Circular No. 37/1999/TT-BTC guides the classification of goods according to the Tariff List for export duties and import duties.

CIRCULAR

Guidelines for classifying goods according to the Export Tax Schedule, Import Tax Schedule

tax for export, Tariff of import tax

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Pursuant to Decree No. 54/CP dated August 28, 1993 of the Government detailing the implementation of the Law on Export Tax and Import Tax; Decree No. 94/1998/NĐ-CP dated November 17, 1998 of the Government detailing the implementation of the Law Amending and Supplementing Certain Provisions of the Law on Export Tax and Import Tax No. 04/1998/QH10 dated May 20, 1998 of the National Assembly;

To accurately determine the rate of export tax, import tax on goods actually exported or imported; to facilitate taxpayers and tax collection agencies in classifying goods;

After consulting relevant ministries and sectors, the Ministry of Finance provides some general principles for classifying taxable goods according to the Export Tax Schedule, Import Tax Schedule as follows:

A- IMPORT TAX SCHEDULE

I. PRINCIPLES OF CONSTRUCTION

The list of taxable items in the current Import Tax Schedule (hereinafter referred to as the Schedule) is based on the Harmonized System of Commodity Description and Coding of the World Customs Organization, now called the World Customs Organization (abbreviated as the HS) up to the subheading level (six-digit coding). At the item level (eight-digit coding), the Schedule is mainly based on the List of Goods for Import and Export of Vietnam issued with Decision No. 324/TCTK-QĐ dated December 26, 1995 of the General Statistics Office, while also making modifications or additions to certain items to meet the requirements of export tax and import tax policy.

II. STRUCTURE OF THE IMPORT TAX SCHEDULE:

The current Import Tax Schedule has 97 chapters (excluding Chapter 77 for reserve). Each chapter is divided into five columns and defined as follows:

- Column 1 is the code for the group of goods;

- Column 2 is the code for the sub-group of goods;

- Column 3 is the code for the item;

- Column 4 is the description of the group, sub-group, or item;

- Column 5 specifies the rate of import tax.

1. Group of Goods:

According to the Schedule, each chapter is detailed into several groups of goods. Each group of goods is coded with four digits.

Example: The group of goods "Fresh, chilled, or frozen pork" is coded as 0203, where the first two digits (02) are the code for the chapter (the second chapter of the Schedule), and the last two digits (03) identify the position of the group within the chapter (the third group of the chapter).

2. Sub-group of Goods

2.1. According to the Schedule, each group of goods may be further detailed into several sub-groups of goods. Each sub-group within a group is coded with six digits.

Example: The sub-group "Corn kernels" is coded as 100510, where the first two digits (10) are the code for the chapter (the tenth chapter), the next two digits (05) identify the position of the group within the chapter (the fifth group of the chapter), and the last two digits (10) identify the position of the sub-group within the group (the first sub-group of the group).

2.2. There are two ways to classify and code sub-groups, called Level 1 sub-groups and Level 2 sub-groups. In which:

Level 1 sub-group: the last digit of the sub-group code is 0 and is indicated by a single dash (-) in the description column (Column 4).

Example: sub-groups 151560, 220820, 730630.

2.3. If a Level 1 sub-group is further divided into Level 2 sub-groups, then this Level 1 sub-group is not assigned a code but is indicated by a single dash (-) in the description column.

Example: The sub-group "Turnip seeds" under group 1209 is not assigned a code such as 120910 but is indicated by a single dash (-) in the description column because this sub-group is further divided into two Level 2 sub-groups: 120911 and 120919.

Level 2 sub-group: the last digit of the sub-group code is 1; 2; 3; 4; 5; 6; 7; 8; 9 and is indicated by a double dash (--) in the description column.

Example: sub-groups 390791, 481029, 540232.

2.4. If a group of goods does not detail into multiple sub-groups, it will be coded with two additional zeros at the end.

Example: Group 1002 "Black barley" does not detail into sub-groups and thus is coded as 100200.

3. Item:

3.1. The Harmonized System of Commodity Description and Coding of the World Customs Organization does not detail groups and sub-groups into individual items. To meet management requirements and the situation of import and export trade in Vietnam, many groups and sub-groups in the Schedule are detailed into individual items. Each item is coded with eight digits (except for special cases specified in the "Special" section).

Example: The item "Gas meter" is coded as 90281010. Where the first two digits (90) are the code for the chapter: Chapter 90; the next two digits (28) indicate the position of the group within the chapter: the twenty-eighth group; the next two digits (10) indicate the position of the sub-group within the group: the first sub-group; the last two digits (10) indicate the position of the gas meter within the sub-group: the first item.

3.2. Particularly, some groups or sub-groups, although detailed into items, are not coded but recorded in the "Special" section and marked with a plus sign (+). These are temporary items listed in the Schedule and will gradually be removed to align with Vietnam's commitments under the ASEAN Common Tariff Schedule. Although these items are not coded at the eight-digit level, they are still classified under the group or sub-group codes from which they are detailed. When processing customs procedures, these items are recorded according to the group code (if the item falls within the scope of the group), the sub-group code (if the item falls within the scope of the sub-group), followed by the "Special" section. The rate of import tax is calculated according to the rate specified for the item in the "Special" section, not according to the rate of the group or sub-group code.

Example: The item "Steel wire for producing tire reinforcement," recorded under the "Specific" section at Chapter 73, subheading 7326, sub-subheading 73262000 of the current Preferential Import Tariff Schedule. When processing customs formalities, the declarant enters the code number 73262000 for the item "Steel wire for producing tire reinforcement" into the "Specific" section; however, it is not taxed according to the import tariff rate of code number 73262000 (currently this code has a preferential import tariff rate of 20%), but rather according to the import tariff rate of the "Specific" section: "Steel wire for producing tire reinforcement" (currently this code has a preferential import tariff rate of 0%).

3.3. In cases where subheadings do not detail different items, they will be additionally coded with two zeros at the end.

Example: Subheading 760120 "Aluminum alloy" is added 00 at the end to become 76012000.

3.4. In cases where groups do not detail subheadings that have been additionally coded with two zeros at the end as stated in Point 2.4 of Section II above, and also do not detail different items, they will continue to be additionally coded with two zeros at the end.

Example: Group 1002 "Black barley," which does not detail subheadings, is added 2 zeros to become 100200. Then, since it also does not detail different items, this group continues to be added 00 at the end to become 10020000.

4. Tariff Rate:

4.1. The tariff rates specified in the Tariff Schedule are preferential rates and are issued by the Minister of Finance. Preferential rates may be listed for groups (if the group does not divide into subheadings or items); or for subheadings (if the subheading does not divide into items); or for items (if groups or subheadings divide into items). Therefore, when looking up the code number and the import tariff rate of a specific item, it is necessary to see the level of detail of the group to determine the exact tariff rate of the imported item: group, first-level subheading, second-level subheading, or item.

4.2. Special preferential rates and ordinary rates are not specified in the Tariff Schedule but are implemented according to separate regulations. For example: the rate listed in the Import Tariff Schedule issued together with Decree No. 107/1997/NĐ-CP dated November 5, 1997 of the Government on the list of goods and import tariff rates to implement the program of reducing import tariffs from European Union (EU) countries for the period 1998-2001 is a special preferential rate. Although not generally specified in a Tariff Schedule, the principles of construction, structure, and classification rules for applying ordinary rates, preferential rates, and special preferential rates are completely identical according to the guidance provided in this Circular.

All imported goods belong to the List of Item Groups of the Import Tariff Schedule. Depending on technical characteristics, nature, degree of processing, management requirements... of each type of goods, the Import Tariff Schedule names them appropriately. Therefore, when classifying goods, it is necessary to base on the nature, structure, characteristics, and function of the actual imported item to classify it into the most suitable group or subheading.

II - PRINCIPLES OF CLASSIFICATION OF GOODS IN THE IMPORT TARIFF SCHEDULE

To accurately determine that an item only belongs to one code number and cannot be classified under another code number; the classification of items in the Tariff Schedule will be based on the description of each item, subheading, and group in the Tariff Schedule, six general principles of the Tariff Schedule Explanation (the general principles of the Tariff Schedule Explanation are attached as an appendix to this Circular), and refer to the explanations of parts, chapters, groups, and subheadings of the Tariff Schedule Explanation. However, to suit Vietnam's conditions and the details of the current Import Tariff Schedule, some items in the Tariff Schedule will not strictly follow the above classification principles but will be implemented as follows:

1. In cases where an item can be classified into two or more groups or subheadings (including items listed under the "Specific" section), classification will be carried out according to the group or subheading that details the item at the eight-digit coding level or details it in the "Specific" section, not classified into groups or subheadings that do not detail the item at the eight-digit coding level or are not detailed in the "Specific" section, even though according to the general classification principle, the item might fit better into a chapter, group, or subheading where it is not detailed.

Example: The item "Monosodium glutamate," detailed at code number 21039010, is not detailed at subheading 292242 "Monosodium glutamate," although according to the HS Tariff Schedule classification principle, this item could be more appropriately detailed in subheading 292242 "Monosodium glutamate."

2. Classification of imported goods as complete sets or integrated equipment will not follow the general principles but will be classified according to the main machine of the set. Specifically: Fuel oil, transport trucks, passenger cars, trucks for both passengers and cargo, if recorded in the Economic Technical Justification or confirmed by the investment project approval authority, will not be classified and taxed according to the main machine of the complete set or integrated equipment.

The conditions for a consignment of complete equipment or synchronized equipment to be classified and taxed at the import tariff rate applicable to the main machine include:

Economic and technical justification or Investment Project;

Approval document of the authority reviewing the Economic and Technical Justification or Investment Project together with the List of goods to be imported in the consignment of complete equipment or synchronized equipment;

Confirmation from the authority reviewing the Economic and Technical Justification or Investment Project clearly stating that the imported goods are: complete equipment or synchronized equipment and the main machine of the complete equipment or synchronized equipment;

Import contract, detailed consignment import list (Packing list), and other certificates (if any) all showing that the imported goods are complete equipment or synchronized equipment. In cases of agency imports, there must be an agency import contract;

The actual imported goods are complete equipment or synchronized equipment;

In cases where a consignment of complete equipment or synchronized equipment is not imported in one single shipment but in multiple shipments, provided that the total quantity of goods imported in each shipment correctly reflects the complete equipment or synchronized equipment according to the approval of the authority reviewing the Economic and Technical Justification or Investment Project, such consignment will also be classified and taxed based on the main machine of the consignment;

Based on the above conditions and the actual imported goods, the Customs authority will tax the complete equipment or synchronized equipment according to the main machine of the consignment and maintain a record of the actual imported goods consistent with the List of goods to be imported approved by the authority reviewing the Economic and Technical Justification or Investment Project. Goods not included in the List of goods to be imported approved by the authority reviewing the Economic and Technical Justification or Investment Project shall be classified and taxed according to the respective import tariff rates applicable to each item;

3. Machinery and equipment classified by capacity shall refer to the maximum rated capacity of such machinery and equipment (design capacity);

Example: Code 87011010 "Pedal-controlled tractors up to 15CV" means that code 87011010 includes pedal-controlled tractors with a maximum rated capacity up to 15CV;

4. Classification of specialized goods (for example, specialized cameras) is based on their specific characteristics and specialized usage. In cases where the specific characteristics and specialized usage of imported goods cannot be determined, classification and taxation shall be based on the appraisal results obtained through the Customs authority's request for appraisal;

In practice, a commodity may be declared under various names: by component structure, characteristics, nature, degree of processing, function, but only one name is recorded in the Tariff Schedule. Therefore, when classifying goods, careful consideration should be given to the description of the goods to properly classify them into the most appropriate group and sub-group;

Example: The item detailed in Group 3824, Subgroup 382490 of the Tariff Schedule has the name based on its function as: "Chemical mixtures for producing beverages." However, the item to be classified is declared as a mixture of chemicals including phosphoric acid, caffeine, caramel coloring, and water, for producing beverages. Although the Tariff Schedule does not explicitly state whether the chemical mixture for producing beverages includes phosphoric acid, caffeine, caramel coloring, and water or other chemicals, based on the description of the item as a mixture (of several chemicals) and its purpose solely for producing beverages and not for immediate consumption or production of another product, the item is classified under Subgroup 382490, Detailed Code 38249010: "Chemical mixtures for producing beverages." In this case, the classification is based on the description of the item's characteristics (mixture of chemicals) and its function (to produce beverages);

B - EXPORT DUTY SCHEDULE

The list of goods in the Export Duty Schedule is primarily based on the HS List. However, since the majority of export items have an export duty rate of 0% (zero percent), the Export Duty Schedule does not list the code number and name of all groups of items as in the HS List, but only lists the name, code number, and export duty rate for certain groups of items. The principle of classification in the Export Duty Schedule is implemented as follows:

1. Groups of items not specifically listed with names and code numbers in the Export Duty Schedule are those groups of items not specified with individual export duty rates for each group, but instead are listed under Section XXXXXX at the end of the Export Duty Schedule, with an export duty rate of 0% (zero percent). However, during customs procedures, taxpayers still need to declare the name and code number of the goods as if they were imported goods;

Example: Item "Pickled cucumbers in containers," which is not specifically listed with a code number and name in the Export Duty Schedule, thus has an export duty rate of 0% (zero percent). However, during customs procedures, the unit does not declare the code number for this item under Section XXXXXX: "Other items not listed above," with an export duty rate of 0%, but declares it under code number 20011000, with an export duty rate of 0% (zero percent);

2. Groups of items specifically named in the Export Duty Schedule are those groups of items specified with individual export duty rates for each group. If the entire group or subgroup of items is subject to export duties, the export duty rate will be specified for the entire group or subgroup. In cases where items within a group or subgroup have different export duty rates, these rates will be detailed and specified for each item. Items not specifically named or specified with export duty rates in these groups or subgroups will be subject to the export duty rate of the group or subgroup.

Example 1: The item "Tin ore and enriched tin ore," with code 260900, is clearly stated to have an export tax rate of 20%. According to the classification principle of the Tariff Schedule, this code includes: "Tin ore and enriched tin ore." Therefore, the entire group of "Tin ore and enriched tin ore," with code 260900, has an export tax rate of 20%.

Example 2: The item "Crude petroleum and bituminous mineral oils, crude," with code 270900, has an export tax rate of 0%. However, for "Crude oil," with code 27090010, the export tax rate is 4%. Thus, within the group of "Crude petroleum and bituminous mineral oils, crude," only the item "Crude oil" has an export tax rate of 4%, while other items in this group have an export tax rate of 0%.

C - SETTLEMENT OF COMPLAINTS

1. Rights and responsibilities of taxpayers in complaining about the classification and calculation of export import taxes according to the Export Tariff Import Tariff.

To accurately determine the export tax rate, import tax rate of the actual exported or imported goods; to facilitate the tax collection agency in classifying goods when handling customs procedures, the taxpayer must present appropriate documents as required by the customs authority and self-declare, calculate, and pay taxes.

In cases where the customs authority rechecks and determines the tax amount of the entity, and the entity disagrees with the recalculation by the local customs authority, the entity still must pay the full adjusted tax amount determined by the local customs authority, while having the right to file a complaint according to the law.

2. Responsibilities and authorities of the export import tax collection agency in settling complaints about the classification and calculation of export import taxes according to the Export Tariff Import Tariff.

Within twenty days from the date of receipt of a complete complaint with sufficient grounds for resolution, the General Department of Customs must resolve it and simultaneously send the resolution of the complaint to the Ministry of Finance. If the taxpayer disagrees with the decision of the General Department of Customs, they have the right to appeal to the Minister of Finance. Within thirty days from the date of receipt of a complete complaint with sufficient grounds for resolution, the Minister of Finance must resolve it and simultaneously send the resolution of the complaint to the General Department of Customs. The decision of the Minister of Finance on resolving the complaint is final.

To ensure accurate and consistent classification of goods, avoiding situations where the same item is classified and taxed differently among regions, responses from the Ministry of Finance to taxpayers regarding the classification of goods in the Export Tariff or Import Tariff shall be sent to the General Department of Customs; responses from the General Department of Customs to taxpayers or directives to a local customs unit regarding the classification of goods in the Export Tariff or Import Tariff shall be sent to the Ministry of Finance and all local customs bureaus.

In cases where the General Department of Customs finds that the responses or decisions on resolving complaints about the classification of goods according to the Export Tariff, Import Tariff issued by the Ministry of Finance still have issues, they will continue to follow the guidance provided in these documents while reflecting any issues to the Ministry of Finance for timely resolution.

This Circular guides the classification of goods according to the Tariff Schedule of the Export Tax and Import Tax; it takes effect from April 10, 1999, and replaces Circular No. 51-TC/TCT dated August 13, 1997, guiding the determination of taxable items according to the Export Tariff Import Tariff, Circular No. 06-TC/TCT dated January 19, 1993, stipulating and guiding the calculation of export import taxes for complete equipment and individual equipment, and Circular No. 132/1998/TT/BTC stipulating and guiding the calculation of export import taxes for production line integrated equipment. During implementation, if there are any difficulties, please report them to the Ministry of Finance for prompt resolution.