Circular No. 65-TC/TCT guides the determination of the taxable value for import tax and special consumption tax on imported goods of subjects exempted from tax which now change the grounds for exemption.

CIRCULAR

OF THE MINISTRY OF FINANCE NUMBER 65/TC-TCT OF SEPTEMBER 24, 1997 GUIDING THE DETERMINATION OF CUSTOMS VALUE FOR IMPORT DUTIES AND SPECIAL CONSUMPTION TAXES ON IMPORTED GOODS OF SUBJECTS ELIGIBLE FOR EXEMPTION FROM SUCH TAXES NOW CHANGING THE REASON FOR EXEMPTION

Pursuant to Article 7, Article 15 of Decree No. 54/CP dated August 28, 1993 of the Government detailing the implementation of the Law on Export Tax and Import Tax;
Pursuant to Decree No. 97/CP dated December 27, 1995 of the Government detailing the implementation of the Law on Special Consumption Tax and Laws amending and supplementing certain provisions of the Law on Special Consumption Tax;
Pursuant to the directive of the Prime Minister communicated in Circular No. 2972/KTTH dated June 13, 1997 of the Government Office; After receiving opinions from the Ministry of Trade, the General Department of Customs, the Ministry of Finance guides the determination of the customs value for import duties and special consumption taxes to be collected retrospectively on imported goods that were exempted from tax and have been put into use, now due to a change in the reason for exemption (liquidation, transfer, gift, improper use, etc.). Hereinafter referred to as transfer, specifically as follows:

For office premises of agencies and units under the Ministry of Public Security and the Ministry of Defense, they shall be implemented according to separate guidelines issued by the Ministry of Public Security and the Ministry of Defense after consultation with the Ministry of Finance.

1) Non-repayable aid goods that have been used for the purpose of the program/project and have exceeded the implementation period of the program/project may be transferred to subjects not eligible for tax exemption;

2) Goods of foreign-invested enterprises that are exempted from tax under the Law on Foreign Investment in Vietnam, now transferred to subjects not eligible for tax exemption;

3) Goods of subjects enjoying tax exemption in Vietnam transferred to subjects not eligible for tax exemption;

4) Imported goods specifically used for direct service to national security, defense; scientific research and education, training which have been exempted from import tax but are not used for the purposes of national security, defense, scientific research and education, training, now transferred to subjects not eligible for tax exemption;

5) Gifts and donations for Vietnamese organizations that have been exempted from import tax but are not used for their intended purpose of gifts and donations, now transferred to subjects not eligible for tax exemption.

6) Other cases that are exempted or reduced from import tax according to the decision of the competent authority, transferred to subjects not eligible for tax exemption, shall be subject to retrospective collection of import tax and special consumption tax (if applicable).

II. METHOD FOR DETERMINING THE CUSTOMS VALUE FOR IMPORT DUTIES AND SPECIAL CONSUMPTION TAX (IF APPLICABLE) IN THE CASES OF RETROSPECTIVE COLLECTION MENTIONED ABOVE

Imported goods of subjects eligible for tax exemption and reduction as stipulated in Section I above, which have been put into use, now permitted to change the reason for exemption (liquidation, transfer, gift, etc.) must be subject to retrospective collection of import tax and special consumption tax (if applicable). The customs value for calculating the import tax and special consumption tax (if applicable) to be collected retrospectively must be determined based on the residual value of the goods at the time of transfer, liquidation, or gift, etc.

The residual value of the goods at the time of transfer, liquidation, or gift, etc., is determined based on the quality inspection results of the State agency with the authority to inspect. In cases where the time of use and depreciation rate, and the actual condition of the goods are considered, the tax collection agency has the right to reject the inspection results if it deems them inappropriate and request a re-inspection. The tax collection agency will bear the inspection costs if the re-inspection results match the initial inspection results requested by the unit or enterprise; the unit or enterprise will be responsible for paying the inspection costs if the re-inspection results do not match the initial inspection results requested by the unit or enterprise.

Based on the quality inspection results of the State agency with the authority to inspect, the Customs Authority determines the customs value for import tax according to the following principles:

- If the residual value of the goods is 30% (thirty percent) or less, the customs value for taxation is 10% (ten percent) of the import price of the goods.

- If the residual value of the goods is between 30% and 50%, the customs value for taxation is 20% (twenty percent) of the import price of the goods.

- If the residual value of the goods is between 50% and 70%, the customs value for taxation is 30% (thirty percent) of the import price of the goods.

- If the residual value of the goods is between 70% and 85%, the customs value for taxation is 45% (forty-five percent) of the import price of the goods.

- If the residual value of the goods is 85% or more, the customs value for taxation is 60% (sixty percent) of the import price of the goods.

The import price of the goods mentioned above is determined based on the CIF import price at the time of transfer. In cases where the goods subject to retrospective tax collection do not have an import price, it will be determined based on the minimum import tax value in the current Minimum Import Tax Value Table; if not found in the Minimum Import Tax Value Table, the Customs Authority will establish the price according to the principle stipulated in Article 7 of Decree No. 54/CP dated August 28, 1993 of the Government. Then determine the customs value for import tax on goods subject to retrospective tax collection according to the aforementioned principle.

For the customs value for special consumption tax of imported goods subject to special consumption tax and subject to retrospective tax collection, it is determined according to the formula prescribed in Clause b, Point 2, Section II of Circular No. 98 TC/TCT dated December 30, 1995 of the Ministry of Finance. Specifically:

In which the customs value for import tax and import tax are determined as prescribed above.

III. VIOLATION HANDLING

Subjects stipulated in Section I above, if the transfer involves false declaration or non-declaration to evade taxes, in addition to the retrospective collection of the import tax and special consumption tax mentioned above, they will be punished according to the provisions of the Law on Export Tax and Import Tax and the Law on Special Consumption Tax currently in effect.

IV. IMPLEMENTATION

This Circular takes effect from the date of issuance.

Previous regulations contrary to this Circular are hereby abolished. During the implementation process, if there are difficulties, units are advised to promptly report to the General Department of Customs and the Ministry of Finance for study and consideration of amendments and supplements to ensure compliance.