Circular No. 7430/TC-TCT provides guidance on import tax and value-added tax for sewing machines and sewing machine motors to Hong Ngoc Embroidery Company based on current regulations of the Ministry of Finance.
Scope of application
General Department of Customs; enterprises importing sewing machines, sewing machine motors
Key points
- Sewing machines used in households are subject to preferential import tax at 50% (Article 1)
- Other types of sewing machines not used in households are exempt from import tax (Article 1)
- Alternating current electric motors for sewing machines with power below or above 7.5 kW are subject to preferential import tax at 30% (Article 1)
- Machinery and equipment included in production lines that cannot be produced domestically are not subject to value-added tax when imported (Article 2)
- Enterprises that have paid value-added tax on goods exempt from tax may deduct this tax when declaring periodic value-added tax
🌐 Social impact of this document
- Assist enterprises in understanding preferential import tax rates and conditions for exemption of VAT
- Ensure consistent implementation of regulations regarding taxes on sewing machines, sewing machine motors
- Enterprises can reduce input costs if they are exempt from import tax or can deduct VAT
❓ Frequently asked questions
Are sewing machines used in households subject to import tax?
Subject to preferential import tax at 50% (Article 1)
Machinery and equipment included in production lines that cannot be produced domestically, are they subject to VAT when imported if certain conditions are met?
Not subject to VAT if the specified conditions are satisfied (Article 2)
Alternating current electric motors for sewing machines with power below or above 7.5 kW are subject to preferential import tax at what rate?
Preferential import tax at 30% (Article 1)
Enterprises that have paid VAT on goods exempt from tax can they deduct this tax?
Can deduct this tax when declaring periodic value-added tax
Full text
LETTER
OF THE MINISTRY OF FINANCE NUMBER 7430/TC-TCT DATED AUGUST 6, 2001
REGARDING IMPORT TAX AND VALUE-ADDED TAX ON SEWING MACHINES AND MOTOR UNITS FOR SEWING MACHINES
MOTOR OF SEWING MACHINE
TO: General Department of Customs
The Ministry of Finance has received Letter No. 18/HN-XNK dated June 26, 2001 from Hong Ngoc Garment and Embroidery Company regarding import tax and value-added tax on sewing machines and motor units for sewing machines. To ensure uniform implementation, the Ministry of Finance provides its opinion as follows:
1. Regarding Import Tax:
Based on the Preferential Tariff Schedule issued together with Decision No. 1803/1998/QĐ-BTC dated December 11, 1998 by the Minister of Finance; the list of amendments and supplements to names and rates of import tax for certain groups of goods in the Preferential Tariff Schedule issued together with Decision No. 19/2000/QĐ-BTC dated December 5, 2000 (effective from January 1, 2001); the principles for classifying goods according to the Import Tariff Schedule as stipulated in Circular No. 37/1999/TT-BTC dated April 7, 1999 by the Ministry of Finance; and Circular No. 99/2000/TT-BTC dated October 12, 2000 by the Ministry of Finance guiding the classification and grouping of machinery equipment in complete sets according to the Import Tariff Schedule, it is determined that:
* Item: Sewing machines, sewing machine heads, belong to Group 8452, including:
- For household use, under code 8452.10.00, preferential import tax rate of 50% (fifty percent).
- Other types (excluding those for household use), under codes 8452.21.00 or 8452.29.00, import tax rate of 0% (zero percent).
* Item: Single-phase alternating current motor,不分家用和非家用的电机部分，属于第8501组，根据功率分别属于代码8501.40.10或8501.40.20，最惠国进口税率为30%（三十个百分点）。
2. Regarding Value-Added Tax:
Based on Circular No. 122/2000/TT-BTC dated December 29, 2000 by the Ministry of Finance guiding the implementation of Decree No. 79/2000/NĐ-CP of the Government detailing the implementation of the Law on Value-Added Tax, it is determined that: machinery and equipment included in production lines which are not domestically produced and need to be imported to form fixed assets for enterprises, provided they meet the procedures and requirements set out at Point 4, Section II, Part A - Circular No. 122/2000/TT-BTC dated December 29, 2000 mentioned above, are exempt from value-added tax upon importation.
In the case of the company in question, if it is determined that the goods fall under the category not subject to value-added tax at the import stage but the enterprise has already paid value-added tax on these goods, then the value-added tax paid at the import stage will be considered as input VAT which the enterprise can deduct when declaring value-added tax periodically.
The Ministry of Finance provides its opinion for the General Department of Customs to direct uniform implementation.
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