Circular No. 5524/TC-TCHQ regarding procedures and documentation for processing imported goods not subject to value-added tax (VAT) at the import stage, as well as the handover process for transferred processed products.

LETTER

OF THE MINISTRY OF FINANCE NO. 5524/TC-TCHQ ON MAY 24, 2004
REGARDING PROCEDURES AND DOCUMENTS FOR PROCESSING IMPORT GOODS
THAT ARE NOT SUBJECT TO VALUE ADDED TAX

Respected: - People's Committees of provinces and centrally governed cities

- Ministries, ministerial-level agencies, and government agencies

- Customs Departments of provinces and centrally governed cities

Pursuant to the guidance provided in Circular No. 120/2003/TT-BTC dated December 12, 2003 of the Ministry of Finance guiding the implementation of Decree No. 158/2003/NĐ-CP of the Government detailing the implementation of the Law on Value Added Tax (VAT) and the Law Amending and Supplementing Certain Provisions of the Law on Value Added Tax, the Ministry of Finance hereby guides the procedures and documents for processing import goods that are not subject to VAT at the import stage and the procedures for receiving and transferring processed products as follows:

I. PROCEDURES AND DOCUMENTS FOR HANDLING IMPORT GOODS
THAT ARE NOT SUBJECT TO VAT AT THE IMPORT STAGE AS PROVIDED IN POINT 20, 22, SECTION II, PART A OF CIRCULAR 120/2003/TT-BTC:
1. Goods for humanitarian aid and non-reimbursable donations (including goods imported from ODA non-reimbursable funds) must have a confirmation letter from the Department of Foreign Financial Affairs - Ministry of Finance.

2. Goods traded under transshipment methods must have:

+ Purchase contracts, sales contracts (certified copies from the enterprise).

+ Approval documents from the Ministry of Trade for goods listed in the prohibited import list (certified copies from a notary or the Ministry of Trade).

+ Business registration certificates with registered enterprise codes for import and export (certified copies from the enterprise).

3. Transit goods and goods passing through Vietnam's territory:

3.1. For goods in direct transit, there must be a declaration form for transit goods.

3.2. For goods in transit stored in customs areas or changing transportation means, there must be a customs declaration form for transit goods and a declaration form for transit goods.

3.3. For goods in transit stored outside customs areas or passing through inland territories, the following documents must be provided:

+ Permission for transit issued by the Ministry of Trade or authorized agencies.

+ Customs declaration forms for transit goods and declaration forms for transit goods.

+ If the transit goods are self-propelled vehicles, an additional temporary driving permit issued by the provincial or municipal police where the goods enter must also be provided.

Specifically, for goods of the People's Republic of China, the Lao People's Democratic Republic, and the Kingdom of Cambodia in transit through the Socialist Republic of Vietnam, they must comply with the Decision of the Minister of Trade regarding the regulations on goods of these countries transiting through Vietnam's territory. In detail:

+ Decision No. 0305/2001/QĐ-BTM dated March 26, 2001 of the Minister of Trade promulgating the regulations on goods of the People's Republic of China transiting through the Socialist Republic of Vietnam.

+ Decision No. 0938/2000/QĐ-BTM dated June 30, 2000 of the Minister of Trade promulgating the regulations on goods of the Lao People's Democratic Republic transiting through the Socialist Republic of Vietnam.

+ Decision No. 1732/2000/QĐ-BTM dated December 13, 2000 of the Minister of Trade promulgating the regulations on goods of the Kingdom of Cambodia transiting through the Socialist Republic of Vietnam.

4. For imported goods that are not subject to VAT and simultaneously qualify for tax exemption, tax exemption examination, or tax refund examination such as gifts for state agencies, political organizations, social-political organizations, social organizations, social-professional organizations, people's armed forces units; gifts and presents for individuals in Vietnam; items of foreign organizations and individuals according to diplomatic exemptions; goods carried by persons within the duty-free baggage allowance, goods of Vietnamese citizens residing abroad when returning to Vietnam; temporarily imported goods for re-export; temporarily exported goods for re-import; raw materials imported for producing and processing export goods under export processing contracts signed with foreign countries, the procedures and documents for not collecting VAT shall be implemented in accordance with the procedures and documents for tax exemption, tax exemption examination, and tax refund examination prescribed in Circular No. 172/1998/TT-BTC dated December 22, 1998 of the Ministry of Finance guiding the implementation of Decree No. 54/CP dated August 28, 1993, and Decree No. 94/1998/NĐ-CP dated November 17, 1998 of the Government detailing the implementation of the Law on Export Duties and Import Duties and the Laws Amending and Supplementing Certain Provisions of the Law on Export Duties and Import Duties.

To manage, monitor, and settle declarations for goods not subject to VAT as mentioned above, enterprises must declare on the tax section of the import/export goods declaration form that the goods are exempt from VAT according to one of the points in Section II, Part 3 of Circular No. 120/2003/TT-BTC dated December 12, 2003.

II. PROCEDURES FOR RECEIVING AND TRANSFERRING PROCESSED PRODUCTS FOR TRANSFERRED EXPORT GOODS AND TRANSFER CERTIFICATES TO DEDUCT INPUT VAT

Implement in accordance with the regulations on customs procedures for export and import goods at the place of import and export as stipulated in Decision No. 153/2002/QĐ-BTC dated December 17, 2002 of the Minister of Finance.

The Ministry of Finance hereby informs the People's Committees of provinces and centrally governed cities; ministries, ministerial-level agencies, and government agencies to be aware and uniformly implement this matter. Customs Departments of provinces and centrally governed cities shall publicly post this circular at customs clearance locations so that enterprises can be informed. During the implementation process, if there are difficulties or obstacles, please promptly report them to the General Department of Customs for further guidance and supplementation.

The Ministry of Finance hereby informs the People's Committees of the provinces and centrally governed cities; the Ministries, ministerial-level agencies, and government agencies to be aware and to uniformly direct the implementation. The Customs Departments of the provinces and cities shall publicly post this circular at the customs record-keeping locations for enterprises to be informed. In the course of implementation, if there are difficulties or obstacles, it is recommended that units promptly report them to the General Department of Customs for further guidance and supplementary instructions.