CIRCULAR

Guidelines for Decree No. 40/2007/NĐ-CP dated March 16, 2007 of the Government on the determination of customs value for exported and imported goods

Pursuant to the Export Tax and Import Tax Law No. 45/2005/QH11 dated June 14, 2005;

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

Pursuant to the Law on Tax Administration No. 78/2006/QH11 dated November 29, 2006;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 11, 2003 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 40/2007/NĐ-CP dated March 16, 2007 of the Government on the determination of customs value for exported and imported goods;

The Ministry of Finance hereby provides guidance as follows:

Part I

GENERAL PROVISIONS

I. SCOPE OF REGULATION AND APPLICABLE OBJECTS

1. This Circular 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 subject to this Circular.

3. In cases where international treaties to which Vietnam is a member provide different provisions, such provisions shall be implemented according to the treaty.

II. PRINCIPLES AND METHODS FOR DETERMINING CUSTOMS VALUE

1. The customs value for tax purposes (hereinafter referred to as the taxable value) is determined based on the following principles and methods:

a) For exported goods, the taxable value is the selling price at the port of export (FOB price, DAF price) excluding international insurance fees (I) and international freight charges (F).

In cases where there is no sales contract, the taxable value for exported goods is the declared value reported by the declarant.

b) For imported goods, the taxable value is the actual amount paid up to the first point of entry and is determined sequentially by applying six methods of determining the taxable value from Section I to Section VI of Part II of this Circular, stopping immediately upon determining the taxable value.

If the declarant requests in writing, the sequence of applying the methods of determining the taxable value specified in Sections IV and V of Part II of this Circular may be interchanged.

2. The customs value for statistical purposes (hereinafter referred to as the statistical value) is determined based on the following principle:

a) For goods subject to taxation, the statistical value is determined based on the taxable value already established according to the principles and methods prescribed in point b, Clause 1, Item 1 of this Circular.

b) For goods not subject to taxation, exempted from taxation, or eligible for tax exemption, or goods for which the taxable value cannot be determined according to point b, Clause 1, Item 1 of this Circular, the statistical value is the declared value reported by the declarant according to 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).

III. TIME OF DETERMINATION OF CUSTOMS VALUE AND TAX PAYMENT DEADLINE

1. The time of determination of customs value for exported and imported goods is the date when the declarant registers the customs declaration for exported and imported goods.

In cases where the determination of the taxable value must be postponed, the time of determination of the taxable value for imported goods is the date when the customs authority or the declarant determines the taxable value according to the provisions of this Circular.

2. Tax payment deadline:

a) For the difference between the tax amount determined by the customs authority and the tax amount self-reported and self-calculated by the taxpayer in cases where the goods have been cleared, the payment deadline is ten days from the date the customs authority issues the tax assessment decision;

b) For other cases, the tax payment deadline is carried out according to the provisions of Clauses 3, 4, and 5 of Article 42 of the Tax Administration Law.

IV. DEFINITIONS

The terms used in this Circular are understood as follows:

1. "Sales contract" is an agreement for the purchase and sale of goods in the form of a written document for importing goods into Vietnam, under which the seller has the obligation to deliver the goods, transfer ownership of the goods to the buyer, and receive payment; the buyer has the obligation to pay the seller and receive the goods. Forms of telegrams, telexes, faxes, email, and other forms of electronic information printed on paper are also considered written documents.

2. "Purchase commission" is the amount of money that the buyer pays to an agent representing them to purchase imported goods at the most reasonable price.

3. "Sales commission" is the amount of money that the seller pays to an agent representing them to sell exported goods to the buyer.

4. "Brokerage fee" is the amount of money that the buyer or seller or both must pay to a broker to assume the role of intermediary in the transaction of purchasing and selling imported goods.

5. "Royalty and license fee" is the amount of money that the buyer must pay directly or indirectly to the owner of intellectual property rights or to the person authorized by the owner of intellectual property rights or to the licensor to use intellectual property rights. Examples include payments for patents, design copyrights, trademarks, trademark usage rights, copyright, production licenses.

6. Goods with value are considered "similar": if the difference between them is influenced by the following objective factors:

- The nature of the goods, the characteristics of the industry producing the goods;

- The seasonality of the goods;

- Minor differences from a commercial standpoint.

When examining the approximate value of two values, they must be brought to the same conditions of sale.

7. "Identical imported goods": are imported goods identical in all aspects, including:

- Physical characteristics such as product surface, constituent materials, manufacturing method, function, intended use, physical, chemical, and mechanical properties;

- Product quality;

- Brand reputation of the product;

- Produced in the same country, by the same manufacturer or authorized manufacturer.

Imported goods that basically meet these conditions are considered identical imported goods even if they have minor differences in appearance such as color, size, style without affecting the value of the goods.

Imported goods are not considered identical if during the production of one of the goods, technical designs, construction plans, implementation plans, artistic designs, design drawings, diagrams, sketches, or similar services produced in Vietnam are provided free of charge by the buyer to the seller.

8. "Imported goods similar" are goods that although not identical in all respects have basic characteristics in common, including:

- Made from equivalent raw materials and produced using the same manufacturing methods;

- Having the same functions and purposes of use;

- Equivalent quality;

- Interchangeable in commercial transactions, meaning the buyer accepts substituting one good for another;

- Produced in the same country, by the same manufacturer or an authorized manufacturer, imported into Vietnam.

Imported goods will not be considered similar if during the production of one of these goods, technical designs, construction designs, artistic designs, implementation plans, design drawings, diagrams, sketches, or similar products and services made in Vietnam are provided free of charge or at a reduced price by the buyer to the seller.

9. "Imported goods of the same grade or kind" are goods within the same group or set of groups of goods produced by the same industry or specific field, including identical imported goods and similar imported goods.

Example: Construction steel types such as round smooth steel, twisted steel, shaped steel (U, I, V-shaped), produced by the steel industry, are goods of the same type;

- In the method of determining the customs value based on the deductive value, "imported goods of the same grade or kind" are imported goods from all countries into Vietnam, regardless of origin.

- In the method of determining the customs value based on the computed value, "imported goods of the same grade or kind" must be imported goods with the same origin as the goods whose customs value is being determined.

10. "First port of entry" is the destination port recorded on the transport document. For road, rail, or inland waterway transportation, "first port of entry" is the destination port recorded in the contract.

Part II

CUSTOMS VALUE FOR IMPORTED GOODS

I. DETERMINATION OF CUSTOMS VALUE BASED ON TRANSACTION VALUE

The tax value of imported goods must first be determined based on the transaction value.

The transaction value is the price actually paid or payable by the buyer to the seller for the imported goods, adjusted according to the provisions of Section VII Part II of this Circular.

The actual amount paid or payable is determined by the total amount of money paid or payable directly or indirectly by the buyer to the seller for the imported goods.

1. The transaction value shall be applied if the following conditions are met:

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

a.1) Restrictions prescribed by Vietnamese law, such as: requirements for imported goods to be labeled in Vietnamese, conditional imported goods, or goods subject to pre-clearance inspection before release,...

a.2) Restrictions on the place of consumption; or

a.3) Other restrictions that do not affect the value of the goods.

These restrictions are factors directly or indirectly related to the imported goods but do not increase or decrease the actual payment price for those goods.

Example: The seller requires the buyer not to sell or display the imported goods before introducing them to the market.

b) The price or sale of the goods does not depend on conditions or payments that cannot determine the value of the goods subject to customs valuation.

Example:

- The seller sets the price for imported goods on the condition that the buyer will also purchase a certain quantity of other goods.

- The price of imported goods depends on the price of other goods that the importer will resell to the exporter.

- The price of imported goods is based on a form of payment unrelated directly to the imported goods, such as: imported goods are semi-finished products supplied by the seller to the buyer under the condition that the seller will reclaim a certain quantity of finished products made from those imported semi-finished products.

If the purchase or sale of goods or their prices depend on one or more conditions, but the buyer has objective and valid evidence to determine the monetary impact of such dependency, it still meets this condition; when determining the customs value, the amount reduced due to the dependency must be added to the transaction value.

c) After reselling, transferring, or using the imported goods, the buyer does not have to pay any additional amounts from the proceeds obtained from disposing of the imported goods, except for the amount specified in point e clause 2 section VII Part II of this Circular.

d) The buyer and seller do not have a special relationship or if they do, such relationship does not affect the transaction value. The assessment of the impact of a special relationship on the transaction value is guided by clause 3 of this section.

2. The transaction value includes the following items:

a) Purchase price stated on the invoice:

If the purchase price stated on the invoice includes discounts for the imported consignment, these amounts are deducted to determine the customs value, provided that the discount is documented in writing before loading onto the means of transport and there are legitimate records and documents to separate this discount from the invoice price and these documents must be submitted together with the customs declaration.

Types of discounts include:

- Trade level discounts for the purchase and sale of goods;

- Quantity discounts for the purchase and sale of goods;

- Discounts based on payment terms and timing.

Discounts are accepted to be deducted when determining the customs value provided that the discounts comply with international trade practices.

In cases where goods have contractual discounts and are imported in multiple shipments (multiple declarations), the discount can only be considered and accepted after the enterprise submits a declaration and supporting documents proving the completion of the importation and payment for the entire contract. The customs authority responsible for the enterprise's customs declaration must verify related documents and records submitted by the enterprise, proving that the discount has been implemented.

b) Adjustments according to the guidance in Section VII Part II of this Circular.

c) Amounts the buyer must pay but are not included in the purchase price stated on the invoice, including:

- Advance payments, prepayments, deposits for production, purchase, 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 settled through offsetting debts.

3. Determining the impact of a special relationship on the transaction price:

a) In cases where the buyer and seller have a special relationship but it does not affect the transaction value, the declarant must declare this fact and determine the tax value based on the transaction value.

b) Based on available information, if the customs authority suspects that a special relationship has affected the transaction value, it must immediately notify the declarant in writing of the grounds for suspicion.

c) The customs authority must facilitate the declarant's explanation and provision of additional relevant information to clarify whether the special relationship between the buyer and seller affects the transaction value of the imported goods as stipulated in point d of this clause.

If within thirty working days from the date of receiving the customs authority's notification, the declarant does not provide explanations and additional relevant information, the customs authority shall determine the tax value for the imported consignment according to the principles and methods of determining the tax value specified from Section I to Section VI of Part II of this Circular.

d) The special relationship between the buyer and seller does not affect the transaction value if either of the following conditions is met:

d.1) Although there is a special relationship, the purchase and sale transaction is conducted as if with buyers without a special relationship:

Example 1:

+ The price of the imported goods is negotiated and agreed upon in the commercial contract in a manner consistent with the usual negotiation and pricing practices of the industry or in a way that the seller offers the goods to other buyers without a special relationship.

+ The price of the imported goods includes common costs and profits corresponding to the common costs and profits of selling goods of the same grade or type.

The customs authority must examine how the buyer and seller organize their sales relationship and negotiate to reach the declared price, thereby concluding whether the declared value is influenced by the special relationship.

d.2) Or the transaction value is approximately equal to one of the following values of the consignment exported to Vietnam on the same day or within a sixty-day period (calendar days) before and after the exportation of the consignment being valued:

- The tax value determined based on the transaction value of identical or similar imported goods sold to another importer who does not have a special relationship with the exporter (seller).

- The tax value of identical or similar imported goods determined based on the deduction value as prescribed in Section IV of Part II of this Circular.

- The tax value of identical or similar imported goods determined based on the computed value as prescribed in Section V of Part II of this Circular.

d.3) These tax values are only for comparison purposes and the tax value of identical or similar imported goods must be adjusted to the same conditions as the goods being proven:

- Adjustment to the same purchasing conditions: The adjustment of the tax value of identical or similar imported goods to the same purchasing conditions as the consignment being proven is carried out according to the guidance at point b of Clause 2 of Section III of Part II of this Circular.

- Adjustment of amounts to be added or subtracted as prescribed in Section VII of Part II of this Circular.

4. Determining the tax value for imported goods that are "intermediate media" containing "software" used for data processing devices:

a) The tax value of imported goods that are intermediate media containing software is the actual or payable amount paid for such intermediate media, excluding the value of the software contained therein, provided that the invoice separately lists the value of the software from the value of the intermediate media.

The tax value of the intermediate media includes the purchase price listed on the invoice and costs for recording or installing the software onto the intermediate media.

"Software" under this provision means data, programs, or instructions expressed in the form of commands, codes, diagrams, or any other form that, when transferred to a data processing device, enables the device to perform a specific task or achieve a specific result (for example: software programs, descriptions of digital information programs). Audio products, film images, or video images are not considered software under this provision.

"Intermediate media" refers to floppy disks, CDs, magnetic tapes, magnetic cards, or any object capable of storing information, used as temporary storage or for transferring software. To use the software, it must be transferred, installed, or integrated into a data processing device.

"Intermediate media" here does not include integrated circuits, microchips, semiconductors, or similar devices or components attached to circuit boards or devices.

b) The provisions at point a of this clause shall not apply when determining the tax value for imported equipment, machines, or devices containing software if any of the following circumstances apply:

- The software is recorded, installed, or integrated into imported goods that are not "intermediate media" or into the hardware of machines or devices.

- The actual payment for imported software is one of the amounts to be added as prescribed in Section VII of Part II of this Circular.

5. Documents to be submitted:

- Customs declaration documents as prescribed;

- Other relevant documents related to the determination of the tax value.

II. DETERMINATION OF TAX VALUE BASED ON THE TRANSACTION VALUE OF IDENTICAL IMPORTED GOODS

If the tax value cannot be determined based on the transaction value as guided in Section I of Part II of this Circular, the tax value of the imported goods will be determined based on the transaction value of identical imported goods.

The method of determining the tax value based on the transaction value of identical imported goods is implemented as guided in Section III of this Part, where the phrase "similar imported goods" is replaced by the phrase "identical imported goods."

III. DETERMINATION OF TAX VALUE BASED ON THE TRANSACTION VALUE OF SIMILAR IMPORTED GOODS

1. Determining the tax value:

If it is not possible to determine the taxable value according to the methods prescribed in Sections I and II of Part II of this Circular, the taxable value of imported goods shall be determined based on the transaction value of similar imported goods, provided that such similar imported goods have been accepted by the customs authority for determining the taxable value based on transaction value, and have the same purchase conditions and export time conditions as the imported goods whose taxable value is being determined under the guidance of Clause 2 of this Section.

In case similar imported goods with the same purchase conditions as the imported goods whose taxable value is being determined cannot be found, other similar imported goods with different purchase conditions must be selected but must be adjusted to the same purchase conditions.

2. Conditions for selecting similar imported goods:

Similar imported goods can be selected if they meet the following conditions:

Export time condition:

The similar imported goods must be exported to Vietnam on the same day or within a period of 60 days before and 60 days after the export date of the imported goods whose taxable value is being determined.

b) Purchase conditions:

b.1) Trade level and quantity conditions:

b.1.1) The similar imported goods must have the same trade level and quantity conditions as the imported goods whose taxable value is being determined.

b.1.2) If similar imported goods as specified in Subparagraph b.1.1 cannot be found, then similar imported goods with the same trade level but different quantities must be selected, and subsequently, the transaction value of the similar imported goods must be adjusted to the same quantity as the imported goods whose taxable value is being determined.

b.1.3) If similar imported goods as specified in Subparagraphs b.1.1 and b.1.2 cannot be found, then similar imported goods with different trade levels but the same quantity must be selected, and subsequently, the transaction value of the similar imported goods must be adjusted to the same trade level as the imported goods whose taxable value is being determined.

b.1.4) If similar imported goods as specified in Subparagraphs b.1.1, b.1.2, and b.1.3 cannot be found, then similar imported goods with different trade levels and quantities must be selected, and subsequently, the transaction value of the similar imported goods must be adjusted to the same trade level and quantity as the imported goods whose taxable value is being determined.

b.2) Transport distance and transportation method, insurance conditions:

The similar imported consignment 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 customs value.

If there is a significant difference in insurance fees, then it must be adjusted to the same insurance conditions as the imported goods whose taxable value is being determined.

c) When applying the method of determining the taxable value based on the transaction value of similar imported goods, if similar imported goods produced by the same producer or authorized producers cannot be found, then similar imported goods produced by other producers and having the same origin must be considered.

d) When determining the taxable value using this method and two or more transaction values of similar imported goods are identified, after adjusting them to the same purchase conditions as the imported goods whose taxable value is being determined, the taxable value will be the lowest transaction value.

If during the customs clearance process there is insufficient information to select identical or similar imported goods to those whose taxable value is being determined, then the taxable value of the imported goods shall not be determined according to the guidance in Section II or Section III of Part II of this Circular, and instead, the next method must be applied.

3. Documents and materials to be submitted:

a) For the declarant when applying the method of determining the taxable value based on the transaction value of similar imported goods, in addition to the customs declaration documents as prescribed, the declarant must submit to the customs authority copies certified as true copies by the enterprise of the following documents:

- Customs declaration form and valuation declaration form of similar imported goods;

- Transportation contract of similar imported goods (if there is adjustment of these costs);

- Insurance contract of similar imported goods (if there is adjustment of these costs);

- Commercial contract, commercial invoice of similar imported goods, and export price lists of the manufacturer or foreign seller (if there is adjustment regarding quantity or trade level);

- Other necessary and relevant legal documents required for determining the taxable value (if necessary).

b) For the customs authority when applying the method of determining the taxable value based on the transaction value of similar imported goods, they must base their determination on the available information at the customs authority where the taxable value is being determined and the documents and evidence provided by the declarant.

IV. DETERMINATION OF TAXABLE VALUE BASED ON DEDUCTED VALUE

1. Determining the tax value:

If it is not possible to determine the taxable value according to the methods prescribed from Section I to Section III of Part II of this Circular, the taxable value of imported goods shall be determined based on the deducted value, calculated from the unit selling price of imported goods, identical imported goods, or similar imported goods on the domestic market of Vietnam, minus (-) reasonable costs and profits obtained after selling the imported goods. - Related to any assistance provided by any person, as stipulated in Subparagraph d.1 of Point d of Clause 2 of Section VII of Part II of this Circular.

This method shall not be applied if the goods selected to determine the selling price fall under any of the following circumstances:

- Not yet sold on the domestic market of Vietnam or the sale has not been recorded in accounting documents and books in accordance with Vietnamese accounting laws;

2. Conditions for selecting the unit selling price on the Vietnamese market:

a) The unit selling price on the Vietnamese market must be the unit selling price of the imported goods whose taxable value is being determined, identical imported goods, or similar imported goods, sold in their original state as imported.

b) The selected unit selling price must correspond to the largest cumulative quantity of goods sold immediately after importation, but not later than 90 days after the importation date of the goods whose taxable value is being determined, and the buyer and seller must not have a special relationship.

Example 2: Lot A includes many items, among which item B needs to be determined for taxable value using the deduction method. Lot A was imported on January 1, 2005. Another lot containing an identical item to item B was imported earlier and sold to multiple domestic buyers at various prices and times as follows:

800 VND/piece

 

 

In the above example, the selling price chosen for deduction is 800 VND/unit, corresponding to the largest quantity sold (450 units), at a level sufficient to form a selling price. This price satisfies the conditions for selecting the selling price, namely:

- Largest cumulative quantity (450 pieces).

- Sale time within 90 days from the date of importation.

3. Deduction Principle:

The determination of deduction amounts must be based on accounting records and valid documentation available and recorded in accordance with Vietnamese accounting regulations and standards.

Deduction amounts must be those that are permitted to be included in reasonable and legitimate business expenses under Vietnamese accounting laws.

4. Deductions from the selling price include:

The items deducted from the selling price are reasonable costs and profits obtained after selling the goods on the Vietnamese market, including the following:

a) Transportation costs, insurance fees, and other costs related to transporting goods after importation, specifically:

a.1) Transportation costs, insurance fees, and other costs related to transporting goods from the first port of entry to the importer's warehouse or delivery location within Vietnam;

a.2) Transportation costs, insurance fees, and other costs related to transporting goods from the importer's warehouse within Vietnam to the sales location, if the importer bears these costs.

b) Taxes, fees, and levies payable in Vietnam when importing and selling imported goods on the domestic market.

c) Commissions or common expenses and profits related to the sale of imported goods in Vietnam.

c.1) In cases where the importer acts as an agent for foreign traders, the commission amount is deducted. If the commission already includes the costs mentioned in points a and b of this clause, such costs shall not be deducted again.

c.2) In cases of outright purchase and resale, common expenses and profits are deducted: Common expenses and profits must be considered comprehensively when determining the deduction value. The determination and allocation of common expenses and profits for imported goods must comply with Vietnamese accounting regulations and standards.

Common expenses include direct and indirect costs serving the importation and sale of goods on the domestic market, such as marketing costs, storage and preservation costs before sale, management activity costs serving importation and sale,...

The basis for determining deduction amounts is the data recorded and reflected on the accounting books and vouchers of the importer, consistent with Vietnamese accounting regulations and standards. This data must correspond to the data obtained from the import and sale activities of goods of the same grade or type in Vietnam.

5. For goods sold in a condition different from their original state upon importation:

a) Where the selling price of goods sold in their original state upon importation cannot be found, the selling price of imported goods after additional processing or manufacturing within the country is taken, minus the costs of such processing or manufacturing that can be quantified, provided that the costs of additional processing or manufacturing within the country and the costs mentioned in Clause 4 of this Section can be separated. If these costs cannot be separated from the selling price, the deduction method for determining the customs value cannot be applied, and the next method must be used instead.

b) Where, after processing or manufacturing, the imported goods retain their original characteristics, nature, and utility but are only part of the goods sold on the domestic market, the deduction method cannot be applied to determine the customs value of the imported goods.

c) If, after processing or manufacturing, the imported goods change their characteristics, nature, and utility and are no longer recognizable as the originally imported goods, this method cannot be applied.

6. Documents and materials to be submitted:

The declarant or importer must submit certified copies of the following documents along with the customs declaration procedures:

a) Sales invoices issued or approved for use by the Ministry of Finance.

b) Agency sales contracts if the importer acts as an agent for the exporter. This contract must specify the specific commission fee that the agent receives and the types of expenses the agent must pay.

c) An explanation of sales revenue and the expenses mentioned in Clause 4 of this Section.

d) Customs declarations and valuation declarations of the selected consignment for deduction.

đ) Other necessary documents required by the customs authority to check and determine the customs value according to the valuation method.

V. DETERMINATION OF CUSTOMS VALUE BASED ON CALCULATED VALUE

1. If the customs value of imported goods cannot be determined according to the methods prescribed from Section I to Section IV of Part II of this Circular, the customs value of imported goods will be determined based on the calculated value. The calculated value of imported goods includes the following items:

a) Direct costs for producing imported goods: Production cost or value of raw materials, production process costs or other processing costs used in producing imported goods. These costs include:

- Costs specified in point a, b, c of Clause 2 of Section VII of Part II of this Circular;

- Value of assistance provided as guided in item d.1 of point d of Clause 2 of Section VII of Part II of this Circular.

Only the value of assistance products specified in item d.1.4 of point d of Clause 2 of Section VII of this Circular, which are carried out in Vietnam, shall be included in the customs value if the producer bears the costs for such assistance products.

b) Common expenses and profit generated from selling goods of the same grade or type as the imported goods being valued, produced in the exporting country for sale to Vietnam. Profit and common expenses must be considered comprehensively when determining the calculated value.

Common expenses include all direct or indirect costs of production and sale for export of goods, but not calculated according to the guidance provided in point a of this clause.

c) Transportation costs, insurance costs, and other costs related to the transportation of imported goods as provided for in points g and h, Clause 2, Section VII, Part II of this Circular.

2. Basis for determining the transaction value:

Is the data recorded and reflected on accounting documents and books of the producer, except when such data does not correspond with the data collected in Vietnam. Such data must correspond with the data obtained from production and importation activities of similar or identical goods produced by the exporter for export to Vietnam.

3. Documents and materials to be submitted:

The declarant or importer must submit certified copies of the following documents and at the same time present the original documents for verification:

a) An explanation from the producer regarding the costs mentioned in point a and b, Clause 1, of this section, accompanied by a certified copy of the producer's invoices and accounting records consistent with the explanation;

b) Sales invoice of the producer;

c) Documents regarding the costs mentioned in point c, Clause 1, of this section.

In case there are insufficient documents as mentioned above, the transaction value for tax purposes shall not be determined according to the guidance in this section and shall proceed to the next method.

VI. DETERMINATION OF THE TRANSACTION VALUE BY INFERENCE METHOD

1. If the transaction value cannot be determined according to the methods prescribed from Section I to Section V of Part II of this Circular, the transaction value will be determined by the inference method based on objective and available data at the time of determining the transaction value.

The transaction value determined by the inference method is established by sequentially and flexibly applying the methods for determining the transaction value prescribed from Section I to Section V of Part II of this Circular, stopping immediately upon determining the transaction value, provided that such application complies with the provisions of Clause 2 of this section.

2. When determining the transaction value by this method, the declarant and customs authority shall not use the following values to determine the transaction value:

a) Domestic market selling price of similar products manufactured in Vietnam.

b) Selling price of goods in the domestic market of the exporting country.

c) Selling price of goods exported to another country.

d) Production costs of goods, except for production costs used in the valuation method.

đ) Minimum transaction value.

e) Presumed or hypothetical prices.

g) Using the higher of two substitute values as the transaction value.

3. Some examples of flexible application of methods for determining the transaction value:

a) Applying the method for determining the transaction value based on the transaction value of identical imported goods or similar imported goods.

a.1) If there are no identical or similar imported goods exported to Vietnam on the same day or within 60 days before and after the export date of the batch of imported goods being valued, then select identical or similar imported goods exported within a longer period but not exceeding 90 days before and after the export date of the batch of goods being valued.

a.2) If there are no identical or similar imported goods of the same origin, then select imported goods of different origins but still satisfying the conditions for identical or similar imported goods.

b) Applying the method for determining the transaction value based on the deductive value by one of the following ways:

b.1) Within 90 days from the import date, if the unit price for deduction cannot be determined, then choose the unit price sold with the largest cumulative quantity within 120 days from the import date of the selected batch for deduction.

b.2) If there is no resale price of the imported goods or identical or similar imported goods to a non-related buyer, then choose the resale price to a related buyer, provided that the special relationship does not affect the transaction price.

The transaction value of imported goods is determined by the transaction value of identical imported goods already determined by the deductive value or computed value.

The transaction value of imported goods is determined by the transaction value of similar imported goods already determined by the deductive value or computed value.

4. In addition to the examples provided in Clause 3 of this section, the flexible application of methods for determining the transaction value may rely on price databases and objective and lawful documents, but shall not violate the provisions of Clause 2 of this section.

VII. ADJUSTMENTS

1. Principles of adjustment.

a) For amounts to be added, adjustments shall only be made under the following conditions:

- These amounts are paid by the buyer and have not been included in the actual price paid or payable.

- The amount to be added must be directly related to the imported goods.

- In cases where the imported batch has amounts to be added but there is no objective data to determine the transaction value, it shall not be determined according to the transaction value and must proceed to the next method.

b) For amounts to be deducted, adjustments shall only be made when there are lawful and valid data and documents to separate them from the sales price and are available at the time of determining the transaction value.

2. Amounts to be added:

a) Commissions and brokerage fees, excluding purchase commissions. In cases where these costs include taxes payable in Vietnam, such taxes shall not be added to the transaction value of imported goods.

b) Packaging costs considered to be inseparable from the imported goods, including: packaging purchase price, other costs related to purchasing and transporting packaging to the place of packing and storing goods.

Types of containers, packaging boxes, and racks used as means for packing goods for transportation and reused multiple times shall not be considered as packaging materials attached to the goods, and therefore, shall not be included in the cost of packaging materials attached to the goods.

c) Packaging costs, including the following items:

c.1) Packaging material costs, including the purchase price of packaging materials and other related costs associated with purchasing and transporting packaging materials to the location where packaging takes place.

c.2) Labor costs for packaging, including wages paid to workers and other costs related to hiring labor for packaging goods that are being valued for tax purposes.

If the buyer must bear living and travel expenses for workers during the packaging period, these costs also belong to labor costs for packaging.

d) The value of goods and services provided free of charge or at a reduced price by the buyer to the producer or seller, directly or indirectly, for the production and sale of imported goods to Vietnam (hereinafter referred to as the value of assistance).

d.1) Assistance includes:

d.1.1) Raw materials, components, spare parts, and similar products incorporated into imported goods.

d.1.2) Raw materials, materials, and fuel consumed during the production of imported goods.

d.1.3) Tools, equipment, molds, dies, patterns, and similar products used to produce imported goods.

d.1.4) Design drawings, technical drawings, artistic designs, implementation plans, construction designs, sample designs, diagrams, sketches, and similar services produced abroad and necessary for the production of imported goods.

d.2) Determining the value of assistance:

- If the goods or services provided as assistance are purchased from a person without a special relationship to provide them to the seller, the value of the assistance is the purchase price of those goods or services.

- If the goods or services provided as assistance are produced by the importer or a person with a special relationship to the importer and supplied to the seller, the value of the assistance is the production cost of those goods or services.

- If the goods or services provided as assistance are produced by a production facility owned by the buyer located abroad but there are no records or documents to account separately for those goods or services, the value of the assistance will be determined by allocating the total production costs of that facility during the same period to the quantity of goods or services provided as assistance.

- If the assistance is rented or borrowed by the buyer, the value of the assistance is the rental or borrowing cost.

- If the assistance is used goods, the value of the assistance is the remaining value of those goods.

- If the assistance is processed or manufactured by the buyer before transferring it to the seller for use in producing imported goods, the additional value added by processing or manufacturing must be added to the value of the assistance.

- If the buyer sells the assistance to the exporter at a discount, the discounted value must be added to the taxable value.

- In cases where surplus raw materials or waste materials are obtained after producing imported goods from the assistance, the recovered value from these surplus raw materials or waste materials must be deducted from the value of the assistance if there are data showing the value of the waste or surplus raw materials.

The value of the assistance includes all related costs associated with purchasing, transportation, and insurance up to the place where the imported goods are produced.

d.3) Allocation of the value of assistance to imported goods.

d.3.1) Principles of allocation of the value of assistance.

- The value of all assistance must be fully allocated to imported goods;

- The allocation must be documented through legal and valid records of the allocation;

- The allocation must comply with Vietnamese accounting regulations and standards.

d.3.2) Methods of allocating the value of assistance:

The declarant allocates the assistance to the imported goods according to one of the following methods:

- Allocate to the quantity of imported goods in the first import shipment;

- Allocate based on the number of units of goods produced up to the time of the first import shipment;

- Allocate to the entire expected production volume according to the sales agreement between the buyer and the seller (or the producer);

- Allocate based on a declining or increasing principle;

- In addition to the above methods, the buyer may use other allocation methods, provided they comply with accounting regulations and are documented.

đ) Royalty fees, license fees:

đ.1) Royalty fees and license fees must be included in the actual payment or payable amount for imported goods if they meet the following conditions:

đ.1.1) Royalty fees or license fees must be paid for the use of intellectual property rights directly related to the imported goods being valued.

If royalty fees or license fees are not directly related to the imported goods, they shall not be included when determining the taxable value.

Example 3: An importer pays a royalty fee to use a process for printing semi-transparent floral fabric from the owner of the process. Subsequently, the importer imports machinery and equipment used to produce this type of fabric from another exporter (who is not the owner of the process). This royalty fee does not need to be included in the transaction value of the imported goods because the payment is only for using the production process, not for the imported goods themselves, which are machinery and equipment.

đ.1.2) Royalty fees and license fees must be paid directly or indirectly by the buyer. Payment of royalty fees and license fees must be a condition of the purchase of the imported goods. The buyer agrees to pay royalty fees and license fees as part of the purchase activity aimed at acquiring the imported goods.

The declarant must submit to the customs authority a certified copy of the documents and records showing the payment of royalty fees and license fees and the authorization document issued by the owner of the right or the authorizing party.

đ.1.3) Royalty fees and license fees have not been included in the selling price of the goods being valued for tax purposes.

đ.2) Royalty fees and license fees shall not be included in the taxable value in the following cases:

đ.2.1) Amounts that the buyer must pay for the right to reproduce imported goods or to copy artistic works in Vietnam.

đ.2.2) Amounts that the buyer must pay for the right to distribute or resell imported goods, if such payment is not a condition of the sale of the imported goods.

In cases where amounts paid for the right to reproduce, distribute, or resell imported goods have been included in the selling price of the goods, they shall not be deducted from the customs value of the imported goods.

đ.2.3) In cases where copyright fees and license fees are partially included in the imported goods and partially based on factors unrelated to the imported goods without distinguishing or separating these elements, or it is impossible to determine which part is the copyright fee according to the financial agreement between the buyer and the seller, then the copyright fees and license fees shall not be added to the customs value.

đ.3) Basis for determining copyright fees and license fees:

đ.3.1) The basis for determining copyright fees and license fees includes payment receipts for copyright fees and license fees or other valid and legal documents reflecting the obligation to pay these amounts.

đ.3.2) In cases where copyright fees and license fees cannot be determined at the time of import due to their dependency on post-import sales revenue or other reasons specified in the sales contract or separate agreements regarding payment of copyright fees, the declarant must declare and commit in writing to provide supplementary declarations about these costs to fully determine the customs value of the consignment and fulfill tax obligations.

e) Amounts that the importer must pay from proceeds received after reselling, disposing of, or using imported goods transferred to the seller in any form.

Example 4: The importer must pay an amount based on a certain percentage of post-import sales revenue or rental income from imported goods.

In cases where the amount to be added cannot be determined at the time of import due to its dependency on post-import sales revenue or other reasons specified in the sales contract or separate agreements, the declarant must declare and commit in writing to provide supplementary declarations about these costs to fully determine the customs value of the consignment and fulfill tax obligations.

g) Transportation costs and all other costs directly related to transporting imported goods to the place of importation, such as loading, unloading, stacking, and transferring costs, surcharges for old ships, leasing costs for various types of containers, boxes, and supports used as packaging means for transportation, and reusable items. The adjustment value of this item is determined based on the transport contract or relevant documents and materials related to the transportation of goods.

g.1) In cases where a consignment contains different types of goods but the transport document does not detail each type of goods, the declarant must allocate these costs to each type of goods using the following priority allocation methods:

- Allocation based on the carrier's freight rate schedule;

- Allocation based on the weight or volume of the goods;

- Allocation based on the ratio of the purchase value of each type of goods to the total value of the consignment.

g.2) In cases where the purchase price does not include transportation costs and the buyer does not have valid and legal documents, or the document is invalid, the transaction value method shall not be applied to determine the customs value.

h) Insurance costs for goods transported to the place of importation.

h.1) In cases where the importer does not purchase insurance for the goods, this cost shall not be added to the customs value.

h.2) Insurance fees purchased for a consignment containing different types of goods, but not detailed for each type of goods, shall be allocated based on the value of each type of goods.

Costs mentioned in points g and h of this clause, if already including VAT payable in Vietnam, shall not be added to the customs value.

3. Deductible amounts:

If the following amounts are included in the transaction value and there are objective data based on available valid and legal documents at the time of determining the customs value, they shall be deducted when determining the customs value:

a) Costs for activities arising after the importation of goods, including construction, architectural, installation, maintenance, or technical assistance costs, technical consulting costs, supervision costs, and similar costs.

b) Domestic transportation and insurance costs within Vietnam. In cases where these costs relate to multiple types of goods, they must be allocated to the goods whose customs value needs to be determined according to the principles set out in points g and h of clause 2 of this section.

c) Taxes, fees, and charges payable in Vietnam already included in the purchase price of imported goods. In cases where these fees and charges relate to multiple types of goods and cannot be directly determined for each type of goods, they shall be allocated based on the ratio of the purchase value of each type of goods to the total value of the consignment.

d) Costs borne by the buyer related to marketing imported goods, including:

- Market research and investigation costs for products to be imported;

- Advertising costs for trademarks and brands of imported goods;

- Costs related to displaying and introducing newly imported products;

- Costs for participating in trade fairs and exhibitions of new products;

- Pre-import inspection costs for quantity and quality of goods. In cases where these costs are agreed upon between the buyer and seller and are part of the actual or future payment made by the buyer to the seller, they will not be deducted from the transaction value.

- Letter of Credit opening costs for paying for the imported consignment, if this cost is paid by the buyer to the bank representing the buyer to make the payment.

đ) Interest payable related to the payment for imported goods, subject to:

- The interest payable must be documented separately from the paid or payable price.

In case requested, the buyer shall prove that the declared value is indeed the amount paid or to be paid and the interest rate applicable is consistent with the usual credit interest rate at the time and in the country where the financial agreement was concluded.

Example 5: Buyer A enters into a contract with Seller B to purchase a batch of refrigerators.

The terms of the contract stipulate that:

+ If the buyer pays the price within two weeks from the date of issuance of the commercial invoice, the value of the goods is 9,700 USD.

+ If the buyer pays the price after two weeks from the date of issuance of the commercial invoice, the value of the goods to be paid is 10,000 USD (= 9,700 USD + 300 USD).

The commercial invoice presented by the buyer when processing customs procedures shows the value of the consignment as 9,700 USD.

Upon reviewing the import documentation, the customs authority finds that the buyer paid after two weeks from the date of issuance of the invoice, thus the actual amount paid or to be paid is 10,000 USD.

Therefore, in this case, although the commercial invoice shows the value of the consignment as 9,700 USD, the actual amount paid by the buyer to the seller is 10,000 USD.

The taxable value = the actual amount paid or to be paid = 10,000 USD.

VIII. DETERMINATION OF TAXABLE VALUE FOR IMPORTED GOODS IN CERTAIN SPECIFIC CASES

1. For imported goods that have been exempted from tax, but later used for purposes other than those for which the exemption was granted, the taxable value shall be declared and taxed. The taxable value of imported goods is determined based on the remaining value of the goods, calculated according to the period of use and storage in Vietnam (from the date of importation as stated in the customs declaration form to the date of reassessment of taxes) and is specifically determined as follows:

 

 

- Specifically, for imported motor vehicles that have been exempted from tax but later used for purposes other than those for which the exemption was granted; when transferring ownership procedures are carried out, if the declared value at the time of importation for tax exemption is lower than the price of identical or similar imported goods in the price database system at the time of transfer, then the price in the price database system at the time of transfer and the ratio specified above shall be used as the basis for determining the taxable value.

2. For scrap materials obtained during the production of goods processed for foreign parties, which are resold to Vietnam by the party hiring the processing services, the taxable value is determined as follows:

+ In cases where there is a sales contract, the principles and methods for determining the taxable value prescribed from Section I to Section VI of Part II of this Circular shall be applied to determine the taxable value.

+ In cases where there is no sales contract, the taxable value is determined as provided in Clause 7 of this Section.

3. For imported goods that are leased or borrowed, the taxable value is the actual payment made under the contract signed with foreign countries, consistent with relevant legal and valid documents related to leasing or borrowing of goods.

4. For imported goods that are taken abroad for repair, the taxable value is the actual cost paid under the contract signed with foreign countries, consistent with relevant legal and valid documents related to the repair of goods.

5. Warranty items: In cases where imported goods include warranty items according to the sales contract (including items sent later), the taxable value is the actual payment made for the imported goods including the value of the warranty items. The value, quantity, conditions, and duration of the warranty must be clearly specified in the contract.

6. Promotional items: In cases where imported goods include promotional items according to the sales contract (including items sent later), the taxable value is determined as follows:

a) In cases where the value of promotional items is specifically stipulated in the sales contract, but does not exceed 10% of the value of the imported goods, the taxable value of the imported goods (including promotional items) is the actual payment made for the entire consignment of imported goods.

b) In cases where the value of promotional items cannot be separated from the value of the imported goods or exceeds 10% of the value of the imported goods, the taxable value for the entire consignment of imported goods (taxable value of the imported goods and taxable value of the promotional items) cannot be determined based on the transaction value and must be shifted to the next method.

7. Imported goods without a sales contract, such as border residents' trade goods; imported goods of passengers entering the country, both within and beyond the tax-free allowance; goods as gifts or presents, both within and beyond the tax-free quota; imported goods of postal service enterprises and express delivery companies; and other types of transactions without a sales contract, the taxable value is determined as follows:

a) In cases of single items:

- For automobiles, motorcycles, or single items of machinery and equipment valued at 50 million VND or more according to the price database: the taxable value is determined by the customs authority based on the principles and methods for determining the taxable value prescribed from Section I to Section VI of Part II of this Circular, based on the price data at the time of determination.

- For other single items: the taxable value is the declared value.

b) In cases that are not single items:

- If the total declared value of the consignment is 5 million VND or less, the taxable value is the declared value.

- If the total declared value of the consignment exceeds 5 million VND (including cases where domestic organizations or individuals purchase goods across the border and import them to Vietnam; goods of passengers traveling in and out of the country sent together or separately; goods as gifts or presents...), the taxable value is determined by the customs authority based on the principles and methods for determining the taxable value prescribed from Section I to Section VI of Part II of this Circular, based on the price data at the time of determination.

8. Other special cases:

a) Excess imported goods compared to the goods purchase contract already signed with the foreign party:

a.1) Excess imported goods are identical or similar to the goods listed on the import contract: The customs value of the excess imported goods shall be determined according to the method for determining the customs value of the goods listed on the import contract.

a.2) Excess imported goods are different from the goods listed on the import contract, if permitted for importation, the customs value shall be determined based on the sequential application of the methods for determining the customs value as stipulated from Section II to Section VI Part II of this Circular, not determined according to the transaction value method.

b) Imported goods that are not in compliance with the goods purchase contract already signed with the foreign party:

b.1) Goods that are not in compliance with specifications, if permitted for importation, the customs value is the actual amount paid for the imported goods. Goods that are not in compliance with specifications are understood as goods actually imported with differences in color, size, style compared to the description in the sales contract, and such differences do not affect the actual price paid.

b.2) Goods that do not conform to the sales contract, if permitted for importation, the customs value shall be determined based on the sequential application of the methods for determining the customs value as stipulated from Section II to Section VI Part II of this Circular, not determined according to the transaction value method.

c) Imported goods damaged, lost, or missing due to justifiable reasons during transportation or loading/unloading:

c.1) For the quantity of goods that are not damaged, lost, or missing, the customs value is the actual amount paid for the imported goods (the undamaged, unlost, unmissing portion).

c.2) For the portion of goods that are damaged or lost, the customs value shall be calculated based on the customs value of the intact imported goods and reduced accordingly to the extent of damage, loss, or missing, consistent with the inspection results and relevant documentation.

d) Imported goods to compensate for the losses mentioned in point c of this clause, the customs value shall be determined according to the guidance from Section I to Section VI Part II of this Circular.

đ) In cases where there is a discrepancy in quantity between the actual imported goods and the commercial invoice due to the nature of the goods, consistent with the delivery conditions and payment terms in the sales contract, the import tax amount shall be determined as follows:

đ.1) Regarding the determination of the actual quantity of goods exported and imported: When an inspection has been conducted, the actual quantity of goods exported and imported shall be determined based on the inspection results.

đ.2) When determining the customs value, it must be based on the commercial invoice and the sales contract (delivery terms, tolerance ratio, natural characteristics of the goods, and payment terms). The customs value cannot be lower than the actual amount paid recorded on the commercial invoice and related documents.

đ.3) Some specific examples:

Example 6:

A company imports tobacco fiber according to the contract, quantity 1000 tons, unit price 100 USD/ton, moisture allowance ±2%. The commercial invoice records = 1000 tons x 100 USD, payment amount is 100,000 USD.

- Actual quantity imported within the tolerance range specified in the contract: When importing, the customs authority checks the weight and finds 1020 tons or 980 tons, the payment amount for tax calculation is 100,000 USD.

- Actual quantity imported outside the tolerance range specified in the contract: If the checked quantity is 1200 tons, the actual quantity of goods imported is determined as 1200 tons and the customs value is calculated as follows: 1000 tons x 100 USD + 176 tons x 100 USD (the quantity of goods for calculating the customs value is 1176 tons = 1200 tons - (1200 tons x 2%)).

In case the actual quantity imported (900 tons) is less than the quantity recorded on the commercial invoice, and the commercial invoice is issued based on the actual delivered goods, the customs value is the payment amount recorded on the commercial invoice.

Part III

CHECKING THE TAXABLE VALUE

I. CUSTOMS VALUE VERIFICATION AT THE CUSTOMS STAGE

1. Principles, objects of verification:

a) Objects of verification: Are customs documents and related materials concerning the determination of the customs value of goods subject to document verification or actual goods verification.

b) Verification principles: Apply risk management regarding valuation.

Customs value verification according to the principle of applying risk management regarding valuation is carried out based on classifying goods into items under the List of Items Subject to Risk Management Regarding Valuation and items outside the List of Items Subject to Risk Management Regarding Valuation, specifically:

b.1) Items under the List of Items Subject to Risk Management Regarding Valuation:

The General Department of Customs is responsible for building, publishing, and guiding the Customs Departments of provinces and cities to implement the List of Items Subject to Risk Management Regarding Valuation as the basis for verification, evaluation of the truthfulness and accuracy of declared values, organizing consultations (hereinafter referred to as consultations) for consignments suspected of declared values as stipulated in Clause 5 of this Article. For consignments suspected of declared values as stipulated in Clause 5 of this Article.

The criteria for building the list of items subject to risk management regarding valuation include:

- Imported items with high tariff rates and large import turnover;

- Sensitive imported items with potential for trade fraud.

Based on management capacity, trade fraud situation, human resources for management, the List of Items Subject to Risk Management Regarding Valuation will be adjusted at each stage to ensure alignment with actual management needs.

b.2) Items outside the List of Items Subject to Risk Management Regarding Valuation: The Director of the Provincial/City Customs Department is responsible for building a list of key items requiring focused management in their locality to carry out verification, evaluation of the truthfulness and accuracy of declared values, and organizing consultations for consignments suspected of declared values as stipulated in Clause 5 of this Article.

Key items requiring focused management in localities are those frequently involved in import activities or have large import turnovers, high tariff rates, potential for trade fraud through prices but not included in the list of items subject to risk management regarding valuation.

The Director of the Customs Office of the province or city must proactively collect, compile, analyze, and periodically report to the General Department of Customs on goods and groups of goods that need to be supplemented into the List of Goods Subject to Risk Management on Price.

2. Content of Inspection:

The customs authority shall conduct detailed inspections of the following contents:

a) Inspection of declaration content: inspect all criteria recorded on the import declaration form and the valuation declaration form submitted by the declarant, paying particular attention to the following criteria:

The name of the goods must be complete, detailed with code symbols, brand names, origin of the goods, consistent with the criteria on the valuation declaration form. Specifically:

- The declared name of the goods should be the common trade name accompanied by basic characteristics of the goods such as: structure, constituent materials, components, concentration, capacity, size, style, function, brand name, origin,... meeting the requirements for classification and determining factors affecting the determination of the dutiable value of the goods.

- In cases where the name of the goods is not declared specifically and clearly as prescribed above, the declarant must supplement the declaration. If the declarant does not supplement the declaration or supplements it incompletely, it will be handled according to the provisions of point a, Clause 3, Section this.

Example: For motorcycles and cars, information such as brand name, manufacturer, country of production, style, engine displacement, model, other code marks,... must be included.

- Unit of measurement: must be clearly quantified according to units of measurement (such as m, kg,...), in cases where it cannot be clearly quantified (such as box, case,...) then equivalent conversion must be carried out (such as how many boxes in a case, how many kg in each box, how many packages, pieces,...).

b) Inspection of the accuracy of the dossier (such as mathematical calculations,...); honesty and consistency of content among the documents in the customs dossier (such as comparing and contrasting the terms of the contract,...); comparing and contrasting the contents of the commercial invoice with the commercial contract; comparing and contrasting the contents declared on the valuation declaration form with relevant documents in the customs dossier.

c) Inspection of the legality and validity of the documents related to the determination of the dutiable value.

d) Inspection of compliance with the principles and methods for determining the dutiable value stipulated in this Circular; conditions for application and procedures for using the methods to determine the declared value.

Example: The declarant incorrectly applies the procedures for determining the dutiable value stipulated in Part II of this Circular.

đ) Inspection of the accuracy and honesty of the declared value: The customs authority compares and contrasts the declared value with the price database at the time of value verification to assess risk, verify, and examine the accuracy and honesty of the declared value.

The price database used for verifying the declared value consists of price data collected, updated, and used in accordance with the Regulation on Building, Managing, and Using the Price Database issued by the Ministry of Finance.

3. Handling of inspection results:

a) Reject the declared value and determine the dutiable value according to the principles and methods stipulated in this Circular if:

After inspection, the customs authority discovers any of the following violations: regarding procedures and documents; regarding the principles and procedures for applying the methods to determine the dutiable value (hereinafter referred to as procedural and document violations). Specifically:

Procedural and document violations requiring rejection of the declared value include:

a.1) The declarant is required to supplement the declaration on the name of the goods but does not declare or declares incompletely;

a.2) There is inconsistency in content between the documents and materials in the customs dossier submitted or presented by the declarant to the customs authority, and there is a basis to determine that the declarant has declared dishonestly the contents related to the determination of the value;

Example: There is a difference in the description of goods between the commercial invoice and the transport contract.

a.3) The customs dossier and related documents are not legal or valid;

a.4) Failure to declare or declaring inaccurately the elements of the transaction affecting the value (for example: failure to declare adjustment items, special relationships; failure to declare copyright fees, license fees,...);

a.5) Incorrectly applying the procedures and contents of the methods for determining the dutiable value as prescribed in Clause 2, Article 4 of Decree No. 40/2007/NĐ-CP dated March 16, 2007 of the Government;

a.6) Not satisfying one of the conditions when applying the methods for determining the dutiable value prescribed from Article 7 to Article 12 of Decree No.: 40/2007/NĐ-CP dated March 16, 2007 of the Government;

Example: The declarant does not satisfy the condition of control or use of goods after importation when applying method 1; does not satisfy the time condition when selecting identical or similar goods for method 2, method 3,...

b) Handling cases with doubts:

During the inspection process, if the customs authority has doubts about violations as prescribed in point a of this clause, but lacks sufficient grounds for conclusion or has doubts about the declared price as prescribed in item b.3 point b of this clause, the following actions shall be taken:

b.1) In cases where there are no doubts about the price but doubts about procedural and document violations, the customs authority accepts the declared value while transferring the procedural and document violation doubts to the post-clearance phase.

b.2) In cases where there are doubts about the price and doubts or no doubts about procedural and document violations, the following actions shall be taken:

b.2.1) For goods listed under the price risk management list:

The customs authority shall notify the declarant of the basis and grounds for doubting the declared price, the method and price determined by the customs authority, and handle as follows:

b.2.1.1) In cases where the declarant agrees with the price and method determined by the customs authority, the customs authority will issue a notice to determine the value, levy tax according to regulations, and record it clearly on the import declaration form.

b.2.1.2) In cases where the declarant disagrees with the price and method determined by the customs authority, the customs authority requires the declarant to deposit a guarantee and proceed with consultation as prescribed in Clause 4 and Clause 5 of this section.

b.2.1.3) In case there is doubt about the price level, but the declared value is not more than 5% lower than the price database at the time of inspection, the Director of the Provincial or Municipal Customs Department shall base on the actual import consignment, information data on imported goods, importing enterprises, etc., to decide on the application of the guarantee amount and organize consultations for that consignment.

b.2.2) For goods outside the List of Goods Subject to Risk Management on Price:

b.2.2.1) The customs authority shall notify the declarant of the basis and grounds for doubting the declared price, the method, and the price determined by the customs authority, and handle it according to the provisions of sub-item b.2.1 point b clause 3 of this article for key goods that need focused management at units decided by the Director of the Provincial or Municipal Customs Department.

b.2.2.2) For goods outside the list of key goods decided by the Director of the Provincial or Municipal Customs Department, the declared value shall be accepted while transferring any doubts to the post-clearance phase.

b.3) Cases of doubt about the price level:

Based on the price database at the time of valuation inspection, the customs authority shall compare and cross-check the declared value with the values in the price database to verify the accuracy, truthfulness, and objectivity of the declared value.

Imported goods shall be considered to have doubt about the price level if they fall under any of the following cases:

b.3.1) Imported goods have a declared value lower than the lowest taxable value of identical or similar goods determined by the customs authority; or the lowest declared value of identical or similar goods already accepted by the customs authority as the taxable value (without comparing with consignments currently under suspicion or awaiting consultation).

Identical or similar goods used for comparison are those exported to Vietnam on the same day or within a period of 60 days before and after the export date of the goods currently suspected of having a price issue. If identical or similar goods cannot be found within the aforementioned period, the search period may be extended, but not exceeding 90 days before and after the export date of the goods currently suspected of having a price issue.

b.3.2) Imported goods have a declared value lower than or equal to the declared value of the same type of synchronized components imported; or lower than or equal to the declared value of the main raw materials constituting the finished product imported.

The time limit for searching data shall be implemented according to the provisions of sub-item b.3.1 point b of this article.

b.3.3) Imported goods have a declared value lower than the value of identical or similar goods included in the price risk management list.

b.3.4) Imported goods have a declared value lower than the value collected from other sources of information by the customs authority after being converted to the same conditions as the consignment being inspected for valuation.

b.3.5) Imported goods have discount factors where the declared value after deducting the discount is lower than the value of identical or similar goods specified in the price database.

b.3.6) In cases where identical or similar goods as defined in this Circular cannot be found for comparison and checking the declared value, the concept of identical or similar goods shall be flexibly expanded, specifically:

- Imported goods with multiple accompanying features can be compared with the value of the same type of goods with a basic feature already in the price database.

- Imported goods with higher quality grades can be compared with the value of the same type of goods with lower quality grades already in the price database.

- Imported goods originating from developed countries or regions can be compared with the value of the same type of goods from developing or emerging countries or regions already in the price database (for example, imported goods requiring valuation checks originating from Japan can be compared with the value of the same type of goods originating from South Korea in the price database).

The time limit for searching data shall be implemented according to the provisions of sub-item b.3.1 point b of this article.

c) Acceptance of the declared value: Apart from the cases stipulated in points a and b of this clause, the customs authority shall accept the declared value.

4. Delayed determination of the taxable value:

a) Cases of delayed determination of the taxable value:

a.1) The declarant delays determining the taxable value: This applies to situations where the declarant does not have sufficient information necessary to determine the taxable value at the time of registering the customs declaration.

a.2) The customs authority delays determining the taxable value: This applies to cases where imported goods require immediate payment of duties and are subject to consultation procedures as provided for in sub-item b.2.1.2 and sub-item b.2.2.1 point b clause 3 section I Part III of this Circular.

b) Procedures for delayed determination of the taxable value:

b.1) For cases where the declarant delays determining the taxable value:

- At the time of registering the customs declaration, the declarant must submit a written request to the customs authority to delay determining the taxable value due to insufficient necessary information for determining the taxable value and request the customs authority to allow clearance with a commitment to pay a sufficient guarantee amount to cover the total duty of the imported consignment as determined by the customs authority.

- Based on the declarant's written request, the customs authority handling the import procedures shall determine the taxable value to calculate the guarantee amount to be paid according to the provisions of sub-item c.3 point c clause 3 of this article and notify the declarant in writing.

- The customs authority will only allow clearance when the declarant pays the guarantee amount as stipulated in this Circular.

- Within 30 days (calendar days) from the date of clearance of the goods, the declarant must supplement the necessary information to determine the taxable value of the imported consignment and recalculate the duty payable according to the regulations. If the declarant fails to supplement the necessary information to determine the taxable value within 30 days, the customs authority will determine the taxable value and notify the declarant in writing to be informed and comply.

b.2) In case the customs authority delays determining the dutiable value:

- The customs authority must notify in writing to the declarant the following contents:

+ Basis and grounds for suspicion;

+ Request the declarant to participate in explanation and exercise the right to consultation;

+ Guarantee amount to be paid: calculated according to the provisions at point c.3 clause c of this Article.

- The customs authority will only accept clearance of goods when the declarant submits the guarantee amount as notified by the customs authority.

- Within the guarantee period, the customs authority must organize consultations on the accuracy and truthfulness of the declared value in accordance with the consultation regulations stipulated in Clause 5 Section of this Article to conclude on the dutiable value and notify in writing for the declarant to know and comply.

c) Guarantee in case of delay in determining the dutiable value:

c.1) Form of guarantee: including

- Bank guarantee; or

- Deposit; or

- Advance payment; or

- Other form: the customs authority temporarily retains valuable documents (cars, motorcycles...) or part of imported goods undergoing procedures.

The declarant has the right to request the application of one of the above forms of guarantee, based on the declarant's request, the Head of the Customs Branch decides to apply the appropriate form of guarantee.

c.2) Guarantee period: The guarantee period must be sufficient for consultation, tax assessment (determining the dutiable value) and completing the obligation to pay taxes as prescribed.

c.3) Amount of guarantee:

- The amount of guarantee must be sufficient to cover the entire tax liability to be paid.

The Head of the Customs Branch bases on price databases and principles, methods for determining the dutiable value prescribed in this Circular to decide the amount of guarantee, the amount of guarantee to be paid.

- In case the declarant has already paid tax according to the declaration, the amount of guarantee equals the difference between the tax calculated based on the price determined by the customs authority and the tax calculated based on the declared price of the declarant.

c.4) Guarantee procedure:

c.4.1) Form of guarantee:

The content and form of guarantee shall be implemented in accordance with the law on tax management regarding guarantee of the tax payable.

c.4.2) Form of advance payment:

The procedure for advance payment and refund of advance payment is as follows:

- The advance payment is deposited into the customs authority's account at the State Treasury.

- After concluding on the dutiable value, the Customs Branch will proceed to transfer the corresponding advance payment from the customs authority's deposit account to the state budget revenue account according to current regulations if there is an increase in adjusted tax.

- If beyond the guarantee period, the customs authority does not adjust the dutiable value but accepts the declared value, then it must refund the advance payment that the declarant has submitted.

The Customs Branch is responsible for immediately refunding any excess advance payment to the declarant.

c.4.3) Other form:

- In case the declarant does not apply the guarantee forms of bank guarantee or advance payment, they must submit a written request to the customs authority to apply another form.

- The Head of the Customs Branch bases on the declarant's request and actual situation to decide the appropriate form of guarantee and guarantee procedure.

5. Consultation:

a) Authority for consultation:

- The Head of the Customs Branch, based on the provisions of this Circular, notifies the declarant about the import consignment subject to consultation.

- The Director of the Provincial/City Customs Department organizes the consultation process.

Based on actual circumstances and management capacity, the Director of the Provincial/City Customs Department may authorize the Head of the Customs Branch to conduct the consultation and bear responsibility for the consultation conducted by the Branch.

b) Form of consultation: direct consultation.

c) Cases requiring consultation: as specified in point b.2.1.2 and point b.2.2.1 clause b Clause 3 Section I Part III of this Circular.

For the same commodity, processed by the same enterprise for import procedures at the same customs unit, under the same contract or different contracts, only the first import consignment will be organized for consultation if:

- Information related to inspection and determination of the dutiable value obtained from the price database and other information collected through business measures, up to the time of inspection and determination of the dutiable value for the new consignment, remains unchanged compared to the information used for the initial consultation of the first import consignment.

- The declarant agrees to use the result of the initial consultation for subsequent imports.

d) Consultation and handling of consultation results:

d.1) Preparation for consultation:

- Customs authority:

+ The customs authority notifies in writing to the declarant the time and place for consultation; relevant files and documents serving consultation; basis and grounds for suspicion of the declared value.

+ Collects all information available in the price database and related documents. Analyzes and compiles information for consultation.

+ Prepares consultation questions, focusing on clarifying doubts about documents, prices, discounts, and reductions.

+ Anticipates reasons to reject the declared value, the dutiable value determined by the customs authority, and the method of determination.

- Declarant:

+ Provide information, documents, and certificates according to the content previously notified by the customs authority.

+ The declarant is responsible for appointing an authorized representative to decide on matters related to the determination of the dutiable value or a person fully authorized to participate in consultation.

+ Answer questions during consultation related to the import transaction as requested by the customs authority.

d.2) Content of consultation:

Based on the files, documents, and prepared information, the customs authority requests the declarant to answer questions related to declaring factors of the import transaction; the accuracy and truthfulness of the declared value; the method of determining the dutiable value used by the declarant.

The customs authority focuses on clarifying doubts about the documentation and declared prices. The questioning during the consultation process must be fully and truthfully recorded in the consultation record. At the end of the consultation record, based on the enterprise's responses and price data information, the customs authority clearly states "acceptance" or "rejection" of the declared value and the estimated taxable value. All parties involved in the consultation must sign the consultation record.

d.3) The time for conducting consultations and determining the taxable value: a maximum of 30 days (calendar days) from the date of declaration registration. The Director of the Provincial/City Customs Department is responsible for organizing the declarant to participate in consultations within the prescribed timeframe.

d.4) Handling the results of consultations:

d.4.1) The customs authority rejects the declared value and determines the taxable value in the following cases:

d.4.1.1) The declarant does not honestly declare the contents related to the determination of the taxable value:

- The declarant does not declare or incorrectly declares the actual price paid or to be paid; factors related to the determination of the taxable value (such as adjustments, special relationships, conditions for applying valuation methods...).

- The exporter or the representative of the exporter confirms that the declared price does not match the actual purchase price.

- Information obtained by the customs authority through other business measures confirms that the transaction price is not honest.

- Information provided by the declarant after verification is inaccurate, false documents or illegal, invalid documents.

d.4.1.2) The declarant does not explain or cannot explain the honesty and accuracy of the contents related to the determination of the taxable value:

- After the consultation period, the declarant refuses to participate in the consultation or does not participate in the consultation.

- After the deadline, the declarant cannot provide the required information, documents, and evidence as notified by the customs authority.

- The declarant cannot explain, prove, or provide insufficiently convincing explanations without basis regarding the customs authority's doubts (such as the rationality of the documentation; declared price level or special relationships affecting the transaction value; conflicting declarations with customs documentation; inconsistencies in documentation, evidence, and materials submitted by the enterprise; the rationality of the declared price compared to identical or similar goods in the price database...).

In the case of rejecting the declared value, the customs authority informs the declarant in writing of the rejection of the declared value, specifying the grounds for rejecting the declared value.

d.4.2) Accepting the declared value: Apart from the cases of rejecting the declared value mentioned in paragraph d.4.1, the customs authority accepts the declared value.

đ) All documents and records related to the consultation must be stored together with the customs file.

e) In addition to consultations, to ensure the honesty and objectivity of the inspection and determination process, the customs authority may seek advisory opinions from relevant units and agencies.

6. The General Customs Department specifies the detailed procedures for inspecting and determining the taxable value.

II. INSPECTION OF TAXABLE VALUE AT THE POST-CLEARANCE STAGE

Based on the risk level for each product, industry, group, importer, and import type, the inspection of the taxable value at the post-clearance stage is conducted as follows:

1. For the post-clearance department at the Customs Branch:

Inspect the customs documentation, declared prices, and related materials for imported goods that have not been subject to detailed documentation inspection at the clearance stage. The inspection content is carried out according to the provisions of Clause 2, Section I, Part III of this Circular. During the inspection, if violations concerning documentation, evidence, and valuation methods are discovered, the declared value is rejected and the taxable value is determined according to the established principles and methods specified from Section II to Section VI of Part II of this Circular. If there are doubts about the documentation, evidence, or declared prices but insufficient grounds to conclude fraud, these doubts are transferred to the post-clearance inspection department for further verification and clarification according to regulations.

2. For the post-clearance inspection department:

Based on the doubts about documentation, evidence, or declared prices transferred by the post-clearance department or the clearance inspection department, assess the risk level by product, industry, and importer, and organize post-clearance inspections at the customs office or the enterprise's headquarters. The inspection content and procedures are carried out according to the post-clearance inspection regulations.

3. For the anti-smuggling investigation department:

Organize investigations and verifications of large-scale fraud cases involving valuation such as falsifying documentation and evidence; colluding to uniformly lower or inflate declared values, transferred by the post-clearance inspection department, or prominent and systemic fraud cases with wide-ranging impact detected by anti-smuggling forces.

4. For consignments that have already been inspected at the clearance stage for valuation, including cases where the declared value was rejected or accepted after consultation, if the post-clearance department, post-clearance inspection department, or anti-smuggling investigation department discovers any violations, they will still handle the violations according to the law, recover all taxes, and clarify the responsibility of the clearance inspection department. If there are any violations, disciplinary action will be taken according to the regulations of the sector and the law.

5. The results of the inspection of the taxable value at the post-clearance stage must be reported to the clearance stage within five days from the date of inspection completion.

Part IV

RIGHTS AND OBLIGATIONS OF THE CUSTOMS DECLARANT;

RESPONSIBILITIES OF THE CUSTOMS AUTHORITY

I. RIGHTS OF THE DECLARANT

1. Request the customs authority to keep confidential commercial information provided to the customs authority, including all types of information about the buyer, seller, agent, domestic purchaser, domestic resale price of goods, production cost of imported goods.

2. Request the customs authority to guide the determination of the dutiable value and notify in writing the dutiable value, documents, methods, and calculations used to determine the dutiable value when the dutiable value is determined by the customs authority.

3. Have the right to seek consultation to prove the accuracy and truthfulness of the declared dutiable value when the customs authority has doubts.

4. Request the customs authority to release goods in cases where the determination of the dutiable value must be delayed, based on depositing a guarantee amount for the tax payable.

5. Have the right to appeal the prices determined by the customs authority.

6. Have the right to request in writing a change in the sequence of applying the deducted value method and the computed value method.

II. OBLIGATIONS OF THE CUSTOMS DECLARANT

1. The customs declarant is obligated to declare fully and accurately all costs related to the purchase and sale of imported goods based on the import consignment file, principles, and methods for determining the dutiable value as stipulated in this Circular, and independently determine the dutiable value of imported goods according to the dutiable value declaration form prescribed by the customs authority.

2. Submit the dutiable value declaration form, copies of legitimate and valid documents used to determine the dutiable value together with the import goods declaration form. Present documents for inspection and verification of the dutiable value upon request of the customs authority.

3. Participate in explanations and be subject to inspection by the customs authority regarding the accuracy and truthfulness of the declared value. Be responsible for cooperating with the customs authority in verifying the accuracy and truthfulness of declarations related to the dutiable value...

4. Bear legal responsibility for the accuracy and truthfulness of the contents declared and the results of the customs valuation aimed at taxation and customs statistics purposes.

5. The customs declarant shall bear sole responsibility for the documents sent by the customs authority to the address registered with the customs authority on the customs declaration form if they are delivered by postal service but not received by anyone.

6. Deposit the guarantee amount as required by the customs authority pursuant to Clause 4, Item I, Part III of this Circular.

III. RESPONSIBILITIES AND LIMITATIONS OF THE CUSTOMS AUTHORITY

1. Maintain confidentiality of commercial information related to declared values at the request of the declarant, except where required to provide such information to relevant agencies as prescribed by law.

2. Explain and guide the customs declarant to comply with the provisions of Decree No. 40/2007/NĐ-CP dated March 16, 2007, and the guidance in this Circular.

3. Notify the customs declarant in writing of the dutiable value, documents, methods, and calculations used by the customs authority to determine the dutiable value when the customs declarant requests it in writing.

4. Provide the dutiable value declaration form to the customs declarant and guide the declaration in accordance with each method of determining the dutiable value. Organize printing, distribution, and issuance of the dutiable value declaration form to the customs declarant.

5. Inspect the contents of the declaration and determine the dutiable value of the customs declarant as stipulated in Part III of this Circular.

6. Require the customs declarant to explain, submit, and present documents and evidence related to the purchase and payment of goods to prove the accuracy and truthfulness of the declared value. In cases of doubt about the documents and evidence, the customs authority must compare them with the original to ensure their accuracy.

7. Determine the dutiable value: The customs authority must base its determination of the dutiable value on the import consignment file; price databases, and the methods for determining the dutiable value specified in this Circular in the following cases:

a) The customs declarant cannot determine the dutiable value according to the methods prescribed from Item I to Item VI, Part II of this Circular.

b) Cases where the customs authority rejects the declared value as stipulated in Point a, Clause 3, and Subpoint d.4.1, Point d, Clause 5, Item I, Part III of this Circular.

c) The customs declarant does not comply with the provisions of Decree No. 40/2007/NĐ-CP dated March 16, 2007, and the guidance in this Circular.

Part V

COMPLAINTS AND VIOLATION HANDLING

I. APPEAL AND SETTLEMENT OF APPEALS

1. The customs declarant has the right to appeal the result of the determination of the dutiable value by the customs authority. The appellant has rights and obligations as prescribed by laws on appeals and complaints. The appeal document must clearly state the grounds and reasons for the appeal. During the appeal process, the customs declarant must still comply with the decision on the dutiable value made by the customs authority, except in cases where the decision on the dutiable value of the customs authority is temporarily suspended from enforcement under the Law on Appeals and Complaints.

Appeals against administrative decisions and actions of which level shall be initially resolved by the head of that level's unit.

2. If still disagreeing with the initial resolution of the appeal by the customs authority, the customs declarant has the right to appeal a second time to the immediate superior of the person who made the first appeal resolution or initiate an administrative lawsuit at the court in accordance with the laws on appeals and complaints and the laws on administrative litigation.

In the case of further appeal, the appellant must send the appeal letter along with a copy of the first appeal resolution and relevant documents (if any) to the second-level appeal resolver.

The immediate superior of the first-level appeal resolver is responsible for issuing the second-level appeal resolution.

3. Not to consider and resolve cases that have already been resolved by the second-level appeal decision and cases that have been accepted by the court for resolution.

4. In cases where complaints are not resolved, the complaint resolution body must clearly state the reasons and notify the complainant in writing within the time limit prescribed by law.

II. HANDLING VIOLATIONS

1. Customs officers who lack a sense of responsibility and violate the provisions of Decree No. 40/2007/NĐ-CP dated March 16, 2007, and the guidance provided in this Circular, causing damage to taxpayers or resulting in tax loss, must compensate for the damage according to the law and will be subject to disciplinary action or criminal liability depending on the nature and severity of the violation as prescribed by law.

2. Taxpayers are responsible for paying back taxes when the customs authority or another competent authority discovers acts of fraud or tax evasion during inspection.

Part VI

IMPLEMENTATION

1. The Ministry of Finance shall cooperate with relevant ministries and industry associations to organize the collection, exchange of price information for inspection and valuation purposes.

2. The General Department of Customs shall establish a price database system to serve inspection and valuation for taxation within the customs sector.

The provincial and city customs offices have the responsibility to organize the collection, processing, reporting, and utilization of price information in accordance with the regulations of the General Department of Customs.

3. The Director of the General Department of Customs is responsible for guiding and directing the implementation of this Circular.

4. This Circular guides the inspection and determination of value for exported and imported goods, replacing Appendix I issued along with Circular No. 113/2005/TT-BTC dated December 15, 2005. All other conflicting contents are hereby abolished.

This Circular takes effect fifteen days after its publication in the Official Gazette.