Circular No. 34/2004/TT-BTC guiding the recovery of taxes, imposition of fines, and collection of additional fees for imported motor vehicles in violation of regulations

 CIRCULAR

Guidelines for recovering taxes, imposing penalties, and collecting additional fees

on imported automobiles in violation of regulations

Pursuant to the Export Tax Law and Import Tax Law dated December 26, 1991 and the Laws amending and supplementing certain Articles of the Export Tax Law and Import Tax Law dated July 5, 1993; Decision No. 04/1998/QH10 dated May 20, 1998;

Pursuant to Decrees No. 54/CP dated August 28, 1993; No. 94/1998/NĐ-CP dated November 17, 1998 of the Government detailing the implementation of certain provisions of the Export Tax Law and Import Tax Law and the Laws amending and supplementing certain Articles of the Export Tax Law and Import Tax Law;

Pursuant to the directives of the Prime Minister in Circulars No. 2752/VPCP-KTTH dated May 23, 2002; No. 5372/VPCP-KTTH dated September 27, 2002; No. 1169 VPCP-KTTH dated March 17, 2003; No. 183/VPCP-KTTH dated January 12, 2003 of the Government Office regarding the handling of automobiles imported in violation of regulations;

After exchanging opinions with the Ministry of Public Security; the Ministry of Trade; the Ministry of Transport; the Ministry of Finance, the guidelines for confiscating, recovering taxes, imposing penalties, and collecting additional fees on automobiles imported in violation of regulations are 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.

1. Objects subject to confiscation, tax recovery, penalty imposition, and additional fee collection:

Types of "closed-body cargo trucks resembling passenger cars," imported during the period from May 1, 2001 (the date when Decision No. 46/2001/QĐ-TTg dated April 4, 2001 of the Prime Minister took effect) to April 26, 2002 (the date when the General Department of Customs issued Circular No. 1863 TCHQ-GSQL guiding the cessation of import procedures for such types of vehicles according to Circular No. 0580/TM-XNK dated April 18, 2002 of the Ministry of Trade), excluding those vehicles imported by the Ministry of Public Security and the Ministry of Defense for specialized use as military transport vehicles equipped with operational devices for service and combat operations, including the following brands:

+ Korando SSangyong; Korando Daewoo.

+ Hyundai Galloper Innovation; Hyundai Galloper II.

+ Hyundai Starex 3-seater.

+ Hyundai Starex 6-seater.

+ Kia Carnival 6-seater.

+ Hyundai Grace.

+ Hyundai Istana.

+ Daewoo Damas.

And other types of "closed-body cargo trucks resembling passenger cars" with different brands.

2. Parties liable for payment and amounts to be recovered:

- Units and individuals importing the types of vehicles specified in Point 1, Section I of this Circular shall be liable for recovering import taxes and consumption taxes according to the Export Tax Law and Import Tax Law; Consumption Tax Law; and shall be subject to administrative penalties for violations of tax laws at the time of the violation.

- Units and individuals using the types of vehicles specified in Point 1, Section I of this Circular, which have been registered as cargo trucks or pick-up trucks and have been permitted by competent authorities to convert into passenger vehicles, must pay a fixed additional fee as stipulated in Point 2, Section II of this Circular.

3. Handling of confiscated vehicles: closed-body cargo trucks imported illegally into Vietnam as specified in Point 1 above (including those imported into Vietnam after the specified date) but not yet processed through customs clearance procedures shall not be covered by the tax recovery guidelines in this Circular and shall be confiscated. The police and customs authorities shall coordinate and report to the People's Committee of the province or city to issue a decision to confiscate and handle the goods according to current regulations governing confiscated items.

II. METHODS FOR DETERMINING AMOUNTS TO BE RECOVERED, PENALTIES, AND ADDITIONAL FEES

Where:

b: is the amount of import tax and consumption tax determined based on:

- The number of vehicles subject to tax recovery under Point 1, Section I of this Circular.

- Tariff rate: applied according to the import tax and consumption tax rates prescribed for passenger vehicles (passenger vehicle models corresponding to the imported vehicle models in terms of appearance, size, load capacity, and seating capacity, the determination of seating capacity being based on the manufacturer's standards) at the time the unit or individual submits the import declaration form to the customs authority.

- Taxable value: the minimum taxable value prescribed for passenger vehicles by the General Department of Customs at the time the unit or individual submits the import declaration form to the customs authority.

c: is the amount of import tax and consumption tax that the customs authority has announced at the time of import procedures.

2. Additional fee:

Vehicles imported as specified in Point 1, Section I of this Circular, which have been registered as cargo trucks (or dual-purpose cargo and passenger vehicles), and have been allowed by competent authorities to convert into passenger vehicles within five years (60 months) from the first registration date, must pay a fixed additional fee of 20,000,000 VND per vehicle (twenty million dong per vehicle). If the conversion occurs beyond the five-year period from the first registration date, then this additional fee does not need to be paid. In cases where conversion is made without permission from the competent authorities, administrative penalties shall be imposed according to Clause 5 and Clause 10 of Article 20 of Decree No. 15/2003/NĐ-CP dated February 19, 2003 of the Government, concerning the handling of administrative violations in road traffic, or Clause 3 and Clause 5 of Article 17 of Decree No. 39/2001/NĐ-CP dated July 13, 2001 of the Government (which has been replaced by Decree No. 15/2003/NĐ-CP mentioned above), depending on the time of the violation.

3. Administrative penalties:

Customs authorities shall base their actions on Decree No. 100/2004/NĐ-CP dated February 25, 2004 of the Government concerning administrative penalties in the field of taxation and related guidance documents to impose administrative penalties on entities involved in imports.

III. IMPLEMENTATION

1. Authorities responsible for tax recovery and administrative penalties:

- Local Customs Bureaus shall calculate and notify the recovery of import taxes and consumption taxes for cases requiring tax recovery. The deadline for paying the recovered taxes shall be carried out according to Section III, Part C, Circular No. 172/1998/TT-BTC dated December 22, 1998 of the Ministry of Finance and current regulations. Depending on the level of violation, decisions on administrative penalties in the field of taxation shall be issued according to current regulations.

- Provincial and municipal Tax Bureaus shall be responsible for guiding declarations and receiving declarations for the payment of additional fees from organizations and individuals required to pay the additional fee, declared according to Form No. 01 attached to this Circular. The Director of the Provincial and Municipal Tax Bureaus shall issue notices for the collection of additional fees (according to Form No. 03 attached to this Circular) so that units and individuals can pay the money into the State Treasury.

- The State Treasury of the provinces and centrally governed cities shall collect money based on the Notice of Tax Recovery and Additional Tax Collection issued by the Customs and Tax authorities, and issue payment receipts to organizations and individuals making payments.

- The Public Security Organs shall only permit the conversion of vehicle registration to passenger vehicles when the vehicle owner presents the Notice of Additional Tax Collection from the Tax authority and the payment receipt for additional tax issued by the State Treasury.

- The People's Committees of the provinces and centrally governed cities; Ministries, ministerial-level agencies, and government agencies shall instruct subordinate units to notify the contents of this Circular to organizations and individuals subject to tax recovery, additional tax payment, and administrative violation penalties.

- Authorities responsible for tax recovery, additional tax collection, and fines shall facilitate the process and not cause difficulties or inconvenience to those required to pay recovered taxes and additional taxes.

2. Regarding entities required to recover taxes:

- Organizations and individuals importing the types of vehicles specified in Point 1, Section I of this Circular shall contact the Customs authority at the port of entry to determine the amounts of tax recovery and administrative violation fines, receive notices of tax payment and decisions on administrative violation penalties (if applicable), and be responsible for paying the full amount of recovered taxes and fines (if applicable) as notified by the Customs authority.

- For additional tax: Organizations and individuals using the aforementioned automobiles that have been converted to passenger vehicles, as specified in Clause 1, Section I of this Circular, must declare and pay the additional tax according to the guidance provided in Point 2, Section II of this Circular. These entities must complete the declaration form for additional tax for vehicles with changed functions (Form No. 01 attached), submit the registration form to the local Tax Bureau where they reside or where their office is registered, receive the notice, and pay the additional tax (VND 20,000,000 per vehicle) into the State Treasury of the province or centrally governed city as notified by the Tax authority.

- Entities subject to tax recovery are responsible for paying the full amount of taxes and additional taxes (including additional taxes if applicable) as notified by the Customs and Tax authorities within the deadlines stipulated in supplementary notices.

3. Declaration and Payment Deadlines:

- By June 30, 2004, organizations and individuals subject to tax recovery and additional tax payment must declare and pay the amounts due to the authorities responsible for tax recovery (as specified in Point 1, Section III of this Circular).

- Organizations and individuals subject to tax recovery, administrative violation penalties in the tax domain, and additional tax payment must deposit the funds into the State Treasury according to the deadlines stated in the notices issued by the Customs and Tax authorities. Failure to make timely payments will result in late payment penalties as prescribed.

4. Reporting and Inspection:

- Recovered import taxes, special consumption taxes; penalties and additional taxes shall be fully deposited into the State Budget according to the current Budget Classification. The State Treasuries of the provinces and centrally governed cities are responsible for monitoring these revenues.

- Upon completion of the tax recovery, penalty imposition, and additional tax collection period, the collecting units must prepare detailed lists regarding: Quantity; Types; Frame Numbers; Engine Numbers; Origin Declaration Forms; Import Declaration Forms; Names and Addresses of Importing Units/Individuals; Amounts Due for Recovery... (according to Form No. 02 attached to this Circular) and send them to the Ministry of Finance (General Department of Customs) for monitoring.

5. Handling violations:

- Beyond the deadline mentioned above, if vehicles converted to passenger vehicles that are subject to additional tax but have not declared and paid the additional tax are discovered, the Public Security Organs shall temporarily prohibit their circulation. In such cases, in addition to being prohibited from circulation, they must also bear late payment penalties of 0.1% of the total additional tax due for each day from the date the declaration deadline expired (June 30, 2004) as specified in Point 3, Part C above.

- For organizations and individuals subject to import tax recovery, special consumption tax recovery, and administrative violation penalties (if applicable), if they fail to register declarations with the Customs and Tax authorities beyond the declaration deadline (June 30, 2004), they will not be allowed to register vehicle circulation. If they have registered for declaration and recovery but fail to make timely payments as notified by the Customs and Tax authorities, the authority issuing the recovery decision and penalties may apply measures similar to those for late payment of taxes and penalties at the import stage.

6. For "closed-body cargo trucks resembling passenger cars" imported between January 1, 1999, and April 30, 2001, the recovery procedures shall be implemented according to the directives of the Prime Minister in Official Letter No. 806/CP-VI dated July 16, 1998, from the Government Office, Official Letters No. 2813/TCHQ-KTTT dated August 14, 1998, and No. 6065/TCHQ-KTTT dated December 28, 2000, and related guidance documents from the General Department of Customs.

This Circular takes effect fifteen days after its publication in the Official Gazette. During implementation, if there are any issues, units are advised to discuss with the Ministry of Finance for prompt resolution.