Decision No. 195-TTg promulgates the regulations on duty-free shops.

Pursuant to …;

ISSUANCE OF REGULATIONS ON DUTY-FREE SHOPS

PRIME MINISTER

Pursuant to the Government Organization Law dated September 30, 1992;
To strengthen the management of duty-free shops' operations;
At the proposal of the Minister of Trade,

DECISION:

Article 1. These Regulations on duty-free shops are promulgated together with this Decision.

Article 2. This Decision takes effect from the date of signature; all previous regulations contrary to this Decision are abolished.

The Minister of Trade, the Minister of Finance, and the Director General of the General Department of Customs shall be responsible for guiding and supervising the implementation of the Regulations issued together with this Decision.

Article 3. The Ministers, Heads of Ministries equivalent to Ministries, agencies under the Government, and Chairpersons of Provincial People's Committees directly under the Central Government shall be responsible for implementing this Decision.

REGULATIONS

REGARDING DUTY-FREE SHOPS
(Issued together with Decision No. 195/TTg dated April 8, 1996 of the Prime Minister)

Article 1.

1- A duty-free shop is a store selling imported goods exempted from import tax (hereinafter referred to as a duty-free shop) for specified subjects and at designated areas as stipulated in Article 3 of these Regulations.

2- The operation of duty-free shops is subject to direct inspection and supervision by the Ministry of Trade and the Vietnam Customs.

3- Priority is given to domestic enterprises investing in joint ventures to build duty-free shops and to provide stable sources of goods for sale.

Article 2. General provisions on conditions and application procedures for opening duty-free shops:

1- Enterprises wishing to open duty-free shops must have a business license issued by the Ministry of Trade.

2- Conditions for enterprises to be considered for issuance of a business license for duty-free goods include:

a) The enterprise must be established according to Vietnamese law and operate in provinces and centrally-administered cities with international border gates (airports, seaports, railways, roads) where the number of passengers exiting and entering exceeds 15,000 people per year. The business of selling duty-free goods must be consistent with the enterprise’s registered business activities.

b) Having sufficient capital and infrastructure including a system of stores and warehouses meeting standards, convenient for sales and supervision by Customs.

c) Having a staff with adequate management and sales skills.

d) Having a stable source of goods.

3- If an enterprise meets the conditions set out in Clause 2 of this Article and has a need to open a duty-free shop, it shall submit an application for business to the Ministry of Trade.

- Application form for a business license (Form 1, Form 3).

- Application for duty-free business,

- Copy of the Decision establishing the enterprise,

- Copy of the Enterprise's Business Registration Certificate,

- Necessary documents to explain the conditions set out in Clause 2 of this Article.

- Document from the General Department of Customs; the management agency of the area where the shop will be located (airport authority, port authority, station...) accepting the location of the duty-free shop,

- Cooperation proposal with foreign companies (if applicable).

4- The Ministry of Trade shall be responsible for reviewing applications and issuing business licenses for duty-free goods, in accordance with the needs of each area and location as stipulated in Article 3 of these Regulations.

5- Vietnamese enterprises that have been permitted to open duty-free shops or have been permitted to cooperate with foreign companies to sell duty-free goods may continue to operate according to the issued licenses and are responsible for complying with all provisions of these Regulations.

Article 3. Provisions on the location of duty-free shops:

1- International airport departure lounges, international seaports, international land and rail border gates, if they meet the conditions, may open duty-free shops to serve outbound and transit passengers (including drivers and crew members of transportation vehicles).

2- On international flights operated by Vietnamese airlines or airlines established according to Vietnamese law, duty-free goods can be sold to serve passengers and flight crews on board.

3- Duty-free shops serving inbound passengers (including flight crews and attendants on international flights) at some international airports; downtown duty-free shops (Downtown Duty Free Shop) for those waiting to depart, and duty-free shops for diplomatic missions as stipulated in Decree No. 73/CP dated July 30, 1994 of the Government, shall be decided by the Prime Minister based on the proposals of provincial and municipal People's Committees and relevant ministries and sectors.

4- The specific locations of duty-free shops mentioned in Clause 3 of this Article must be approved by the provincial or municipal People's Committee; the location of dedicated warehouses for duty-free goods must be approved by the provincial or municipal Customs and must be subject to direct inspection and supervision by Customs.

Article 4. Provisions on goods sold at duty-free shops include:

1- Goods sold at duty-free shops are imported goods for duty-free trade approved by the Ministry of Trade according to current regulations.

2- In addition to imported goods for duty-free trade, duty-free shops are encouraged to sell domestically produced goods and legally imported goods circulating legally in the Vietnamese market. These goods are considered export goods and must comply with export commodity policies according to current import and export management regulations.

3- Procedures for transferring goods into warehouses and bringing goods from warehouses to duty-free shops are regulated by the General Department of Customs.

4- Imported goods for duty-free trade must be affixed with a "VIETNAM DUTY NOT PAID" label issued by the Ministry of Finance or by the enterprise but approved by the Ministry of Finance.

5- Imported goods for duty-free trade approved by the Ministry of Trade, if they remain unsold for a long time and the enterprise requests disposal (cancellation, payment of import tax to transfer to domestic consumption, or re-exportation), must be confirmed in detail by Customs, the enterprise owner, and must be approved by the Ministry of Trade. In such cases, the Ministry of Trade must strictly monitor to prevent the misuse of duty-free trade to bring restricted import consumer goods into the domestic market beyond the prescribed limits. Goods prohibited from import cannot be disposed of through domestic consumption.

In cases where goods are broken or severely damaged, a record with customs certification must be established and the goods destroyed under customs supervision without requiring permission from the Ministry of Trade.

Article 5. The procedures for selling goods and tax obligations at duty-free shops include:

1- Conditions and procedures for selling goods:

a) Selling to passengers departing, arriving, or transiting as stipulated in Article 3 of this Regulation, when they present a valid passport.

b) Direct sales to passengers on international flights operated by Vietnam Airlines or other airlines established under Vietnamese law.

c) Individuals entitled to duty-free purchase standards must present their purchase book along with their passport or identity card issued by the Ministry of Foreign Affairs if purchasing for personal use; the purchase book along with a diplomatic note or letter of introduction from the organization if purchasing for organizational use.

d) Foreign nationals, overseas Vietnamese, and Vietnamese citizens awaiting departure as specified in Article 3 of this Regulation must present their passports and tickets with registered departure dates to register for purchases. Goods will be received at the exit port when the passenger has completed departure formalities.

e) Duty-free goods for the daily needs of crew members may be sold based on orders from the ship's captain. These goods must be sealed intact and transported onto the vessel under customs escort before the ship departs from the port.

f) Individuals entitled to duty-free purchase standards can buy goods according to quantities prescribed by Vietnamese law; incoming passengers can purchase according to the quantity limits set for tax-free baggage allowances for departing and arriving passengers. Departing crew members can purchase goods according to reasonable needs taking into account the duration of the voyage.

Other individuals can purchase without quantity restrictions and are responsible for complying with export and import procedures as well as permitted quantity regulations for export and import.

2- Imported goods of duty-free shops approved by the Ministry of Trade are exempt from import taxes according to guidelines from the Ministry of Finance; if there is inventory surplus, they may be disposed of domestically according to the provisions of Article 4 of this Regulation, provided that taxes are paid as required by law.

Goods produced in Vietnam and legally imported into Vietnam as specified in Article 4 of this Regulation must pay export taxes (if applicable) when sold to departing or transiting passengers.

3- Other tax obligations, declaration and payment procedures, final settlement, and financial accounting systems shall be carried out according to the guidelines of the Ministry of Finance. Special invoices, if used, must be approved by the Ministry of Finance.

Article 6. Enterprises operating duty-free shops must report their duty-free sales activities to the Ministry of Trade, Ministry of Finance, General Department of Customs, and relevant departments every three months, six months, and annually.

Article 7. This Regulation takes effect from the date of signature. Previous regulations inconsistent with this Regulation are abolished.