Decree No. 94/1998/ND-CP detailing the implementation of the Law Amending and Supplementing Certain Articles of the Law on Export Tax and Import Tax No. 04/1998/QH10 dated May 20, 1998.

DECREE OF THE GOVERNMENT

Details implementing the Law Amending and Supplementing Certain Provisions of the Law on Export Tax and Import Tax number 04/1998-QH10 dated May 20, 1998
||| Based on the Law on Foreign Investment in Vietnam dated November 8, 1996; the Law Encouraging Domestic Investment (Amended) number 03/1998/QH10 dated May 20, 1998;

THE GOVERNMENT

Pursuant to the Government Organization Law dated September 30, 1992;

||| Based on the Law on Export Tax and Import Tax dated December 26, 1991; the Law Amending and Supplementing Certain Provisions of the Law on Export Tax and Import Tax dated July 5, 1993; the Law Amending and Supplementing Certain Provisions of the Law on Export Tax and Import Tax number 04/1998/QH10 dated May 20, 1998;

Rates of import tax are stipulated as follows:

At the proposal of the Minister of Finance,

DECREE:

Article 1.1.Rates applicable to imported goods include general rates, preferential rates, and special preferential rates:

a)Preferential rates apply to imported goods originating from countries or blocs that have agreements on most-favored-nation treatment in trade relations with Vietnam.

Preferential rates are specified in the Import Tariff Schedule issued by the Minister of Finance. The Ministry of Finance shall take the lead in coordinating with the Ministry of Trade and other relevant ministries based on import and export policies and market price fluctuations during specific periods to adjust the tariff rates in the Import Tariff Schedule in accordance with the tariff rate framework prescribed by the Standing Committee of the National Assembly.

b)General rates apply to imported goods originating from countries without agreements on most-favored-nation treatment in trade relations with Vietnam.

General rates are uniformly applied at a level higher than fifty percent (50%) compared to the preferential rates stipulated in point a, sub-item 1 of this Article. For exceptional cases requiring a higher or lower rate (but not exceeding seventy percent (70%) compared to the preferential rate), after reaching consensus with the Ministry of Trade, the Ministry of Finance will specify the rate for each specific case to ensure compliance with policy and trade relations during specific periods.

c)Special preferential rates apply to imported goods originating from countries or blocs that have special preference agreements on import taxes under free trade zones, customs unions, or to facilitate border trade flows.

Special preferential rates shall be applied to imported goods meeting the following conditions:

They must be specific items listed in the agreement and must meet all conditions set forth in the agreement.

They must originate from countries sharing a common border or from countries within a bloc where Vietnam participates in tax arrangements according to the agreement.

The Ministry of Trade shall provide detailed guidance on the origin criteria of goods stipulated in points a, b, and c of sub-item 1 of this Article.

2.Supplementary rates provided for in point a, b, and c of Clause 2, Article 9 of the Law on Export Tax and Import Tax supplemented in Clause 1, Article 1 of Law number 04/1998/QH10 dated May 20, 1998 shall be separately regulated.

Goods subject to exemption from import tax as stipulated in Clause 2, Article 1 of the Law Amending and Supplementing Certain Provisions of the Law on Export Tax and Import Tax number 04/1998/QH10 are detailed as follows:

Article 2.1.Imported goods specifically used for direct service to national security, defense, scientific research, education, and training shall be exempt from import tax according to the list of imported goods unified by the Ministry of Finance in coordination with relevant ministries and sectors.

2.Imported goods of foreign-invested enterprises and foreign partners in joint business operations under the Law on Foreign Investment in Vietnam shall be exempt from import tax according to the provisions of Decree 12/CP dated February 18, 1996 of the Government detailing the implementation of the Law on Foreign Investment in Vietnam, Decree number 10/1998/NĐ-CP dated January 23, 1998 of the Government on certain measures to encourage and ensure foreign direct investment in Vietnam, and Decree number 62/1998/NĐ-CP dated August 15, 1998 of the Government promulgating regulations on investment under Build-Operate-Transfer (BOT), Build-Transfer-Operate (BTO), and Build-Transfer (BT) contracts for foreign investment in Vietnam.

3.Imported goods of domestic enterprises under the Law Encouraging Domestic Investment shall be exempt from import tax according to Article 25 of the Law Encouraging Domestic Investment (Amended) dated May 20, 1998.

4.Gifts and samples given by foreign organizations and individuals to Vietnamese organizations and individuals and vice versa shall be exempt from tax according to the regulations of the Ministry of Finance.

The Ministry of Finance shall specify the procedures for applying for tax exemptions for each case stipulated in this Article.

Declaration and payment of tax

Article 3.1.Every time an organization or individual has goods permitted for export, they must declare and submit the export declaration form, pay the export tax to the Customs authority responsible for export procedures, and bear responsibility for the accuracy of the declaration.

2.Every time an organization or individual has goods permitted for import, they must declare and submit the import declaration form, pay the import tax to the Customs authority responsible for import procedures, and bear responsibility for the accuracy of the declaration.

For some ports with large volumes of imported goods, additional locations may be established for import procedures and collection of import taxes. The General Department of Customs shall coordinate with the Ministry of Finance to report to the Government for approval of additional locations for import procedures.

Customs authorities are responsible for inspecting exported and imported goods, processing customs formalities, and collecting taxes in accordance with this Decree.

Inspection, taxation, and deadlines for tax payment:

Article 4.1.The date for calculating export tax and import tax is the day when organizations and individuals register their export or import declaration forms with the Customs authority. Taxes are calculated based on the tax rate and taxable value on the day of registration of the export or import declaration form.

2.Within eight (8) working hours from the time of receiving the export or import declaration form, the Customs authority must officially notify the taxpayer of the amount of tax due.

Within eight (8) working hours from the time of receiving the Export-Import Goods Declaration, the Customs authority must officially notify the taxpayer of the amount of tax due.

For certain goods with large quantities imported each time (such as iron, steel,steel products, cement, clinker, oil, fertilizers) and goods that must have qualitystandards certification according to the Government's regulations before beingpermitted to circulate on the Vietnamese market, the deadline for tax notificationmay be extended but not exceeding three working days as specifically prescribedby the General Department of Customs.

For goods that must have technical standards certification to determine the HScode, the condition of old or new goods to ensure accurate tax calculation, thedeadline for tax notification may be extended beyond three days, but not exceedingfifteen working days.

The certification agencies and state quality inspection agencies are responsiblefor ensuring the completion of the certification and quality inspection periodfor exported and imported goods so that the customs agency can notify taxes to taxpayers.

The Ministry of Science, Technology and Environment shall coordinate with theMinistry of Trade and the Ministry of Finance to specifically prescribe theauthorities competent for certification and quality inspection of exported andimported goods and to specify the final decision-making authority in case ofcomplaints.

3. The deadlines for paying export duties and import duties are stipulated asfollows:

a) For exported goods, fifteen (15) days from the date the taxpayer receives theofficial notification from the customs agency regarding the amount of duty to bepaid.

b) For imported raw materials and components intended for producing exportedgoods, nine (9) months from the date the taxpayer receives the officialnotification from the customs agency regarding the amount of duty to be paid.

In cases where production cycles or raw material reserves of enterprises requirea longer period such as shipbuilding, machinery manufacturing, etc., the taxpaid deadline may be extended appropriately according to the production cycleand raw material reserves, as decided by the Ministry of Finance for each specificcase.

If goods produced using imported raw materials are actually exported within thetax payment deadline specified above, then there is no need to pay thecorresponding import duty. If goods are exported outside the specified taxpayment deadline, the taxpayer must pay the duty according to the regulations.

Export-producing enterprises must register with the customs agency the goodsas raw materials and components for producing exported goods. In cases wherethe enterprises have registered and applied the tax payment deadline as prescribedin this clause but consume the goods domestically, they will be subject topenalties as stipulated in Article 5 of this Decree.

The Ministry of Finance shall specifically prescribe the conditions for applyingthe tax payment deadline and the circumstances subject to penalties as stipulatedin this clause.

c) For temporarily exported goods, re-imported goods, or temporarily importedgoods, re-exported goods, fifteen (15) days from the expiration date of thetemporary export, re-import, temporary import, or re-export permit.

If actual re-importation (for temporarily exported goods) or actual re-exportation(for temporarily imported goods) occurs within the tax payment deadline specifiedabove, then there is no need to pay the corresponding export duty or import duty.

The Ministry of Trade shall generally prescribe the deadlines for temporaryimportation and re-exportation and temporary exportation and re-importation.

For other forms of temporary importation and re-exportation or temporaryexportation and re-importation that are not business activities as defined by theMinistry of Trade, the tax payment deadline shall be implemented according topoints a, d, đ of this clause.

d) For machinery, equipment, raw materials, fuel, materials, and transportmeans imported directly for enterprise production, thirty (30) days from thedate the taxpayer receives the official notification from the customs agencyregarding the amount of duty to be paid.

đ) For imported consumer goods, the tax must be fully paid before receiving thegoods. In cases where there is a guarantee regarding the tax amount to be paidby financial institutions or other organizations permitted to conduct certainsbanking activities according to the Law on Financial Institutions, the taxpayment deadline is thirty (30) days from the date the taxpayer receives theofficial notification from the tax collection agency regarding the amount of dutynotified. The Ministry of Trade shall lead and coordinate with relevant ministriesto prescribe the list of imported consumer goods as stipulated in this point.

If the taxpayer fails to pay the tax within the specified deadline, the guarantororganization must assume responsibility for paying the tax on behalf of thetaxpayer.

Guaranteeing the tax amount to be paid for taxpayers, the rights and obligationsof financial institutions providing guarantees, and the obligations of taxpayersreceiving guarantees shall be carried out according to Articles 58, 59, and 60 ofthe Law on Financial Institutions dated December 12, 1997.

Article 5.Taxpayers violating the Law on Export Duties and Import Duties shall be subjectto penalties according to the provisions of Clause 5, Article 1 of the LawAmending and Supplementing Certain Provisions of the Law on Export Duties andImport Duties No. 04/1998/QH10 dated May 20, 1998, and other legal documentsregulating administrative violations in the field of taxation and customs.

Article 6.This Decree takes effect from January 1, 1999. Any previous regulations onexport duties and import duties that conflict with the provisions of this Decreeare abolished.

The Minister of Finance, the Minister of Trade, the Minister of Science,Technology and Environment, the Director-General of the General Department ofCustoms, and the Governor of the State Bank of Vietnam are responsible forcoordinating detailed guidance on implementing this Decree.

Ministers, Heads of ministerial-level agencies, Heads of agencies under theGovernment, Chairmen of People's Committees of provinces and centrally-administered cities are responsible for implementing this Decree./.