated in Clauses 2 and 3 of this Article, the business operator shall submit a written request to the Customs Department managing duty-free sales in the province or city for consideration of extension, with the extension period being once only and not exceeding 180 days for each consignment of exports or imports.

5. Customs procedures for imported and exported goods for duty-free sales shall be implemented according to current regulations for imported and exported goods under purchase contracts.

6. Business operators engaged in duty-free sales shall use invoices issued by the Ministry of Finance or by agencies authorized by the Ministry of Finance to issue invoices, or self-printed invoices approved by the Ministry of Finance according to current regulations on printing, issuing, using, and managing invoices.

7. Goods sold at duty-free shops, including tobacco products, alcohol, beer, and electrical appliances, must be affixed with a "VIETNAM DUTY NOT PAID" label on each item.

The "VIETNAM DUTY NOT PAID" label shall be issued by the Ministry of Finance. The position for affixing the label on each item mentioned above shall be implemented according to the provisions set forth in the Appendix attached to these Circulars.

8. Vietnamese Dong, US Dollar, and Euro are the currencies used in transactions at duty-free shops. Accordingly, prices are listed on each item and are based on the exchange rates of commercial banks at the time of price listing.

9. Customs will not seal warehouses or shops and will not directly supervise sales.

II. PROVISIONS FOR BUSINESS OPERATORS ENGAGED IN DUTY-FREE SALES

Article 4. Business Activities of Duty-Free Sales

1. A trader may only engage in duty-free sales business when fully meeting the conditions stipulated in Article 2 and Clause 4 of Article 3 of this Regulation.

2. The trader must ensure that there is a computer system connected to the duty-free store, duty-free goods warehouse, and the Customs Sub-department managing duty-free sales business (hereinafter referred to as "Customs") in accordance with Clause 4, Article 3 of this Regulation; specifically as follows:

a) For duty-free stores:

- Immediately upon selling goods, the sales staff is responsible for entering data into the computer and transmitting this data through the network to Customs, including the following information:

+ Name of the buyer;

+ Passport number or travel document number;

+ Boarding pass for departing passengers traveling by air, including flight number and date of departure;

+ Departure registration ticket number for waiting passengers (for those awaiting departure);

+ Name of goods, quantity, value.

- At the end of each working day, the sales staff is responsible for transmitting data through the network to Customs regarding the inventory at the store (including name of goods, item code, quantity, value).

b) For duty-free goods warehouses:

- Immediately upon goods being received into or dispatched from the warehouse (including dispatch to duty-free stores or aircraft), the warehouse management staff is responsible for entering data into the computer and transmitting this data through the network to Customs, including the following information:

+ Name of goods, item code, quantity, value;

+ Goods received into or dispatched from the warehouse according to customs declaration number / on ... day ... month ... year at the Customs Sub-department at border gate ....

- At the end of each week's working days, the warehouse management staff is responsible for transmitting data through the network to Customs regarding the inventory at the warehouse (including name of goods, item code, quantity, value).

3. The trader shall submit to the Provincial or Municipal Customs Department (where the duty-free store and duty-free goods warehouse are located) a request for confirmation of compliance with the conditions for inspection and control at the location of the duty-free store and duty-free goods warehouse as stipulated in Clause 4, Article 3 of this Regulation. The request for confirmation includes the following documents:

- Request letter (with floor plan): 01 original copy;

- Business Registration Certificate / Investment Certificate: 01 certified copy.

4. After receiving the trader's request and conducting an on-site inspection, the Provincial or Municipal Customs Department has the responsibility to report to the General Department of Customs the specific results to issue a document confirming compliance or non-compliance with the conditions for inspection and control by Customs at the location of the duty-free store and duty-free goods warehouse proposed by the trader.

Article 5. Responsibilities of Traders Engaging in Duty-Free Sales Business

In addition to the responsibilities prescribed in Decision No. 24/2009/QĐ-TTg dated February 17, 2009 of the Government Prime Minister, the Ministry of Finance provides detailed guidance on the following matters:

1. Duty-free stores and duty-free goods warehouses can only store goods that have completed customs procedures. Each item within the store and warehouse must be arranged and organized appropriately to facilitate Customs inspections when necessary.

2. After completing import procedures or before dispatching goods from the warehouse to the store for sale, the trader is responsible for affixing the "VIETNAM DUTY NOT PAID" label on each item of imported goods that require labeling.

3. Goods managed under the temporary import and temporary export regime in duty-free sales business are subject to full legal responsibility by the trader for the quality of goods and food safety during customs procedures as well as when selling to buyers in accordance with the law.

4. Monthly, the trader must prepare a sales report to be submitted to Customs (in the format specified in this Circular) in the first week of the following month for Customs to review, monitor (lagging behind) and settle import declarations.

5. Based on monthly reports, semi-annually and annually, the trader reports to the General Department of Customs on the operation of duty-free sales business.

III. PROVISIONS FOR CUSTOMS AUTHORITIES MANAGING DUTY-FREE SALES BUSINESS

 MANAGEMENT OF DUTY-FREE SALES BUSINESS

Article 6. Responsibilities of Customs Authorities

1. The Customs Authority managing duty-free sales business is the Customs Sub-Department (hereinafter referred to as "Customs") decided by the Provincial/City Customs Department according to the authority prescribed to assign tasks for implementation.

2. Customs authorities managing duty-free sales have the responsibility to:

a) Perform customs procedures for imported and exported goods intended for duty-free sales.

b) Process declarations for temporarily imported and exported goods.

c) Based on declarations for imported and exported goods, management tracking books, sales reports, warehouse entry receipts, warehouse exit receipts, receipts for goods entering duty-free shops, and actual goods at shops and warehouses, carry out inspections of goods entering warehouses, exiting warehouses, entering shops, inventory in warehouses, and inventory in shops.

d) Monthly, Customs shall inspect sales invoices of shops to monitor (reconcile) and process declarations for imported and exported goods that have been sold or re-exported within the first week of the following month.

đ) Customs shall manage and track imported and exported goods for sale at duty-free shops through maintaining tracking books or by monitoring via networked computers between Customs and traders.

e) Coordinate with traders to implement computer networks to receive data from traders as stipulated in point a, b, Clause 2, Article 4 of this Circular.

g) During the management, tracking, and processing of declarations for imported and exported goods, if violations by traders are discovered, they shall be handled according to the nature and severity of the violation as prescribed by law.

IV. REGULATIONS ON OBJECTS, CONDITIONS AND QUANTITIES

DUTY-FREE PURCHASES

Article 7. Objects are persons departing, transiting who purchase duty-free goods at departure gate duty-free shops as stipulated in points a, b, Clause 1, Article 5 and Clause 1, Article 6 of the Regulation.

1. Before selling goods:

Sales staff are responsible for checking the following documents:

a) Passport or travel document as prescribed.

b) Boarding pass for persons departing or transiting by air (in this case, it is not required for buyers to present their passports for inspection).

c) In cases where persons departing purchase duty-free goods with a total value exceeding the amount specified by the State Bank of Vietnam, when purchasing, the person departing must present to the sales staff proof of origin of the currency used in transactions as prescribed by the State Bank of Vietnam.

Except in cases where persons departing use cards to withdraw money at counters located in departure quarantine areas or persons departing purchase duty-free goods and pay by card.

2. When selling goods:

Sales staff are responsible for performing the following:

a) Fully and accurately record all contents prescribed on the sales invoice. For persons departing or transiting by air, additional information such as flight number and date of departure must be recorded.

b) Retain sales invoices according to the date of sale (if sales invoices are in rolls, retain them by roll).

c) Retain copies of proof of origin of the currency used in transactions as prescribed by the State Bank of Vietnam (if applicable).

3. Traders may use duty-free goods for processing and retail at restaurants and waiting rooms in quarantine areas of international airports to serve immediate needs of passengers awaiting departure or transit.

Specifically, on sales invoices: at the buyer's name line, write "retail goods", without recording flight number and date, other information on the invoice must be fully recorded as prescribed.

4. In cases where tourists traveling by sea in a group have passports or travel documents as prescribed but do not have entry visas or entry/exit declarations, if they purchase duty-free goods, they shall follow the provisions of Clause 2 of this Article, except that the sales invoice shall include the name of the cruise ship. Shop staff are responsible for delivering goods to tourists immediately after they complete departure formalities.

Article 8. The subject is a person waiting to exit the country who purchases tax-free goods at a duty-free store within the city as stipulated in Point c, Clause 1, Article 5 and Clause 1, Article 6 of the Regulation.

1. Before selling goods:

Sales staff are responsible for checking the following documents:

a) A valid passport.

b) A registered departure ticket.

2. When selling goods:

Sales staff are responsible for performing the following:

a) Fully and accurately record all contents prescribed on the sales invoice (consisting of three copies); the sales invoice must bear the signature of the purchaser.

b) For small items, place the goods and sales invoice (two copies) in a specialized plastic bag and seal it (using the seal of the store).

c) Hand over the sealed bag to the purchaser for self-preservation, and the purchaser is responsible for presenting it to the customs office at the exit port.

d) Retain one copy of the sales invoice according to the date of sale.

3. Responsibilities of the duty-free store within the city:

a) For goods with large quantities and bulky sizes, the store is responsible for transportation and coordinating with the customs office at the exit port to hand over these goods to the purchaser in the quarantine area at the exit port.

b) In cases where the purchaser presents goods to the customs office at the exit port that do not match the sales invoice or the store does not have a sales invoice (with confirmation from the customs office at the purchaser's exit port) during settlement, the store is responsible for paying the full tax according to the current Tax Law for the sold goods.

c) During the last week of the month, the store is responsible for contacting the customs office at the exit port where the purchaser has departed to complete the procedures for receiving all confirmed sales invoices.

4. Responsibilities of the customs office at the exit port where the purchaser departs:

a) Accept goods from the purchaser or from the duty-free store within the city.

b) Check the seal of the duty-free store.

c) Inspect the actual goods against the sales invoice; confirm on the sales invoice by signing and stamping the back of the sales invoice (two copies).

d) Hand over one copy to the purchaser, retain one copy.

đ) During the last week of the month, complete the procedures for handing over all confirmed sales invoices to the store.

Article 9. The subject is a passenger on an outbound aircraft purchasing tax-free goods on the aircraft as stipulated in Clause 2, Article 5 and Clause 1, Article 6 of the Regulation.

1. The seller guides the customer to fully fill out the Purchase Order (according to the form issued together with this Circular); the seller retains the Purchase Order as evidence for settlement with customs; the Purchase Order is the responsibility of the enterprise to print, manage, and use.

2. Within 24 hours from when the aircraft parks at the designated position of the Civil Aviation Authority at the international airport, the trader must submit to customs a detailed sales report for each outbound flight. The detailed report includes: Name of purchaser, flight number, date of flight, name of item, quantity, value; The detailed report must be confirmed by the seller or their authorized representative; an invoice for total sales for customs to use as a basis for checking and settling the Outbound Inventory Form.

Article 10. The subject is an agency, organization, or individual entitled to diplomatic privileges and exemptions purchasing tax-free goods at a duty-free store within the city as stipulated in Clause 3, Article 5 and Clause 2, Article 6 of the Regulation.

1. Before selling goods:

Sales staff are responsible for checking the following documents:

a) Passport, diplomatic identification card, diplomatic note (if purchasing goods for an agency or organization).

b) Quota book for tax-free goods.

c) Authorization document for purchasing goods (in cases of purchasing under authorization).

d) Permit from the Provincial or Municipal Customs Department (for motor vehicles and motorcycles).

2. When selling goods:

The sales staff shall perform the following duties:

a) Fully and accurately record all contents prescribed on the sales invoice.

b) Cut the corresponding sticker for the sold item, affix it to the sales invoice.

b) Retain the sales invoice according to the date of sale.

c) Retain the documents c and d as prescribed in Clause 1 of this Article.

Article 11. The subject entitled to preferential tax policies as prescribed by the Prime Minister purchasing tax-free goods at duty-free shops within the city as stipulated in Clause 3, Article 5 and Clause 2, Article 6 of the Regulation.

1. Before selling goods:

Sales staff are responsible for checking the following documents:

a) Passport.

b) Confirmation document from the competent state agency (as for the buyer being an ODA expert under Decision No. 211/1998/QĐ-TTg dated October 31, 1998 of the Government, or the buyer being overseas Vietnamese invited back to work in Vietnam under Decision No. 210/1999/QĐ-TTg dated October 27, 1999 of the Government).

2. When selling goods:

Sales staff are responsible for performing the following:

a) The shop leader confirms and deducts on the document specified in point b, Clause 1 of this Article regarding the quantity of goods purchased at the shop.

b) Record all contents as prescribed on the sales invoice accurately.

c) Retain the sales invoice according to the date of sale.

d) As for the document specified in point a, Clause 2 of this Article:

- Retain a certified and deducted copy confirmed by the shop leader if the buyer has not yet purchased the full amount of tax-exempt goods.

- Retain the original document certified and deducted by the shop leader if the buyer has already purchased the full amount of tax-exempt goods.

Article 12. The subject working as a seafarer on international shipping vessels as stipulated in Clause 4, Article 5 and Clause 3, Article 6 of the Regulation

1. In the case of purchasing tax-free goods to serve the common living needs of seafarers during the time the vessel is docked at a Vietnamese port awaiting departure:

a) Seafarers on board are permitted to purchase tax-free goods at duty-free shops once, according to the following specific quantities:

- Spirits 22 degrees or higher: 1.5 liters.

- Spirits below 22 degrees: 2.0 liters.

- Alcoholic beverages, beer: 3.0 liters.

- Cigarettes: 400 sticks.

- Cigars: 100 sticks.

b) Sales regulations:

- The ship captain / vessel representative on behalf of the seafarers shall place an order (which may be in paper form or electronic form such as email, fax) for a single purchase for all seafarers.

- Sales staff shall perform:

+ Check the order and list of seafarers.

+ On the invoice, record the full name and passport number of the ship captain / vessel representative, vessel identification number, and entry date of the vessel, and sign the invoice.

+ Retain the sales invoice, order, and list of seafarers as the basis for customs declaration settlement.

2. In the case of purchasing tax-free goods to serve the needs of seafarers for the next voyage outside Vietnamese territorial waters, such purchases can only be made at the duty-free shop at the port of departure.

a) Sales regulations:

- The ship captain / vessel representative places orders according to needs.

- Sales staff shall perform:

+ Check the order and list of seafarers.

+ On the invoice, record the full name and passport number of the ship captain / vessel representative, vessel identification number, and entry date of the vessel, and sign the invoice.

+ Retain the sales invoice, order, and list of seafarers as the basis for customs declaration settlement.

b) Goods purchased at the duty-free shop according to the order serving the needs of seafarers for the next voyage (to be used outside Vietnam's territorial waters) must be placed in the ship's warehouse for sealing and confirmation of actual export by the customs office at the port of departure (signing and stamping by customs officials on the sales invoice), and monitored until the ship departs.

3. In cases where there is no duty-free shop at an international seaport, the duty-free shop at the nearest provincial or municipal seaport is permitted to sell tax-free goods to the subjects specified in Clause 1 and Clause 2 of this Article.

When exporting goods from the warehouse / shop to the vessel that has placed an order, the trader must issue a Warehouse Exit Form / Shop Exit Form detailing each item, quantity, and value, and submit it to the customs office at the port of departure. The sales process shall be carried out in accordance with the provisions of Clause 1 and Clause 2 of this Article.

V. REGULATIONS ON CUSTOMS MANAGEMENT FOR IMPORTED GOODS ALREADY SUBJECTED TO DUTIES AND DOMESTICALLY PRODUCED GOODS SOLD AT DUTY-FREE SHOPS

Article 13. Goods Produced in Vietnam

1. Goods produced in Vietnam include goods manufactured from domestic raw materials and goods manufactured from imported raw materials.

2. Goods produced in Vietnam that are sold at duty-free shops must not be on the list of prohibited export goods. If they are conditional export goods, they must have a permit from the specialized management agency as stipulated by law.

Article 14. Customs Procedures for Imported Goods Already Paid Duty and Goods Produced in Vietnam

The customs procedures for imported goods already paid duty and goods produced in Vietnam sold at duty-free shops shall be treated as export goods and comply with the legal regulations on export goods.

1. Responsibilities of traders:

1.1. The seller of goods registers an export declaration form (HQ/2002-XK), while the buyer (duty-free shop trader) registers an import declaration form (HQ/2002-NK) as if for exported and imported goods under a sales contract.

a) For imported goods already paid duty, additional documents must be submitted: the original import declaration form, tax receipts (certified copies stamped and signed by the company director).

b) Customs procedures shall be carried out at the Customs Sub-Department managing duty-free shop trading.

1.2. Each day, based on sales invoices, the buyer has the responsibility to compile the number of goods sold on that day to prepare a daily sales report.

1.3. Based on the record book or data tracked on a networked computer with Customs and the daily sales report, when all the imported goods declared on the HQ/2002-NK form have been sold, the buyer has the responsibility to notify the seller to contact Customs for verification and confirmation of actual export.

2. Responsibilities of Customs:

2.1. Customs is responsible for handling export and import procedures according to current regulations.

- Specifically, for the HQ/2002-XK declaration form: confirm completion of customs procedures and stamp in box 26, without confirming actual export and without stamping in box 27.

- Track this type of goods separately through maintaining a record book or tracking on a networked computer between Customs and traders.

2.2. Based on Point 1.3, Clause 1 of this Article, Customs confirms actual export in box 27 of the HQ/2002-XK declaration form (including the Customs copy and the declarant's copy) and settles the file according to regulations.

2.3. Customs implements tax refund procedures according to the relevant tax laws.

VI. REGULATIONS ON CUSTOMS MANAGEMENT FOR IMPORTED GOODS SOLD AT DUTY-FREE SHOPS TRANSFERRED TO OTHER USE

 TRANSFERRED TO OTHER USE

Article 15. For Re-exported Goods

1. The merchant submits to Customs the following documents:

- A request for re-exportation.

- Permit from the Ministry of Industry and Trade (if the imported goods require a permit from the Ministry of Industry and Trade).

2. The re-export procedures shall be carried out according to the current regulations for re-exported goods customs procedures.

Article 16. For Goods Sold in the Domestic Market

1. The trader submits the following documents to Customs:

- A request for transferring goods to be sold in the domestic market, specifying each item, commodity code, quantity, and value.

- Permit from the Ministry of Industry and Trade (if the imported goods required a permit from the Ministry of Industry and Trade upon import).

2. Customs procedures for transferring goods to be sold in the domestic market shall be conducted according to current regulations similar to those for imported goods under a sales contract.

VII. REGULATIONS ON SETTLEMENT OF FILES

Article 17. Documentation for Settlement

The documentation for settlement includes:

- Request letter for settlement;

- Import declaration form (retained copy by the declarant): original;

- Sales invoices for each type of tax-exempt buyer as stipulated in Section IV of this Circular: submit copies, present originals;

- Monthly sales report of the trader: copy;

- Other documents (if any).

Article 18. Procedures for Settlement

1. Each month, Customs shall conduct settlement of import declarations for goods sold within that month once in the first week of the following month. When Customs conducts inspection and settlement, the trader must present the documentation specified in Article 17 of this Circular and accounting books and records related to their business activities (upon request by Customs).

2. Within ten days from the date of selling out all goods or the expiration of the storage period, the trader is responsible for submitting to Customs the settlement documentation as prescribed in Article 17 of this Circular.

3. During the settlement process, if deemed necessary, Customs will inspect the quantity of goods stored in warehouses and at duty-free shops. Annually, Customs will conduct regular inspections of inventory levels.

4. After completing the settlement of import declarations, the trader must retain sales documentation in accordance with accounting regulations.

5. Settlement for broken, damaged, deteriorated, or substandard goods:

5.1 For goods that are broken during transportation or storage, damaged, deteriorated, or substandard, the trader must submit an explanatory document to Customs, detailing the reasons and specifying the item name, commodity code, quantity, and value. Customs, based on the explanation and actual condition of the goods, is responsible for confirming such goods.

5.2 The trader is responsible for organizing the disposal of waste materials in accordance with the regulations on waste disposal under the supervision of Customs; reporting to the General Department of Customs on the results of the disposal.

5.3 Tax policies for disposed goods shall be implemented in accordance with current tax laws.

VIII. IMPLEMENTATION PROVISIONS

Article 19. Effective Date

1. This Circular takes effect forty-five days from the date of issuance. Decree No. 77/2004/QĐ-BTC dated September 28, 2004 of the Ministry of Finance regarding customs management of goods sold at duty-free shops and related guiding documents are hereby repealed.

2. The General Department of Customs is responsible for guiding the settlement of import declarations for goods imported for sale at duty-free shops which completed procedures before July 1, 2009.

3. The Director of the General Department of Customs instructs the Directors of Provincial Customs Departments to organize management, monitoring, and implementation of the guidance provided in this Circular./.