Circular No. 84/1997/TT-BTC guiding the amendment and supplementation of 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 COMPLEMENTING CERTAIN POINTS IN CIRCULARS NO. 72A-TC/CT OF AUGUST 30, 1993, NO. 107 TC/TCT OF DECEMBER 30, 1993, AND NO. 53 TC/TCT OF JULY 13, 1995 ISSUED BY THE MINISTRY OF FINANCE ON EXPORT TAXES AND IMPORT TAXES

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 issued by the Ministry of Finance;
In recent years, there have been significant changes in the import and export of goods both domestically and in regional and global trade. New trading forms have emerged, particularly the trend towards economic integration with regions around the world, which has had an impact on Vietnam's economy and society. These changes have affected trade policies and export and import tax policies, necessitating appropriate tax systems to ensure business operations and strengthen tax tools for economic development and to secure revenue for the State budget. Therefore, it is necessary to issue supplementary guidelines to amend export and import tax policies to address existing issues and inconsistencies that need to be resolved uniformly but are not yet clearly defined in current guidance 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 provides the following guidelines for amending and supplementing certain aspects of export and import taxes:

1. Cases for Refund of Taxes

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

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

The consumption quota of raw materials and components used in producing export products shall be established by the enterprise and the enterprise director shall be responsible for the legal basis and accuracy of the quota. The enterprise shall register this quota with the Tax Authority (where the enterprise organizes production) and the Customs Authority (where the import procedures for raw materials and components and export procedures for finished products will be handled). Registration of the quota with the Tax Authority and the Customs Authority must be completed before the import procedures are carried out. Based on the registered quota of raw materials and components, the Customs Authority will consider refunding (or not collecting) import tax 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 enterprise must immediately report to the Tax Authority and the Customs Authority where the quota was registered to serve as the basis for refunding tax when the product is actually exported. Any false declaration or fraud in establishing the quota will be considered tax evasion and subject to collection of the difference in import tax and penalties under 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 specialized management agency to serve as the basis for considering and resolving the refund of tax for the enterprise.

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

The refund of tax 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 products for export (through direct export, agency export, or export at the place of production). All cases of domestic sales under any form for exporting finished products do not fall within the scope of being eligible for the refund of import tax.

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

1.2.1. In cases where the goods are still under the supervision and management of the Customs Authority in warehouses or storage areas at the border, but are allowed 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, issued by the Ministry of Finance.

1.2.2. In cases where the goods are outside the supervision and management of the Customs Authority, when re-exporting, the import tax paid will be refunded corresponding to the quantity of goods re-exported, and no export tax will be required when re-exporting the goods 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 must occur within 45 days from the date the unit or enterprise receives the goods from the customs authority.

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

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

The head of the unit is responsible for notifying the local Tax Authority and the Customs Authority where the import procedures were carried out about the discrepancy in the goods. Immediately after the re-inspection of the goods by the inspection agency, the Customs Authority must seal the goods until they are re-exported.

The documents for requesting the refund of import tax and exemption from export tax include:

- A request letter from the unit clearly stating the reasons for returning imported goods to the foreign owner (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 Office handling the import procedures for the consignment and the local tax authority regarding the discrepancies between the goods and the contract.

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

- The Import Declaration form for the imported goods which has been processed and cleared by the Customs Office.

- The Export Declaration form for the exported goods which has been confirmed by the Customs Office as actually exported, specifying which Import Declaration form allows the re-exportation.

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

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

- A commission export/import contract if the goods are being exported/imported on commission.

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, they shall be eligible for refund of import duties according to the provisions of 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 Vietnam's territory, 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 Vietnam's territory:

- 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 Vietnam's territory:

- 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 making up all import duties, penalties will be imposed according to the current regulations of the Law on Export Tax, Import Tax, and Administrative 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 Trade allowing the import of machinery, equipment, and tools, clearly stating the import method as "Temporary Import-Reexport".

- The Import Declaration form for goods, which has been processed and confirmed by the Customs Office.

- The tax receipt for import duties.

- A commission export or import contract (if it is a commission export/import).

In cases where units or contractors continue to win bids for other construction and installation projects in Vietnam and are allowed by the Ministry of Trade to transfer the aforementioned machinery, equipment, and tools to serve other projects, they can handle 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 Vietnam's territory, and import duties will be refunded when the goods are re-exported out of Vietnam's territory).

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 all types of automobiles) 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 owner within the warranty period as stipulated in the foreign trade contract signed when importing, and are allowed by the Ministry of Trade to be "temporarily exported and re-imported", no export duties or import duties need to be paid. The Customs Office will handle the export and import procedures and manage the 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 legally 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 of the inspection results issued by the authorized goods inspection agency.

- A permit 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 border gate.

- An import customs declaration form, confirmed and cleared by the customs authority at the border gate; 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 specified in point (1) above, when re-exporting or re-importing goods, the export and import procedures 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 of point 1, section VII of 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, or grade stipulated 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 entity has paid more import duty than the recalculated amount, the excess will be refunded.

In cases where it is determined that there is a significant impact on consumer rights, such as affecting 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 of 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 phrase "Authorized agencies for inspecting export and import goods" 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.

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 (State 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 (State Budget Department) requesting a refund of the export duty and import duty already paid, specifying the account number at the bank.

- 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 to be refunded,...

- A payment receipt for export duty and import duty issued by the Customs Authority into the State Budget (Account 741) confirmed by the State Treasury where the tax was paid. The confirmation from the State Treasury must specify the date of payment to the State Budget, the amount paid, the Chapter, Type, Item, Sub-item of the State Budget, and must have the signature of the leader of the State Treasury where the payment was made 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 (State 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 State 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) has 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 Special Consumption Tax Law. The recovered tax amounts and penalties shall be collected and deposited 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 Government Budget.

+ The amount of penalties and proceeds from the sale of confiscated goods (if applicable) shall be deposited 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 collection 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 discovered and recovered by the Tax authorities or financial inspectors, if difficulties arise during the calculation of the 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 cooperate with the Customs authorities at the same level to resolve these issues. If the taxpayer deliberately delays or evades payment of the tax, 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 cooperate 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 competent state authorities to operate duty-free sales serving the following groups:

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

- Passengers on aircraft and flight crews.

- Passengers 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 missions under 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 competent state authority (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 temporary decision 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 imports and exports 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, 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 1A and 1B issued together with this Circular). If the enterprise fails to submit the settlement documents within thirty days, the provincial or municipal Customs office has the right to suspend the import procedures for duty-free goods until the enterprise submits 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 compare 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 is changed, 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 tax evaded.

8. The authority to examine the above cases shall be implemented 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 of 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 exemptions, reductions, and refunds of export tax, import tax, and special consumption tax for 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 provisions contrary to those stipulated in this Circular are hereby abolished. The Ministry of Finance requests the General Customs Department to instruct and guide the management procedures so that the Customs Departments of provinces and centrally-administered cities strictly implement and manage to prevent fraud causing revenue loss to the State budget and avoid undue inconvenience to businesses.

Cases of tax refunds mentioned above which 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 eligible recipients at duty-free shops, as prescribed in Circulars No. 107 TC/TCT dated December 30, 1993, and No. 98 TC/TCT dated December 30, 1995 of the Ministry of Finance from January 1994 to the present, the General Customs Department is requested to instruct the implementation of inspections and settlements of duty-free sales in accordance with the established system and eligible recipients; At the same time, compile and report to the Ministry of Finance the situation of settlements 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.

During the implementation process, if there are any difficulties, the General Customs Department is requested to compile and reflect them to the Ministry of Finance for research and supplementary guidance as appropriate.