Circular No. 45/2007/TT-BTC guiding the application of preferential import tax rates

CIRCULAR

Guidelines for Implementing Special Preferential Import Tariff Rates

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Pursuant to the Law on Export Tax and Import Tax No. 45/2005/QH11 dated June 14, 2005; Decree No. 149/2005/NĐ-CP dated December 8, 2005 of the Government detailing the implementation of the Law on Export Tax and Import Tax;

Pursuant to Decree No. 154/2005/NĐ-CP dated December 15, 2005 of the Government detailing certain provisions of the Customs Law on customs procedures, inspection, and supervision;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance.

The Ministry of Finance hereby provides guidelines for implementing special preferential import tariff rates as follows:

I. SCOPE, CONDITIONS AND PRINCIPLES OF APPLICATION

b) In cases where funds from organizations and individuals within and outside Vietnam are used for victim support work and victim support benefits, such activities shall be carried out in accordance with the regulations of the Ministry of Finance and the donor; in cases where there is no agreement between the donor or their authorized representative and the Ministry of Finance regarding the expenditure level, the expenditure level prescribed in this Circular shall apply.

Goods imported from countries, groups of countries, or territories that implement special preferential treatment regarding import tariffs with Vietnam (hereinafter referred to as countries having special preference agreements with Vietnam) under free trade zones, customs unions, or to facilitate border trade, and other special preferential cases (hereinafter referred to as trade agreements).

2. Conditions for Application

2.1. Goods imported to be eligible for application of special preferential import tariff rates must satisfy all conditions specified in each Decision on the issuance of the Special Preferential Import Tariff Schedule to implement trade agreements issued by the Minister of Finance.

2.2. Goods from duty-free zones (including processed goods) imported into the domestic market to apply for special preferential tariff rates issued by the Minister of Finance must meet the following conditions:

(i) Belong to the corresponding Special Preferential Import Tariff Schedule issued by the Minister of Finance.

(ii) Satisfy the requirements for origin of goods, confirmed by a certificate of origin for goods, as prescribed by the Ministry of Trade.

2.3. Goods imported with a total value of the consignment (FOB) not exceeding 200 USD are not required to have a certificate of origin (hereinafter referred to as a special preferential certificate of origin).

3. Principles of Application

3.1. The special preferential import tariff rate applicable to a product is determined according to a decision of the Minister of Finance (including any decisions amending or supplementing such decisions) issuing the Special Preferential Import Tariff Schedule to implement trade agreements, as guided in this Circular and other current regulations.

3.2. In cases where the special preferential import tariff rate (MFN) for a product specified in the Preferential Import Tariff Schedule is lower than the special preferential tariff rate specified in the Special Preferential Import Tariff Schedule of Vietnam for each trade agreement decided by the Minister of Finance, the applicable import tariff rate for that product will be the MFN rate.

3.3. The special preferential tariff rate applied to individual parts and components imported for assembly of mechanical, electrical, and electronic products shall be implemented as follows:

Individual parts (part assemblies), components (component assemblies) that meet the conditions for applying special preferential tariff rates as stipulated in Section I of this Circular and have a special preferential certificate of origin shall be subject to the special preferential tariff rate of the complete product. Remaining individual parts and components without a special preferential certificate of origin shall be subject to the MFN rate or the general tariff rate of the complete product.

Enterprises must present one or more separate commercial invoices for individual parts (part assemblies), components (component assemblies) with a special preferential certificate of origin to request application of the special preferential tariff rate.

The application of the special preferential tariff rate is carried out at the time of tax calculation according to the laws on export tax and import tax. Customs clearance procedures for import taxes are conducted according to current regulations.

The principle of classifying individual parts and components as either assembled or unassembled is implemented according to current laws on classification of exported and imported goods and other relevant current laws.

3.4. The special preferential tariff rate applied to processed goods imported from duty-free zones into the domestic market is the special preferential tariff rate of Vietnam for the imported processed goods as specified in the Special Preferential Import Tariff Schedule issued by the Minister of Finance for each trade agreement.

3.5. In cases where the declarant has not yet submitted a special preferential certificate of origin at the time of registering the customs declaration for imported goods but the imported goods meet other conditions stipulated in Section I of this Circular, provisional tax shall be calculated based on the MFN rate. When the declarant submits a valid special preferential certificate of origin according to Section II of this Circular, the customs authority shall recalculate the tax based on the corresponding special preferential tariff rate according to the correct regulations.

3.6. Goods with certificates of origin marked "FOR CUMULATION PURPOSES ONLY" shall not be eligible for application of special preferential tariff rates.FOR CUMULATION PURPOSES ONLYshall not apply the special preferential tax rate.

3.7. In cases where the commercial invoice is issued by a third party who is not a contracting party to the commercial contract, the imported goods into Vietnam may still be eligible for special preferential tariff rates if they meet all conditions stipulated in Clause 2 of Section I of this Circular.

II. ORIGIN, CERTIFICATE OF ORIGIN FOR GOODS

1. Rules for recognizing goods as originating from countries having special preference agreements with Vietnam are stipulated in the regulation on issuing certificates of origin decided by the Minister of Trade for each trade agreement.

2. Certificates of origin must bear signatures and seals consistent with the authorized signature and seal models issued by the competent authorities of countries having special preference agreements with Vietnam. Lists of competent authorities issuing certificates of origin for countries having special preference agreements with Vietnam are stipulated in the Decisions on issuing the Special Preferential Import Tariff Schedule for each trade agreement issued by the Minister of Finance.

3. When the declarant presents a back-to-back certificate of origin issued by an intermediate member country and the goods meet the provisions of Section I of this Circular, they are entitled to the special preferential tariff rate. The customs authority shall conduct verification of the back-to-back certificate of origin according to the verification procedure for origin issued by the General Director of the General Department of Customs.

4Article . The Certificate of Origin (C/O) for goods from the duty-free zone imported into the domestic market must bear the signature and stamp consistent with the official model of the signature and stamp of the authorized agency by the Ministry of Trade to issue C/O.

5Article . Provisions on submitting the Certificate of Origin (C/O):

5.1. The time for submitting the C/O to the Customs Authority is at the time of registering the customs declaration for imported goods. The C/O submitted to the Customs Authority includes one original copy and must still be valid at the time of submission. The validity period of the C/O is six months from the date of issuance.

5.2. In cases where the C/O cannot be submitted at the time of registering the customs declaration, if there are legitimate reasons and the declarant requests in writing to delay the submission of the preferential C/O until within the permitted period, the Head of the Customs Office may decide to extend the submission period for up to thirty days from the date of registering the customs declaration.

If the declarant submits the C/O beyond the extended thirty-day period and the C/O remains valid and consistent with the supporting documents and the actual inspection results of the goods (if required), the Customs Authority will accept and apply the preferential tariff rate for the imported consignment while implementing the following measures against the violator:

a) Administrative penalty for the late submission of the C/O beyond the permitted extension period according to the Decree on Administrative Penalties in Customs.

b) Listing the enterprise as non-compliant with customs laws.

c) Conducting strict post-clearance inspections on imported consignments with preferential C/Os.

d) Not accepting security bonds for enterprises importing goods under special preferences, requiring immediate payment of taxes.

6Article . In case of doubt regarding the authenticity and accuracy of the C/O, the Customs Authority shall handle it according to the following procedures:

6.1. Suspend the application of the preferential tariff rate and temporarily collect taxes at the Most-Favored-Nation (MFN) rate if the goods meet the conditions for applying the MFN rate; if not, apply the general rate.

6.2. Request a re-examination of the C/O:

- The Customs Authority shall raise points of doubt about the authenticity and accuracy of the C/O and request the importer to provide additional documentation (if available) to prove that the goods genuinely originate from countries with special preference agreements with Vietnam; or:

- Request the issuing authority of the country of export to confirm (The General Department of Customs will conduct verification based on reports from the Customs Departments of provinces and cities).

- The General Department of Customs will send a verification team to the exporting country to verify the authenticity of the C/O.

When sufficient evidence confirms that the goods genuinely originate from countries with special preference agreements with Vietnam, the Customs Authority shall be responsible for processing the refund procedures for the importer of the difference between the amount temporarily collected at the MFN rate or the general rate and the amount calculated at the preferential rate.

During the waiting period for the re-examination results, continue to process the release of goods according to the general import regulations.

The procedure and formalities for requesting a re-examination shall be carried out according to the relevant provisions in the regulation on issuing certificates of origin decided and issued by the Minister of Trade for each trade agreement.

The review and acceptance period for the C/O shall not exceed three hundred sixty-five days from the date of submission of the C/O to the Customs Authority or from the date when the Customs Authority suspects fraudulent misrepresentation regarding the origin of the goods.

III. CUSTOMS DECLARATION AND INSPECTION

1. General principles

1.1. Customs declaration and inspection for imported goods subject to special preferential tariffs must comply with current regulations on customs procedures, customs supervision, import goods origin inspection procedures, and the provisions of this circular.

1.2. Goods subject to this circular are subject to customs inspection according to the regulations of the General Department of Customs.

1.3. The Customs Office must assign customs officers with adequate qualifications and capabilities to handle customs procedures for imported goods subject to special preferential tariffs at each stage of receiving the customs declaration, inspecting the goods, calculating taxes, and compiling customs files.

2. Customs Declaration

2.1. The declarant is responsible for fully, accurately, and clearly declaring all criteria specified in the customs declaration form; self-determine the special preferential tariff rate or request guidance from the assigned customs officer on the application of the special preferential tariff rate before proceeding with the declaration.

2.2. When declaring the import tariff rate, the declarant must clearly specify which decision of the Minister of Finance the special preferential tariff rate is applied under.

2.3. The declarant must prepare documents and papers proving that the goods meet the conditions for applying the special preferential tariff rate such as the C/O, documents proving direct shipment...

3. Customs Inspection

Customs inspection for goods subject to special preferential import tariff rates shall be conducted according to the provisions of this Circular, the Decision on Issuing the Special Preferential Import Tariff Schedule of Vietnam to Implement Free Trade Agreements by the Ministry of Finance, the inspection procedures for goods' origin issued by the Director-General of the General Department of Customs, and other related legal documents.

IV. OTHER PROVISIONS

1Article . Provisions on tax calculation bases, tax collection and payment systems, tax exemption and reduction systems, tax refund systems, tax recovery, complaints, violation handling, and other provisions shall be implemented according to the provisions of the Law on Export Tax, Import Tax, Law on Tax Administration, Law on Customs, and current guiding documents.

2Article . In cases where changes occur in the legal documents of countries with special preference agreements with Vietnam issued to implement related international agreements or due to other reasons affecting Vietnam's right to apply special preferential tariff rates, the Ministry of Finance will provide appropriate guidance for each specific case.

V. IMPLEMENTATION ORGANIZATION

This Circular shall take effect fifteen days from the date of publication in the Official Gazette and shall apply to customs declarations for imported goods registered with customs authorities from the date this Circular takes effect; Circular No. 14/2006/TT-BTC dated February 28, 2006, of the Ministry of Finance guiding the implementation of preferential import tariff rates under special preferential agreements of Vietnam to implement the Agreement on the Framework of the Early Harvest Program (EHP) of the Association of Southeast Asian Nations (ASEAN); Circular No. 16/2004/TT-BTC dated March 10, 2004, of the Ministry of Finance guiding the implementation of Decree No. 99/2004/NĐ-CP dated February 25, 2004, of the Government on the list of goods and import tariff rates of Vietnam to implement the Early Harvest Program under the ASEAN-China Framework Agreement on Comprehensive Economic Cooperation; Circular No. 52/2006/TT-BTC dated June 12, 2006, of the Ministry of Finance guiding the implementation of preferential import tariff rates under special preferential agreements of Vietnam to implement the ASEAN-China Trade in Goods Agreement; Decision No. 35/2006/QĐ-BTC dated June 12, 2006, of the Ministry of Finance promulgating the list of goods and preferential import tariff rates of Vietnam for 2006 to implement the ASEAN-China Trade in Goods Agreement are hereby repealed.

Any previous provisions guiding preferential import tariff rates that conflict with the provisions of this Circular are hereby repealed.

In case of difficulties or obstacles during implementation, they should be reported promptly so that the Ministry of Finance can provide supplementary guidance as appropriate./.