Circular Joint Circular No. 56-TT/LB guiding the implementation of Directive No. 575/TTg dated August 24, 1996 of the Prime Minister on measures to urge payment and prevent overdue import and export taxes for the years 1996-1997.

CIRCULAR

JOINT MINISTRY OF FINANCE - GENERAL DEPARTMENT OF CUSTOMS DECREE NO. 56/TTLB ON GUIDELINES FOR IMPLEMENTING THE PRIME MINISTER’S DIRECTIVE NO. 575/TTG DATED AUGUST 24, 1996 ON MEASURES TO ENFORCE AND COMBAT OVERDUE TAXES ON IMPORTS AND EXPORTS IN THE YEARS 1996-1997

To implement Directive No. 575/TTg dated August 24, 1996 of the Prime Minister on measures to enforce and combat overdue taxes on imports and exports in the years 1996-1997, the Joint Ministry of Finance - General Department of Customs hereby provides specific guidelines as follows:

I. MEASURES TO STRENGTHEN COLLECTION AND HANDLING OF OVERDUE TAXES ON IMPORTS AND EXPORTS AND OTHER REVENUES OF CUSTOMS

In order to collect overdue taxes on imports and exports and other revenues of the Customs sector into the State budget in accordance with the specific situation at each stage and for each category, while encouraging units to proactively pay off their principal debts into the State budget, the handling of overdue taxes on imports and exports and other revenues of Customs shall be carried out as follows:

1. For the amount of overdue taxes on imports and exports and other revenues of customs declarations registered with customs authorities before April 1, 1992.

a) For units that have been dissolved but still owe taxes on imports and exports and other revenues, the authority issuing the dissolution decision shall direct the liquidation board to dissolve the unit or request the debt settlement board (for units that were previously dissolved) to settle the debts of the dissolved unit according to the priority order specified in Point 3, Section II, Circular No. 54/TC/CN dated November 13, 1990 of the Ministry of Finance guiding financial matters when dissolving state-owned enterprises.

If the liquidation funds are insufficient to repay the overdue taxes on imports and exports and other revenues, the local Customs Bureau shall coordinate with the liquidation board, the State Capital and Asset Management Bureau at enterprises, and report to the People's Committee of the province or city (for local enterprises) or the competent ministry (for central enterprises) to propose to the Ministry of Finance and the General Department of Customs to submit to the Government for consideration to write off the debt.

b) For units that are still operating (including units that have been merged into another unit or split into several units) but still owe taxes on imports and exports and other revenues, the receiving unit or the immediate superior authority of the unit that has been split must carry out procedures to reconcile and confirm the amount of overdue taxes on imports and exports and other revenues with the customs authority where the unit owes. Based on the reconciliation and confirmation of the debt with the customs authority, the unit must register and commit to a plan to pay off the overdue taxes until September 30, 1996. Any failure to pay taxes according to the committed plan registered with the customs authority will be subject to handling under Sections II, III, and V of this Circular.

For units that are unable to pay the remaining tax due to losses: after verification and confirmation by the Tax Bureau, the State Capital and Asset Management Bureau at enterprises, the People's Committee of the province or city (for local enterprises) or the competent ministry (for central enterprises), they shall report to the Ministry of Finance and the General Department of Customs to submit to the Government for consideration to allow the write-off of the debt.

c) For units entrusted with import and export activities for other units that still owe taxes on imports and exports and other revenues, they must also follow paragraphs a and b of Point I above.

d) For units with customs declarations for exported goods and imported goods registered before April 1, 1992 who have paid all overdue taxes, the provincial or municipal Customs Bureau where the unit owes taxes on imports and exports shall process the exemption from late payment penalties for the unit.

2. For the amount of overdue taxes on imports and exports and other revenues of customs declarations registered with customs authorities from April 1, 1992 to September 30, 1996.

a) The local Customs Bureau where the unit still owes taxes must reconcile the amount of overdue taxes and other revenues of the unit and require the unit to commit to a plan to pay off all overdue amounts into the State budget by September 30, 1996. Any failure to pay taxes according to the committed plan will be subject to handling under Sections II, III, and V of this Circular.

- For units that have been dissolved, the authority issuing the dissolution decision must reconcile and confirm the debt with the customs authority and require the liquidation board to dissolve the unit to settle the debts of the dissolved unit according to the priority order specified in Point 3, Section II of Circular No. 54/TC-CN dated November 13, 1990 of the Ministry of Finance.

- For units that have been merged into another unit, split into several units, or entrusted with import and export activities, the receiving unit or the immediate superior authority of the unit that has been split or the entrusted unit must reconcile and confirm the debt with the customs authority and implement the plan to pay off the overdue taxes on imports and exports and other revenues by September 30, 1996 according to the provisions above.

b) By September 30, 1996, if a unit has fully paid off overdue taxes (overdue for more than 15 days for exported goods, over 30 days for imported goods, and over 90 days for goods with imported raw materials for production of exported goods) and other revenues of customs, and due to objective reasons, they are unable to pay the late payment penalties for taxes on imports and exports, the General Department of Customs will consider resolving the issue of exempting or reducing the late payment penalties on a case-by-case basis. The procedure for considering exemption or reduction of late payment penalties for taxes is as follows:

- A letter requesting exemption or reduction (specifying the requested reduction level) of late payment penalties for taxes on imports and exports from the People's Committee of the province or city (for local enterprises) or the competent ministry (for central enterprises).

- A letter requesting consideration of exemption or reduction of late payment penalties for taxes from the enterprise with verification and confirmation and recommendation from the local tax authority.

- A confirmation letter from the local Customs Bureau where the unit has fully paid off overdue taxes by September 30, 1996.

- A reconciliation statement of late payment penalties (by each customs declaration for imports and exports) between the unit and the Customs Bureau where the unit still owes late payment penalties.

- Pursuant to the above provisions, the General Department of Customs shall examine and resolve requests for exemption or reduction of late payment fines on taxes as proposed by the People's Committee of provinces or cities or the competent ministry for each declaration and specific case. For units that have fully or partially paid the late payment fine on taxes (if any) before the Prime Minister's Directive No. 575/TTg dated August 24, 1996, such payments will not be refunded.

c) For units that have been granted exemptions or reductions of late payment fines on import and export taxes for consignments declared from April 1, 1992 to September 30, 1996, starting October 1, 1996, to enjoy the tax payment deadlines stipulated in Article 17 of the Law on Import and Export Taxes (fifteen days for exported goods, thirty days for imported goods, and ninety days for imported raw materials for exported goods), the unit must provide a bank guarantee certifying its ability to pay the import and export taxes within the prescribed deadline. In cases where the bank does not issue a guarantee, the enterprise can only complete customs procedures after fully paying the import and export taxes for the consignment. The implementation period under this paragraph c, point 2, section is until December 31, 1996.

II- MEASURES TO WITHDRAW FUNDS FROM THE ACCOUNT BALANCE OF ENTERPRISES AT BANKS TO BE DEPOSITED INTO THE STATE BUDGET.

From October 1, 1996 onwards, if an entity still owes import and export taxes and late payment fines beyond the compulsory collection deadline set by the Law and deliberately delays payment into the state budget, the Director of the local Customs Office where the entity still owes taxes and late payment fines shall issue a decision requiring the bank where the entity has an account to withdraw funds from the entity’s account balance to be deposited into the state budget equal to the amount of outstanding import and export taxes and late payment fines. If the account balance is insufficient to cover the full amount of outstanding taxes and fines, the remaining tax debt, in addition to being subject to compulsory measures under Article 20 of the Law on Export and Import Taxes, shall also be subject to the measures provided in Section III of this Circular.

For entities entrusted with exporting or importing on behalf of other entities or individuals who still owe import and export taxes and late payment fines, the same measures shall apply.

III- MEASURES TO SEIZE IMPORT AND EXPORT GOODS OF THE ENTERPRISE

In addition to applying the aforementioned measures without the ability to recover the outstanding import and export taxes and late payment fines, the local Customs Office where the entity still owes taxes shall issue a decision to seize imported goods equivalent in value to the outstanding taxes and fines (including goods currently undergoing import procedures and those already imported belonging to the entity owing taxes). After seizing the goods, the customs authority shall proceed to transfer the seized goods to the Department of Finance and Price Control to organize public auctions according to regulations, using the proceeds to settle the outstanding import and export taxes into the state budget, in accordance with the dedicated revenue accounts of the customs and the current budget classification.

For entities that still owe import and export taxes but process imports at another Customs Office, the Customs Office where the entity still owes taxes shall coordinate with the Customs Office where the entity processes imports to implement the measures as prescribed.

For entities that still owe import and export taxes but no longer process imports, the Customs Office where the entity still owes taxes shall issue a decision to seize imported goods owned by the entity and currently in operation, then proceed to transfer the seized goods to the Department of Finance and Price Control at the location of the entity's business headquarters to organize public auctions as prescribed.

After issuing a decision to seize imported goods of the entity, the local Customs Office must notify the Department of Justice and coordinate with it to carry out the public auction.

Any remaining proceeds from the public auction after deducting the outstanding import and export taxes owed by the entity, costs associated with the seizure, organization of the public auction, and remaining goods, the Customs Office shall issue a decision to return the amount to the entity. After issuing the decision to seize goods and organizing the public auction, the Customs Office and the Department of Finance and Price Control must report to the People's Committee of the province or city, the competent ministry of the entity, the Ministry of Finance, and the General Department of Customs on the tax revenues and fines collected from the public auction.

IV- MEASURES OF SECURING ASSETS AND BANK GUARANTEES

For entities that have long-term arrears of import and export taxes and late payment fines due to force majeure factors such as natural disasters, fires causing damage to goods and assets, making it impossible for the entity to immediately pay the full amount of taxes, the General Department of Customs may allow the entity to defer payment, provided that the entity secures assets equivalent to the outstanding tax amount with a financial institution or obtains a guarantee from the bank where the entity maintains an account.

Procedures for deferring overdue taxes:

- A letter requesting permission to defer payment of import and export taxes, verified and confirmed by the local tax authority and recommended by the People's Committee of the province or city or the competent ministry.

- A statement confirming the outstanding import and export tax amount between the entity and the Customs Office where the entity still owes taxes (detailed by each declaration of goods).

- Documentation securing assets equivalent to the outstanding tax amount with a bank in accordance with the bank's procedures for securing assets, or a bank guarantee or commitment from the bank where the entity maintains an account.

Based on the above documents, the General Department of Customs shall consider allowing the deferral of import and export taxes on a case-by-case basis, but the maximum allowable deferral period shall not exceed sixty days from the date exceeding the prescribed tax payment deadline. After issuing a decision to defer tax payment, the General Department of Customs must inform the Ministry of Finance, the People's Committee of the province or city, the competent ministry, and the local tax authority.

V- MEASURES TO SUSPEND BUSINESS LICENSES FOR IMPORT AND EXPORT ACTIVITIES

For units that still owe import and export taxes and late payment penalties and require compulsory collection, if applying all the above measures remains ineffective or if units continue to owe import and export taxes for an extended period, each month (on the 25th of every month), the Customs Departments of provinces and cities shall prepare a list to send to the General Department of Customs to establish a list to notify the Ministry of Trade to suspend the issuance of import and export business licenses to these units. After suspending the issuance of import and export business licenses to the unit, the Ministry of Trade must notify the People's Committee of the province or city, the competent ministry, the Ministry of Finance, and the General Department of Customs.

VI - During the process of urging the payment of outstanding taxes, if any enterprise is found to intentionally delay or take actions to obstruct the enforcement authorities with the aim of misappropriating state budget taxes, the Customs Departments of provinces and cities shall prepare reports to submit to the General Department of Customs so that the General Department of Customs can report to the Prime Minister. Depending on the severity of the violations by these enterprises, administrative sanctions or criminal liability may be pursued.

This Circular takes effect from the date of signature. Previous regulations contrary to the spirit of this Circular are abolished.

In the course of implementation, any difficulties encountered should be promptly reported to the Ministry of Finance and the General Department of Customs for further guidance and supplementary instructions.