Decision No. 77/2004/QD-BTC on customs management for goods sold at duty-free shops

Pursuant to …;

Rules for customs management of goods sold at tax-free shops

duty-free goods trading

_____________________

THE MINISTER OF FINANCE

Pursuant to the Customs Law No. 29/2001/QH10 adopted by the National Assembly of the Socialist Republic of Vietnam at its 9th session on June 29, 2001;

Pursuant to Decree No. 101/2001/NĐ-CP dated December 31, 2001 of the Government detailing the implementation of certain provisions of the Law on Customs regarding customs procedures and customs inspection and supervision regimes;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance.

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decision No. 206/2003/QĐ-TTg dated October 7, 2003 of the Prime Minister amending and supplementing certain articles of the Regulations on duty-free shops issued together with Decision No. 205/1998/QĐ-TTg dated August 19, 1998 of the Prime Minister;

Considering the proposal of the General Director of the General Department of Customs and after obtaining the unified opinion of the Ministry of Trade;

DECISION:

Article 1: These rules for customs management of goods sold at tax-free shops are hereby promulgated.

Article 2: This Decision shall take effect fifteen days from the date of publication in the Official Gazette. Decree No. 54/2003/QĐ-BTC dated April 16, 2003 of the Minister of Finance is hereby repealed.

Article 3: The General Director of the General Department of Customs, heads of units under the Ministry of Finance's agency, and related organizations and individuals are responsible for implementing this Decision.

REGULATIONS

Customs management of goods sold at shops

duty-free goods trading

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(Enacted together with Decision No. 77/2004/QĐ-BTC dated September 28, 2004 of the Minister of Finance)

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. Goods imported for sale at tax-free shops (hereinafter referred to as shops) shall be processed through customs procedures at the Customs Sub-department managing the shop.

Customs procedures for goods imported for sale at shops shall be carried out in accordance with the regulations applicable to imported goods for business purposes. However, the tax calculation procedure shall only apply to cases where the imported goods intended for sale to inbound travelers exceed the free allowance threshold as prescribed by law (taxation and collection of taxes on the excess portion).

2. Goods imported for sale at tax-free shops must be affixed with the "Vietnam Duty Not Paid" label issued by the Ministry of Finance under the supervision of the customs authority before being placed in storage.

The position for affixing labels on goods imported for sale at tax-free shops shall be implemented in accordance with Appendix 1 attached to this Decision.

3. Types of cosmetics (under the quality control list managed by the Ministry of Health) permitted for import for sale at tax-free shops are exempted from registration for circulation. Businesses operating tax-free shops shall bear legal responsibility for the quality of cosmetics.

In cases where businesses request to move cosmetics out of the tax-free shop's management area for domestic consumption, they must register for circulation in accordance with the regulations of the Ministry of Health.

4. Customs authorities will not seal warehouses or shops, nor directly supervise or handle sales procedures. Once a month, Customs shall review sales documents provided by the shop to reconcile import declarations. During the reconciliation process, if deemed necessary, Customs may conduct inventory checks.

5. Responsibilities of the shop:

5.1 Sell goods according to the prescribed procedures, to the designated recipients, and within the specified quantities.

5.2 Maintain sales records and documents in accordance with the provisions set forth in Section II below.

5.3 Each month, the shop must submit a sales report to the Customs Sub-department managing the shop (using the form attached as Appendix 2 to this Decision) for Customs to review and reconcile.

5.4 The shop must have a computer system connected to the Customs Sub-department managing the shop to transmit sales data directly to the customs authority:

- Sales data (name of buyer, passport number or travel document number, item name, quantity, value).

- Inventory data (item name, code number, quantity, value).

6. The Customs Sub-department managing the shop must maintain a record of imported goods for sale at the shop and sales data provided by the shop in accordance with the provisions set forth in Point 5.4 above.

II. RULES ON SALES

1. In cases where the buyer is diplomatic missions, consular offices, or international organization representative offices in Vietnam, they are entitled to the tax-free quota as stipulated in Decree No. 73/CP dated July 30, 1994 of the Government.

1.1 Sales staff must check the following documents:

a) Passport, diplomatic identification card, or diplomatic note (if the buyer is an institution).

b) Tax-free quota book.

c) Power of attorney for purchasing goods (for purchases made under power of attorney).

d) Permit from the Provincial or City Customs Office (for motor vehicles and motorcycles).

1.2 Sales staff must collect and retain the following documents:

a) Cut and affix the corresponding label to the sales invoice.

b) Sales invoice.

c) Documents c and d as specified in Point 1.1 above.

2. In cases where the buyer is foreign experts implementing ODA programs or projects in Vietnam, or Vietnamese citizens residing abroad returning to work in Vietnam upon invitation by Vietnamese state agencies, the tax-free quota is regulated by Decision No. 211/1998/QĐ-TTg dated October 31, 1998 of the Prime Minister for foreign experts, and Decision No. 210/1999/QĐ-TTg dated October 27, 1999 of the Prime Minister for Vietnamese citizens residing abroad.

2.1 Pre-sale procedures: The shop must present the document specified in Point 2.2.c below to the Customs Sub-department managing the shop for confirmation and deduction of purchased goods.

2.2 Sales staff must check the following documents:

a) Passport.

b) Entry-exit declaration form for Vietnam.

c) Confirmation letter from the Ministry of Planning and Investment (if the buyer is an ODA expert) or from the relevant ministry or sector inviting Vietnamese citizens residing abroad to return to work in Vietnam (if the buyer is a Vietnamese citizen residing abroad).

2.3 Sales staff must collect and retain the following documents:

a) Sales invoice.

b) Record the full name, passport number, and date of entry of the buyer on the sales invoice.

c) For the document specified in Point 2.2.c above:

- Collect a copy of the confirmation letter from the competent state agency that has been confirmed and deducted by Customs, if the buyer has not yet purchased the entire tax-free quota.

- Collect the original confirmation letter from the competent state agency, if the buyer has already purchased the entire tax-free quota.

3. In case a person entering the country purchases goods at duty-free shops at the border checkpoint or within the domestic territory:

3.1. Sales staff must check the following documents:

a) Passport.

b) Entry-exit declaration form for Vietnam.

c) After selling the goods, the sales staff must record the total value of the sold goods, sign it, and clearly write their name on the Entry-Exit Declaration Form.

d) Fully record the buyer's full name, passport number, and date of entry on the sales invoice.

3.2. Sales staff must collect and retain the following documents:

a) Sales invoice.

b) Collect a copy of the Entry-Exit Declaration Form (after recording according to the provisions in Article 3.1.c above).

4. In case a person exiting the country purchases goods at a duty-free shop within the domestic territory:

4.1. Sales staff must check the following documents:

a) Passport.

b) Airplane ticket for departure that has been reserved.

4.2. Sales staff must collect and retain the following documents:

a) Sales invoice (already confirmed with actual export by the customs office at the exit checkpoint).

b) Fully record the buyer's full name, passport number, flight number, and date of departure on the sales invoice.

4.3. Customs procedures at the Customs Branch managing the duty-free shop:

a) Check and compare the sold goods with the sales invoice.

b) Seal the sold goods for the shop to transfer to the exit checkpoint.

4.4. Customs procedures at the exit checkpoint:

a) Check the seal of the Customs Branch managing the duty-free shop.

b) Supervise to ensure the goods are actually exported.

c) Confirm actual export on each sales invoice.

5. In case a person exiting the country purchases goods at a duty-free shop at the exit checkpoint:

5.1. Sales staff must check the following documents:

a) Passport or travel document as prescribed.

b) Proof of legitimate foreign currency origin (in cases where the purchase value exceeds the specified foreign currency amount, customs declaration must be made according to the regulations of the State Bank of Vietnam).

5.2. Sales staff must perform the following:

a) Fully record the buyer's full name, passport number (travel document number), and date of departure on the sales invoice.

b) Retain the sales invoice.

5.3. In cases where tourists exit the country by sea without a visa for entry, without a Vietnamese Entry-Exit Declaration Form, they shall follow the provisions set out in Point 5.2 above.

6. Duty-free goods sold on international flights:

6.1. When exporting goods from the warehouse to the aircraft, the enterprise must prepare a "Goods Dispatch Note" specifying the item, quantity, and value of the consignment.

6.2. For outbound flights: The enterprise is permitted to issue a consolidated invoice (three copies) for all goods sold on the aircraft of a single flight, Copy 1 (retained by the enterprise), Copy 2 (for tax exemption settlement with the tax authority), Copy 3 (submitted to Customs).

6.3. For inbound flights: If the buyer purchases goods on an inbound flight, the buyer must declare on the Vietnamese Entry-Exit Declaration Form, and the seller must confirm on the form as per the content confirmed by the sales staff at the inbound duty-free shop (as stipulated in Point 3.1.c above) and issue a sales invoice according to regulations.

6.4. Within 24 hours after the end of the flight, the enterprise must submit to the Customs Branch managing the duty-free shop a detailed sales report for passengers on the outbound or inbound flight, including the following criteria: Buyer's full name, passport number, flight number, date of departure/arrival, with confirmation by the seller; consolidated invoice, dispatch note to serve as the basis for settlement documentation.

7. Duty-free goods serving the needs of crew members during the time the ship is moored at a Vietnamese port for use on board and outside Vietnamese territorial waters:

7.1. In cases where duty-free goods are purchased to meet personal needs while the ship is moored awaiting departure:

Crew members on the ship are allowed to purchase duty-free goods at a duty-free shop once, subject to specific quantities as follows:

a) Quantities:

- Spirits 22 degrees or higher: 1.5 liters.

- Spirits below 22 degrees: 2.0 liters.

- Alcoholic beverages, beer: 3.0 liters.

- Cigarettes: 400 sticks.

- Cigars: 100 sticks.

b) Sales regulations:

- The ship captain or representative on behalf of the crew must prepare a single order for the crew members' needs for these items according to the specified quantities.

- Sales staff must perform the following:

+ Check the order from the ship captain or representative and the list of crew members.

+ Fully record the captain's or representative's full name, passport number, vessel identification number, and date of arrival on the sales invoice and sign the sales invoice.

+ Retain the sales invoice, order, and crew member list as the basis for settlement documentation.

7.2. In cases where duty-free goods are purchased to meet the needs of crew members for the next voyage outside Vietnamese territorial waters, such purchases can only be made at the duty-free shop at the point of departure.

- Sales regulations:

The ship captain or representative must prepare an order based on the needs.

+ Check the order from the ship captain or representative and the list of crew members as the basis for settlement documentation.

+ Check the order from the ship captain or representative and the list of crew members.

+ Retain the sales invoice, order, and crew member list.

+ Retain the sales invoice, order, and crew member list as the basis for settlement documentation.

Goods purchased at the duty-free shop according to the order for the next voyage (to be used outside Vietnamese territorial waters) must be stored in the ship's warehouse for Customs sealing and supervision until the ship departs.

III. REGULATIONS FOR GOODS PRODUCED IN VIETNAM AND LEGALLY CIRCULATING IMPORTED GOODS ON THE VIETNAMESE MARKET SOLD AT DUTY-FREE SHOPS

1. Goods produced in Vietnam include products manufactured from domestic raw materials and components and products manufactured from imported raw materials and components.

2. Goods produced in Vietnam sold at duty-free shops must not be included in the list of prohibited export goods. If they are conditional export goods, they must have a permit from the relevant management agency as prescribed by law.

3. Imported goods legally circulating on the Vietnamese market (hereinafter referred to as imported goods) if sold at duty-free shops are considered export goods and must comply with the export policy as prescribed by law.

4. Customs procedures for goods produced in Vietnam from imported raw materials and components; imported goods sold at duty-free shops:

4. Customs procedures for goods produced in Vietnam from imported raw materials and components; goods that have been imported and sold at duty-free shops:

4.1. The exporting enterprise shall register the export declaration form (HQ/2002-XK), while the purchasing enterprise (tax-exempt goods trading enterprise) shall register the import declaration form (HQ/2002-NK) together with the relevant customs documents as for exported and imported goods under purchase and sale contracts.

For imported goods, additional initial import documents shall be submitted: the import declaration form, various tax receipts (certified copies stamped and signed by the enterprise director).

The selling enterprise and the purchasing enterprise shall handle customs procedures at the Customs Branch managing the tax-free shop.

4.2. The Customs Branch managing the tax-free shop shall be responsible for handling export and import procedures for the consignment according to current regulations, specifically:

- For the export declaration form HQ/2002-XK: confirm that customs procedures have been completed and stamp in box 26, without confirming actual export and without stamping in box 27.

- Maintain a separate record book for this type of goods.

4.3. Daily, based on payment invoices with customers, the purchasing enterprise shall be responsible for summarizing the quantity of goods sold on that day and preparing a daily sales report to submit to the Customs Branch managing the tax-free shop.

4.4. Based on the record book and the daily sales report, when all imported goods listed on the import declaration form HQ/2002-NK are sold out, the purchasing enterprise shall notify the selling enterprise to contact the Customs Branch managing the tax-free shop for inspection, verification, and confirmation, stamping actual export in box number 27 on the export declaration form HQ/2002-XK (including the declaration retained by Customs and the declaration of the selling enterprise) as the basis for liquidating the file.

5. The provisions stipulated in this section only apply to enterprises that require tax refunds as provided by tax laws.

IV. REGULATIONS ON IMPORTED GOODS SOLD AT TAX-FREE SHOPS FOR TRANSFER TO OTHER USES

1. Re-exported goods:

1.1. When processing re-export procedures, the enterprise must submit the following documents:

- A request for re-export.

- Trade Ministry permit (if there was a Trade Ministry permit upon importation).

1.2 Customs procedures for re-export:

- Re-export customs procedures shall be carried out as prescribed for re-exported goods.

- The Customs Branch managing the tax-free shop shall process the re-export.

2. Goods transferred for domestic consumption:

2.1. When transferring imported goods sold at tax-free shops for domestic consumption, the enterprise must submit to the Customs Branch managing the tax-free shop:

- A request.

- Trade Ministry permit (for conditional imports).

2.2. Customs procedures for transferring goods for domestic consumption shall be carried out as prescribed for imported goods for trade.

V. REGULATIONS ON LIQUIDATION

1. The liquidation file includes:

1.1. Sales documents for each category as specified in Part II above.

1.2. Monthly sales reports of the shop.

1.3. Other documents (if any).

Liquidation shall be conducted periodically monthly. Annually, the Customs Branch managing the tax-free shop shall conduct inventory checks.

The shop is responsible for retaining sales files (according to each category of buyers specified in Part II above) to present when Customs conducts inspections and liquidations.

2. Liquidation procedures:

- Each month, the Customs Branch managing the tax-free shop shall carry out liquidation of goods sold in the previous month once in the first week of the following month. When Customs inspects and liquidates, the shop must present the file as stipulated in point 1, Part V above and other related books and documents (when requested by Customs).

- During the liquidation process, if deemed necessary, Customs may conduct inventory checks.

- After liquidation, the shop must retain sales files for the period prescribed by law.

3. Liquidation for damaged goods and destruction:

3.1. For goods damaged during transportation, the enterprise must submit an explanatory document and an appraisal certificate from an authorized agency or a local government confirmation.

In cases of minor damage to a few items with low value, the enterprise submits an explanatory document to the Customs Branch managing the tax-free shop for confirmation of liquidation without needing to submit an appraisal certificate or local government confirmation.

3.2. For expired goods, damaged goods, or goods that have lost quality, the enterprise must submit an explanatory document and an appraisal certificate.

3.3. Destruction procedures: Follow the provisions of the law.