DECREE NO. 155/2005/ND-CP ON THE DETERMINATION OF CUSTOMS VALUE FOR EXPORTED AND IMPORTED GOODS

DECREE

Regulations on determining customs value for exported and imported goods

for exported and imported goods

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Based on the Export Tax, Import Tax Law number 45/2005/QH11 dated June 14, 2005;

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

Considering the proposal of the Minister of Finance,

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Decree stipulates the determination of customs value for the purpose of calculating taxes and statistics for exported and imported goods.

2. Exported and imported goods are the objects to which this Decree applies.

3. In cases where international treaties to which Vietnam is a party provide different provisions from this Decree, such treaties shall be implemented according to their provisions.

Article 2. Explanation of terms

1. "Transaction value" means the total amount of money actually paid or to be paid directly or indirectly by the buyer to the seller for the purchase of imported goods, adjusted in accordance with the provisions of Clause 13 of this Decree.

2. "Sold for export to Vietnam" refers to a commercial activity involving the transfer of goods from the seller to the buyer through a Vietnamese border checkpoint or from a free trade zone into the domestic market, with the aim of transferring ownership of the goods from the seller to the buyer.

3. "Date of export" used in the transaction value method for identical imported goods and the transaction value method for similar imported goods is the date when the goods are loaded onto the means of transport as indicated on the bill of lading; for goods transported by road, "date of export" is the date of declaration of the customs declaration form.

4. "First port of entry" is the destination port recorded on the transport document. For international road, rail, or river transport, "first port of entry" is the destination port recorded on the contract.

5. "Available information" includes all information related to the examination and determination of the taxable value provided by the declarant to the customs authority or collected by the customs authority up to the time of examination and determination of the taxable value. Such information must be retained, analyzed, and managed by the customs authority.

6. "Identical imported goods" are goods that are identical in every aspect, including physical characteristics, quality, and reputation; produced in the same country, by the same manufacturer or another manufacturer under authorization of that manufacturer, and imported into Vietnam.

7. "Similar imported goods" are goods that, although not identical in every aspect, have basic similarities in features, made from the same raw materials; having the same function and can be substituted for each other in commercial transactions; produced in the same country, by the same manufacturer or another manufacturer under authorization of that manufacturer, and imported into Vietnam.

8. "In the same condition as when imported" used in the deduction value method for determining the taxable value, refers to goods that, after importation, have not been subjected to any action that changes their shape, characteristics, nature, utility, or increases or decreases their import value.

9. The buyer and seller have a special relationship when:

a) They are employees or directors of another business;

b) They are recognized partners or shareholders in a business;

c) They are employer and employee;

d) The seller has control over the buyer or vice versa;

đ) They are both controlled by a third party;

e) They jointly control a third party.

A person who controls another person as specified in points d, đ, e of Clause 9 of this Article is someone who can directly or indirectly limit or direct the other person.

g) They have a family relationship as follows:

- Spouses;

- Parents and children recognized by law;

- Grandparents and grandchildren, having a blood relationship;

- Uncles, aunts, and nephews, nieces, having a blood relationship;

- Full siblings;

- Siblings-in-law.

h) A third party owns, controls, or holds five percent or more of the voting shares of both parties;

i) Parties are associated in business, where one party is the exclusive agent, distributor, or assignee of the other party, and such association is considered a special relationship if it complies with the provisions from point a to point h above.

Article 3. Time for Determining Customs Value

The time for determining customs value is the date on which the declarant registers the customs declaration for export or import goods.

In cases where the customs value is determined by the customs authority, the time for determining customs value is the date on which the customs authority determines the value according to the provisions of this Decree.

Article 4. Principles and Methods for Determining Customs Value for Tax Purposes

The customs value for tax purposes for exported and imported goods (hereinafter referred to as taxable value) shall be determined based on the following principles and methods:

1. For exported goods, the taxable value is the price at the port of export (FOB price, DAF price), excluding insurance premium (I) and freight (F).

2. For imported goods, the taxable value is the actual price paid up to the first point of entry and is determined by sequentially applying the methods for determining the taxable value prescribed from Article 7 to Article 12 of this Decree until a method that determines the taxable value is found.

If the declarant requests it in writing, the sequence of applying the methods for determining the taxable value prescribed in Article 10 and Article 11 of this Decree may be interchanged.

3. The Ministry of Finance shall base on the principle of determining the taxable value prescribed in Clause 2 of this Article to specify the procedures for checking and determining the taxable value for imported goods in the following cases:

a) Imported goods that have been exempted from taxes, put into use in Vietnam but later permitted by competent authorities to be transferred or change their purpose from the previously exempted tax;

b) Imported goods that are on loan;

c) Imported goods taken abroad for repair or processing;

d) Warranty goods and promotional goods;

đ) Imported goods without a sales contract, including:

- Goods traded or exchanged by border residents;

- Goods imported by inbound passengers, gifts, presents, personal effects exceeding the tax-free allowance;

- Goods imported by postal service enterprises providing express delivery services.

e) Other special imported goods.

Article 5. Customs Value for Statistical Purposes

1. The customs value for statistical purposes for exported and imported goods (hereinafter referred to as statistical value) shall be determined based on the following principle:

a) For goods subject to taxation, the statistical value is determined based on the taxable value already determined according to the principles and methods prescribed in Article 4 of this Decree;

b) For goods not subject to taxation, exempted from taxes, or whose taxable value cannot be determined according to Article 4 of this Decree, the statistical value is declared by the declarant based on the following principle:

- For imported goods, the statistical value is the price at the first point of entry (CIF price);

- For exported goods, the statistical value is the price at the port of export (FOB price, DAF price).

2. The Ministry of Finance shall specify the procedures for collecting, processing, using, and storing statistical values.

Article 6. Information and price databases

1. The taxable value for imported goods shall be checked and determined based on the price database and available information.

2. The Ministry of Finance shall specify the construction, management, and use of the price database and available information.

Chapter II

METHODS FOR DETERMINING THE TAXABLE VALUE

IMPORTED GOODS

Article 7. Method for determining the taxable value based on the transaction value of imported goods

1. The taxable value of imported goods is the transaction value.

The transaction value is determined by the total amount actually paid or to be directly or indirectly paid by the buyer to the seller for the imported goods, adjusted according to the provisions of Article 13 of this Decree.

The total amount actually paid or to be directly or indirectly paid by the buyer to the seller for the imported goods includes the following items:

a) The purchase price recorded on the commercial invoice. In cases where the purchase price recorded on the commercial invoice includes discounts applicable to the imported consignment in accordance with international trade practices, these amounts shall be deducted to determine the taxable value.

The Minister of Finance shall specify the deduction of such discount from the taxable value.

b) Amounts that the buyer must pay but are not included in the purchase price recorded on the commercial invoice, including:

- Advance payments, deposits for production, sale, transportation, and insurance of goods;

- Indirect payments to the seller such as amounts paid by the buyer to a third party at the seller's request; amounts paid through offsetting debts.

2. Conditions for applying the method of determining the taxable value based on the transaction value:

a) The buyer is not restricted in disposing of or using the goods after importation, except for the following restrictions:

- Restrictions on the sale and use of goods as prescribed by Vietnamese law;

- Restrictions on the place of consumption of goods after importation;

- Other restrictions that do not affect the value of the goods;

b) Prices or sales are not dependent on conditions or payments that cannot be used to determine the value of the goods to be determined as the taxable value;

c) After reselling the goods, the importer does not have to pay any additional amount from the proceeds obtained from the disposition or use of the goods, excluding adjustments specified in point d, Clause 1, Article 13 of this Decree;

d) The buyer and seller do not have a special relationship or if they do, such relationship does not affect the transaction value.

In cases where the customs authority has grounds to believe that a special relationship affects the transaction value, it must immediately notify the declarant in writing of such grounds.

The customs authority facilitates the declarant in providing additional information to clarify whether the special relationship between the buyer and seller does not affect the transaction value. If within thirty days (working days) from the date of receiving the notification from the customs authority, the declarant does not provide additional information, the customs authority shall determine the taxable value in accordance with the provisions of Clause 6, Article 15 of this Decree.

A special relationship between the buyer and seller is considered not to affect the transaction value when the transaction value is approximately equal to one of the following values of a similar consignment exported to Vietnam on the same day or within sixty days before or after the exportation of the consignment being determined for its taxable value:

- The transaction value of identical or similar goods sold to another importer who does not have a special relationship with the exporter (seller);

- The taxable value of identical or similar goods determined in accordance with Article 10 of this Decree;

- The taxable value of identical or similar goods determined in accordance with Article 11 of this Decree.

Article 8. Method for determining the taxable value based on the transaction value of identical imported goods

1. For imported goods into Vietnam, if the taxable value cannot be determined according to the provisions of Article 7 of this Decree, then the taxable value shall be the transaction value of identical imported goods that has been determined according to the provisions of Article 7 of this Decree.

2. Identical imported goods must satisfy the following conditions:

a) The consignment of identical imported goods exported to Vietnam on the same day or within sixty days before or after the export date of the consignment being determined for its taxable value;

b) The consignment of identical imported goods has a transaction at the same level or has been adjusted to the same wholesale or retail level, with the same quantity or has been adjusted to the same quantity as the consignment being determined for its taxable value;

c) The consignment of identical imported goods has the same distance and mode of transport or has been adjusted to the same distance and mode of transport as the consignment being determined for its taxable value.

3. When applying the method for determining the taxable value prescribed in this Article, if there is no consignment of goods produced by the same manufacturer, consideration may be given to goods produced by another manufacturer, but it must ensure the provisions regarding identical imported goods.

4. When determining the taxable value prescribed in this Article from two transaction values of identical imported goods or more, the taxable value shall be the lowest transaction value, after adjusting the price to the same conditions specified in Clause 2 of this Article.

Article 9. Method for determining the taxable value based on the transaction value of similar imported goods

1. For imported goods into Vietnam, if the taxable value cannot be determined according to the provisions of Articles 7 and 8 of this Decree, then the taxable value shall be the transaction value of similar imported goods that has been determined according to the provisions of Article 7 of this Decree.

2. Similar imported goods must satisfy the following conditions:

a) The consignment of similar imported goods exported to Vietnam on the same day or within sixty days before or after the export date of the consignment being determined for its taxable value;

b) The consignment of similar imported goods has a transaction at the same level or has been adjusted to the same wholesale or retail level, with the same quantity or has been adjusted to the same quantity as the consignment being determined for its taxable value;

c) The consignment of similar imported goods has the same distance and mode of transport or has been adjusted to the same distance and mode of transport as the consignment being determined for its taxable value.

3. When applying the method for determining the taxable value prescribed in this Article, if there is no consignment of goods produced by the same manufacturer, consideration may be given to goods produced by another manufacturer, but it must ensure the provisions regarding similar imported goods.

4. When determining the taxable value prescribed in this Article from two transaction values of similar imported goods or more, the taxable value shall be the lowest transaction value, after adjusting the price to the same conditions specified in Clause 2 of this Article.

Article 10. Method for Determining the Tax Value Based on Deductible Value

1. For imported goods into Vietnam, if the tax value cannot be determined according to Articles 7, 8, and 9 of this Decree, the tax value shall be the deductible value. The deductible value is determined based on the selling price of the imported goods, identical imported goods, or similar imported goods on the Vietnamese market, minus (-) reasonable costs incurred after importation.

2. The selling price of imported goods on the Vietnamese market shall be determined according to the following principles:

a) The selling price of imported goods is the actual selling price; if there is no actual selling price for the imported goods whose tax value needs to be determined, the actual selling price of identical or similar imported goods still in their original condition when imported, sold on the domestic market, shall be used to determine the actual selling price;

b) The importer and the domestic buyer have no special relationship;

c) The price is calculated based on the largest quantity sold sufficient to form a unit price;

d) The goods are sold (wholesale or retail) on the earliest date immediately after importation, but not later than 90 days (calendar days) after the importation of that consignment.

3. Reasonable costs incurred after importing goods include:

a) In the case where the importer purchases goods under an outright purchase method, the deductions include:

- Transportation costs and insurance costs for the goods when consumed on the domestic market;

- Taxes, fees, and charges payable to the state budget upon importation and sale of imported goods, which, according to current laws, are recorded as revenue from sales, cost of goods sold, and selling expenses;

- General management costs related to the sale of imported goods;

- Profit from sales after importation.

b) In the case where the importer acts as an agent for foreign traders, the deduction is the commission for sales.

If the agent performs certain activities related to post-importation sales in Vietnam beyond the agency agreement, the costs of these activities incurred in Vietnam are also deductible within the scope agreed upon in the contract.

Post-importation costs permitted to be deducted as specified in Clause 3 of this Article must truthfully reflect common and actual costs and profits in the industry and comply with accounting principles in Vietnam.

4. Imported goods processed or further manufactured domestically shall also be determined based on the tax value principle stipulated in Clause 1 of this Article, minus the processing and manufacturing costs that increase the value of the goods.

The method for determining the tax value prescribed in this Article shall not be applied in the following cases:

- Goods imported and then processed or manufactured no longer retain their original condition upon importation;

- Goods imported and then processed or manufactured retain their characteristics, nature, and utility as when imported but are only part of the goods sold on the Vietnamese market.

In the case where goods imported and then processed or manufactured no longer retain their original condition upon importation, but the additional value added through processing or manufacturing can be accurately determined, the tax value shall still be determined according to this Article.

5. The deduction of costs and profits as prescribed in Clauses 3 and 4 of this Article must be based on objective and quantifiable documentation and data. These data must be recorded and reflected in accounting books in accordance with accounting laws.

Article 11. Method for Determining the Tax Value Based on the Calculated Value

1. For imported goods into Vietnam, if the tax value cannot be determined according to the methods prescribed from Article 7 to Article 10 of this Decree, then the tax value shall be the calculated value. The calculated value shall include the following items:

a) The basket cost or basket value of raw materials, production costs of the manufacturing process or other processing costs of producing the imported goods;

b) Costs and profit for selling the imported goods;

c) Adjustment costs as stipulated at points đ and e, Clause 1, Article 13 of this Decree.

2. The determination of the calculated value must be based on data provided by the manufacturer and comply with accounting principles of the country producing the goods.

Article 12. Method of Inference for Determining the Tax Value

1. For imported goods into Vietnam, if the tax value cannot be determined according to the methods prescribed from Article 7 to Article 11 of this Decree, then the tax value will be determined using the method of inference.

The method of inference involves sequentially and flexibly applying the methods for determining the tax value prescribed from Article 7 to Article 11, stopping immediately upon reaching a method that determines the tax value, provided that such application complies with the provisions of Clause 2 of this Article and is based on available documentation, data, and information at the time of determining the tax value.

2. When applying the method of inference, the following values may not be used to determine the tax value:

a) Domestic market sales price of similar products produced in Vietnam;

b) Sales price of goods in the domestic market of the exporting country;

c) Sales price of goods exported to another country;

d) Production costs of goods, except for the production costs of imported goods as stipulated in Article 11 of this Decree;

đ) Minimum taxable value;

e) Assumed prices;

g) A system allowing the use of the higher of two substitute values as the tax value.

Article 13. Adjustments

1. Amounts to be added to the transaction value to determine the tax value:

a) The following costs borne by the buyer but not included in the transaction value:

- Commission and brokerage fees;

- Packaging costs considered to be inseparable from the imported goods;

Packaging considered inseparable from the imported goods includes packaging that regularly accompanies the goods as a condition for preservation or use, classified together with the goods under current classification and commodity code principles.

- Packing costs, including both material and labor costs.

b) The value of goods and services provided by the buyer to the seller free of charge or at a reduced price for the production and consumption of imported goods in Vietnam, not included in the actual payment or future payment, including:

- Raw materials, components, spare parts, and similar items forming part of the imported goods;

- Tools, molds, dies, and similar items used to produce the imported goods;

- Raw materials and fuel consumed during the production of the imported goods;

- Technical designs, construction designs, implementation plans, artistic designs, sample designs, diagrams, and sketches performed abroad and necessary for the production of the imported goods.

c) Royalty fees and license fees for intellectual property rights related to the imported goods that the buyer must pay as a condition of purchasing the imported goods;

d) Amounts received by the buyer after disposing of or using the imported goods, transferred in any form to the seller of the imported goods;

đ) Transportation, loading, unloading, and transshipment costs related to transporting the imported goods to the customs port of entry;

e) Insurance costs for transporting the imported goods to the customs port of entry.

2. The following amounts shall be deducted from the transaction value if they have been included in the purchase price of the imported goods:

a) Costs arising after importing the goods, including construction, architectural, installation, maintenance, or technical assistance costs;

b) Domestic transportation and insurance costs arising after importing;

c) Taxes, fees, and charges payable to the state budget included in the purchase price of the imported goods;

d) Interest payments related to the payment for imported goods, provided that the interest rate must be documented and consistent with the usual lending rates applied by financial institutions in the exporting country at the time of signing the contract;

đ) Discounts made before loading the goods onto the means of transport in the exporting country, documented and submitted together with the import declaration form.

3. The addition or subtraction of costs as prescribed in Clauses 1 and 2 of this Article can only be carried out based on objective, available, and quantifiable data, in compliance with accounting laws.

4. No other amounts may be added or subtracted beyond those specified in Clauses 1 and 2 of this Article.

Chapter III

RIGHTS AND OBLIGATIONS OF THE CUSTOMS DECLARANT

RESPONSIBILITIES OF THE CUSTOMS AUTHORITY

Article 14. Rights and Obligations of the Customs Declaration Person

1. The customs declaration person has the following rights:

a) Request the customs authority to keep confidential information related to the determination of the dutiable value provided;

b) Request the customs authority to notify and guide on the determination of the dutiable value as prescribed in this Decree;

c) Prove the accuracy and truthfulness of the declared dutiable value;

d) Lodge complaints against decisions on the dutiable value made by the customs authority;

đ) Request the customs authority to notify in writing the customs declaration person of the dutiable value, method, and calculation used to determine the dutiable value when it is determined by the customs authority;

e) Request clearance of goods according to Article 16 of this Decree.

2. Obligations of the customs declaration person:

a) Adhere to the principle of self-declaration and accurate and truthful determination of the dutiable value; bear legal responsibility for the accuracy and truthfulness of the declared contents and the result of determining the dutiable value;

b) Provide authentic information and legitimate documents and vouchers as the basis for determining the dutiable value upon request of the customs authority;

c) Be subject to inspection by the customs authority regarding the dutiable value as prescribed in this Decree.

Article 15. Responsibilities and Authorities of the Customs Authority

1. Guide the customs declaration person to determine the dutiable value as prescribed in this Decree.

2. Require the customs declaration person to submit and present legitimate documents and relevant materials concerning the purchase and sale of goods to prove the accuracy and truthfulness of the declared dutiable value of imported goods.

In case of not accepting the explanation about the dutiable value provided by the customs declaration person, the customs authority must immediately notify in writing the customs declaration person of the grounds and basis for non-acceptance.

3. Notify in writing the customs declaration person of the dutiable value, method, and calculation used by the customs authority to determine the dutiable value.

4. Keep confidential information provided by the customs declaration person related to the determination of the dutiable value, at the request of the customs declaration person and in accordance with the provisions of the law.

5. Clear goods at the request of the customs declaration person based on the deposit of guarantee as prescribed in Article 16 of this Decree.

6. Determine the dutiable value in the following cases:

a) The customs declaration person cannot determine the dutiable value according to the methods prescribed from Article 7 to Article 12 of this Decree;

b) The customs declaration person declares the dutiable value inaccurately;

c) The customs declaration person does not explain or cannot explain the truthfulness and accuracy of the declared value as required by the customs authority.

7. Inspect the declaration and determination of the dutiable value of imported goods. Issue decisions to recover or refund taxes due to incorrect determination of the dutiable value.

8. Collect, analyze, and manage necessary information as the basis for inspection and determination of the dutiable value.

Article 16. Suspension of Determination of Dutiable Value

1. During the process of determining the dutiable value of imported goods, if the customs declaration person does not have sufficient information to determine the dutiable value, upon request of the customs declaration person, the customs authority may accept clearance of goods under the condition that the customs declaration person must deposit a guarantee for the tax of the consignment in the form of: surety, cash deposit, or other appropriate forms of guarantee at a level sufficient to fulfill the tax obligation.

2. The Ministry of Finance shall stipulate the amount, form, and procedures for depositing the guarantee referred to in Clause 1 of this Article.

Chapter IV

COMPLAINTS AND VIOLATION HANDLING

Article 17. Complaints and Resolution of Complaints

In case the declarant does not agree with the customs value determination decision of the customs authority, they must still comply with that decision while having the right to file a complaint in accordance with the law on complaints.

Article 18. Handling violations

Organizations and individuals violating the provisions of this Decree shall be subject to administrative penalties or criminal prosecution, depending on the nature and severity of the violation, in accordance with the law.

Customs officers and other individuals who lack a sense of responsibility, violate the provisions of this Decree, causing damage to the declarant, shall be required to compensate for the damage in accordance with the law and may be subject to disciplinary action or criminal prosecution, depending on the nature and severity of the violation, in accordance with the law.

Chapter V

IMPLEMENTATION

Article 19. Responsibilities of Authorities, Organizations, and Individuals

1. The Ministry of Finance shall guide and organize the implementation of this Decree.

2. The State Bank of Vietnam shall instruct and guide credit organizations to provide the customs authority with all relevant documents related to the payment of exported and imported goods for the purpose of inspection and determination of customs value.

3. Relevant ministries and sectors shall have the responsibility to cooperate with the customs authority in combating commercial fraud through pricing.

4. Associations, business organizations, and related individuals shall have the responsibility to provide information about exported and imported goods at the request of the customs authority.

Article 20. Implementation Provisions

1. This Decree shall take effect fifteen days from the date of publication in the Official Gazette, replacing Decree No. 60/2002/NĐ-CP dated June 6, 2002 of the Government on the determination of customs value for imported goods under the principle of the Agreement implementing Article 7 of the General Agreement on Tariffs and Trade. All previous regulations contrary to this Decree are hereby abolished.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of provincial and centrally-administered city People's Committees are responsible for implementing this Decree./.