Circular No. 65/TC-TCT guides the determination of the taxable value for import duties and special consumption taxes on imported goods of entities that have been exempted from tax but now change the grounds for exemption.

CIRCULAR

Guidelines for determining import tax prices and special consumption taxes for imported goods of entities previously exempted from taxes but now changing their exemption reasons

These guidelines apply to entities that have changed the reasons for their tax exemptions.

Pursuant to Article 7 and Article 15 of Decree No. 54/CP dated August 28, 1993, detailing the implementation of the Law on Export Tax and Import Tax;

Pursuant to Decree No. 97/CP dated December 27, 1995, detailing the implementation of the Special Consumption Tax Law and laws amending and supplementing certain provisions of the Special Consumption Tax Law;

Pursuant to the directive of the Prime Minister communicated in Circular No. 2972/KTTH dated June 13, 1997, issued by the Government Office; After receiving opinions from the Ministry of Trade, the General Department of Customs, and the Ministry of Finance regarding the determination of import tax and special consumption tax prices for imported goods previously exempted from taxes and now being transferred due to changes in the reasons for exemption (liquidation, transfer, gift, improper use, etc.), the following specific guidelines are hereby issued:

I. OBJECTS AND SCOPE OF APPLICATION

1) Non-repayable aid goods used for the purpose of a program/project, upon expiration of the program/project period, may be transferred to entities not eligible for tax exemption;

2) Goods of foreign-invested enterprises exempted from taxes under the Law on Foreign Investment in Vietnam, if transferred to entities not eligible for tax exemption;

3) Goods of entities enjoying tax exemption regimes in Vietnam, if transferred to entities not eligible for tax exemption;

4) Imported goods specifically used for direct national security, defense; scientific research and education, training purposes, which were exempted from import taxes but are now being transferred to entities not eligible for tax exemption due to non-use for such purposes;

5) Gifts and donations for Vietnamese organizations exempted from import taxes but improperly used and then transferred to entities not eligible for tax exemption;

6) Other cases where tax exemptions or reductions are granted according to decisions of competent authorities, and subsequently transferred to entities not eligible for tax exemption, resulting in the recovery of import taxes and special consumption taxes (if applicable).

II. METHODS FOR DETERMINING THE TAXABLE PRICE FOR IMPORT TAXES AND SPECIAL CONSUMPTION TAXES (IF APPLICABLE) IN THE ABOVE MENTIONED CASES OF TAX RECOVERY
SPECIAL CONSUMPTION TAX (IF ANY) IN THE CASES OF RECOVERY MENTIONED ABOVE
IN THE CASES MENTIONED ABOVE WHERE RECOVERY IS REQUIRED

For imported goods of entities eligible for tax exemptions or reductions as stipulated in Section I above, which have been put into use and now change the reasons for tax exemptions or reductions (liquidation, transfer, gift, etc.), tax recovery for import taxes and special consumption taxes (if applicable) must be conducted. The taxable price for calculating these taxes must be 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 appraisal results of the goods by the competent state appraisal authority. In cases where the time of use and depreciation rate, along with the actual condition of the goods, indicate that the appraisal result is unsuitable, the tax collection agency has the right to refuse the appraisal result and request a re-appraisal. If the re-appraisal result matches the original appraisal result, the tax collection agency will bear the appraisal costs; otherwise, the entity or enterprise requesting the original appraisal will be responsible for the costs.

Based on the quality appraisal results of the goods by the competent state appraisal authority, the customs agency shall determine the taxable price for import taxes according to the following principles:

If the residual value of the goods is 30% (thirty percent) or less, the taxable price shall be 10% (ten percent) of the import price of the goods.

If the residual value of the goods is between 30% and 50%, the taxable price shall be 20% (twenty percent) of the import price of the goods.

If the residual value of the goods is between 50% and 70%, the taxable price shall be 30% (thirty percent) of the import price of the goods.

If the residual value of the goods is between 70% and 85%, the taxable price shall be 45% (forty-five percent) of the import price of the goods.

If the residual value of the goods is 85% or more, the taxable price shall be 60% (sixty percent) of the import price of the goods.

The import price mentioned above is determined based on the CIF (Cost, Insurance, and Freight) import price at the time of transfer. If the imported goods subject to tax recovery do not have an import price, it will be determined based on the minimum import tax price in the current Minimum Import Tax Price List; if not found in the list, the customs agency will establish the price according to the principle stipulated in Article 7 of Decree No. 54/CP dated August 28, 1993. Then, the taxable price for import taxes on goods subject to tax recovery will be determined according to the aforementioned principles.

For the taxable price of special consumption taxes on imported goods subject to special consumption taxes and tax recovery, it shall be determined according to the formula specified in Item b, Point 2, Section II of Circular No. 98 TC/TCT dated December 30, 1995, issued by the Ministry of Finance. Specifically:

In which, the taxable price for import taxes and import taxes are determined as stipulated above.

III. VIOLATION HANDLING

Entities stipulated in Section I above, if transferring goods with false declarations or failing to declare to evade taxes, in addition to recovering the full amount of import taxes and special consumption taxes as stipulated above, will also be subject to penalties according to the current Law on Export Tax and Import Tax and the Law on Special Consumption Tax.

IV. IMPLEMENTATION

This Circular takes effect from the date of issuance.

Any previous regulations contrary to this Circular are hereby abolished. In case of difficulties during implementation, units are requested to promptly report to the General Department of Customs and the Ministry of Finance for review and appropriate amendments./.