Circular No. 45/2005/TT-BTC providing detailed guidelines for the implementation of Decree No. 78/2003/ND-CP dated July 1, 2003, Decree No. 151/2004/ND-CP dated August 5, 2004, Decree No. 213/2004/ND-CP dated December 24, 2004, and Decree No. 13/2005/ND-CP dated February 3, 2005 of the Government on the promulgation of the List of Goods and Tariff Rates of Vietnam to implement the Agreement on ASEAN Common Effective Preferential Tariff Scheme (Content Attached).

CIRCULAR

Guidelines for implementing Decree No. 78/2003/NĐ-CP dated July 1, 2003, Decree No. 151/2004/NĐ-CP dated August 5, 2004, Decree No. 213/2004/NĐ-CP dated December 24, 2004, Decree No. 13/2005/NĐ-CP dated February 3, 2005 of the Government on promulgating the List of Goods and Tariff Rates of Vietnam to implement the Agreement on the Common Effective Preferential Tariff (CEPT) of the Association of Southeast Asian Nations (ASEAN)

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Implementing the Protocol on the Accession of the Socialist Republic of Vietnam to the Agreement on the Common Effective Preferential Tariff (CEPT) to realize the ASEAN Free Trade Area (AFTA) (hereinafter referred to as the CEPT/AFTA Agreement), signed in Bangkok on December 15, 1995;

Enforcing Decree No. 78/2003/NĐ-CP dated July 1, 2003, Decree No. 151/2004/NĐ-CP dated August 5, 2004, Decree No. 213/2004/NĐ-CP dated December 24, 2004, Decree No. 13/2005/NĐ-CP dated February 3, 2005 of the Government on promulgating the List of Goods and Tariff Rates of Vietnam to implement the CEPT/AFTA Agreement;

The Ministry of Finance hereby provides guidance as follows:

I. SCOPE AND CONDITIONS FOR APPLICATION

1. Imported goods to be subject to the special preferential tariff rate under the Common Effective Preferential Tariff (CEPT) (hereinafter referred to as the CEPT rate), as stipulated in Article 1 of Decree No. 78/2003/NĐ-CP dated July 1, 2003, Decree No. 151/2004/NĐ-CP dated August 5, 2004, Decree No. 213/2004/NĐ-CP dated December 24, 2004, and Decree No. 13/2005/NĐ-CP dated February 3, 2005 of the Government, must meet the following conditions:

1.1. Included in the List of Goods and Tariff Rates of Vietnam to implement the CEPT/AFTA Agreement issued together with Decree No. 78/2003/NĐ-CP dated July 1, 2003, Decree No. 151/2004/NĐ-CP dated August 5, 2004, Decree No. 213/2004/NĐ-CP dated December 24, 2004, and Decree No. 13/2005/NĐ-CP dated February 3, 2005 of the Government.

1.2. Imported from member countries of ASEAN into Vietnam, including the following countries:

- Brunei Darussalam;

- Kingdom of Cambodia;

- Republic of Indonesia;

- Lao People's Democratic Republic;

- Malaysia;

- Union of Myanmar;

- Republic of the Philippines;

- Republic of Singapore; and

- Kingdom of Thailand;

1.3. Satisfy the ASEAN origin requirements, confirmed by the ASEAN Certificate of Origin Model D (C/O Model D), as specified in Part III of this Circular.

1.4. Directly transported from the exporting country which is a member of ASEAN to Vietnam, as provided for in Decision No. 1420/2004/QĐ-BTM dated October 4, 2004 of the Minister of Industry and Trade.

2. Goods of export processing enterprises established in Vietnam (hereinafter referred to as export processing enterprises) sold into the domestic market or processed for enterprises in the domestic market when imported shall be subject to the CEPT rate if they satisfy the conditions set out in items 1.1 and 1.3 of this Circular.

II. IMPORT DUTY RATES APPLIED

1. The import tariff rate applicable to imported goods subject to the CEPT rate as prescribed in Part I of this Circular is the CEPT rate for each year, corresponding to the CEPT rate column of that year, as specified in the List of Goods and Tariff Rates of Vietnam to implement the CEPT/AFTA Agreement, issued together with Decree No. 78/2003/NĐ-CP dated July 1, 2003, Decree No. 151/2004/NĐ-CP dated August 5, 2004, Decree No. 213/2004/NĐ-CP dated December 24, 2004, and Decree No. 13/2005/NĐ-CP dated February 3, 2005 of the Government.

2. For goods listed in the List of Goods and Tariff Rates issued together with Decree No. 78/2003/NĐ-CP dated July 1, 2003, Decree No. 151/2004/NĐ-CP dated August 5, 2004, Decree No. 213/2004/NĐ-CP dated December 24, 2004, and Decree No. 13/2005/NĐ-CP dated February 3, 2005 of the Government, which only specify the implementation schedule for the CEPT rate until 2006, the CEPT rate applied for subsequent years will be the CEPT rate for 2006 as stipulated in these Decrees, unless otherwise provided by the Government.

3. In cases where the most-favored-nation (MFN) import tariff rate of a product specified in the current preferential import tariff list is adjusted to a lower level than the CEPT rate, the import tariff rate applicable to such product will be the MFN rate.

If the MFN rate stipulated in the Preferential Import Tariff Schedule of such commodity is adjusted to a higher level than the CEPT rate, the applicable import duty rate will be the CEPT rate.

4. In cases where imported goods by enterprises for production or assembly of mechanical, electrical, and electronic products meet both the conditions for applying the CEPT rate and the conditions for applying the import tariff rate based on the local content ratio according to current regulations, the enterprise may choose one of the two options: implementing the tax policy based on the local content ratio or the CEPT rate, specifically as follows:

If the enterprise chooses to apply the tariff rate based on the local content ratio, when importing detailed parts or non-assembled components, the enterprise must apply a uniform tariff rate based on the local content ratio for the entire list of imported parts or non-assembled components, even though some parts in the list meet the conditions for applying the CEPT rate.

If the enterprise chooses to apply the CEPT rate, detailed parts or non-assembled components that meet the conditions for applying the CEPT rate will be subject to the CEPT rate; other parts and non-assembled components will be subject to the MFN rate or the general tariff rate.

5. Parts and accessories of complete knock-down (CKD) automobile kits imported from multiple sources (countries of origin) and multiple shipments can be subject to the CEPT rate according to the tariff rate specified for CKD automobile kits, provided that separate commercial invoices are presented for the parts and accessories requesting application of the CEPT rate, in addition to the conditions set out in Part I of this Circular.

Parts and accessories of CKD automobile kits imported from multiple sources and multiple shipments that do not meet the conditions set out in Part I of this Circular will be subject to the MFN rate or the general tariff rate of CKD automobile kits.

Application of the CEPT rate is implemented when handling the import procedures for specific consignments. The customs clearance procedures for import duties are carried out according to the current regulations.

6. The rate of the Common Effective Preferential Tariff (CEPT) applicable to goods processed by export processing enterprises for domestic businesses shall be the CEPT rate of the imported processed goods as stipulated in the list of goods and CEPT rates issued together with Decrees No. 78/2003/NĐ-CP dated July 1, 2003, Decree No. 151/2004/NĐ-CP dated August 5, 2004, Decree No. 213/2004/NĐ-CP dated December 24, 2004, and Decree No. 13/2005/NĐ-CP dated February 3, 2005 of the Government.

7. In cases where changes occur in the lists of goods issued by ASEAN countries for implementing the CEPT/AFTA Agreement, affecting Vietnam's right to apply the CEPT rates as provided in Part I, the Ministry of Finance will issue appropriate guidance for each specific case.

III. CERTIFICATE OF ORIGIN (C/O) AND INSPECTION OF THE CERTIFICATE OF ORIGIN

1. The rules for goods to be recognized as having ASEAN origin are set out in the Regulation on Issuance of ASEAN Certificate of Origin Form D issued together with Decision No. 1420/2004/QĐ-BTM dated October 4, 2004 and Decision No. 151/2005/QĐ-BTM dated January 27, 2005 of the Minister of Trade.

2. The Certificate of Origin must bear a signature and stamp consistent with the official model signature and stamp issued by the competent authorities responsible for issuing CO Form D in the following ASEAN member countries:

- In Brunei Darussalam, it is the Ministry of Industry and Resources;

- In the Kingdom of Cambodia, the Ministry of Commerce;

- In the Republic of Indonesia, it is the Ministry of Trade and Industry;

- In the Lao People's Democratic Republic, the Ministry of Trade;

- In Malaysia, the Ministry of International Trade and Industry;

- In Myanmar, the Ministry of Commerce;

- In the Philippines, the Department of Finance;

- In Singapore, the Customs Authority; and

- In Thailand, the Ministry of Commerce.

3. For Form D C/O for goods of export processing enterprises sold in the domestic market or processed by such enterprises for domestic businesses, the certificate must bear the signature and stamp consistent with the official signature and stamp model issued by the Regional Import-Export Management Departments or Industrial Zones and Export Processing Zones Management Boards authorized by the Ministry of Trade.

4. Specifically, for Form D C/O for goods imported within the list of goods issued together with Decree No. 213/2004/NĐ-CP dated December 24, 2004 of the Government (excluding goods processed by export processing enterprises for domestic businesses), which are declared in import customs declarations registered with customs authorities from January 1, 2004 until this Circular takes effect, the validity period may be extended but not exceeding two (02) years from the date of registration of the import customs declaration.

The deadline for presenting Form D C/O to customs authorities shall be carried out in accordance with the provisions of Decision No. 1420/2004/QĐ-BTM dated October 4, 2004 and Decision No. 151/2005/QĐ-BTM dated January 27, 2005 of the Minister of Trade.

5. In cases of doubt regarding the authenticity and accuracy of Form D C/O, the Customs Authority has the right:

- To request a re-inspection of Form D C/O: The Customs Authority will send a request to the competent authority issuing the certificate of origin in the exporting country to request confirmation.

- To suspend the application of the CEPT rate and temporarily collect taxes at the preferential or ordinary tariff rates currently in force.

- To request the importer to provide additional documents (if available) to prove that the goods indeed have ASEAN origin within the latest period of one (01) year.

- During the waiting period for the re-inspection results, the procedures for releasing the goods according to the general import regulations shall continue.

- When sufficient documents prove that the goods indeed have ASEAN origin, the Customs Authority shall be responsible for conducting the procedures to refund the difference between the temporarily collected tax amount under the preferential or ordinary tariff rates and the tax amount calculated under the CEPT rate to the importer.

The procedures and requirements for requesting a re-inspection are carried out in accordance with the Regulation on Issuance of ASEAN Certificate of Origin Form D issued together with Decision No. 1420/2004/QĐ-BTM dated October 4, 2004 and Decision No. 151/2005/QĐ-BTM dated January 27, 2005 of the Minister of Trade.

IV. OTHER PROVISIONS

1. Enterprises importing goods listed in the list of goods issued together with Decree No. 213/2004/NĐ-CP dated December 24, 2004 of the Government, which are declared in import customs declarations registered with customs authorities from January 1, 2004 until this Circular takes effect, may submit supplementary Form D C/O and related documents in accordance with current laws to recalculate the import tax payable. If the enterprise meets the conditions specified in Part I of this Circular, they will be refunded the difference between the import tax already paid and the import tax calculated under the CEPT rate. In cases where the enterprise has not yet paid the import tax as notified by the customs authority and late payment penalties arise, the import tax and late payment penalties will be recalculated based on the CEPT rate as prescribed above.

Enterprises submitting supplementary Form D C/O and related documents to complete the procedures for recalculating the import tax payable must not be later than December 31, 2005.

2. Provisions concerning the basis for calculating taxes, tax collection and payment systems, tax exemption and reduction systems, tax refund systems, tax recovery, violation handling, and other provisions shall be implemented in accordance with the provisions of the Law on Export Tax and Import Tax and current guiding documents.

V. IMPLEMENTATION

This Circular shall take effect fifteen days after its publication in the Official Gazette, replacing Circular No. 64/2003/TT-BTC dated July 1, 2003, Circular No. 9493/TC-HTQT dated September 12, 2003, Circular No. 736/TC-HTQT dated January 19, 2004, Circular No. 3932/TC-HTQT dated April 15, 2004, and Circular No. 5127/TC-HTQT dated May 14, 2004 of the Ministry of Finance.

During implementation, if there are difficulties or obstacles, please report them promptly so that the Ministry of Finance can provide supplementary guidance as appropriate.