Joint Circular No. 53/1998/TTLT-TC-TM-CN-TCHQ guides the implementation of Decree No. 107/1997/NĐ-CP dated November 5, 1997 of the Government on issuing a list of goods and import-export taxes to implement the program of reducing import tax rates from European Union (EU) countries for the years 1998-2001.

 JOINT CIRCULAR

Guidelines for Implementing Decree No. 107/1997/NĐ-CP dated November 5, 1997 of the Government on the issuance of a list of goods and import tax rates to implement the program of reducing import taxes from European Union (EU) countries for the years 1998-2001

 

To implement Decree No. 107/1997/NĐ-CP dated November 5, 1997 of the Government on the issuance of the List of Goods and Import Tax Rates to implement the program of reducing import taxes from European Union (EU) countries for the years 1998-2001;

The Ministry of Finance, Ministry of Trade, Ministry of Industry, and General Department of Customs provide guidance as follows:

I. SCOPE OF APPLICATION:

1. Goods subject to import tax rates as prescribed in Decree No. 107/1997/NĐ-CP dated November 5, 1997 of the Government are imported goods from EU countries and must meet the following conditions:

1.1. They are items included in the list of goods issued together with Decree No. 107/1997/NĐ-CP dated November 5, 1997 of the Government;

1.2. They have a Certificate of Origin (C/O) issued by the competent authority of EU countries, confirming that the goods originate from EU countries;

1.3. They are items meeting the origin standards stipulated in this Circular;

1.4. The goods are shipped directly from an exporting EU member country to Vietnam. Goods transported in the following cases will be considered as being shipped directly from an exporting EU member country to Vietnam:

(i) Goods are transported from an EU member country directly to Vietnam without passing through any other country;

(ii) During transportation to Vietnam, goods pass through one or more countries, but all such countries are members of the EU;

(iii) Goods are transported and must pass through one or more countries or territories that are not members of the EU, with or without transshipment or temporary storage at those countries or territories, but the importer organization or individual must prove that:

- The transit is deemed necessary due to geographical reasons or transportation requirements;

- The goods are not sold or consumed in countries or territories that are not members of the EU; and

- The goods do not undergo any other operation except unloading and reloading or certain operations aimed at protecting the goods.

In cases (ii) and (iii) mentioned above, the consignor (Importer) must clearly declare the transport route, transshipment, warehousing, etc., on the customs declaration form and submit supporting documents to the customs authority.

All Certificates of Origin (C/O) shall be used within the framework and format of the EU.

The Ministry of Trade is responsible for notifying the authorized organizations issuing certificates of origin, the C/O model, and the stamp model of the authorized organization issuing C/O for textile-wearing apparel products from EU member countries entering Vietnam, ensuring compliance with the origin standards stipulated in this Circular.

Currently, the authorized organizations issuing Certificates of Origin (C/O) of EU member countries are determined as follows:

- In Austria (AUSTRIA):

+ Chamber of Commerce and Industry.

+ Customs authorities (where necessary) authorized to issue.

- In Belgium (BELGIUM):

+ Chamber of Commerce and Industry.

+ Other authorized agencies: Ministry of Economic Relations.

- In Denmark (DENMARK):

+ Chamber of Commerce and Industry.

+ Other authorized agencies to issue are:

. Customs authorities (where necessary)

. Council of Handicraft Industries.

. Danish Industry.

. Council of Trade Federations.

- In Finland (FINLAND):

+ Chamber of Commerce and Industry.

+ Customs authorities (where necessary) authorized to issue.

- In France (FRANCE):

+ Chamber of Commerce and Industry.

+ Other authorized agencies to issue are: Certain specialized agencies under the Ministry.

- In Germany (GERMANY):

+ Chamber of Commerce and Industry.

+ Other authorized agencies to issue are:

. Customs authorities (where necessary).

. Chamber of Commerce (Handicraft).

- In Greece (GREECE):

+ Chamber of Commerce and Industry.

- In Ireland (IRELAND):

+ Chamber of Commerce and Industry.

- In Italy (ITALY):

+ Chamber of Commerce and Industry.

+ Other authorized agencies to issue are:

. Customs authorities (where necessary).

. Urban Police Inspectorate SANMARIO for products originating from SANMARIO.

- In Luxembourg (LUXEMBOURG):

+ Chamber of Commerce of Luxembourg.

- In Netherlands (NETHERLAND):

+ Chamber of Commerce and Industry.

- In Portugal (PORTUGAL):

+ Chamber of Commerce and Industry.

- In Spain (SPAIN):

+ Chamber of Commerce and Industry.

- In Sweden (SWEDEN):

+ Chamber of Commerce and Industry.

- In United Kingdom (UNITED KINGDOM):

+ Chamber of Commerce and Industry.

2. Procedure for submitting C/O to the Customs Authority:

Organizations and individuals importing goods specified in Point 1, Part I of this Circular (hereinafter referred to as the importer) are required to submit to the Customs Authority at the time of customs procedures and when registering the import declaration, the original Certificate of Origin (C/O) issued by the authorized organization of the exporting country.

In case there is a change in the organization issuing C/O, the C/O model, and the stamp of the authorized organization permitted to issue C/O as mentioned above, the Ministry of Trade is responsible for promptly informing the Customs Authority. While the Ministry of Trade has not yet provided a complete list of the above-mentioned EU member countries, the Customs Authority will levy taxes according to the general import tariff rate and release the goods to the importer. At the same time, the Customs Authority will promptly report to the General Department of Customs and the Ministry of Trade for timely instructions. After the Ministry of Trade provides a complete list for comparison, the Customs Authority will be responsible for rechecking the C/O of the imported goods batch. If they ensure that the C/O is issued by the authorized organization of EU member countries and comply with the conditions stipulated in this Circular, the Customs Authority will levy import taxes according to the current import tariff rate for textile-wearing apparel from EU member countries entering Vietnam and process refunds for any excess tax paid.

II- TAX SCHEDULE

The applicable tax rate for imported goods meeting the conditions set out in Part I of this Circular is the rate specified in the list of goods issued together with Decree No. 107/1997/NĐ-CP dated November 5, 1997 of the Government.

For batches of imported goods that do not meet the conditions set out in Part I of this Circular, the import tax rate shall be applied as prescribed in the Law on Export Tax and Import Tax.

III- INSPECTION OF CERTIFICATE OF ORIGIN (C/O)

In case of doubt regarding the authenticity and accuracy of the Textile and Apparel Origin Certificate issued by EU member countries, the Customs authority has the right to:

- Request a recheck of the Origin Certificate (C/O). The Customs authority will send a request to the authorized issuing organization of the exporting country for verification and confirmation.

- Suspend the application of the preferential tariff rate specified in the List of Goods issued together with Decree No. 107/1997/NĐ-CP dated November 5, 1997 of the Government and apply according to the current general import-export tariff rate.

- Require the importer to provide additional documentation (if available) to prove that the goods originate from EU member countries within the latest period of not more than one year.

While awaiting the results of the recheck, customs clearance procedures shall continue to be carried out if the goods are not prohibited or restricted from importation.

When the Customs authority obtains sufficient evidence proving that the goods indeed originate from the EU, the difference between the import duty collected at the general import tariff rate and the import duty calculated at the preferential tariff rate specified in the Import Tariff issued together with Decree No. 107/1997/NĐ-CP dated November 5, 1997 of the Government shall be refunded to the importer.

The principles for recognizing goods as originating from EU countries are that the goods must meet one of the following conditions:

1- Goods produced entirely or extracted in the exporting country which is an EU member state (Goods with full origin):

The "full origin" standard is understood strictly. Even a very small part of imported materials, parts, or components of unknown origin used will make the corresponding product lose its "full origin" status. However, the finished products may still meet the conditions to enjoy tax benefits under different regulations on products made from imported materials, as stipulated below under the processing and manufacturing standards.

2- Goods not produced or extracted in the exporting country which is an EU member but satisfy the following conditions:

* Processing and Manufacturing Standards:

Products manufactured in an EU member state using all or part of raw materials, parts, or components, including those of undetermined origin, are considered to have originated from that state if such raw materials, parts, or components undergo processing and manufacturing that significantly alter their essential characteristics or properties.

For textile and apparel products, they only need to go through at least one production technology stage; and the final processing stage must be carried out in one of the EU member states.

Example: For clothing products, garments can use imported fabric to cut and sew into exportable clothing products. This means that using imported fabric to produce clothing items such as pants and shirts is considered to have originated from the benefiting state.

All simple processing stages within simple operations are not accepted as originating from EU member states, including:

+ Stages of preserving goods during transportation and storage (ventilation, spreading, drying, cooling, salting, chemical treatment, removing defective parts, and similar work);

+ Simple tasks such as dusting, screening, sorting, packaging (including assembling into sets), cleaning, painting, cutting;

+ (i) Changing packaging and unloading or combining consignments;

+ (ii) Filling bottles, bags, cases, attaching labels, etc., and other simple attachment works;

+ Marking labels, trademarks, or symbols to distinguish goods or their packaging;

+ Assembling products of the same or different types when one or more parts of the assembled product do not meet the requirements to be considered as an originating product;

+ Simply assembling parts or products to form a finished product;

+ A combination of two or more of the above simple works.

IV- OTHER PROVISIONS:

Provisions on the basis for calculating taxes; tax collection and accounting systems, tax reporting; tax exemption and reduction systems; tax refund, tax recovery, and violation handling procedures are implemented according to the provisions of the Law on Export Tax and Import Tax and current guiding documents.

Every six months and annually, the General Department of Customs is responsible for reporting the quantity and value (trade volume) of imported goods subject to the provisions of this Circular to the Ministry of Finance and the Ministry of Trade.

V- IMPLEMENTATION:

This Circular takes effect and applies to all batches of textile and apparel products imported from EU member countries into Vietnam with import declaration forms registered with the Customs authority starting from January 1, 1998.

During implementation, if there are difficulties, units and agencies are requested to report to the Ministry of Finance for timely guidance and supplementation.