Circular No. 214/2010/TT-BTC guiding preferential import tax policies for materials and equipment imported to produce key mechanical products and to invest in producing such products.

CIRCULAR

Guidelines on Preferential Import Tax Policy for Materials and Equipment Imported for the Production of Key Mechanical Products and

 for Investment in the Production of Key Mechanical Products

 _________________________

Pursuant to the Law on Export Tax and Import Tax dated June 14, 2005;

Pursuant to Resolution No. 295/2007/NQ-UBTVQH12 dated September 28, 2007 of the Standing Committee of the National Assembly on the issuance of the Export Tariff List according to the category of goods subject to tax and the tariff rate range for each category of goods, and the Preferential Import Tariff List according to the category of goods subject to tax and the preferential tariff rate range for each category of goods;

Pursuant to Resolution No. 830/2009/UBTV12 dated October 17, 2009 of the Standing Committee of the National Assembly on amending Resolution No. 295/2007/NQ-UBTVQH12 dated September 28, 2007 and Resolution No. 710/2008/NQ-UBTVQH12 dated November 22, 2008;

Pursuant to Decree No. 87/2010/NĐ-CP dated August 13, 2010 of the Government providing details on the implementation of certain provisions of the Export and Import Tax Law;

Pursuant to Decision No. 10/2009/QĐ-TTg dated January 16, 2009 of the Prime Minister on the mechanism to support the development of key mechanical product production;

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;

The Ministry of Finance issues guidelines on preferential import tax policy for materials and equipment imported for the production of key mechanical products and for serving investment projects in the production of key mechanical products as stipulated in Decision No. 10/2009/QĐ-TTg dated January 16, 2009 of the Prime Minister on the mechanism to support the development of key mechanical product production as follows:

Article 1. Rate of Preferential Import Tax

Materials and equipment imported for the production of key mechanical products and for serving investment projects in the production of key mechanical products shall be subject to a preferential import tax rate of 0%.

Article 2. Conditions, Documents, and Procedures

1. To be eligible for the preferential import tax rate of 0% as specified in Article 1 of this Circular, the following conditions must be met:

a) The imported materials and equipment must be those intended for the production of key mechanical products and for serving investment projects in the production of key mechanical products as listed in Appendix I (List of Key Mechanical Products from 2009 to 2015) and Appendix II (List of Investment Projects in the Production of Key Mechanical Products from 2009 to 2015) issued together with Decision No. 10/2009/QĐ-TTg;

b) Enterprises must self-determine their needs for use and compile a list of imported materials and equipment, accompanied by a tracking sheet and register with the Customs Authority before registering the first import declaration; the list of imported materials and equipment and the tracking sheet are established once for the entire project or for each phase of the implementation of the investment project in the production of key mechanical products, or for each key mechanical product. In case there are errors or changes in the quantity or value of the imported materials and equipment listed on the list, the enterprise may supplement or adjust them, but the supplementary materials and equipment must be consistent with the needs of the key mechanical product production project or key mechanical product.

c) Place of registration of the list:

The Provincial or Municipal Customs Office where the enterprise carries out the production of key mechanical products or implements the investment project in the production of key mechanical products, or the nearest Provincial or Municipal Customs Office if there is no customs office in that province or city; the Director of the Provincial or Municipal Customs Office selects and assigns a unit capable of handling the registration of duty-free imported goods.

In cases where the Provincial or Municipal Customs Office manages customs for several provinces, in addition to the registration unit mentioned above, the Director of the Provincial or Municipal Customs Office may consider and decide to assign the Sub-Customs Office managing customs in the province where the investment project is located to register the list of materials and equipment within that province.

2. When processing customs procedures, the declarant submits and presents to the Customs Authority the following documents:

a) Customs documents as prescribed currently;

b) Confirmation from the Steering Committee of the Key Mechanical Product Program that the enterprise is a type of business producing key mechanical products;

c) A letter from the enterprise requesting the application of the preferential import tax rate of 0%, specifying the type of materials and equipment, value, customs declaration; in case there are multiple types of materials and equipment across multiple customs declarations, they must be listed separately along with the customs declarations requesting the application of the preferential import tax rate of 0%; commitment to accurately declare, provide correct documents, and use for the intended purpose.

d) Based on the conditions and documents mentioned above, the Customs Authority updates the quantity and value of the imported materials and equipment onto the original tracking sheet of the taxpayer and signs confirmation according to regulations, retains one copy of the list of imported materials and equipment applying the preferential import tax rate of 0% and the tracking sheet indicating the quantity and value of the imported materials and equipment applying the preferential import tax rate of 0% together with the import documents. Upon completion of the quantity of imported materials and equipment listed on the list, the head of the Sub-Customs Office where the final procedure is carried out confirms on the original tracking sheet of the taxpayer, photocopies one copy to send to the Customs Office where the list was registered for post-clearance inspection of the use of imported materials and equipment applying the preferential import tax rate of 0%.

Article 3. Settlement of importation and use of materials and equipment subject to zero percent preferential import tax.

1. Enterprises importing materials and equipment subject to zero percent preferential import tax, in addition to using such imported materials and equipment for their intended purposes, shall be responsible for settling the implementation of importation and use of materials and equipment subject to zero percent preferential import tax according to the registered List with the customs authority where the List was registered for management, monitoring, and inspection of the implementation of importation and use of materials and equipment subject to zero percent preferential import tax.

2. Settlement deadline: within forty-five days from the completion date of the production of key mechanical products during the period from 2009 to 2015 or the completion date of investment projects for producing key mechanical products during the period from 2009 to 2015, enterprises must settle with the customs authority where the List was registered regarding the importation and use of materials and equipment subject to zero percent preferential import tax for the purpose of producing key mechanical products or for serving investment projects for producing key mechanical products.

3. Contents of settlement:

3.1. Quantity of materials and equipment imported for the purpose of producing key mechanical products or for serving investment projects for producing key mechanical products;

3.2. Actual consumption rates of imported materials and equipment;

3.3. Quantity of materials and equipment imported under zero percent preferential import tax that have been used for producing key mechanical products or for investment projects for producing key mechanical products;

3.4. Quantity of materials and equipment imported under zero percent preferential import tax that have been used for other purposes;

3.5. Quantity of key mechanical products produced or investment projects for producing key mechanical products completed.

Article 4. Effective date

1. This Circular takes effect 45 days from the date of signature.

2. This Circular abolishes Circular No. 104/2010/TT-BTC dated July 22, 2010, and Clause 5, Section II, Appendix III issued together with Circular No. 184/2010/TT-BTC dated November 15, 2010 of the Ministry of Finance, which stipulates the rates of export tax and preferential import tariff according to the List of taxable items.