Circular No. 84/1997/TT-BTC guiding amendments and supplements to certain points in Circulars No. 72A-TC/CT dated August 30, 1993, No. 107-TC/TCT dated December 30, 1993, and No. 53-TC/TCT dated July 13, 1995 of the Ministry of Finance on export tax and import tax.

CIRCULAR

Guidelines for Amending and Supplementing Certain Points in Circulars No. 72A-TC/CT dated August 30, 1993, No. 107-TC/TCT dated December 30, 1993, and No. 53-TC/TCT dated July 13, 1995

 of the Ministry of Finance on Export Tax and Import Tax

 

Pursuant to Decree No. 54/CP dated August 28, 1993 of the Government detailing the implementation of the Law on Export Tax and Import Tax and the Law Amending and Supplementing Certain Provisions of the Law on Export Tax and Import Tax;

Pursuant to Circulars No. 72A-TC/TCT dated August 30, 1993, No. 107 TC/TCT dated December 30, 1993, and No. 53 TC/TCT dated July 13, 1995 of the Ministry of Finance;

In recent years, the situation of import and export goods in the country as well as regional and global trade has undergone significant changes. Various trading forms have been expanded, particularly the trend towards economic integration with regions around the world has had an impact on the economy and society of our country. These changes have affected trade policy and export tax and import tax policy, necessitating appropriate tax systems to ensure business operations and to strengthen tax tools as levers for economic development and to ensure revenue for the State budget. Therefore, it is necessary to have guiding documents to supplement and amend export tax and import tax policies to address existing issues and inconsistencies arising from practical implementation that are not yet specifically addressed in current guiding documents.

After receiving comments from the Ministry of Trade, the Ministry of Planning and Investment, and the General Department of Customs, the Ministry of Finance hereby provides guidelines for amending and supplementing certain issues regarding export tax and import tax as follows:

1. Cases for Refund of Taxes

Supplementing certain provisions in Section VII of Circular No. 72A-TC/TCT dated August 30, 1993, and Circular No. 53 TC/TCT dated July 13, 1995 of the Ministry of Finance as follows:

1.1. Supplementing certain provisions of the aforementioned Circular No. 53 TC/TCT: For imported raw materials and components used for production and subsequent export;

The consumption quota of raw materials and components used in producing export products shall be established by the enterprise and the enterprise's director shall be responsible for the legal basis, accuracy, and correctness of the quota, registering with the Tax Authority (where the enterprise organizes production of the product) and the Customs Authority (where the import procedures for raw materials and components and export procedures for the finished product will be carried out). Registration of the quota with the Tax Authority and the Customs Authority shall be conducted before the import procedures are initiated. Based on the registered quota of raw materials and components, the Customs Authority shall examine and refund taxes (or not collect import taxes) on the portion of raw materials and components used in the production process corresponding to the quantity of exported products. If the registered quota does not match the actual consumption rate, the unit or enterprise must immediately report to the Tax Authority and the Customs Authority where the quota was registered to serve as the basis for tax refunds when the product is actually exported. Any false declaration or fraud in establishing the quota will be considered tax evasion and subject to tax collection and penalties according to the current Law on Export Tax and Import Tax.

In cases where there are doubts about the consumption quota of raw materials and components for producing export products, the Customs Authority may request an appraisal from the relevant management agency to serve as the basis for considering and resolving tax refunds for enterprises.

Annually, the Customs Authority shall take the lead in coordinating with local Tax Authorities to organize inspections of the consumption quotas of raw materials and components used in producing export products related to import tax refunds.

The tax refund shall only apply to enterprises importing (through direct import, agency import, or import at the place of production) raw materials and components and then directly producing or organizing processing and receiving the finished product for export (through direct export, agency export, or export at the place of production). All cases of domestic sales under any form for export of finished products do not fall within the scope of import tax refunds.

1.2. Supplementing paragraph e, point 1, section VII of Circular No. 72A-TC/TCT dated August 30, 1993 of the Ministry of Finance: For imported goods that do not comply with the signed commercial contracts or due to objective reasons require re-exportation back to the foreign seller, then:

1.2.1. In cases where the goods are still under the supervision and management of the Customs Authority in warehouses or ports but are permitted to be re-exported, if no import tax has been paid, no import or export tax will be required; or if import tax has already been paid, it will be refunded according to point 1a, section VII of Circular No. 72A-TC/TCT dated August 30, 1993 of the Ministry of Finance.

1.2.2. In cases where the goods are outside the supervision and management of the Customs Authority, when re-exported, the previously paid import tax will be refunded corresponding to the quantity of goods being re-exported, and no export tax will be required upon re-export to the foreign party, provided that the following conditions are met:

* The discovery of discrepancies between the goods and the signed foreign trade contract or due to objective reasons, within 45 days from the date the unit or enterprise receives the goods from the port managed by the Customs Authority.

* The results of the inspection by the state functional agency (third-party inspector) immediately upon discovering discrepancies in the goods.

* Clear explanations about the discrepancies from the agencies (Customs, Vinacontrol...) that inspected the imported goods previously.

The head of the unit shall be responsible for informing the local Tax Authority and the Customs Authority where the import procedures were carried out about the discrepancy to monitor and manage. Immediately after the third-party inspection of the goods with discrepancies is completed, the Customs Authority must seal the goods until they are re-exported.

The application for refund of import tax and exemption from export tax includes:

- A request letter from the unit clearly stating the reasons for returning imported goods to the foreign consignee (must clearly confirm that the imported goods do not meet the technical standards, quality, quantity, etc., as stipulated in the signed Contract).

- Inspection documents issued by the Goods Inspection Authorities in Vietnam when importing and after discovering discrepancies with the contract.

- Confirmation and opinion of the Customs Authority where the import procedures were carried out and the local tax authority regarding the discrepancies between the goods and the contract.

- An agreement document with the foreign consignee to accept the return of goods (or notification from the foreign consignee agreeing to accept the returned goods), clearly stating the reasons for accepting the goods.

- The customs declaration for imported goods which has been processed and cleared by the Customs Authority.

- The customs declaration for exported goods which has been confirmed by the Customs Authority as actually exported, specifying which import declaration allows the re-exportation.

- The tax receipt for import duties issued by the Customs Authority.

- A legally valid import contract signed with the foreign party.

- A commission export/import contract if the goods are commissioned for export/import.

1.3. Supplementing paragraph e point 1 section VII Circular No. 72A-TC/TCT dated August 30, 1993 of the Ministry of Finance: In cases where machinery, equipment, and tools of units, winning contractors for projects in Vietnam are brought in to serve construction and installation work during the construction period, and in cases where machinery, equipment, and tools imported by Vietnamese enterprises leased or borrowed from abroad to serve production, are allowed to be imported under the temporary import-reexport system by the Ministry of Commerce, they shall be eligible for refund of import duties according to paragraph e point 1 section VII of Circular No. 72A-TC/TCT mentioned above; When importing, temporary import duties must be paid, and upon re-exporting such machinery and equipment out of the territory of Vietnam, the import duties will be considered for refund. The amount of import duty to be refunded is determined based on the remaining value of the machinery, equipment, and tools at the time of re-export calculated according to the period of use and storage in Vietnam. Specifically, as follows:

* For new machinery, equipment, and tools imported into the territory of Vietnam:

- If the period of use and storage in Vietnam is six months or less, the entire amount of import duties paid will be refunded.

- If the period of use and storage in Vietnam exceeds six months but does not exceed one year, eighty-five percent of the import duties paid will be refunded.

- If the period of use and storage in Vietnam exceeds one year but does not exceed two years, seventy percent of the import duties paid will be refunded.

- If the period of use and storage in Vietnam exceeds two years but does not exceed three years, fifty-five percent of the import duties paid will be refunded.

- If the period of use and storage in Vietnam exceeds three years but does not exceed four years, forty percent of the import duties paid will be refunded.

- If the period of use and storage in Vietnam exceeds four years but does not exceed five years, twenty-five percent of the import duties paid will be refunded.

- If the period of use and storage in Vietnam exceeds five years, fifteen percent of the import duties paid will be refunded.

* For used machinery, equipment, and tools permitted to be imported into the territory of Vietnam:

- If the period of use and storage in Vietnam is six months or less, the entire amount of import duties paid will be refunded.

- If the period of use and storage in Vietnam exceeds six months but does not exceed one year, eighty percent of the import duties paid will be refunded.

- If the period of use and storage in Vietnam exceeds one year but does not exceed two years, sixty percent of the import duties paid will be refunded.

- If the period of use and storage in Vietnam exceeds two years but does not exceed three years, forty-five percent of the import duties paid will be refunded.

- If the period of use exceeds three years, thirty percent of the import duties paid will be refunded.

In cases where the goods are not re-exported overseas, in addition to being required to pay all due import duties, penalties will be imposed according to the current regulations of the Law on Export Duties and Import Duties and administrative fines for violations in the field of trade.

The documents for considering the refund of import duties include:

- A letter from the unit requesting a refund of paid import duties or export duties (if applicable), clearly stating the reasons for requesting the refund.

- A bidding decision (or document) from the competent authority (for the case of contractors). Contracts (or agreements) between Vietnamese enterprises and foreign customers regarding leasing or borrowing machinery and equipment to serve production.

- A document from the Ministry of Commerce allowing the import of machinery, equipment, and tools, clearly stating the import method as "Temporary Import-Reexport".

- Customs declarations for imported and exported goods which have been processed and confirmed by the Customs Authority.

- Receipts for payment of import duties.

- Commission export or import contracts (if it is a commissioned export/import).

In cases where units or contractors continue to win bids for construction and installation of other projects in Vietnam and are allowed by the Ministry of Commerce to transfer the aforementioned machinery, equipment, and tools to serve other projects, they can carry out import and export procedures on-site without paying export duties or import duties (meaning only import duties need to be paid when the goods are first imported into the territory of Vietnam, and import duties will be refunded when the goods are re-exported out of the territory of Vietnam).

1.4. Supplementing point e section VII Circular No. 72A-TC/TCT dated August 30, 1993 of the Ministry of Finance: In cases where machinery and equipment (excluding automobiles of all types) of units and Vietnamese enterprises temporarily exported abroad for repair and restoration, and in cases where they are temporarily exported for repair by the foreign consignee within the warranty period as stipulated in the foreign trade purchase and sale contract signed when importing, and are allowed by the Ministry of Commerce to be "temporarily exported and re-imported", no export duties or import duties need to be paid. The Customs Authority will handle the export and import procedures and monitor the management of temporarily exported goods until they are re-imported according to current regulations and issue a decision not to collect taxes for this case.

The conditions for applying to this case include:

- A request letter from the unit or enterprise explaining clearly the reasons and causes for sending machinery and equipment abroad for repair and committing to re-importing them, with confirmation from the superior management agency.

- A lawful and valid repair contract between the unit and the foreign party detailing the condition of the machinery and equipment being sent for repair (quantity, value, serial number, year of production...), the list and quantity of parts needing repair, the condition of the machinery and equipment upon re-importation (quantity, value...), repair costs, etc.

- A fixed asset card for the machinery and equipment confirmed by the local tax authority managing the enterprise.

- A notification document of the inspection results issued by the State-authorized goods inspection agency.

- A permit document from the Ministry of Trade allowing the unit to temporarily export machinery and equipment abroad for repair and subsequent re-importation. - An export customs declaration form, confirmed and cleared by the customs authority at the port of exit.

- An import customs declaration form, confirmed and cleared by the customs authority at the port of entry; it must specify which export customs declaration form the re-imported goods correspond to.

- A consignment export and import contract if the transaction is conducted through consignment.

* For cases stipulated in item (1) above, when re-exporting or re-importing goods, the procedures for export and import must be carried out at the customs authority where the goods were first imported or exported. If fraudulent acts related to export duties or import duties are discovered, in addition to recovering the taxes, penalties will be imposed according to the current regulations of the Law on Export Duties and Import Duties.

2. Amend and replace paragraph d point 1 section VII Circular No. 72A-TC/TCT dated August 30, 1993 of the Ministry of Finance as follows: For imported goods that do not meet the quality, specifications, grade specified in the trade contract signed with the foreign party due to errors by the foreign side, provided there is a certificate of inspection from a state-authorized inspection agency and confirmation from the foreign owner, the provincial or centrally-administered city Customs Bureau shall base their decision to allow importation on the actual inspection results of the imported goods, provided they do not violate the import regulations of the Ministry of Trade and General Department of Customs. At the same time, recalculate the import duty payable to collect the appropriate amount based on the actual imported goods. If the unit has already paid more import duty than the recalculated amount, the excess will be refunded.

In cases where it is deemed to significantly affect consumer rights, such as impacting the environment, health, or product quality, the customs authority must seek the opinion of the Ministry of Trade, which must provide a written response approving or requiring the enterprise to re-export the goods back to the foreign owner.

3. Amend and replace point 2 section V Circular No. 72A TC/TCT dated August 30, 1993 of the Ministry of Finance as follows:

For export and import transactions of enterprises with foreign investment capital and joint ventures based on cooperation contracts, in special cases encouraging investment, after obtaining written agreement from the Ministry of Finance and the Ministry of Planning and Investment, specific exemptions from export duties or import duties may be granted according to Article 63 of Decree No. 12/CP dated February 18, 1997 of the Government. The temporary implementation of specific import duty exemptions will follow the provisions of Circular No. 20 TC/TCT dated March 16, 1995 of the Ministry of Finance.

Replace the term "VINACONTROL Agency" as defined in Circular No. 72A-TC/TCT dated August 30, 1993 of the Ministry of Finance, with the term "State-authorized goods inspection agencies" to handle export duties and import duties according to Article 14 of Decree No. 54/CP dated August 28, 1993 of the Government detailing the implementation of the Law on Export Duties and Import Duties and the Law amending and supplementing certain articles of the Law on Export Duties and Import Duties.

5. Add the following paragraph at the end of section VII of Circular No. 72A TC/TCT dated August 30, 1993 of the Ministry of Finance: In cases where the Ministry of Finance (Budget Department) grants refunds of export duties and import duties, in addition to the provisions of Circular No. 72A-TC/TCT dated August 30, 1993 of the Ministry of Finance, the following additional documents must be submitted:

- A request letter from the unit to the Ministry of Finance (Budget Department) requesting a refund of the export duty and import duty paid, specifying the bank account number.

- A letter from the provincial or centrally-administered city Customs Bureau where the unit handled the export or import procedures, requesting the Ministry of Finance to process the refund of export duty or import duty for the unit: confirming the amount of export duty and import duty paid into the State budget, the amount eligible for refund, etc.

- A payment receipt for export duty and import duty issued by the Customs Authority and deposited into the State budget account (account 741), confirmed by the State Treasury where the payment was made. The confirmation from the State Treasury must specify the date of deposit into the State budget, the amount deposited, the Chapter, Type, Item, Sub-item of the Budget Classification, and must have the signature of the State Treasury leader to serve as the basis for the Ministry of Finance to verify and approve the refund from the State Treasury.

The application for a refund of taxes submitted to the Ministry of Finance (Budget Department) must be original or certified copies by a state notary. For documents not certified by a state notary, the unit must submit a request letter confirming the copy and bear responsibility for its legal validity. At the same time, the original must be presented to the Budget Department for verification against the copy, after which the original will be returned to the unit.

6. Amend and supplement item (-) number 4 point 1 Section VIII Circular No. 72A TC/TCT dated August 30, 1993 of the Ministry of Finance, regarding procedures and authority for recovering import and export taxes and imposing penalties for violations of the Law on Export Tax and Import Tax as follows:

- In cases where the Customs authorities discover through inspection, the Customs authorities shall issue decisions to recover taxes and impose penalties and organize the collection of fines according to current regulations.

- In cases where the Tax authorities or financial inspectors discover enterprises engaging in tax evasion related to export tax and import tax, the Director of the Provincial Tax Department or the Head of the Financial Inspection Board (at provincial level or higher) shall have the authority to issue decisions to recover taxes and impose penalties according to the provisions of the Law on Export Tax and Import Tax and the Law on Special Consumption Tax. The recovered tax amounts and penalties shall be collected and submitted as follows:

+ One hundred percent (100%) of the recovered import and export taxes and Special Consumption Tax (if applicable) shall be deposited into the Central Budget.

+ The penalty amounts and proceeds from the sale of confiscated goods (if applicable) shall be submitted according to the current regulations of the Ministry of Finance.

The results of recovery and imposition of penalties mentioned above shall be included in the revenue results at the local level where the recovery takes place and shall be considered for year-end excess revenue bonuses according to the provisions of the State Budget Law.

- In cases where other agencies discover and report, the relevant files shall be compiled and submitted to the Customs authorities to issue decisions to recover taxes and impose penalties and organize the collection of fines according to current regulations.

Units and individuals who contribute to the discovery and recovery of export tax and import tax shall be rewarded according to Decree No. 22/CP dated April 17, 1996 of the Government and Circular No. 45 TC/TCT dated August 1, 1996 of the Ministry of Finance.

For cases where the Tax authorities or financial inspectors discover and recover taxes, if difficulties arise during the calculation of the amount of import tax and export tax to be recovered due to issues with determining tax rates or taxable values, the Tax authorities or financial inspectors shall coordinate with the Customs authorities at the same level to resolve these issues. If the taxpayer deliberately delays or evades payment of taxes, in addition to the enforcement measures stipulated in Circular No. 45 TC/TCT dated August 1, 1996 of the Ministry of Finance, the Tax authorities or financial inspectors may coordinate with the Customs authorities to apply the enforcement measures stipulated in the Law on Export Tax and Import Tax.

7. Regarding the procedures and authority for considering exemptions from import tax and special consumption tax (if applicable) for imported goods of enterprises and organizations intended for sale tax-free at duty-free shops permitted by authorized state agencies to operate duty-free sales for the following categories of customers:

- Departing passengers, transit passengers (including drivers and service personnel on transportation vehicles) at international seaports, border gates, and railway stations in Vietnam.

- Passengers on aircraft and flight crews.

- Customers waiting to depart at downtown duty-free shops.

- Arriving passengers (including flight crews and attendants on international flights) at certain international airports according to the standard quantity of tax-free luggage allowed for departing and arriving passengers as specified in Decree No. 17/CP dated February 6, 1995 of the Government.

- Diplomatic delegations as specified in Decree No. 73/CP dated July 30, 1994 of the Government.

Specifically, the procedures and documents include:

+ A letter requesting exemption from import tax.

+ A permit to operate duty-free sales issued by the authorized state agency (only submitted once when applying for tax exemption).

+ An import quota (or plan) for goods issued by the Ministry of Trade, clearly stating the target customers for duty-free sales.

+ A customs declaration form for imported goods that has been verified and taxed by the Customs authorities.

+ A tax notification from the Customs authorities.

+ An export-import trade contract signed with foreign parties stamped with registration by the Export-Import Permit Office - Ministry of Trade.

+ Invoice, packing list...

Based on the aforementioned documents, within seven days, the Ministry of Finance (General Department of Taxation) shall issue a decision temporarily exempting import tax and special consumption tax (if applicable). The Customs office handling the import procedures for the enterprise shall, based on the Ministry of Finance's (General Department of Taxation's) temporary tax exemption decision, implement the procedures and stamp "Temporarily Exempted Goods" on the Customs Declaration Form. Implement the supervision and management system for duty-free goods according to the current regulations of the General Department of Customs.

The Customs office directly managing the duty-free shop shall be responsible for maintaining records, monitoring, and supervising the stock-out and sales activities of the duty-free shop. The General Department of Customs shall guide the inspection and supervision of the import and export stock and sales activities of duty-free shops to ensure uniform implementation nationwide.

Quarterly (on the tenth day of the first month of each quarter), the enterprise operating duty-free sales must report the settlement of duty-free sales and inventory levels to the Ministry of Finance (General Department of Taxation) and the General Department of Customs. The General Department of Customs shall be responsible for directing inspections and settlements of duty-free sales by the enterprise according to the current regulations and settle each batch of goods according to the Customs Declaration Form for imported goods accompanied by the Settlement Certificate (Form No. 1A and 1B attached to this Circular). If the enterprise fails to submit the settlement documents within thirty days, the provincial or municipal Customs office shall have the right to suspend the import procedures for duty-free goods until the enterprise submits the complete settlement reports.

After the customs authority approves the settlement report on duty-free goods sold, the entity must submit this settlement report along with a letter requesting the Ministry of Finance (General Department of Taxation) to consider and issue a formal decision on exemption from import tax and special consumption tax (if applicable) for the consignment. Within fifteen days from the date of receipt of the complete application for formal tax exemption from the entity and based on the customs authority's settlement report, the Ministry of Finance (General Department of Taxation) must issue a formal tax exemption document. Upon receiving the formal tax exemption decision from the Ministry of Finance (General Department of Taxation), the provincial customs authority and the direct managing customs authority of the duty-free shop shall verify and process the refund of import tax.

In cases where the entity has inventory and is permitted by the Ministry of Trade to sell such inventory in the domestic market, within two days after the reason for tax exemption changes, the entity must declare to the customs authority to calculate and collect the full amount of import tax and special consumption tax (if applicable) according to current regulations.

For imported goods intended for sale at duty-free shops, if they are sold to ineligible recipients for tax exemption or consumed domestically without permission from the Ministry of Trade, in all cases, this shall be considered as tax evasion and the entity must pay back the exempted import tax and special consumption tax (if applicable) and be fined from two to five times the amount of evaded taxes.

8. The authority to examine the above cases shall be carried out in accordance with Circular No. 72A TC/TCT dated August 30, 1993, Circular No. 53 TC/TCT dated July 13, 1995, Circular No. 732 TC/TCT dated April 1, 1994, issued by the Ministry of Finance, and the specific authority defined in this Circular.

9. Quarterly and annually, the General Customs Department shall compile and submit to the Ministry of Finance data and evaluations on the situation of tax exemptions, reductions, and refunds for export taxes, import taxes, and special consumption taxes on imported goods under the jurisdiction of the customs authority to handle and implement (according to Form No. 2 attached to this Circular).

10. Implementation organization:

This Circular takes effect fifteen days from the date of signature. Previous regulations that conflict with the provisions of this Circular are hereby abolished. The Ministry of Finance requests the General Customs Department to instruct and guide the management procedures so that the provincial customs authorities strictly implement and manage to prevent fraud causing loss to the State budget and avoid inconvenience for businesses.

Cases of tax refunds mentioned above that have arisen before this Circular takes effect shall be examined and resolved by the Ministry of Finance on a case-by-case basis.

The settlement of import tax and special consumption tax for imported goods sold to serve tax-exempt recipients at duty-free shops, as stipulated in Circulars No. 107 TC/TCT dated December 30, 1993, and No. 98 TC/TCT dated December 30, 1995, issued by the Ministry of Finance from January 1994 to the present, the General Customs Department is requested to instruct the implementation of verification and settlement of duty-free sales in accordance with the prescribed system and objects; At the same time, compile and report to the Ministry of Finance the situation of settlement of duty-free sales for entities. Enterprises permitted to sell duty-free goods must submit documents to the Ministry of Finance (General Department of Taxation) to apply for formal tax exemption in accordance with Point 7 of this Circular.

Any difficulties encountered during implementation should be compiled and reported to the Ministry of Finance by the General Customs Department for research and consideration to provide supplementary guidance as appropriate./.