DECREE NO. 60/2002/ND-CP ON THE DETERMINATION OF CUSTOMS VALUE FOR IMPORTED GOODS IN ACCORDANCE WITH THE PRINCIPLES OF THE AGREEMENT IMPLEMENTING ARTICLE 7 OF THE GENERAL AGREEMENT ON TARiffs AND TRADE

DECREE

Provisions on the determination of customs value for imported goods in accordance with the principles of the Agreement implementing Article 7 of the General Agreement on Tariffs and Trade (GATT).

_____________________________

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Based on the Law on Export Tax, Import Tax;

Based on Article 71 of the Customs Law;

At the proposal of the Director-General of the General Department of Customs.

DECREE:

Chapter 1:

GENERAL PROVISIONS

Article 1. Scope and Applicability

1. This Decree stipulates the determination of customs value for imported goods in accordance with the principles of the Agreement implementing Article 7 of the General Agreement on Tariffs and Trade (hereinafter referred to as customs value under GATT).

2. Imported goods under commercial contracts originating from countries or international organizations that Vietnam has committed to implement customs value under GATT are subject to the customs value provisions of this Decree.

3. Based on the commitments of the Socialist Republic of Vietnam to other countries, international organizations, and the actual situation of Vietnam, the Director of the General Department of Customs shall coordinate with relevant ministries and agencies to submit to the Prime Minister for decision specific scope and objects subject to the customs value provisions of this Decree.

4. The customs value for imported goods outside the scope specified in Clause 2, Clause 3 of Article 1 and Clause 1 of Article 18 of this Decree shall be implemented in accordance with current laws on export tax and import tax.

Article 2. Time and method of determining customs value

1. The time for determining customs value for imported goods is the date when the declarant registers the customs declaration form for imported goods.

2. The customs value for imported goods is determined by applying sequentially one of the methods prescribed from Article 5 to Article 10 of this Decree and stopping immediately at the method that determines the customs value.

In case the declarant requests, the sequence of applying the methods to determine customs value prescribed in Articles 8 and 9 of this Decree may be interchanged.

Article 3. Exchange rate for determining customs value

1. The customs value is calculated in Vietnamese Dong.

2. The exchange rate for determining customs value for imported goods is the average transaction rate on the inter-bank foreign exchange market published by the State Bank of Vietnam at the time of registering the customs declaration form for imported goods. In case the Bank does not publish the exchange rate or information does not reach the customs checkpoint on the day, it shall apply the exchange rate for taxation of the preceding day.

Article 4. Explanation of terms

In this Decree, the following terms are understood as follows:

1. Transaction price is the actual price paid or to be paid for goods sold for export to Vietnam.

2. Identical imported goods are those goods identical in all respects, including physical characteristics, quality, and reputation; they are produced in the same country, by the same manufacturer or another manufacturer authorized by that manufacturer, and imported into Vietnam.

3. Similar imported goods are those goods although not identical in all respects but have basic similar features, made from equivalent raw materials; they have the same function and can be substituted for each other in trade transactions; they are produced in the same country, by the same manufacturer or another manufacturer authorized by that manufacturer, and imported into Vietnam.

4. Special relationship between buyer and seller means the following relationships:

a) They are members of another business entity;

b) They are owners of the same business entity;

c) They are employer and employee;

d) The seller has control over the buyer or vice versa;

đ) They are both controlled by a third party;

e) They jointly control a third party;

g) They are members of the same family in the following relationships:

- Spouses;

- Parents and children;

- Full siblings;

- Grandparents and grandchildren, having a blood relationship;

- Uncles, aunts, and nephews, nieces, having a blood relationship;

- Parents-in-law and son-in-law, parents-in-law and daughter-in-law;

- Siblings-in-law.

h) A third party owns, controls, or holds five percent or more of the voting shares of each party.

Chapter 2:

METHODS FOR DETERMINING CUSTOMS VALUE FOR IMPORTED GOODS

Article 5. Method for determining customs value based on transaction price for imported goods.

 1. The customs value for imported goods is the transaction price, adjusted according to the provisions of Article 11 of this Decree.

2. Conditions for applying the method of determining the taxable value based on the transaction value:

a) The buyer has full rights to dispose of and use the goods after importation. If there are restrictions below, it is considered to satisfy this condition:

- The purchase and sale, use of goods must comply with the laws of Vietnam.

- The buyer and seller have agreed on the place of consumption of goods after importation.

- Other restrictions that do not affect the value of the goods.

b) The sale of goods or prices are not dependent on certain conditions leading to the inability to determine the value of goods requiring valuation;

c) After reselling the goods, the importer does not have to pay any additional amount from the proceeds obtained from disposing of and using the goods, except for adjustments provided for in Article 11 of this Decree;

d) The buyer and seller do not have a special relationship or if they do, such relationship does not affect the transaction price. Determining the impact of a special relationship is regulated in Clause 3 of this Article.

3. Determining the impact of a special relationship on the transaction price:

a) In case the declarant reports having a special relationship with the seller but such special relationship does not affect the transaction price, it is considered to satisfy the provision at point d Clause 2 of this Article.

b) In case the customs authority has grounds to believe that the special relationship affects the transaction price, it must immediately notify the declarant in writing to prove by pointing out the transaction price approximating one of the values below of the consignment exported to Vietnam on the same day or within 30 days before or after the export day of the consignment being valued:

- The transaction value of identical or similar goods sold to another importer who does not have a special relationship with the exporter (seller);

- The customs value of identical or similar imported goods determined in accordance with Article 8 of this Decree;

- The customs value of identical or similar imported goods determined in accordance with Article 9 of this Decree.

If more than thirty days have passed since receiving the notification from the customs authority and the declarant cannot prove otherwise, the customs authority shall act in accordance with the provisions set out in point b, Clause 4, Article 13 of this Decree.

Article 6. Method for determining the taxable value based on the transaction value of identical imported goods

1. For imported goods entering Vietnam, if the taxable value cannot be determined according to Article 5 of this Decree, the taxable value shall be the transaction value of identical imported goods that have been determined according to Article 5 of this Decree.

2. Identical imported goods must satisfy the following conditions:

a) The identical imported consignment was exported to Vietnam on the same day or within thirty days before or after the export date of the consignment being determined for its taxable value.

b) The identical imported consignment has a transaction at the same level of trade or has been adjusted to the same level of wholesale or retail trade as the consignment being determined for its taxable value, and has the same quantity or has been adjusted to the same quantity as the consignment being determined for its taxable value.

c) The identical imported consignment has the same distance and mode of transport, or has been adjusted to the same distance and mode of transport as the consignment being determined for its taxable value.

3. When applying the method for determining the taxable value prescribed in this Article, if there is no identical imported consignment produced by the same manufacturer, then consideration will be given to goods produced by another manufacturer, but it must comply with the regulations on identical imported goods.

4. When determining the taxable value prescribed in this Article and two or more transaction values of identical imported goods can be identified, the taxable value shall be the lowest transaction value, after adjusting the price to the same conditions specified in Clause 2 of this Article.

Article 7. Method for determining the taxable value based on the transaction value of similar imported goods

1. For imported goods entering Vietnam, if the taxable value cannot be determined according to Articles 5 and 6 of this Decree, the taxable value shall be the transaction value of similar imported goods that have been determined according to Article 5 of this Decree.

2. Similar imported goods must satisfy the following conditions:

a) The similar imported consignment was exported to Vietnam on the same day or within thirty days before or after the export date of the consignment being determined for its taxable value.

b) The similar imported consignment has a transaction at the same level of trade or has been adjusted to the same level of wholesale or retail trade as the consignment being determined for its taxable value, and has the same quantity or has been adjusted to the same quantity as the consignment being determined for its taxable value.

c) The similar imported consignment has the same distance and mode of transportation, or has been adjusted to the same distance and mode of transportation as the consignment being determined for its taxable value.

3. When applying the method for determining the taxable value prescribed in this Article, if there is no similar imported consignment produced by the same manufacturer, then consideration will be given to goods produced by another manufacturer, but it must comply with the regulations on similar imported goods.

4. When determining the taxable value prescribed in this Article and two or more transaction values of similar imported goods can be identified, the taxable value shall be the lowest transaction value, after adjusting the price to the same conditions specified in Clause 2 of this Article.

Article 8. Method for determining the taxable value based on the deductive value

1. For imported goods entering Vietnam, if the taxable value cannot be determined according to Articles 5, 6, and 7 of this Decree, the taxable value shall be the deductive value. The deductive value is determined based on the selling price of imported goods on the Vietnamese market minus (-) reasonable costs and post-importation sales profit.

2. The selling price of imported goods on the Vietnamese market shall be determined according to the following principles:

a) The selling price of imported goods is the actual selling price. If there is no actual selling price for the imported goods whose taxable value needs to be determined, the actual selling price of identical or similar imported goods in their original condition sold on the domestic market shall be taken to determine the actual selling price.

b) The importer and the domestic buyer have no special relationship;

c) The selling price calculated based on the largest quantity sold.

d) Goods are sold (wholesale or retail) immediately after importation, but not later than ninety days after the importation of the consignment.

3. Reasonable costs and post-importation sales profit:

a) In the case where the importer purchases goods under an outright purchase method, the deductions include:

- Transportation costs and insurance costs for the goods when consumed on the domestic market;

- Taxes, fees, and charges payable to the state budget when importing and selling imported goods, as stipulated by current laws, which are recorded in the revenue, cost of goods sold, and selling expenses of imported goods.

- General management costs related to the sale of imported goods;

- Profit from sales after importation.

b) In the case where the importer acts as an agent for foreign traders, the deduction is the commission for sales.

In cases where a sales agent authorized by a foreign trader implements certain activities related to post-importation sales in Vietnam outside the agency agreement, the costs of these activities incurred in Vietnam shall also be deducted within the scope agreed upon in the contract.

4. Imported goods processed or further manufactured domestically may also be determined for their taxable value according to the principle set out in Clause 1 of this Article, and additional processing or manufacturing costs increasing the value of the goods shall be deducted.

In cases where the imported goods undergo processing or manufacturing resulting in changes to their characteristics, nature, function, and they are no longer recognizable as the originally imported goods, the method for determining the taxable value prescribed in this Article shall not be applied.

5. Determining reasonable costs and post-importation sales profit as prescribed in Clause 3 of this Article must be based on available objective data and consistent with Vietnamese accounting principles.

Article 9. Method for determining the taxable value based on the computed value

1. For imported goods entering Vietnam, if the taxable value cannot be determined according to the methods prescribed from Article 5 to Article 8 of this Decree, the taxable value shall be the computed value. The computed value includes the following items:

a) Production costs and profits of imported goods.

b) Adjustment costs as prescribed in Clause 1 of Article 11 of this Decree.

2. The determination of the calculated value must be based on data provided by the manufacturer and comply with accounting principles of the country producing the goods.

Article 10. Inference Method

1. For imported goods into Vietnam, if the taxable value cannot be determined according to the methods prescribed from Article 5 to Article 9 of this Decree, the taxable value shall be determined using an appropriate method based on available objective documents and data at the time of determining the taxable value and consistent with the provisions of this Decree.

2. When applying the method of inference, the following values may not be used to determine the tax value:

a) Domestic market sales price of similar products produced in Vietnam;

b) The selling price of goods in the domestic market of the exporting country;

c) The selling price of goods for export to another country;

d) Production costs of goods, excluding production costs of imported goods as stipulated in Article 9 of this Decree;

đ) Minimum taxable value;

e) Assumed prices;

g) The transaction value of identical or similar imported goods higher when determined from two different values or more.

Article 11. Adjustments

1. Amounts to be added to the transaction value to determine the tax value:

a) The following costs borne by the importer but not included in the transaction value:

- Commission and brokerage fees, except purchase commission;

- Packaging costs attached to the goods;

- Packing costs, including both material and labor costs.

b) The value of goods and services provided free of charge or at reduced prices by the buyer to the seller for the production and consumption thereof and allocated to the imported consignment, including:

- Raw materials, components forming part of the goods, spare parts and similar details incorporated in the imported goods;

- Tools, dies, molds and similar items used to produce the imported goods;

- Fuel and energy consumed in the production of the imported goods;

- Technical designs, construction designs, artistic designs, sample designs, drawings and sketches made abroad used to produce the imported goods.

c) Royalty payments and license fees related to intellectual property rights concerning the imported goods that the buyer must pay as a condition of the sale of the imported goods;

d) Amounts received by the importer after disposal or use of the imported goods transferred in any form to the seller of the imported goods;

đ) Transportation, loading, unloading costs related to the transportation of imported goods to the port of entry;

e) Insurance costs of the goods to the port of entry.

2. The following amounts shall be deducted from the transaction value if they have been included in the purchase price of the imported goods:

a) Costs arising after importation of goods, including costs for construction, architecture, installation, maintenance or technical assistance;

b) Domestic transportation and insurance costs arising after importing;

c) Taxes, fees, and charges payable to the state budget included in the purchase price of the imported goods;

d) Interest payable related to payment for imported goods, provided that the interest rate is specified in the sales contract and is consistent with the usual lending rates applied by financial institutions of the exporting country at the time of signing the contract;

đ) Discounts implemented before loading the goods onto the means of transport in the exporting country, documented and submitted together with the customs declaration for imported goods.

3. The addition or subtraction of costs as prescribed in Clause 1 and Clause 2 of this Article can only be carried out based on available objective data.

4. No other amounts may be added or subtracted beyond those specified in Clause 1 and Clause 2 of this Article.

Chapter 3:

RIGHTS AND OBLIGATIONS OF THE CUSTOMS DECLARANT, RESPONSIBILITIES OF THE CUSTOMS AUTHORITY

Article 12. Rights and obligations of the declarant

1. Rights of the declarant:

a) Request the customs authority to keep confidential information related to the determination of the taxable value provided;

b) Request the customs authority to guide and notify the determination of the taxable value in accordance with this Decree;

c) Have the right to prove the accuracy and truthfulness of the declared taxable value and appeal decisions on the taxable value of the customs authority in accordance with Article 14 of this Decree.

2. Obligations of the customs declaration person:

a) Declare fully and accurately all contents according to the customs declaration form for the taxable value of imported goods; determine the taxable value themselves and bear legal responsibility for the accuracy and truthfulness of the declared contents and the result of the taxable value determination;

b) Submit and present documents serving as the basis for checking and determining the taxable value upon request of the customs authority;

c) Be subject to inspection by the customs authority regarding the dutiable value as prescribed in this Decree.

Article 13. Responsibilities and authorities of the customs authority

1. The General Department of Customs issues the customs declaration form for the taxable value of imported goods, specifying the declaration contents in detail in accordance with each method of determining the taxable value prescribed in this Decree. The Provincial, Interprovincial, or Central City Customs Department or the Customs Sub-department at the border gate issues the customs declaration form for the taxable value to the customs declarant; guides the customs declarant to declare and determine the taxable value of imported goods in accordance with this Decree.

2. Require the customs declarant to submit and present documents related to the purchase and sale of goods to prove the accuracy and truthfulness of the declared taxable value of imported goods.

In case the customs declarant cannot prove the accuracy and truthfulness of the taxable value, they must immediately notify the customs declarant in writing.

3. Keep confidential information provided by the customs declarant related to the determination of the taxable value upon request of the customs declarant.

4. The customs authority has the right to determine the taxable value in the following cases:

a) The customs declarant cannot determine the taxable value according to one of the methods prescribed from Article 5 to Article 10 of this Decree within the customs procedure period;

b) The customs declarant does not have a document proving or cannot prove the accuracy and truthfulness of the declared taxable value within thirty days from the date of receiving the notification from the customs authority;

c) The customs declarant incorrectly determines the taxable value or the determination of the taxable value does not comply with the provisions of this Decree.

5. Check the declaration and determination of the value used as the basis for taxation of imported goods.

Chapter 4:

COMPLAINTS AND VIOLATION HANDLING

Article 14. Complaints and Resolution of Complaints

1. If the customs declarant believes that the decision on the taxable value of the customs authority is incorrect, they shall send a complaint to the Head of the Customs Sub-department where the taxable value was determined. While waiting for resolution, the customs declarant must still comply with the decision on the taxable value of the customs authority.

2. If the declarant disagrees with the decision on the complaint resolution made by the Head of the Customs Branch, the declarant has the right to file a further complaint to the Director of the Provincial, Interprovincial, or Central City Customs Department. If the declarant disagrees with the decision on the complaint resolution made by the Director of the Provincial, Interprovincial, or Central City Customs Department, the declarant has the right to file a complaint to the competent state agency in accordance with the provisions of the law.

The declarant has the right to initiate a lawsuit before the court in accordance with the provisions of the law.

3. The time limit, procedures for handling complaints, and the authority to resolve complaints shall be implemented in accordance with the provisions of the law on complaints and other relevant legal provisions.

Article 15. Handling Violations

Organizations and individuals violating the provisions of this Decree shall be subject to administrative penalties or criminal prosecution, depending on the nature and severity of the violation, in accordance with the provisions of the law.

Customs officers and civil servants and other individuals who lack a sense of responsibility, violate the provisions of this Decree, causing damage to the declarant, must compensate for the damage in accordance with the provisions of the law and may be subject to disciplinary action or criminal prosecution, depending on the nature and severity of the violation, in accordance with the provisions of the law.

Chapter 5:

IMPLEMENTATION

Article 16. Responsibilities of state management agencies

1. The General Department of Customs shall take the lead and coordinate with relevant ministries and agencies to collect and build data to serve the determination of the customs value in accordance with the provisions of this Decree and measures to combat trade fraud through pricing.

2. The State Bank of Vietnam shall direct and guide credit organizations to provide complete documentation related to the payment of export and import consignments to serve the verification and determination of the customs value.

Article 17. Reservation Clause

1. The reservation does not apply to Clause 4 of Article 8 and Article 9 of this Decree. Based on international commitments and the actual conditions of Vietnam, the General Department of Customs shall coordinate with relevant ministries and agencies to submit to the Government for amendment, supplementation, or abolition of the provisions of this clause.

2. The reservation applies to the limited minimum taxable value for certain imported goods to protect the interests of the state and domestic production. Based on the above principle and the current mechanism for managing the import and export of goods, the Ministry of Finance shall coordinate with relevant ministries and agencies to issue a list of imported goods subject to the minimum taxable value as provided in this clause.

Article 18. Implementation Provisions

1. This Decree takes effect from July 1, 2002.

Imported goods listed in the Vietnamese List to implement the Common Effective Preferential Tariff (CEPT) Agreement of ASEAN Member States shall be valued according to the provisions of this Decree.

2. In cases where the Agreement implements the amendments and supplements to Article 7 of the General Agreement on Tariffs and Trade (GATT), provided that the amended and supplemented contents of the Agreement do not conflict with the fundamental principles of Vietnamese law and international treaties to which Vietnam is a party, such amended and supplemented contents of the Agreement shall be applied. The General Department of Customs shall submit to the Government for amendment and supplementation of this Decree to be consistent with the amended and supplemented contents of the Agreement.

3. The General Department of Customs shall study and draft guiding documents to implement this Decree for the Minister, Chairman of the Government Office to sign and promulish in accordance with Decision No. 40/2002/QĐ-TTg dated March 18, 2002 of the Prime Minister on the authority to sign and promulish regulatory legal documents to manage state administration in sectors and fields under the management of government agencies.

4. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of People's Committees of provinces and centrally governed cities have the responsibility to enforce this Decree.