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Decree No: 122/2016/ND-CP of Septemer 01, 2016, schedules of import tariffs and preferential import tarrifs, list of goods and its flat tax, compound tariff, and out- of – quota import tarrif

mplawadmin — Thu, 31 May 2018 15:41:51 +0000

THE GOVERNMENT ——-	SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness ————
No: 122/2016/ND-CP	Hanoi, September 01, 2016

DECREE

SCHEDULES OF IMPORT TARIFFS AND PREFERENTIAL IMPORT TARRIFS, LIST OF GOODS AND ITS FLAT TAX, COMPOUND TARIFF, AND OUT- OF – QUOTA IMPORT TARRIF

Pursuant to the Law on Government organization dated June 19, 2015;
Pursuant to the Law on Export and Import tax dated April 06, 2016;
Pursuant to the Resolution No.71/2006/QH11 dated November 29, 2006 by the National Assembly on ratification of the Socialist Republic of Vietnam’s Protocol on Accession to the World Trade Organization; At request of the Minister of Finance;
The Government hereby issues this Decree specifying schedules of import tariff and preferential import tariff, list of goods and its flat tax, compound tariff, and out-of-quota import tariff.
Article 1. Scope
This Decree specifies schedules of import tariffs and preferential import tariffs, list of goods and its flat tax, compound duties, and out-of-quota import tariffs.
Article 2. Regulated entities

Taxpayers under the Law on Import –Export duties
Customs authorities and customs officials.
Organizations and individuals whose rights and obligations are relevant to imports and exports.

Article 3. Introduction of schedules of import -exports tariffs according to Directory for taxable products, List of goods and its flat tax, compound tariff, and out-of-quota import tariff
The following Annexes are attached to this Decree:

Annex I – Schedule of export tariff according to the Directory for taxable products (hereinafter referred to as “export tariff schedule”).
Annex II – preferential import tariff schedule according to the Directory for taxable products (hereinafter referred to as “preferential import tariff schedule “).
Annex II- List of goods and schedules of flat taxes and compound tariffs on used cars for transport of passengers of not exceeding 15 people (including driver)0}
Annex IV – List of goods and schedule of out-of-quota import tariffs thereon

Article 4. Export tariff schedule

The schedule of export tariffs on taxable products in the Annex I hereof shall specify the code, description of goods and specific export tariff rate.
Charcoal of heading 4402.90.90 applying export duty 5% shall meet the following technical criteria:

Indicators	Content
Ash	≤ 3%
Fixed carbon (c) – which is odorless and smokeless	≥ 70%
Calorific value	≥7000Kcal/kg
Sulphur	≤ 0.2%

Gold jewellery and part thereof (heading 71.13), goldsmiths ‘wares and part thereof (heading 71.14) and other gold articles (heading 71.15) shall be exempted from export tariff if the following requirements are satisfied:
a) a copy certificate of testing that certifies gold content of not exceeding 95% issued by the testing agencies is submitted to the customs authority (enclosed with an original copy for collation), besides required customs documents under regulation of laws.
b) In case of gold jewellery and parts thereof (heading 71.13), goldsmiths’ ware and parts thereof (heading 71.14) and other old articles (heading 71.5) exported under an outward processing contract or as domestic exports, the certificate of gold content testing is not required. In case of domestic exports, the exporter shall present a raw gold import permit issued by the State bank of Vietnam to the customs authority.
Export tariffs on fertilizers of heading 31.01, 31.02, 31.03, 31.04 and 31.05 are as follows:
a) Fertilizers of headings 31.01, 31.02, 31.03, 31.04 and 31.05 of which the value of sources, minerals and consumed energy accounts for at least 51% of the product price shall be taxed at the export tariff rate 5%.
b) Fertilizers other than those specified in point a of this clause shall be levied at the export tariff rate applicable to articles of headings 31.01, 31.02, 31.03, 31.04 and 31.05 in the export tariff schedule prescribed in Annex 1 attached hereto.

Article 5. Preferential import tariffs
The preferential import tariff schedule of taxable products on the List presented in Annex II contains:

Section I: Preferential import tariff rate on imports in 97 chapters of the Directory for Vietnam imports. Part I shall specify the name of Part, chapter, notes, description of goods (heading and name of articles), Code (08 digits) and preferential import tariff rates on taxable articles.
Section II: Chapter 98 – Code and specific preferential import tariff rates of a number of articles. The Section II shall specify:
a) Notes, procedures and requirements for specific preferential import tariff rates.

– Notes for the Chapter: Articles specified in clause 1, Part I, Section II of Annex II attached hereto shall be eligible for specific preferential tariff rate prescribed in chapter 98.
– Note of headings:
+ Article classification and specific preferential import tariff rate applicable to CKD, chassis fitted to engines, cars with petcock shall conform to clause 2.1, Part I, section II of Annex II;
+ Bleached Kraft used for cement bags of heading 98.07, alloy steel with BO and/or Cr and/or Ti of heading 98.11; fillers, skin care products of heading 98.25, Nylon cord fabric 1680/D/2 and 1890 D/2 of heading 98.26; copper wire with the cross section exceeding 6mm but not exceeding 8mm of heading 98.30; Polypropylene resin in primary form of heading 98.37; non-alloy steel, in rod or roll, subjected to hot rolling in heading 98.39 are eligible for specific preferential import tariff rate prescribed in Chapter 98 if such articles meet technical standards stipulated in clauses 2.2, 2.3, 2.4, 2.5, 2.6, 2.7 and 2.8 Part I Section I of Annex II.
– Article classification, procedures and requirements for specific preferential tariff rate and preferential tariff reporting shall be made in accordance with clause 3 Part I Section II of Annex II.

b) The directory for articles eligible for specific preferential import tariff shall specify the Code of articles of chapter 98; goods description ( name of goods); respective Code of such articles in Section I, Annex II (97 Chapters in Vietnam’s import tariff schedule) and specific preferential import tariff rate prescribed in Chapter 98, Part II, section II of Annex II.
c) Articles which are eligible for specific preferential import tariff rate and are mentioned in chapter 98 and eligible for special preferential import tariff rate under current regulations of laws may be applied either of such above mentioned tariff rate.
d) Declarants shall specify code in “Mã hàng tương ứng tại Mục I Phụ lục II (respective Code in Section I Annex II) and write down Code specified in Chapter 98 to the side.

E.g.: For bleached Kraft used for cement bags, its PLU shall be 4804.29.00 (9807.00.00), specific preferential import tariff rate: 3%

Section II: Applicable preferential import tariff rates of a number of articles under WTO’s commitment in 2017, 2018 and 2019 onwards

Article 6. Preferential import tax rates on petrochemicals and mechanical processing machines

Mechanical processing machines of heading from 84.54 through 84.63 are eligible for preferential import tariff rate as follows:

Mechanical processing machines that are not yet manufactured in Vietnam shall be exempted from import duty. Mechanical processing machines prescribed hereof are not specified on the List of domestically-manufactured machines and equipment compiled by the Ministry of Investment and Planning.
b)Mechanical processing machines other than those specified in point a of this clause shall be eligible for preferential import tariff rate applicable to articles of headings from 84.54 through 84.63 in the import tariff schedule prescribed in section I Annex II attached hereto.

Preferential import tariff rate imposed on petrochemicals like benzene of heading 2707.10.00 and 2902.20.00; xylene of heading 2707.30.00; P-xylene of heading 2902.43.00 and polypropylene of headings 3902.10.30 and 3902.10.90 (except for polypropylene in primary form of heading 98.37) shall be levied at an adjustable preferential import tariff rate according to the following roadmap:
a) From September 01, 2016 to December 31, 2016: 1%
b) From January 01, 2017 onwards: 3% (refer to Section I, Annex II attached hereto).

Article 7.Import tariffs on used cars

A flat tax shall be imposed on pasenger cars not exceeding 09 people (including driver) with the cylinder capacity of less than 1,500cc of heading 87.03 and those from 10 to 15 seats (including driver’s seat) of heading 87.02 as stipulated in Annex III hereof.
A compound tariff shall be imposed on passenger cars not exceeding 09 seats (including driver’s seat) with the cylinder capacity of at least 1,500cc of heading 87.03 as stipulated in Annex III hereof.
A preferential import tariff rate of 150% shall be granted to trucks of exceeding 16 seats (including driver’s seat) of heading 87.02 and those with gross vehicle mass not exceeding 05 tones of heading 87.04 (except for refrigerated trucks, waste collection vehicles having a waste compressing device, tanker trucks, armoured vehicles for transport of valuable cargoes; bulk-cement trucks and hooklift trucks).
Other cars of headings 87.02, 87.03 and 87.04 shall be taxed at the tariff rate that equals one and a half of the preferential import tariff rate imposed on the brand-new cars of the same range prescribed in Section I, Annex II hereof.

Article 8 List of goods and schedule of out-of-quota import tariffs

The List of goods under tariff quota including a number of articles of headings 04.07; 17.01; 24.01 and 25.01 is presented in Annex IV attached hereof.
Out-of-quota import tariffs are specified in Annex IV attached hereto.
The annual import quota of articles specified in clause 1 of this Article shall be promulgated by The Ministry of Industry and Trade.
Out-of-quota tariff rate prescribed in clause 2 hereof shall be imposed on articles specified in clause 1 of this Article where the imported quantity exceeds the annual quota decided by The Ministry of Industry and Trade.
Where Vietnam enters into free- trade agreements under which the committed out-of-quota import tariff rate (hereinafter referred to as “bound tariff rate”) of articles specified in clause 1 of this Article is lower than the out-of-quota tariff rate prescribed in Annex IV hereof, the bound tariff rate shall apply (if all requirements for bound tariff rate are satisfied). Where the bound tariff rate is higher than the out-of-quota import tariff rate prescribed in Annex IV, the lower tariff rate shall apply.
In case the quantity of imports specified in clause 1 of this Article does not exceed the import quota by the Ministry of Industry and Trade, the preferential import tariff rate prescribed in Section I, Annex II hereof or special preferential import tariff rate (if all requirements for special preferential import tax rates are satisfied) prescribed in Government’s Decrees shall apply.

Article 9. Implementation

This Decree enters into force from September 01, 2016.
As the effective date of this Decree, the following legislative documents shall be annulled:
a) Decision No.36/2011/QD-TTg dated June 29, 2011 by the Prime Minister on import tariffs on used cars of not exceeding 15 seats (including driver’s seat);
b) Decision No.24/2013/QD-TTg dated May 03, 2013 by the Prime Minister on amendments to clause 1 Article 1 of the Decision No. 36/2011/QD-TTg dated June 29, 2011 by the Prime Minister on used cars of not exceeding 15 seats (including driver’s seat);
c) Circular No.111/2012/TT-BTC dated July 04, 2012 by the Minister of Finance on Lists of Goods and import tax rate subject to import quotas;
d) Circular No. 80/2014/TT-BTC dated June 23, 2014 by the Prime Minister on amendments to Circular No.111/2012/TT-BTC dated July 04, 2012 by the Minister of Finance on Lists of Goods and import tax rate subject to import quotas;
dd) Circular No.182/2015/TT-BTC dated November 16, 2015 by the Minister of Finance on issue of referential import and export tariff according to the nomenclature of taxable products;
e) Circular No.05/2016/TT-BTC dated January 13, 2016 by the Minister of Finance on amendments to preferential import tax rates for a number of environmental goods in APEC in the commodity headings 84.19 and 84.21 in the preferential import tariff;
g) Circular No.16/2016/TT-BTC dated January 21, 2016 by the Minister of Finance on amendments to preferential import tax rates applicable to certain articles in headings 27.07, 29.02 and 39.02 of the preferential import tariff;
h) Circular No.25/2016/TT-BTC dated February 16, 2016 by the Minister of Finance on amendments to preferential import tax rates imposed on diammonium hydrogen phosphate (diammonium phosphate) of HS code 3105.30.00 in preferential import tariff schedule;
i) Circular No.31/2016/TT-BTC dated February 23, 2016 by the Prime Minister on addition of N-Hexane used for producing soybean meal and vegetable oil, rice bran and rice bran oil to chapter 98 of the preferential import tariff schedule.
k) Circular No.48/2016/TT-BTC dated March 17, 2016 by the Minister of Finance on amendments to preferential import tax rates applicable to certain articles of oils and spirit in heading 27.10 of the preferential import tariff;
l) Circular No.51/2016/TT-BTC dated March 18, 2016 by the Minister of Finance on amendments to the list of commodity headings and specific preferential import tax rates for iron or steel articles used in the manufacture of tire bead in chapter 98 of the preferential import tariff promulgated under the Circular No. 182/2015/TT-BTC dated November 16, 2015 of the Minister of Finance;
m) Circular No.73/2016/TT-BTC dated May 20, 2016 by the Minister of Finance on amendments to export tariff rates on sawdust briquettes in heading No. 44.02 in schedule of coal export tariff issued together with the Circular No. 182/2015/TT-BTC dated November 16, 2015 by Minister of Finance;
n) Circular No.98/2016/TT-BTC dated June 29, 2016 by the Minister of Finance on addition of list of articles and preferential import tax rates of Artemia cysts to chapter 98 of preferential import tariff enclosed with Circular No.182/2015/TT-BTC dated November 16, 2015 by the Minister of Finance
The Ministry of Industry and Trade shall take charge of and cooperate with relevant regulatory bodies to specify import coordination mechanism applicable to articles under tariff quota.
Ministers, Heads of ministerial-level agencies, heads of Governmental agencies, Presidents of People’s Committees of provinces shall be responsible for the implementation of this Decree. /.

ON BEHALF OF THE GOVERNMENT
PRIME MINISTER
Nguyen Xuan Phuc

ATTACHED FILE

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Decree No. 134/2016/ND-CP of September 01, 2016, guidelines for the law on export and import duties

mplawadmin — Thu, 01 Sep 2016 15:43:28 +0000

THE GOVERNMENT ——-	SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness —————
No. 134/2016/ND-CP	Hanoi, September 01, 2016

DECREE

GUIDELINES FOR THE LAW ON EXPORT AND IMPORT DUTIES

Pursuant to the Law on Government organization dated June 19, 2015;
Pursuant to the Law on Export and import duties dated April 06, 2016;
Pursuant to the Law on Customs dated June 23, 2014;
Pursuant to the Law on Investment dated November 26, 2014;
Pursuant to the Law on Tax administration dated November 29, 2016;
Pursuant to the Law on amendments to the Law on Tax administration dated November 20, 2012;
Pursuant to the Law on amendments to the Law on Value-added tax, the Law on special excise duty and the Law on Tax administration dated April 06, 2016;
At the request of the Minister of Finance;
The Government promulgates a Decree to provide guidelines for the Law on Export and import duties.
Chapter I
GENERAL PROVISIONS
Article 1. Scope and regulated entities

This Decree provides for dutiable articles; application of export and import duties; deadlines for paying duties on exports and imports; exemption, reduction, refund of export and import duties.
This Decree applies to:
a) Taxpayers defined by the Law on Export and import duties;
b) Customs authorities and customs officials;
c) Organizations and individuals whose rights and obligations are relevant to exports and imports;
d) Organizations involved in implementation of the Law on Export and import duties.

Article 2. Dutiable articles

Goods exported and imported through Vietnam’s border and checkpoints.
Goods exported from the domestic market into export processing enterprises, export processing zones, tax-suspension warehouses, bonded warehouses and other free trade zones defined in Clause 1 Article 4 of the Law on Export and import duties; goods imported from export processing enterprises, export processing zones, tax-suspension warehouses, bonded warehouses and other free trade zones defined in Clause 1 Article 4 of the Law on Export and import duties into the domestic market.
Provisions of the Government’s Decree No. 08/2015/ND-CP dated January 21, 2015 shall apply to the exports delivered to domestic processors specified in Clause 3 Article 2 of the Law on Export and import duties.
Goods of an export processing enterprise which exercises its rights to export, import or distribution specified in Clause 3 Article 2 of the Law on Export and import duties are goods exported or imported by the export processing enterprise to exercise such rights in accordance with trading and investment laws.

Article 3. Application of export and import duties

Export and import duties shall be applied in accordance with Article 5, Article 6 and Article 7 of the Law on Export and import duties.
Where concessional rate of duty on an article specified in a concessional tariff schedule is lower than the special concessional rate specified in a special concessional tariff schedule, the former shall apply.

Where tax is paid according to a special concessional rate which is higher than a concessional rate on the same article, overpaid tax shall be dealt with in accordance with tax administration laws.
Article 4. Deadline for paying tax, duty payment guarantee and tax deposit

Deadlines for paying tax specified in Article 9 of the Law on Export and import duties are applied to dutiable exports and imports prescribed by tax laws.
Export and import duty payment guarantee is either a separate or joint guarantee.
a) Separate guarantee means guarantee of full payment of duty on an export/import declaration offered by a credit institution which operates under the Law on credit institutions;
b) Joint guarantee means guarantee of full payment of duty on more than one export/import declaration opened at one or more Sub-department of Customs offered by a credit institution which operates under the Law on credit institutions; Guaranteed amount of duty under a joint guarantee shall vary according to the amount of paid duty;
c) Where a credit institution (the guarantor) offers a separate guarantee or joint guarantee but the taxpayer has failed to pay duty and late payment interest (if any), the credit institution shall fully pay the duty and late payment interest owed by the taxpayer according to information on the customs information processing system or notification given by the customs authority;
d) Contents of a guarantee letter, submission, verification, monitoring and processing of guarantee letters shall comply with tax administration laws.
If case of depositing import duty on temporarily imported goods before the deadline for re-export, which might be extended, the taxpayer shall transfer an amount of money equal to the import duty on such temporarily imported goods to the customs authority’s deposit account at a State Treasury.

The deposit shall be returned in accordance with regulations of tax administration laws on return of overpaid taxes, late payment interest and fines.

Where temporarily imported goods are not re-exported by the deadline, the customs authority shall transfer the deposit to state budget. If there is a guarantee, the credit institution (the guarantor) shall transfer an amount equal to the import duty to state budget according to information on the customs information processing system or notification given by the customs authority.

Chapter II
EXEMPTION, REDUCTION, REFUND OF DUTIES
Article 5. Grant of duty exemption to goods of foreign entities enjoying diplomatic immunity and privileges

Goods of goods of foreign entities enjoying diplomatic immunity and privileges are prescribed in Clause 1 Article 16 of the Law on Export and import duties. To be specific:
a) Diplomatic missions and consular offices may import and temporarily import goods free of duty within the categories and allowance specified in Appendix I enclosed herewith. Diplomatic officials and consuls may import and temporarily import goods free of duty within the categories and allowance specified in Appendix II enclosed herewith. Other employees of diplomatic missions and consular offices may import or temporarily import goods free of duty within the categories and allowance specified in Appendix III enclosed herewith.
b) Representative offices of UN System organizations and officials thereof may import or temporarily import goods free of duty within the categories and allowance specified in Appendix I and Appendix II enclosed herewith.
c) Representative offices of non-UN System organizations and members thereof are exempt from import duties under international treaties to which Vietnam is a signatory.
d) Representative offices of non-governmental organizations and members thereof are exempt from import duties under agreements between them and Vietnam’s Government.
The entities specified in Point a and Point b Clause 1 of this Article may import the alcohol, beer and tobacco articles specified in Appendix I enclosed herewith free of duty beyond the duty-free allowance to serve diplomatic activities. Duty-free allowance for alcohol, beer and tobacco shall be confirmed by the Ministry of Foreign Affairs.
Apart from the articles specified in Appendix I through III enclosed herewith, the entities mentioned in Point a and Point b of this Clause may import other goods free of duty to serve their works under principle of reciprocity or international practice. Categories and allowance for duty-free goods shall be confirmed by the Ministry of Foreign Affairs.
Where an international treaty or agreement between Vietnam’s government and a foreign non-governmental organization does not specify the categories and allowance for duty-free goods, the Ministry of Finance and the Ministry of Foreign Affairs shall submit a proposal to the Prime Minister for approval.

The categories and allowance for duty-free goods mentioned in this Clause must not exceed those specified in Appendix I through III enclosed herewith.

A car or motorcycle may be temporarily imported to replace another temporarily imported one within the allowance established by any of the authorities specified in Point a and Point b of this Article is only permitted after procedures for re-export, destruction of transfer of such vehicle have been completed.

A person mentioned in Point a or Point b Clause 1 of this Article may only temporarily import a car or motorcycle free of duty to replace another temporarily imported one within the allowance after the temporarily imported vehicle has been re-exported or destroyed.

Application for duty exemption:
a) A customs dossier prescribed by customs laws, except for duty-free goods purchased at duty-free shops;
b) The duty-free allowance book specified in Clause 7 of this Article: 01 certified true copy, unless it has been updated on National Single-window Information Portal;
c) Documents proving completion of re-export, destruction or transfer of the goods mentioned in Clause 4 of this Article: 01 certified true copy;
d) A confirmation of the Ministry of Foreign Affairs in case of import of goods mentioned in Clause 2 or Clause 3 of this Article: 01 certified true copy;
dd) A confirmation given by the Prime Minister in case of import of goods mentioned in Clause 4 of this Article: 01 certified true copy.
Procedures for granting duty exemption are specified in Article 31 of this Decree.

The customs authority where customs procedures are followed shall monitor duty-free allowances electronically. If duty-free allowances are not monitored electronically, the taxpayer shall submit a photocopy and present the original duty-free allowance book for comparison.

Procedures for issuing a duty-free allowance book:
a) Application for issuance of duty-free allowance book to an organization:

01 original copy of Form No. 01 in Appendix VII enclosed herewith.
01 certified true copy of the written notification of establishment of the representative office in Vietnam in case of applying for the first duty-free allowance book.

b) Application for issuance of duty-free allowance book to a natural person:

01 certified true copy of Form No. 02 in Appendix VII enclosed herewith.
01 certified true copy of the ID card issued by the Ministry of Foreign Affairs (for persons mentioned in Point a and Point b Clause 1 of this Article).
01 certified true copy of the work permit or an equivalent document issued by a competent authority if the applicant is a member of an international organization or non-governmental organization (for persons mentioned in Point d Clause 1 of this Article).

c) Power to issue duty-free allowance books:

Directorate of State Protocol – The Ministry of Foreign Affairs or an agency authorized by the Ministry of Foreign Affairs shall issue duty-free allowance books to the entities mentioned in Point a and Point b Clause 1 of this Article 1 within 05 working days from the day on which adequate documents are received.
Customs Departments of provinces where the organizations mentioned in Clause 1 of this Article are located shall issue duty-free allowance books to the entities mentioned in Point c and Point d Clause 1 of this Article within 05 working days from the day on which adequate documents are received.
The Ministry of Foreign Affairs shall monitor and issue duty-free allowance book to the entities granted diplomatic immunity and privileges mentioned in Point c Clause 1 of this Article if they have been issued with duty-free allowance books by the Ministry of Foreign Affairs before the effective date of this Decree.
The authorities mentioned in this Point shall update General Department of Customs with information in duty-free allowance books via National Single-window Information Portal after each duty-free allowance book is issued.
Article 6. Duty-free allowances for luggage

Each time a person immigrates under a passport or a passport substitute (except for laissez-passers) issued by a Vietnamese authority or foreign authority, he/she shall be granted duty-free allowance for his/her luggage, whether it is accompanied luggage or sent before or after his/her arrival:
a) 1.5 liters of alcohol of ≥20% ABV or 2.0 liters of alcohol of <20% ABV or 3.0 liters of other alcoholic drinks or beer.

If the traveler carries a bottle or can of alcohol whose volume exceeds the limit by not more than 01 liter, the whole bottle will be duty-free. If the volume exceeds the limit by more than 01 liter, the exceed amount shall be dutiable;

b) 200 cigarettes or 250 gram of shredded tobacco or 20 cigars;
c) Reasonable quantity and categories of personal belongings;
d) Other items other than those mentioned in Point a through c of this c (not on the List of goods banned from import, suspended from import or subject to conditional import) whose total customs value does not exceed VND 10,000,000;

Where the aforementioned allowance is exceeded, the traveler may decide which items are within the allowance and which are not.

Aircraft operators, attendants on international flights; train operators and attendants on international trains; officers and crewmembers on sea-going vessels; Vietnamese workers and drivers working in countries that shares land borders with Vietnam shall be granted the duty-free allowances mentioned in Point a, Point b and Point d of this Clause every 90 days instead of every time they enter Vietnam. The duty-free allowances mentioned in Point a and Point b Clause 1 of this Article do not apply to people aged under 18.
Each time a person emigrates under a passport or a passport substitute issued by a Vietnamese authority or foreign authority, his/her luggage shall be exempt from export duties without limit, whether it is accompanied luggage or sent before or after his/her departure, provided it is not on the List of goods banned from export, suspended from export or subject to conditional export.
The application for duty exemption is the customs dossier defined by customs law.
Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 7. Exemption of duties on belongings

The following organizations and individuals shall have their belongings defined in Clause 20 Article 4 of the Law on Customs Goods exempt from export and import duties as prescribed in Clause 2 Article 16 of the Law on Export and import duties:
a) Foreigners, Vietnamese citizens who reside overseas and work in Vietnam for at least 12 months;
b) Vietnamese organizations and citizens that operate or work oversea for at least 12 months and then return to Vietnam;
c) Vietnamese citizens who reside overseas and have applied for permanent residence registration in Vietnam for the first import of belongings.
Only 01 item/piece/set of each type of personal belongings of an organization or individual (used or new, excluding cars and motorcycles) shall be exempt from import duties.

Exemption of duties on belongings of an organization whose operating cost is covered by state budget exceeding the duty-free allowance shall be decided by the Ministry of Finance on a case-by-case basis.

Application for duty exemption:
a) A customs dossier defined by customs law;
b) 01 certified true copy of the work permit or an equivalent document issued by a competent authority if the applicant is foreigner or a Vietnamese citizen who resides oversea and works in Vietnam for at least 12 months;
c) 01 certified true copy of a document proving termination of the overseas operation or work if the applicant is a Vietnamese organization or citizen that operates or works overseas for at least 12 months and return to Vietnam afterwards;
d) 01 certified true copy of the passport bearing the seal of the immigration authority at the checkpoint, whether in the passport or a loose leaf visa, or another equivalent unexpired document bearing the seal of the immigration authority at the checkpoint if the applicant is a Vietnamese citizen who resides overseas and has applied for permanent residence registration in Vietnam;
dd) 01 notarized or certified true copy of the family register issued by a police authority which specifies the overseas address if the applicant is a Vietnamese citizen who resides overseas and has applied for permanent residence registration in Vietnam;
e) 01 original copy of the decision on exemption of duties issued by the Minister of Finance if the amount of personal belongings exceeds the duty-free allowance.
Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 8. Exemption of duties on gifts

Gifts exempt from duties specified in Clause 2 Article 16 of the Law on Export and import duties are those that are not enumerated on the List of goods banned from import, banned from export, suspended from export, suspended from import and not enumerated on the List of goods subject to special excise tax (excluding those serving national defense and security purposes) as prescribed by law.
Duty-free allowance:
a) Gifts given by a foreign organization or individual to a Vietnamese organization or individual; gifts given by a Vietnamese organization or individual to a foreign organization or individual whose customs value does not exceed VND 2,000,000 or whose custom value exceeds VND 2,000,000 but duty on which is under VND 200,000 shall be exempt from duties up to 04 times per year.
b) Gifts given by a foreign organization or individual to a Vietnamese organization whose operating cost is covered by state budget as prescribed by state budget laws; gifts given for humanitarian or charitable purposes whose customs value does not exceed VND 30,000,000 shall be exempt from duties up to 04 times per year.

Where duty-free allowance is exceeded by an organization whose operating cost is covered by state budget, duty exemption shall be decided by the Ministry of Finance on a case-by-case basis.

c) Gifts given by a foreign organization or individual to a Vietnamese individual that are drugs or medical equipment for people having fatal diseases specified in Appendix IV hereof whose customs value does not exceed VND 10,000,000 shall be exempt from duties up to 4 times per year.
Application for duty exemption:
a) A customs dossier defined by customs law;
b) A donation agreement if the gift recipient is an organization: 01 certified true copy bearing the seal of such organization.

The recipient who is a natural person shall declare the gifts and information about the overseas giver on the customs declaration, and take responsibility for the truthfulness and adequacy of such information;

c) 01 original copy of the decision on exemption of duties issued by the Minister of Finance if the gifts exceed the duty-free allowance;
d) 01 original copy of the written permission issued by the superior authority for receipt and use of the duty-free goods or a document proving that the organization’s operating cost is covered by state budget (if the recipient is an organization whose operating cost is covered by state budget);
dd) 01 original copy of the document issued by the President of the People’s Committee of the province if the gift is given for humanitarian or charitable purposes.
Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 9. Exemption of duties on goods traded among border residents

Goods traded among border residents that are on the List of goods that are meant to serve their business or consumption published by the Ministry of Industry and Trade shall be exempt from duties within the allowances specified in Appendix V hereof according to Clause 3 Article 16 of the Law on Export and import duties.

Goods purchased or transport within the duty-free allowance but are not meant to serve border residents’ business or consumption shall be dutiable.

Exports and imports of traders who are nationals of bordering countries and permitted to do business at border markets are dutiable.
Application for duty exemption:
a) A customs dossier defined by customs law;
b) Original copy of the laissez-passer or ID card.
Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 10. Exemption of duties on goods imported for further processing and processed exports

Goods imported for further processing and processed exports under processing contracts exempt from export and import duties specified in Clause 6 Article 16 of the Law on Export and import duties comprise:
a) Raw materials, semi-finished products, supplies (including those for manufacture of packages of exports), imported components that are incorporated into the exports or used during the processing of exports not incorporated into the exports, including those imported by the processor to execute the processing contract;
b) Goods imported as samples that are not traded or used;
c) Machinery and equipment imported for processing under a processing contract;
d) Imported finished products that are attached on processed products or packed with processed products as a whole for export according to the processing contract or appendices thereof and are considered raw materials or supplies imported for processing;
dd) Components and parts imported for repair of processed exports under warranty according to the processing contract or appendices thereof and are considered raw materials or supplies imported for processing;
e) Goods imported for further processing but are permitted to be destroyed in Vietnam and have been destroyed in reality.

Goods imported for further processing and used as gifts shall be exempt from duties in accordance with Article 8 of this Decree.
When the processing contract expires, it is not required to re-export goods imported for processing. Imported goods that are not re-exported shall be dutiable;

g) Processed exports.

Where processed exports are made of dutiable domestic raw materials or supplies, export duties shall be charged on the value of raw materials or supplies incorporated into the products at the duty rates applied to such raw materials or supplies when the products are exported.

Basis for determination of eligibility for duty exemption:
a) Availability of a processing contract specified in Decree No. 187/2013/ND-CP.

The taxpayer shall write the number and date of the processing contract and the hirer on the customs declaration;

b) The taxpayer or processor hired by the taxpayer has a facility in Vietnam where goods are processed or exports are manufactured and the customs authority is notified of such facility and the processing contract in accordance with customs laws.
c) Imported raw materials, supplies and components are used for processing or manufacture of the exported products.

The value or quantity of imported raw materials, supplies and components exempt from duty is the actual value or quantity of raw materials, supplies and components used for manufacture of the processed products that are exported in reality and is determined when making a statement of raw materials, supplies and components imported for processing exports in accordance with customs laws.
The taxpayer shall truthfully declare the value or quantity of raw materials, supplies and components that are used for manufacture of the processed products that are imported in reality and granted duty exemption while following customs procedures.

Import duties shall be charged upon machinery, equipment, raw materials, supplies, components and processed products on which processing charges are paid by the foreign party.
Refuses, scrap, redundant raw materials and supplies imported for processing under a processing contract shall be exempt from import duties when they are sold domestically provided they do not exceed 3% of the quantity of each type. VAT, special excise tax and environmental protection tax (if any) shall be paid to the customs authority.
Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 11. Exemption of duties on goods exported for processing and processed imports

Goods exported for processing and processed imports under processing contracts exempt from export and import duties specified in Clause 6 Article 16 of the Law on Export and import duties comprise:
a) Raw materials, supplies and components for export.

Export duties shall be charged on the value or quantity of raw materials, supplies and components corresponding to the quantity of processed products that are not re-imported at the duty rates applied to such raw materials, supplies and components.
Where goods exported for processing are natural resources, minerals or products in which the value of natural resources or minerals plus (+) energy cost makes up at least 51% of the product price and the goods are subject to export duties, duty exemption shall not be granted.
Products in which the value of natural resources or minerals plus (+) energy cost makes up less than 51% of the product price shall be determined in accordance with Decree No. 100/2016/ND-CP dated July 01, 2016 on guidelines for the Law on amendments to the Law on Value-added tax, the Law on special excise duty, the Law on Tax administration and instructional documents thereof;

b) Goods exported as samples that are not traded or used;
c) Machinery and equipment exported for processing under a processing contract;
d) When products that are processed overseas are imported into Vietnam, import duties on the value of raw materials, supplies and components incorporated into the processed products shall be exempt; the remaining value of the products shall be dutiable at the import duty rates applied to processed imports.
Basis for determination of eligibility for duty exemption:
a) The taxpayer has a processing contract specified in Decree No. 187/2013/ND-CP.
b) Exported raw materials, supplies and components are used for processing or manufacture of the imported products.

The value or quantity of raw materials, supplies and components exempt from duty is the actual value or quantity of raw materials, supplies and components used for manufacture of the processed products that are imported in reality and is determined when making a statement of raw materials, supplies and components imported for processing exports in accordance with customs laws.
The taxpayer shall truthfully declare the value or quantity of raw materials, supplies and components that are used for manufacture of the processed products that are imported in reality and is granted duty exemption while following customs procedures.

Procedures for granting duty exemption are specified in Article 31 of this Decree.

The taxpayer shall write on the customs declaration the number and date of the processing contract, number and date of the notification to the customs authority of exported products in which the value of natural resources or minerals plus (+) energy cost makes up less than 51% of the product price.
Article 12. Exemption of duties on goods imported for manufacture of domestic exports

Raw materials, supplies, components, semi-finished products and finished products import for manufacture of domestic exports exempt from import duties specified in Clause 7 Article 16 of the Law on Export and import duties comprise:
a) Raw materials, supplies (including those for manufacture of packages of exports), components, semi-finished products imported incorporated into the exports or used during the manufacture of exports without being incorporated into the exports;
b) Imported finished products that are attached on exports or packed with exports as a whole;
c) Components and parts imported for repair of exports under warranty;
d) Goods imported as samples that are not traded or used.
Basis for determination of eligibility for duty exemption:
a) The manufacturer of exports has a factory where exports are manufactured in Vietnam; owns or has the right to use machinery and equipment at the factory which is suitable for the raw materials, supplies and components imported for manufacture of exports and has notified the customs authority of the factory;
b) The imported raw materials, supplies and components are used for manufacture of the exported products.

The value or quantity of imported raw materials, supplies and components exempt from duty is the actual value or quantity of raw materials, supplies and components used for manufacture of the products that are exported in reality and is determined when making a statement of raw materials, supplies and components imported for manufacture of exports in accordance with customs laws.
The taxpayer shall truthfully declare the value or quantity of raw materials, supplies and components that are used for manufacture of products that are imported in reality and granted duty exemption while following customs procedures.

Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 13. Exemption of duties on temporarily imported goods and temporarily exported goods

Goods that are temporarily imported and re-exported or temporarily exported and re-imported within a certain period of time shall be exempt from duties as prescribed in Clause 9 Article 16 of the Law on Export and import duties.
Goods that are temporarily imported or temporarily exported for repair or replacement as specified in Point c Clause 9 Article 16 of the Law on Export and import duties must not change the shape, functions and basic features of the temporarily imported goods and must not be used to create other goods.

In case of goods replacement under warranty, the replacing item must have the same shape, functions and basic features of the replaced item.

Reusable equipment that are temporarily imported and re-exported or temporarily exported and re-imported to carry exports and imports comprise:
a) Empty containers, with or without hooks;
b) Flex tanks inside containers for storage of liquids;
c) Other reusable equipment for storage of exports and imports.
Procedures for granting duty exemption are specified in Article 31 of this Decree.

In case of temporary import of goods, the taxpayer shall submit a guarantee letter issued by a credit institution or a document proving payment of deposit into the deposit account of the customs authority at a State Treasury if the guarantee letter has not been updated on the customs electronic data processing system.
Provisions of Article 4 of this Decree shall apply to provision of guarantee or depositing of import duties on temporarily imported goods.
Article 14. Exemption of duties on imported fixed assets of entities eligible for investment incentives

Imported fixed assets of an entity eligible for investment incentives are exempt from import duties as prescribed in Clause 11 Article 16 of the Law on Export and import duties.
Regarding an investment project a part of which is eligible for investment incentives, import fixed assets that are exclusively used for such part are exempt from import duties.
Regarding an investment project located in an administrative division provided with investment incentives but the project is not eligible, goods that are imported as fixed assets serving manufacturing activities of the project shall be exempt from import duties.
The Ministry of Planning and Investment shall establish criteria for identification of supplies that cannot be domestically manufactured.

The Ministry of Science and Technology shall establish criteria for identification of specialized vehicles used in technological line directly serving manufacturing activities of investment projects.

Procedures for granting duty exemption are specified in Article 30 and Article 31 of this Decree.

Article 15. 5-year exemption from import duties on raw materials, supplies and components

Raw materials, supplies and components that cannot be domestically manufactured and are imported to serve manufacturing activities of investment projects in the fields eligible for special investment incentives or located in extremely disadvantaged areas specified by investment laws, hi-tech enterprises, science and technology enterprises and science and technology organizations are exempt from import duties for 05 years from the manufacture commencement date as prescribed in Clause 13 Article 16 of the Law on Export and import duties.

The manufacture commencement date is the day on which the manufacture process is officially commenced, excluding the experimental manufacture period. The taxpayer shall declare the manufacture commencement date and notify the customs authority where application for duty exemption is received before following customs procedures.
When the 5-year period expires, the taxpayer shall fully pay duties on the amount of imported raw materials, supplies and components that were exempt from import duties but are not used.

Products in which the value of natural resources or minerals plus (+) energy cost makes up less than 51% of the product price shall be determined in accordance with Decree No. 100/2016/ND-CP dated July 01, 2016 on guidelines for the Law on amendments to the Law on Value-added tax, the Law on special excise duty, the Law on Tax administration and instructional documents thereof.
The basis for identification of fields and business lines eligible for special investment incentives and extremely disadvantaged areas is specified in the Law on Investment and the Government’s Decree No. 118/2015/ND-CP.

The Ministry of Planning and Investment shall establish criteria for identification of raw materials, supplies and components that cannot be domestically manufactured.

Procedures for granting duty exemption are specified in Article 30 and Article 31 of this Decree.

Article 16. Exemption of duties on imports serving petroleum activities

Imports serving petroleum activities are exempt from import duties as prescribed in Clause 15 Article 16 of the Law on Export and import duties.
The Ministry of Science and Technology shall establish criteria for identification of specialized vehicles exclusively used for petroleum activities.
The Ministry of Planning and Investment shall establish criteria for identification of goods that cannot be domestically manufactured.
Procedures for granting duty exemption are specified in Article 30 and Article 31 of this Decree.

Article 17. Exemption of duties on imports serving ship building and sea-going vessels for export

Shipbuilding projects and facilities on the list of preferential fields and business lines as prescribed in investment laws are exempt from export and import duties according to Clause 16 Article 16 of the Law on Export and import duties.
The Ministry of Science and Technology shall establish criteria for identification of vehicles in the technological line directly serving shipbuilding activities.
The Ministry of Planning and Investment shall establish criteria for identification of goods that cannot be domestically manufactured.
Procedures for granting duty exemption are specified in Article 30 and Article 31 of this Decree.

Article 18. Exemption of duties on plant varieties, animal breeds, fertilizers and plant protection substances

Plant varieties, animal breeds, fertilizers and plant protection substances that cannot be domestically manufactured and have to be imported to serve agriculture, forestry and aquaculture are exempt from import duties as prescribed in Clause 12 Article 16 of the Law on Export and import duties.
The Ministry of Planning and Investment shall establish criteria for identification of goods that cannot be domestically manufactured.
The Ministry of Agriculture and Rural Development shall establish criteria for identification of goods on the List of plant varieties, animal breeds, fertilizers and plant protection substances that have to be imported.
Procedures for granting duty exemption are specified in Article 30 and Article 31 of this Decree.

Article 19. Exemption of duties on imports serving scientific research and technological development

Imports serving scientific research, technological development, development of technology incubation, science and technology enterprise incubation and technological innovation are exempt from import duties as prescribed in Clause 21 Article 16 of the Law on Export and import duties.
The Ministry of Planning and Investment shall establish criteria for identification of goods that cannot be domestically manufactured.

The Ministry of Science and Technology shall establish criteria for identification of specialized machinery, equipment, parts and supplies serving scientific research, technological development, development of technology incubation, science and technology enterprise incubation and technological innovation.

The Ministry of Science and Technology shall establish criteria for identification of scientific documents serving scientific research, technological development, development of technology incubation, science and technology enterprise incubation and technological innovation.
Application for duty exemption:

Apart from the documents specified in Article 31 of this Decree, the taxpayer might be required to submit one of the following documents:

a) A certified true copy of the decision on execution of a scientific research or technological development program, project or mission and a list of necessary imports issued by a competent authority in accordance with the Law on science and technology;
b) 01 certified true copy of the document certifying the list of goods necessary for technological incubation or science and technology enterprise incubation issued by the People’s Committee of the province or supervisory Ministry where the technological incubation or science and technology enterprise incubation project is located;
c) 01 certified true copy of the document certifying the list of goods necessary for technological innovation issued by the Ministry of Science and Technology or an agency authorized by the Ministry of Science and Technology.
Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 20. Exemption of duties on imports serving national defense and security purposes

Imports exclusively serving national defense and security purposes and vehicles among which cannot be domestically manufactured are exempt from import duties as prescribed in Clause 22 Article 16 of the Law on Export and import duties.
Basis for determination of eligibility for duty exemption:
a) The goods is part of the annual plan for importing goods exclusively serving national defense and security purposes approved by the Prime Minister or by the Minister of Public Security or by the Minister of National Defense on the Prime Minister’s authority.
b) The specialized vehicles cannot be domestically manufactured as defined by Ministry of Planning and Investment.
An application for duty exemption consists of:
a) Form 03a in Appendix VII enclosed herewith (if duty exemption is granted before customs procedures are completed) or Form 03b in Appendix VII enclosed herewith (if duty exemption is granted after customs procedures is completed) prepared by the Ministry of National Defense or the Ministry of Public Security or a unit authorized by the Ministry of National Defense or the Ministry of Public Security.
b) 01 certified true copy of the sale contract;
c) 01 certified true copy of the import mandate contract or goods supply contract according to the certification of successful bidder or direct contracting decision which specifies that the prices are exclusive of import duties (in case of import mandate or bidding).
Procedures for granting duty exemption:
a) If duty exemption is granted before customs procedures are completed, the Ministry of National Defense or the Ministry of Public Security or a unit authorized by the Ministry of National Defense or the Ministry of Public Security shall submit the application for duty exemption to the General Department of Customs at least 05 working days before registration of the customs declaration.

Within 03 working days from the day on which the application is received, the General Department of Customs shall issue a notice whether duty exemption is granted or request supplementation of the application.
The Sub-department of Customs where customs procedures are followed shall grant customs clearance according to the notice sent by the General Department of Customs.

b) If duty exemption is granted after customs procedures are completed:

The Ministry of Public Security or the Ministry of National Defense or a unit authorized by the Ministry of Public Security or the Ministry of National Defense shall submit the application for duty exemption to the General Department of Customs. The application shall be submitted within 30 working days from the date of customs clearance or release of goods.
Within 03 working days from the day on which the application is received, the General Department of Customs shall issue a notice whether duty exemption is granted or request supplementation of the application.
The Sub-department of Customs where customs procedures are followed shall record the duty exempted according to the notice sent by the General Department of Customs.
Article 21. Exemption of duties on imports serving education

Imports exclusively serving education that cannot be domestically manufactured are exempt from import duties as prescribed in Clause 20 Article 16 of the Law on Export and import duties.
The Ministry of Planning and Investment shall establish criteria for identification of goods that cannot be domestically manufactured.
The Board of Directors shall establish criteria for identification of imports exclusively serving education.
Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 22. Exemption of duties on goods manufactured, processed, recycled or assembled in a free trade zone

Goods manufactured, processed, recycled or assembled in a free trade zone without using imported raw materials or components are exempt from import duties when they are imported into the domestic market as prescribed in Clause 8 Article 16 of the Law on Export and import duties.
Where goods manufactured, processed, recycled or assembled in a free trade zone using imported raw materials or components, they shall be dutiable when imported into the domestic market according to the duty rates and their dutiable values.
Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 23. Exemption of duties on imported raw materials, supplies and components for manufacture or assembly of medical equipment

Raw materials, supplies and components that cannot be domestically manufactured and are imported for manufacture or assembly of medical equipment of an investment project given priority are exempt from import duties for 05 years from the manufacture commencement date as prescribed in Clause 14 Article 16 of the Law on Export and import duties.

The List of medical equipment given priority is specified in Appendix VI enclosed herewith.

The manufacture commencement date which is the beginning date of the 5-year period is the day on which the manufacture process is officially commenced (excluding experimental manufacture period).

The taxpayer shall declare the manufacture commencement date and notify the customs authority where application for duty exemption is received before following customs procedures.

The Ministry of Planning and Investment shall establish criteria for identification of goods that cannot be domestically manufactured.
Procedures for granting duty exemption are specified in Article 30 and Article 31 of this Decree.

Article 24. Exemption of duties on raw materials, supplies and components imported for manufacture or information technology products, digital contents or software

Raw materials, supplies and components imported for manufacture or information technology products, digital contents or software are exempt from import duties as prescribed in Clause 18 Article 16 of the Law on Export and import duties.
The Ministry of Planning and Investment shall establish criteria for identification of goods that cannot be domestically manufactured.
Procedures for granting duty exemption are specified in Article 30 and Article 31 of this Decree.

Article 25. Exemption of duties on goods imported for environmental protection purposes

Goods imported for environmental protection purposes are exempt from import duties as prescribed in Clause 19 Article 16 of the Law on Export and import duties.
The Ministry of Planning and Investment shall establish criteria for identification of goods that cannot be domestically manufactured.
The Ministry of Natural Resources and Environment shall establish criteria for identification of specialized machinery, equipment, vehicles, tools and supplies imported for collection, transport, treatment of wastewater, garbage, exhaust gases, environment survey and analysis, production of renewable energy; pollution control, environmental emergency responses; exports derived from the process of waste recycling and treatment.
Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 26. Exemption of duties on imports serving money printing and minting

Machinery, equipment, raw materials, supplies, components and parts imported for money printing and minting are exempt from import duties as prescribed in Clause 17 Article 16 of the Law on Export and import duties.

The duty-free goods mentioned in Clause 1 of this Article must be imported by organizations designated by the State bank.

The State bank shall establish criteria for identification of machinery, equipment, raw materials, supplies, components and parts imported for money printing and minting.
Application for duty exemption:
a) A customs dossier defined by customs law;
b) 01 certified true copy of the State bank’s written permission for import of machinery, equipment, raw materials, supplies, components or parts for money printing and minting.
Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 27. Exemption of duties on goods imported for non-trading purposes
The following goods are exempt from import duties:

Samples, pictures of samples, videos of samples, models as substitutes for samples whose customs value does not exceed VND 50,000 or that have been modified in a way that they are no longer tradable or usable and can only be used as samples.
Printed advertisements specified in Chapter 49 of Vietnam’s List of exported or imported goods: fliers, commercial catalogues, annual publications, advertisement documents, tourism posters that are used for advertising, announcing or advertising goods or services and provided free of charge shall be exempt from import duties as prescribed in Clause 10 Article 16 of the Law on Export and import duties, provided each shipment only consists of 01 type of printed documents and the total weight of which does not exceed 01 kg. If a shipment consists of more than one type of printed documents, only one copy of a type is permitted or their total weight must not exceed 01 kg.
Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 28. Exemption of duties on goods exported or imported for social welfare, recovery from a disaster, epidemic or other special incidents

Goods exported or imported to serve social welfare works, recovery from a disaster, epidemic or other special incidents that are exempt from duties as prescribed in Clause 23 Article 16 of the Law on Export and import duties comprise:
a) Goods that cannot be domestically manufactured and have to be imported to be used for a project which is part of a social welfare program of the Government are exempt from import duties.
b) Goods that cannot be domestically manufactured and are imported to serve recovery from a disaster or epidemic are exempt from import duties.
c) The Prime Minister shall decide exemption of duties on exports and imports in other special incidents on a case-by-case basis.
The Ministry of Planning and Investment shall establish criteria for identification of goods that cannot be domestically manufactured.
An application for exemption of duties on imports serving recovery from a disaster or epidemic consists of:
a) A written request for duty exemption prepared by the People’s Committee of the province or a Ministry or an equivalent authority which specifies the damage caused by the disaster or epidemic;
b) A list of imports serving recovery from the disaster or epidemic according to Form 04 in Appendix VII enclosed herewith;
c) 01 certified true copy of the decision on outbreak declaration issued by a competent authority as prescribed by the Law on Prevention and treatment of infectious diseases if goods are imported in response to an epidemic.
An application for exemption of duties on imports serving social welfare works consists of:
a) A written request for duty exemption prepared by the People’s Committee of the province, a Ministry or an equivalent authority;
b) A list of imports serving social welfare works according to Form 04 in Appendix VII enclosed herewith.
Procedures for granting duty exemption:
a) In consideration of the written request for duty exemption, the Ministry of Finance, within 15 days, shall process the application and submit the List of duty-free goods to the Prime Minister for approval.
b) Pursuant to the Prime Minister’s directive, the Sub-department of Customs where export or import procedures are followed shall grant exemption of export or import duties.
An application for exemption of duties on goods imported as emergency aid in the event of a disaster or epidemic consists of:
a) A customs dossier specified in Article 24 of the Law on Customs;
b) A written confirmation that the goods are imported as emergency aid issued by the People’s Committee of the province or a Ministry or an equivalent authority. The confirmation must specify the damage caused by the disaster or epidemic;
c) A list of goods imported as emergency aid;
d) 01 photocopy of the decision on outbreak declaration issued by a competent authority as prescribed by the Law on Prevention and treatment of infectious diseases if goods are imported in response to an epidemic.

In consideration of the application for duty exemption, the customs authority where customs procedures are followed shall decide whether to grant duty exemption.
Article 29. Exemption of duties on exports or imports under an international treaty, goods of low values and goods sent by express delivery service

Exports and imports exempt from export and import duties under international treaty to which Vietnam is a signatory:

The basis for determination of eligibility for exemption of export or import duties is the quantity, categories and values of the goods specified in the international treaty.
Where an international treaty does not specify the duty-free categories or quantities, the Ministry of Finance shall reach an agreement with the Ministry of Foreign Affairs on the duty-free categories or quantities and submit a report to the Prime Minister for approval.

Imports sent by express delivery service whose customs value is not exceeding VND 1,000,000 or duty on which is less than VND 100,000 are exempt from import duties.

Where the customs value of goods exceeds VND 1,000,000 or the duty payable exceeds VND 100,000, the entire shipment shall be dutiable.

A shipment whose customs value is less than VND 500,000 or the total export or duty on which is less than VND 50,000 shall be exempt from export and import duties.

Provisions of this Clause do not apply to gifts, goods traded among border residents and goods sent by express delivery service.

Application for duty exemption:

A customs dossier defined by customs law;
For goods exported or imported under an international treaty, the taxpayer shall submit the following documents in addition to the customs dossier:

a) 01 photocopy of the international treaty when submitting the application for the first time (the original copy shall be presented for comparison);
b) 01 certified true copy of the import mandate contract or goods supply contract according to the certification of successful bidder or direct contracting decision which specifies that the prices are exclusive of import duties (in case of import mandate or bidding).
Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 30. Registration of duty-free list

The cases in which a List of goods to be imported free of duty (hereinafter referred to as “duty-free list”) must be registered are specified in Article 14, Article 15, Article 16, Article 17, Article 18, Article 23 and Article 24 of this Decree.
Rules for compilation of a duty-free list:
a) The organization or individual that uses the goods such as project owner, business owner; shipbuilding facility owner, petroleum operator (hereinafter referred to as “project owner”) shall submit the duty-free list. If main contractor or subcontractor or a finance lease company imports the duty-free goods instead of the project owner, such contractor or finance lease company shall use the duty-free list registered with the customs authority by the project owner;
b) The goods must be those exempt from duties specified in Clause 11, Clause 12, Clause 13, Clause 14, Clause 15, Clause 16 or Clause 18 Article 16 of the Law on Export and import duties and suitable for the business lines, objectives, scale, capacity of the project that uses the duty-free goods;
c) A duty-free list shall be compiled for the whole project or each stage, work item, compound or technological line of the project according to the project documents.
An application for registration of the duty-free list consists of:
a) A notification of the duty-free list which specifies the basis for identification of duty-free goods according to Form 05 in Appendix VII enclosed herewith;
b) The duty-free list sent via the electronic data processing system of the customs. In case of disruption of the system or submission of a physical duty-free list, 02 original copy of the duty-free list according to Form 06 in Appendix VII enclosed herewith and 01 original copy of the monitoring sheet according to Form 07 in Appendix VII enclosed herewith shall be submitted;
c) 01 certified true copy of the investment registration certificate, certificate of enterprise registration or an equivalent document, except for the cases in which duty exemption is granted specified in Clause 15 Article 16 of the Law on Export and import duties;
d) 01 certified true copy of the economic-technical thesis or technical documents or project description;
dd) 01 certified true copy of the Certificate of high-tech enterprise or science and technology enterprise or science and technology organization issued by a competent authority if the applicant is a high-tech enterprise or science and technology enterprise or science and technology organization;
e) 01 certified true copy of the Certificate of eligibility for manufacture of medical equipment or an equivalent document in the case of duty exemption specified in Clause 14 Article 16 of the Law on Export and import duties;
g) 01 certified true copy of the petroleum contracts or decision on assignment of petroleum tasks issued by the authority entitled to approve the annual program and budget in the case of duty exemption specified in Clause 15 Article 16 of the Law on Export and import duties.
h) 01 certified true copy of the shipbuilding contract or ship export contract in the case of duty exemption specified in Point b or Point c Clause 16 Article 16 of the Law on Export and import duties;
i) 01 certified true copy of the description of the information technology product, digital content or software production in the case of duty exemption specified in Clause 18 Article 16 of the Law on Export and import duties;
k) 01 certified true copy of the sale contract or goods supply contract according to the bidding result, export or import mandate contract or finance lease contract if the importer and the person that registers the duty-free list are not the same.
Time and location of registration:
a) The project owner shall send the application for registration of the duty-free list in accordance with Clause 2 of this Article before the first declaration of duty-free imports is registered;
b) The application shall be submitted to the Customs Department of the province where the project or the applicant’s headquarters is located, the supervisory Customs Department of the project if the project is located in more than one province or the Customs Department of the province where the compound or technological line is located if the goods are imported as a compound or technological line.
If the duty-free list is incorrect or has to be revised, the project owner shall submit the revised duty-free list together with documents proving the appropriateness of such revisions before goods are imported.
Responsibility of the customs:
a) Within 03 working days from the day on which the application is received, the customs authority shall notify the project owner of the receipt of the duty-free list, request the project owner to complete the application if it is incomplete or to clarify information in the application, or reject the application;
b) If revisions to the duty-free list lead to a change to the duty exempted, the customs authority that received the application shall request the customs authority that carry out import procedures to collect the duty that was improperly exempted;
c) The customs authority shall inspect the use of duty-free goods according to the risk management mechanism prescribed by tax administration and customs laws;
d) In case where the project operation is terminated or changed, the customs authority shall request the project owner to revise the duty-free list, stop procedures for duty exemption and pay the exempted duty.
The project owner shall:
a) Compile the duty-free list in accordance with Clause 1 of this Article;
b) Register the duty-free list, revise the duty-free list and receive feedbacks from the customs authority via the electronic data processing system (unless it is not available);
c) Provide truthful and adequate information; submit the application for registration of the duty-free list on schedule; take legal responsibility for the truthfulness and adequacy of the application; use the duty-free goods for conformable purposes;
d) Retain documents about identification of duty-free exports or imports and present it to the customs authority or a competent authority during inspection;
dd) Notify the customs authority with which the duty-free list was registered of the use of duty-free goods in the fiscal year within 90 days from the end of the fiscal year.

Article 31. Documents and procedures for duty exemption while following customs procedures

The application for duty exemption is the customs dossier defined by the Law on Customs and its instructional documents.
Apart from the documents mentioned in Clause 1 of this Article, the taxpayer might be requested to submit one of the following documents on a case-by-case basis:
a) 01 certified true copy of the import or export mandate contract in case of import or export mandate;
b) 01 certified true copy of the certification of successful bidder or direct contracting decision which specifies that the prices are exclusive of import duties if goods are imported by the successful bidder;
c) 01 certified true copy of the contract for supply of goods for a petroleum operator which specifies that the prices are exclusive of import duties if goods are imported for petroleum activities;
d) 01 certified true copy of the finance lease contract in case imported goods are supplied for an entity eligible for tax incentives (the contract must specify that the prices are exclusive of import duties);
dd) 01 certified true copy of the duty-free goods transfer agreement in case where duty-free goods are transferred to another entity which is eligible for duty exemption (the agreement must specify that the prices are exclusive of import duties);
e) A confirmation given the Ministry of Science and Technology of the vehicles specified in Article 14 of this Decree.
g) 01 certified true copy of the physical duty-free list received by the customs authority (the original shall be presented for comparison)

If the duty-free list is submitted electronically and the taxpayer is not required to submit the physical duty-free list, the customs authority shall decide the grant of duty exemption according to the duty-free list on the electronic data processing system.

Procedures for granting duty exemption:
a) The taxpayer shall determine and declare the amount of duty-free goods and tax exempted (except duties on goods imported or exported for processing by the hirer) while following customs procedures and take responsibility for such declaration.
b) The customs authority where customs procedures are followed shall examine the declaration and applicable regulations to decide the grant of duty exemption.

If imported goods are not eligible for duty exemption as declared, the taxpayer shall have to pay duties and fines (if any).

c) Electronic data processing system shall deduct the quantity of imports or exports written on the duty-free list.

In case of submission of a physical duty-free list, the customs authority shall update and deduct the quantity of goods exported and imported accordingly.
In case of duty-free import of an entire assembly or production line which has to be divided into more than one shipment, within 15 days from the import of the last shipment of each assembly or line, the importer shall submit a consolidated import declaration to the customs authority in accordance with tax administration laws.

Procedures for an organization to obtain exemption of duties on goods that exceed the duty-free allowance specified in Clause 2 Article 7 and Clause 2 Article 8 of this Decree:
a) An application for duty exemption shall be submitted to the General Department of Customs at least 15 working days before customs procedures are initiated;
b) If the application is not satisfactory, within 05 working days from the day on which it is received, the General Department of Customs shall request the applicant to complete it;
c) Within 15 working days from the day on which the satisfactory application is received, the Ministry of Finance shall decide whether to grant duty exemption at the request of the General Department of Customs;
d) The taxpayer and the customs authority where customs procedures are carried out shall follow duty exemption procedures specified in Clause 3 of this Article according to the customs dossier and duty exemption decision issued by the Ministry of Finance.

Article 32. Export and import duty reduction

Duties on exports and imports under customs supervision specified in the Law on Customs 2014 and its instructional documents shall be reduced if the goods are damaged or lost because of inevitable causes as prescribed in Clause 1 Article 18 of the Law on Export and import duties.
An application for duty reduction consists of:
a) Form 08 in Appendix VII enclosed herewith compiled by the taxpayer;
b) 01 certified true copy of the insurance contract or insurance payout notice issued by the insurer (if any) (a confirmation by the insurer is required if the insurance contract does not specify tax indemnification) or the compensation agreement issued by the shipping company in case the damage is caused by the shipping company (if any);
c) A confirmation of damage issued by a local authority e.g. confirmation of conflagration issued by the local fire department, confirmation of natural disaster or accident issued by the People’s Committee of the province.

The confirmation must be issued within 30 days from the occurrence of damage;

d) Confirmation of loss or damage of goods issued by an assessment service provider.

The confirmation must be issued within 30 days from the occurrence of natural disaster, conflagration or accident.

Power to grant duty reduction:
a) The taxpayer shall submit an application to the customs official while following customs procedures or within 30 working days from the issuance date of the confirmation of loss or damage of goods;
b) If a satisfactory application is submitted while following customs procedures, the Sub-department of Customs shall process the application, carry out a physical inspection, inspect the eligibility for duty reduction and decide whether to grant duty reduction before customs procedures are completed as prescribed Article 23 of the Law on Customs;
c) If the application for duty reduction is submitted after customs procedures are completed:

If the application is satisfactory, the Customs Department shall compile a dossier, verify the information, inspect the accuracy and adequacy of the application and, within 15 days from the day on which the satisfactory is received, request the Ministry of Finance to issue a decision on duty reduction or inform the taxpayer and provide explanation if the application is rejected. If the application is not satisfactory, the customs authority shall inform the taxpayer within 03 working days from the day on which it is received.
If a physical inspection of goods that have been released from the customs controlled area is necessary basis for duty reduction, a decision on post-clearance inspection shall be delivered to the taxpayer and the tasks specified in this Point shall be carried out within 40 days from the day on which adequate documents are received.
Article 33. Refund of duties on re-imported exports

Paid duties on the following exports that have to re-imported shall be refunded and import duties thereon shall be exempt:
a) Goods that have been exported but have to be re-imported into Vietnam;
b) Goods that are sent by an organization or individual in Vietnam to an overseas organization or individual by international postal service or express delivery service, duties on which have been paid but delivery is failed and the goods have to be re-imported.

The taxpayer shall provide truthful information about the exported goods, the number and date of the sale contract (if any) and the buyer’s name on the import declaration.
The customs authority shall verify information provided by the taxpayer and specify the result to serve the refund of duties.

An application for duty refund consists of:
a) Form 09 in Appendix VII enclosed herewith;
b) 01 certified true copy of the document proving payment for the exports or imports (if paid);
c) 01 certified true copy of the export/import contract and invoices enclosed therein or the export/import mandate contract, as the case may be;
d) If goods have to be re-imported because it is rejected by the foreign buyer or there is no recipient as notified by the shipping company, 01 certified true copy of the foreign buyer’s notice or agreement with the foreign buyer on the return of goods or the shipping company’s notice of failed delivery which provides explanation and specifies the quantities and categories of the goods returned.

In case of a force majeure event or the taxpayer re-imports goods because of some errors, such document may be omitted. However, the reasons for re-import must be specified in the request for duty refund;

dd) In case of exports or imports mentioned in Point b Clause 1 of this Article, 01 certified true copy of the notice of failed delivery issued by the postal service provider or international express delivery service provider.
Procedures for submission, receipt and processing of application for duty refund are prescribed by tax administration laws.

Paid import duties on the following imports that have to be re-exported shall be refunded and export duties thereon shall be exempt:
a) Imports that have to be re-exported to a foreign country or exported into a free trade zone for consumption therein.

The re-export of goods must be done by the initial importer or a person authorized by the initial importer;

b) Imports that are sent by an overseas organization or individual to an organization or individual in Vietnam by international postal service or express delivery service, duties on which have been paid but delivery is failed and goods have to be re-exported;
c) Imports on which duties have been paid and then goods are sold to foreign vehicles operating international routes through Vietnamese ports or Vietnamese vehicles operating international routes;
d) Imports on which import duties have been paid and that are re-exported while they are retained at checkpoint depot under customs supervision.

The taxpayer shall provide truthful information about the imported goods, the number and date of the sale contract and the buyer’s name on the export declaration.
The customs authority shall verify information provided by the taxpayer and specify the result to serve the refund of duties.

An application for duty refund consists of:
a) Form 09 in Appendix VII enclosed herewith;
b) 01 certified true copy of the VAT invoice or sale invoice in the cases mentioned in Point a or Point c Clause 1 of this Article;
c) 01 certified true copy of the document proving payment for the exports or imports (if paid);
d) 01 certified true copy of the export/import contract and invoices enclosed therein or the export/import mandate contract, as the case may be;
dd) 01 certified true copy of the agreement on return of the imports to the initial foreign exporter in the case specified in Point a Clause 1 of this Article;
e) In case of imports mentioned in Point b Clause 1 of this Article, 01 certified true copy of the notice of failed delivery issued by the postal service provider or international express delivery service provider;
g) In case of imports mentioned in Point c Clause 1 of this Article, a confirmation of quantity and value of purchased goods for foreign ships issued by the ship provider and documents proving payment to foreign shipping companies.
Procedures for submission, receipt and processing of application for duty refund shall comply with tax administration laws.

The taxpayer shall declare the depreciation of goods while they are used and retained in Vietnam as prescribed by accounting laws when applying for duty refund. The depreciation declared is the basis for calculation of the remaining value of goods.

An application for duty refund consists of:
a) Form 09 in Appendix VII enclosed herewith;
b) 01 certified true copy of the document proving payment for the exports or imports (if paid);
c) 01 certified true copy of the export/import contract and invoices enclosed therein or the export/import mandate contract, as the case may be;
Procedures for submission, receipt and processing of application for duty refund shall comply with tax administration laws.

If goods are eligible for duty refund but duty has not been paid or is exempted as prescribed in Article 19 of the Law on Export and import duties, documents and procedures are similar to those for duty refund.
Article 36. Refund of duties on goods initially imported for business operation but eventually used for manufacture of domestic exports

Paid import duties on goods that are initially imported for business operation but eventually used for manufacture of goods that have been exported into a foreign country or a free trade zone shall be refunded.
Import duties on the following imports are refundable:
a) Raw materials, supplies (including those for manufacture of packages of exports), components, semi-finished products imported incorporated into the exports or used during the manufacture of exports without being incorporated into the exports;
b) Imported finished products that are attached on exports or packed with exports as a whole;
c) Components and parts imported for repair of exports under warranty.
Basis for determination of eligibility for duty exemption:
a) The manufacturer of exports has a factory where exports are manufactured in Vietnam; owns or has the right to use machinery and equipment at the factory which is suitable for the raw materials, supplies and components imported for manufacture of exports;
b) The value or quantity of imported raw materials, supplies and components on which import duties are refundable is the actual value or quantity of raw materials, supplies and components used for the manufacture of the products that are exported in reality;
c) The exported products are declared as domestic exports;
d) The manufacturer directly imports goods and exports the products or authorizes another entity to do so.

The taxpayer shall provide truthful information about the exports derived from the imported goods on the customs declaration.

Where a type of raw materials, supplies or components is used to manufacture more than one type of products but only one of them is exported, import duties shall be refunded according to the ratio of the quantity of raw materials, supplies or components incorporated into the exported products to the total value of products manufactured.

The total value of products manufactured is the total value of exported products and selling price of products sold domestically. The value of products exported products is exclusive of the value of domestically purchased raw materials, supplies or components that are incorporated into the exported products.
Refundable import duty is calculated as follows:

Import duty on products exported in reality	=	Value of exported products	x	Total import duties on imported raw materials, supplies and components
		Total value of products manufactured

The value of exported products equals (=) the quantity of exported products multiplied by (x) dutiable value of exported products.

An application for duty refund consists of:
a) Form 09 in Appendix VII enclosed herewith;
b) 01 certified true copy of the document proving payment for the exports or imports (if paid);
c) 01 certified true copy of the export/import contract and invoices enclosed therein or the export/import mandate contract, as the case may be;

The taxpayer shall write the number and date of the contract and the buyer’s name on the export declaration.

d) A statement of duties on imported raw materials, supplies and components (Form 10 in Appendix VII enclosed herewith).

The refundable import duties on imported raw materials, supplies and components must agree with the quantity of raw materials, supplies and components used for manufacture of the products that are exported in reality;

dd) 01 certified true copy of the processing contract with the foreign hirer if raw materials, supplies and components are imported for manufacture of products that are used for processing exports under a processing contract with a foreign entity;
e) 01 certified true copy of the document proving the existence of a factory in Vietnam, the right to ownership or enjoyment of machinery and equipment therein that are suitable for the raw materials, supplies and components imported for manufacture of exports.
Procedures for submission, receipt and processing of application for duty refund shall comply with tax administration laws.

If goods are eligible for duty refund but duty has not been paid or is exempted as prescribed in Article 19 of the Law on Export and import duties, documents and procedures are similar to those for duty refund.
Article 37. Refund of import duty or export duty in case of no imports or exports; refund of overpaid export or import duty; minimum refundable amount

Where import duty or export duty has been paid without imports or exports or the quantity of actual exports or imports is smaller than the quantity on which export or import duty was paid, the amount of paid export or import duty on the goods that are not exported or imported in reality shall be refunded.
The minimum refundable amount in the cases specified in Article 35 through 37 of this Decree is VND 50,000.

The customs authority shall reject applications for refund of duty smaller than the aforementioned minimum refundable amount.

An application for duty refund consists of form 09 in Appendix VII enclosed herewith.
Procedures for submission, receipt and processing of application for duty refund shall comply with tax administration laws.

If goods are eligible for duty refund but duty has not been paid or is exempted as prescribed in Article 19 of the Law on Export and import duties, documents and procedures are similar to those for duty refund.
Where a taxpayer submits an application for duty cancellation while following customs procedures and is not required to pay duty before inspection, the customs authority shall not collect export or import duty.
Chapter III
IMPLEMENTATION CLAUSE
Article 38. Effect

This Decree comes into force from September 01, 2016 and replaces the Government’s Decree No. 87/2010/ND-CP dated August 13, 2010.
Provisions for exemption of export and import duties in the Prime Minister’s Decision No. 31/2015/QD-TTg dated August 04, 2016, the Prime Minister’s Decision No. 52/2015/QD-TTg dated October 20, 2015, the Prime Minister’s Decision No. 53/2013/QD-TTg dated September 13, 2013 and Article 7 of the Prime Minister’s Decision No. 219/2009/QD-TTg are abolished.

Article 39. Transition clause

If a project is provided with export or import duty incentive that is more favorable than that specified in the Law on Export and import duties, the incentive being applied shall be applied until expiration of the incentive duration.
If a project is provided with export or import duty incentive that is less favorable than that specified in the Law on Export and import duties or has not been provided with export or import duty specified in the Law on Export and import duties 2016, the incentives specified in the Law on Export and import duties shall be applied until expiration of the incentive duration.

Article 40. Responsibility for implementation

The Ministry of Planning and Investment shall publish a list of goods that can be manufactured domestically mentioned in Article , 15, 16, 17, 18, 19, 20, 21, 23, 24, 25 and 28 of this Decree.
The Ministry of Science and Technology shall publish a list or establish criteria for identification of:
a) Specialized vehicles used for petroleum activities;
b) Specialized vehicles used in technological line directly serving manufacturing activities of investment projects;
c) Vehicles in the technological line directly serving shipbuilding activities;
d) Scientific documents serving scientific research, technological development, development of technology incubation, science and technology enterprise incubation and technological innovation;
dd) Specialized machinery, equipment, parts and supplies serving scientific research, technological development, development of technology incubation, science and technology enterprise incubation and technological innovation that can be domestically manufactured.
The Board of Directors shall publish a list or establish criteria for identification of goods exclusively serving education.
The Ministry of Agriculture and Rural Development shall publish a list or establish criteria for determination of plant varieties, animal breeds, fertilizers and plant protection substances that have to be imported.
The Ministry of Information and Communications shall publish a list or establish criteria for identification of imported raw materials, supplies and components for manufacture or information technology products, digital contents or software.
The Ministry of Natural Resources and Environment shall publish a list or establish criteria for identification of imported machinery, equipment, vehicles, tools and supplies exclusively serving environmental protection and derived from the process of waste recycling and treatment.
The Ministry of Public Security and the Ministry of National Defense shall inform the General Department of Customs of annual plans for importing goods exclusively serving national defense and security purposes approved by the Prime Minister or by the Minister of Public Security or by the Minister of National Defense who is authorized by the Prime Minister as well and any change to the plan.
The State bank shall publish a list of machinery, equipment, raw materials, supplies, components and parts imported for money printing and mincing and appoint importers thereof.
The Ministry of Foreign Affairs shall inform the Ministry of Finance of tax incentives under international treaties and agreements between Vietnam’s government and foreign non-governmental organizations.
Ministers, Heads of ministerial agencies, Heads of Governmental agencies, Presidents of the People’s Committees of provinces, relevant organizations and individuals are responsible for the implementation of this Decree./.

ON BEHALF OF THE GOVERNMENT
THE PRIME MINISTER
Nguyen Xuan Phuc

APPENDIX I
LIST OF COMMODITIES AND ALLOWANCE FOR COMMODITIES SERVING WORK AND LIFE OF DIPLOMATIC MISSIONS, CONSULAR OFFICES AND REPRESENTATIVE OFFICES OF FOREIGN ORGANIZATIONS IN VIETNAM
(Enclosed with the Government’s Decree No. 134/2016/ND-CP dated September 01, 2016)

No.	Commodity	Allowance for an organization whose personnel does not 5 persons	Allowance for every 3 more persons	Notes
1	Cars	03 vehicles	01 vehicle	Left hand drive, used or new
2	Motorcycles	02 vehicles	01 vehicle	New
3	Alcohols	50 liters	30 liters	Each quarter
4	Beer	100 liters	60 liters	Each quarter
5	Cigarettes	10 cartons	6 cartons	Each quarter, 1 carton has 10 packs, each pack has 20 cigarettes

Note: Used cars must be conformable with effective regulations of law on import of used cars.

APPENDIX II
LIST OF COMMODITIES AND ALLOWANCE FOR COMMODITIES SERVING WORK AND LIFE OF MEMBERS OF DIPLOMATIC MISSIONS, CONSULAR OFFICES AND REPRESENTATIVE OFFICES OF FOREIGN ORGANIZATIONS IN VIETNAM
(Enclosed with the Government’s Decree No. 134/2016/ND-CP dated September 01, 2016)

No.	Commodity	Allowance for the head of a diplomatic mission	Allowance for the head of a consular office or representative office of a international organization	Allowance for a diplomatic official, a consul or an official of an international organization	Notes
1	Cars	02 vehicles	01 vehicle	01 vehicle	Left hand drive, used or new
2	Motorcycles	01 vehicles	01 vehicle	01 vehicle	New
3	Alcohols	100 liters	70 liters	50 liters	Each quarter
4	Beer	300 liters	270 liters	200 liters	Each quarter
5	Cigarettes	30 cartons	30 cartons	20 cartons	Each quarter, 1 carton has 10 packs, each pack has 20 cigarettes

Notes:

Used cars must be conformable with effective regulations of law on import of used cars.
Cars and motorcycles may only be imported if the person has worked in the diplomatic mission, consular office or representative office of a foreign organization in Vietnam which is granted diplomatic immunity and privileges for at least 18 months from the day on which the ID card is issued by the Ministry of Foreign Affairs and the remaining work duration in Vietnam is at least 12 months according to the ID card issued by the Ministry of Foreign Affairs.

APPENDIX III
LIST OF COMMODITIES AND ALLOWANCE FOR COMMODITIES SERVING WORK AND LIFE OF OTHER EMPLOYEES OF DIPLOMATIC MISSIONS, CONSULAR OFFICES AND REPRESENTATIVE OFFICES OF FOREIGN ORGANIZATIONS IN VIETNAM
(Enclosed with the Government’s Decree No. 134/2016/ND-CP dated September 01, 2016)

No.	Commodity	Allowance	Notes
1	Cars	01 vehicle	Left hand drive, used or new
2	Motorcycles	01 vehicle	New
3	Alcohols	40 liters	For the first import
4	Beer	400 liters	For the first import
5	Cigarettes	20 cartons	For the first import; 1 carton has 10 packs, each pack has 20 cigarettes

Notes:

Used cars must be conformable with effective regulations of law on import of used cars.
Cars and motorcycles may only be imported if the person has worked in the diplomatic mission, consular office or representative office of a foreign organization in Vietnam which is granted diplomatic immunity and privileges for at least 12 months from the day on which the ID card is issued by the Ministry of Foreign Affairs and the remaining work duration in Vietnam is at least 09 months according to the ID card issued by the Ministry of Foreign Affairs.
Alcohols, beer and cigarettes may only imported within the first 06 months from the date written on the ID card is issued by the Ministry of Foreign Affairs if the remaining work duration in Vietnam is at least 90 days or more.

APPENDIX IV
LIST OF FATAL DISEASES
(Enclosed with the Government’s Decree No. 134/2016/ND-CP dated September 01, 2016)

1. Cancer	16. Progressive muscular atrophy	30. Lupus erythematosus
2. First-time myocardial infarction	17. Severe rheumatoid polyarthritis	31. Organ transplantation (heart, liver, kidney transplantation)
3. Coronary artery surgery	18. Gangrene because of hemolytic streptococcal infection	32. Progressive pulmonary tuberculosis
4. Heart valve replacement surgery	19. Aplastic anemia	33. Severe burns
5. Aorta surgery	20. Paralysis of two limbs	34. Heart muscle disease
6. Stroke	21. Blindness of both eyes	35. Alzheimer’s disease
7. Coma	22. Loss of two limbs	36. Pulmonary arterial hypertension
8. Multiple sclerosis	23. Hearing loss	37. Neurotransmitter disorder
9. Amyotrophic lateral sclerosis	24. Mutism	38. Severe traumatic brain injury
10. Parkinson’s disease	25. Systemic and permanent injuries	39. Podoconiosis
11. Bacterial meningitis	26. Renal failure	40. Occupational HIV infection
12. Severe encephalitis	27. Medullary cystic disease	41. Bone marrow transplantation
13. Benign brain tumors	28. Recurrent chronic pancreatitis	42. Poliomyelitis
14. Muscular dystrophy	29. Liver failure
15. Progressive spinal muscular palsy

APPENDIX V
DUTY FREE ALLOWANCES FOR GOODS TRADED BY BORDER RESIDENTS
(Enclosed with the Government’s Decree No. 134/2016/ND-CP dated September 01, 2016)
Duty-free allowance for each border resident, who is a Vietnamese citizen that has a permanent residence in a bordering area and is permitted by the police authority of the bordering province to reside in the bordering area, is VND 2,000,000 per day per time and not more than 4 times per month.

APPENDIX VI
LIST OF PRIORITIZED MEDICAL EQUIPMENT
(Enclosed with the Government’s Decree No. 134/2016/ND-CP dated September 01, 2016)

No.	Name	Basic specifications
I	Diagnostic equipment
1.	MRI systems	≥ 0.3 T
2.	Computed tomography systems	≥ 2 slices
3.	Arteriography systems	of various types
4.	Digital radiography machines	of a tube current of ≥ 300 mA
5.	Ultrasound machines, transcranial doppler ultrasound machines	of various types
6.	Medical monitors	≥ 5 parameters
7.	Cardiotocograph	of various types
8.	ECG machines	≥ 3 channels
9.	EEG machines	≥ 32 channels, connected to a computer
10	Pulse oximeters	of various types
11.	Doppler fetal monitors	of various types
12.	Diagnostic endoscopy systems	of various types
13.	Cerebral blood flow meters	of various types
14.	MRI devices	of various types
15.	CT scan devices	of various types
II	Treatment equipment
1.	Electric injectors	of various types
2.	Infusion pumps	of various types
3.	Portable oxygen generators	with a capacity of at least 5 liters
4.	Surgical suction units	Maximum suction rate ≥ 5 liters per minute
5.	Low pressure suction units to drain fluid/air from the pleura	Maximum suction rate = 2 liters per minute
6.	High frequency scalpels	Power ≥ 300 W
7.	CO₂ surgical laser systems	Power ≥ 40 W
8.	Surgical endoscopy systems	of various types
9.	Electrotherapy machines	of various types
10.	Breathing machines	of various types
11.	Extracorporeal lithotripsy systems	of various types
III	Sterilizing equipment
1.	Sterilizing steamers	Capacity ≥ 20 liters
2.	Drying cabinets	Capacity ≥ 50 liters
3.	Warming cabinets	Capacity ≥ 50 liters
4.	Disinfection system for operating rooms	of various types
5.	Medical instrument quick sterilization systems	of various types
6.	Air disinfection machines	of various types
7.	Ultrasonic cleaners	of various types
IV	Testing equipment
1.	Coagulation analyzers	of various types
2.	Automated urine analyzers	≥ 10 parameters
3.	Semi-automatic biochemistry analyzers	of various types
4.	Multipurpose centrifuges	of various types
5.	Automated blood analyzers	≥ 18 parameters
6.	Class II biosafety cabinets	of various types
V	Medical waste and wastewater treatment systems
1.	Medical waste incinerators	Capacity ≥ 5 kg
2.	Insulated medical waste containers (attached to medical waste incinerator)	Capacity ≥ 1,000 liters
3.	Microwave systems for treatment of solid medical wastes	of various types
4.	Medical wastewater treatment systems	of various types
VI	Rehabilitation equipment
1.	Spinal stretch machines	of various types
2.	Rehabilitation equipment for pelvic limbs	of various types
3.	Rehabilitation equipment for elbow and shoulder joints	of various types
VII	Domestic and personal medical equipment
1.	Blood pressure monitors	of various types
2.	Inhalation machines	of various types
3.	Handheld ECG machines	of various types
4.	Personal blood glucose monitors	of various types
5.	Electronic thermometers	of various types
VIII	Other equipment
1.	Blood pipette shaking machines	of various types
2.	Water distillation machines	of various types
3.	Blood and infusion fluid incubators	of various types
4.	Dose readers and dosimeters in radiotherapy	of various types
5.	Dental chairs	of various types
6.	Ultrasonic tartar removal machines	of various types

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Decree No. 100/2016/ND-CP of July 01, 2016, elaboration and guidelines for some articles of the law on …

mplawadmin — Fri, 01 Jul 2016 15:36:48 +0000

THE GOVERNMENT ——-	SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness —————
No. 100/2016/ND-CP	Hanoi, July 01, 2016

DECREE

ELABORATION AND GUIDELINES FOR SOME ARTICLES OF THE LAW ON AMENDMENT OF THE LAW ON VALUE-ADDED TAX, THE LAW ON SPECIAL EXCISE DUTY AND THE LAW ON TAX ADMINISTRATION

Pursuant to the Law on Government organization dated June 19, 2015 dated June 19, 2015;
Pursuant to the Law on amendment of the Law on Value-added tax, the Law on special excise duty and the Law on Tax administration dated April 06, 2016;
At the request of the Minister of Finance;
The Government promulgates a Decree on elaboration and guidelines for some Articles of the Law on amendment of the Law on Value-added tax, the Law on special excise duty and the Law on Tax administration,
Article 1. Amendments to the Government’s Decree No. 209/2013/ND-CP dated December 18, 2013 elaborating and providing guidelines for some Articles of the Law on Value-added tax, amended by the Government’s Decree No. 12/2015/ND-CP dated February 12, 2015:

The first paragraph and Clause 1 Article 3 is amended as follows:

“Article 3. Products not subject to VAT
Products not subject to VAT are specified in Article 5 of the Law on Value-added tax, Clause 1 Article 1 of the Law on amendments to some Articles of the Law on Value-added tax and Clause 1 Article 1 of the Law on amendment of the Law on Value-added tax, the Law on special excise duty and the Law on Tax administration.

Products that have undergone insufficient working or processing specified in Clause 1 Article 5 of the Law on Value-added tax amended in Clause 1 Article 1 of the Law on amendment of the Law on Value-added tax, the Law on special excise duty and the Law on Tax administration are products that have only been cleaned, dried, shelled, deseeded, cut, salted, cooled or otherwise preserved with common methods.”
Clause 3 Article 3 is amended as follows:

“3. Medical services specified in Clause 1 Article 1 of the Law on amendment of the Law on Value-added tax, the Law on special excise duty and the Law on Tax administration includes transport, testing, imaging, blood and blood products used for patients.
Care services for elderly people and disabled people specified in Clause 1 Article 1 of the Law on amendment of the Law on Value-added tax, the Law on special excise duty and the Law on Tax administration include medical and nutritional care, organization of cultural, sport and entertainment activities, physical therapy and rehabilitation for elderly people and disabled people.”

Clause 6 Article 3 is amended as follows:

“6. Public transportation specified in Clause 16 Article 5 of the Law on Value-added tax includes intra-provincial, urban and extra-provincial suburban public transportation by bus and tram (including metro) according to traffic laws.”

Clause 11 Article 3 is amended as follows:

“11. Exports that are processed or unprocessed natural resources and/or minerals whose total value inclusive of energy cost makes up at least 51% of the products derived from such natural resources and/or minerals, exports that are products derived from natural resources and/or minerals whose total value inclusive of energy cost makes up at least 51% of the manufacturing cost.
Natural resources and minerals mentioned in this Clause are domestically obtained natural resources and minerals comprised of metallic minerals, non-metallic minerals, crude oil, natural gas and coal gas.
Value of a natural resource or mineral means the cost of the natural resource or mineral being processed, which is the direct or indirect cost of extraction of such natural resource or mineral if it is extracted, or buying price plus processing price if it is bought.
Energy cost is comprised of fuel, electricity and heat.
Value of a natural resource or mineral and energy cost shall be determined according to the previous year’s statement. For a new enterprise that does not have such statement, they shall be determined according to the investment plan.
The Ministry of Finance shall elaborate this Clause.”

Point d Clause 1 of Article 6 is amended as follows:

“dd) 0% VAT does not apply to:
– Transfer of technology, transfer of intellectual property rights to abroad;
– Selling reinsurance to abroad;
– Extension of credit to abroad;
– Transfer of capital to abroad;
– Investment of securities to abroad;
– Derivative financial services;
– Post and telecommunications services;
– Exports specified in Clause 11 Article 3 of this Decree;
– Goods/services provided for an individual who does not do business in a free trade zone;
– Tobacco, alcohol and beer imported and then exported.”

Article 10 is amended as follows:

“Article 10. VAT refund

A business establishment that pays VAT according to credit-invoice method may offset input VAT that remains after deduction in a month/quarter against that in the next month/quarter.
Refund of VAT on an investment project:
a) A business establishment derived from an investment project which has been registered and pays VAT under credit-invoice method, a petroleum exploration and development project which has been invested for at least 01 year and has not been put into operation shall have VAT on goods/services purchased during investment stage refunded in each year, except for the case specified in Point c of this Clause. If accumulated VAT on goods/services during investment stage is VND 300 million or over, it shall be refunded.

If the project has been inspected or audited by a competent authority, the tax authority may decide the VAT refund according to the inspection or audit result and take responsibility for such decision.

b) In the cases where a business establishment which pays VAT under credit-invoice method has a new investment project (other than commercial housing project) in different a province from that where its headquarters is located and it has not been put into operation, registered, and applied for tax registration, VAT on the investment project shall be refunded if VAT on goods/services purchased during investment stage that remains after being offset against VAT payable on the headquarters’ business operation is at least VND 300 million, except for the case specified in Point c of this Clause. Tax on the investment project shall be separately declared and refund thereof shall be claimed separately.
c) VAT shall not be refunded and shall be offset against that of the next period in the following cases:

– The project of investment in a conditional area has not satisfied all conditions as prescribed in the Law on Investment and specified in Point a Clause 1 Article 13 of the Law on Value-added tax and the Law amendments to the Law on Value-added tax, the Law on special excise duty and the Law on Tax administration, which means the business establishment has not obtained a license for conditional business or has not obtained a certificate of eligibility for conditional business, or a competent authority has not issued a permission for conditional business, or any of the conditions for conditional business have not been satisfied if a written permission is not required by law.
The project of investment in a conditional area fails to maintain fulfillment of all conditions during its operation as specified in Point a Clause 1 Article 13 of the Law on Value-added tax and the Law amendments to the Law on Value-added tax, the Law on special excise duty and the Law on Tax administration, which means the business establishment has its license for conditional business or certificate of eligibility for conditional business or permission for conditional business issued by a competent authority revoked, or it fails to maintain fulfillment of conditions for the conditional business during its business operation. In this case, VAT incurred from the time of revocation of any of the said document or from the time of discovery of the failure to maintain fulfillment of conditions shall not be refunded.
– A natural resource or mineral extraction project licensed from July 01, 2016 or manufacturing project where total value of natural resources and/or minerals inclusive of energy cost makes up at least 51% of the product price.
Clause 11 Article 3 of this Decree shall apply to determination of values of natural resources and minerals and time for determination of values of natural resources and minerals and energy cost.

In a month or quarter, if input VAT on goods/services for export of a business establishment that remains after deduction is VND 300 million or over, it shall be refunded by month or quarter. If such input VAT is smaller than VND 300 million, it shall be offset against that of the next month/quarter. In case a business establishment has both goods/services for export and goods/services for domestic sale and input VAT on goods/services for export that remains after being offset against tax payable is VND 300 million or over, it shall be refunded. Input VAT on purchases used for manufacturing of goods/services for export shall be separately recorded. Otherwise, input VAT shall be determined according to the ratio of revenue from goods/services for export to total revenue from goods/services of tax periods from the period succeeding the period in which tax is funded to the current period in which tax refund is claimed.

Tax shall not be refunded in case goods are imported and then exported outside a customs controlled area according to the Law on Customs and its instructional documents.
Tax authority shall grant a refund before inspection if the taxpayer who is a manufacturer of exports has not incurred any penalty for smuggling, illegal traffic of goods across the border, tax evasion, tax fraud, trade fraud for two consecutive years or the taxpayer does not pose a high risk according to the Law on Tax administration and its instructional documents.

A business establishment paying VAT under credit-invoice method may claim refund of overpaid VAT or input VAT that remains after deduction upon its ownership transfer, conversion, merger, amalgamation, division, dissolution, bankruptcy or shutdown.

A business establishment that is dissolved or bankrupt or shut down before it is put into operation and thus has not incurred output VAT is not required to adjust the amount of VAT that was declared, deducted or refunded. In case of transfer of an investment project or sale of assets of an investment project or repurposing of an investment project, tax shall be declared in accordance with instructions of the Ministry of Finance.

Refund of VAT on programs and projects funded by grant ODA, grant aid or humanitarian aid:
a) Owner of the program/project or main contractor or an organization appointed by the foreign sponsor to manage the program/project funded by ODA shall have VAT on goods/services purchased in Vietnam to serve the program/project refunded.
b) A Vietnamese organization that uses grant aid or humanitarian aid provided by a foreign entity to purchase goods/services serving an aid program/project shall have VAT paid on such goods/services refunded.
An entity granted diplomatic immunity in accordance with regulations of law on diplomatic immunity shall have VAT on goods/services purchased in Vietnam for personal use refunded according to the VAT invoice or payment note on which the prices are inclusive of VAT.
A foreigner or Vietnamese national residing overseas who carries a passport or immigration document issued by a foreign competent authority shall have VAT on goods purchased in Vietnam refunded when they are carried in his/her luggage upon exit from Vietnam.
VAT shall be refunded when a business establishment has a decision on VAT refund issued by a competent authority and in cases in which VAT is refunded under international treaties to which Vietnam is a signatory.”

Article 2. Amendments to the Government’s Decree No. 108/2015/ND-CP dated October 28, 2015 elaborating and providing guidelines for some Articles of the Law on special excise duty and the Law on amendments to the Law on special excise duty:

Clause 1 of Article 4 is amended as follows:

“1. The taxable prices for domestically manufactured goods and imported goods are the selling prices fixed by the manufacturer or importer. If the selling price imposed by the manufacturer or importer is significantly different from market price, a tax authority shall impose tax in accordance with the Law on Tax administration. Taxable price is determined as follows:

Taxable price	=	VAT-exclusive selling price	–	Environmental protection tax (if any)
		1 + Excise tax rate

VAT-exclusive selling price is determined in accordance with VAT laws.

a) In the cases where a manufacturer or importer of goods subject to excise tax sells the goods through its financially dependent affiliates, taxable prices are the selling prices imposed by such affiliates. In the cases where a manufacturer or importer sells goods via an agent that sells goods at prices imposed by the manufacturer or importer to earn commissions, taxable prices are prices imposed by the manufacturer or importer inclusive of commissions.
b) In the cases where goods subject to excise tax are sold to a trading establishment that is in the same parent company-subsidiary company relationship with or is a subsidiary of the same parent company as the manufacturer or importer or is related to the manufacturer or importer, the taxable price must not be smaller by more than 7% of the average price paid by the trading establishments to the manufacturer or importer. In the cases where a manufacturer or importer establishes multiple trading establishments that are in a parent company-subsidiary company relationship or are subsidiaries of the same parent company or are related to the manufacturer or importer, the taxable price must not be smaller by more than 7% of the average price paid by such trading establishments to other trading establishments that are not in the parent company-subsidiary company relationship or not subsidiaries of the same parent company or are not related to the manufacturer or importer. For motor vehicles, the average price is the selling price without optional parts ordered by customers.

It is considered that a manufacturer or importer and a trading establishment are related when one enterprise directly or indirectly holds at least 20% of paid-in capital of the other.
In the cases where the taxable price imposed by the manufacturer or importer is smaller by more than 7% of the average selling price imposed by the trading establishments, the tax authority shall decide the taxable price in accordance with tax administration laws.”

Clause 4 and Clause 5 of Article 4 is amended as follows:

“4. The taxable price for processed goods subject to excise tax is the selling price imposed by the processor or selling price for products of the same or similar kind at selling time.
If the hirer that sells goods to the trading establishment has a parent company-subsidiary company relationship with or are subsidiaries of the same parent company as the manufacturer or importer, or the trading establishment is related to the hirer, the taxable price shall be determined in accordance with Point b Clause 1 of this Article.

For goods manufactured in cooperation between the manufacturer and the user or the owner of the trademark or manufacturing technology, the taxable price is the selling price imposed by the user or owner of the trademark or manufacturing technology. In the cases where goods are manufactured under franchise and sold by a branch or representative office in Vietnam, the taxable price is the selling price imposed by such branch or representative office.

If the branch or representative office sells goods to a trading establishment which has a parent company-subsidiary company relationship with or are subsidiaries of the same parent company as the manufacturer or importer, or the trading establishment has is related to the branch or representative office, the taxable price shall be determined in accordance with Point b Clause 1 of this Article.”
Article 3. Amendments to the Government’s Decree No. 83/2013/ND-CP dated July 22, 2013 elaborating some Articles of the Law on Tax administration and the Law on amendments to the Law on Tax administration, amended by the Government’s Decree No. 91/2014/ND-CP dated October 01, 2014 and the Government’s Decree No. 12/2015/ND-CP dated February 12, 2015:

Clause 1 Article 28a is amended as follows:

“1. A taxpayer who fails to pay tax by the deadline or extended deadline or deadline written in the notice or tax decision issued by the tax authority shall fully pay tax and late payment interest at 0.03% per day on the outstanding amount.
Regarding outstanding tax incurred before July 01, 2016, including tax arrears discovered after inspections by competent authorities, the late payment interest rate specified in this Clause shall be charged from July 01, 2016.
If the taxpayer fails to pay tax because payment for goods/services covered by state budget has not been made on schedule, tax payment shall not be enforced and late payment interest shall not be charged on the outstanding tax, provided it does not exceed the payment covered by state budget.”

Article 38 is abrogated.
Point a Clause 2 Article 39 is amended as follows:

“a) While paying the tax arrears in installments, the taxpayer still have to pay late payment interest at 0.03% of the tax arrears per day. The taxpayer shall fully pay tax and late payment interest.”

Point a Clause 2 Article 42 is amended as follows:

“a) Exemption and reduction of excise tax, resource royalty, personal income tax granted to a taxpayer who suffers from a natural disaster, fire or unexpected accident and consequently is not able to pay tax in accordance with law; exemption of tax on non-agricultural land, tax on agricultural land, land rent, water surface rent, registration fee granted to taxpayers; tax exemption granted to a household or individual that pays less than VND 50,000 in annual non-agricultural land tax. The Ministry of Finance shall elaborate this Point;
The exemption or reduction of land levy depends on cadastral documents and documents proving the eligibility for exemption or reduction of land levy and other relevant documents. Tax authorities shall not issue decisions on tax exemption or reduction, but only specify the amount of land levy exempted or land levy reduction on the land levy notice.”
Article 4. Clause 3 Article 13 of the Government’s Decree No. 129/2013/ND-CP dated October 16, 2013 on administrative penalties for tax offences and enforcement of tax decisions:
“3. The guarantor shall pay tax, late payment interest, fines and interest on late payment of fines (if any) on the taxpayer behalf’s in accordance with the guarantee agreement if the taxpayer fails to pay them.
If the guarantor fails to pay outstanding tax, late payment interest, fines and interest on late payment of fines (if any) on the taxpayer behalf’s in accordance with the guarantee agreement when the taxpayer fails to pay or fully pay them by the deadline imposed by the tax authority, the guarantor shall pay an interest at 0.03% per day on the unpaid amounts and the payment of such amounts shall be enforced in accordance with Clause 3 Article 18 and Article 19 of this Decree. Enforcement procedures applied to the guarantor are the same as those applied to taxpayers.”
Article 5. Effect and responsibility for implementation

This Decree comes into force from July 01, 2016, except for Clause 2 of this Article.
Clause 2 Article 3 of this Decree comes into force from September 01, 2016.
The Ministry of Finance shall provide guidelines for the implementation of this Decree.
Ministers, Heads of ministerial agencies, Heads of Governmental agencies, Presidents of the People’s Committees of central-affiliated cities and provinces, relevant organizations and individuals are responsible for the implementation of this Decree./.

ON BEHALF OF THE GOVERNMENT
THE PRIME MINISTERNguyen Xuan Phuc

The post Decree No. 100/2016/ND-CP of July 01, 2016, elaboration and guidelines for some articles of the law on … appeared first on MP Law Firm.

Law No. 107/2016/QH13 of April 06, 2016, on export and import duties

mplawadmin — Wed, 06 Apr 2016 15:40:19 +0000

THE NATIONAL ASSEMBLY ——–	SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness —————
Law No. 107/2016/QH13	Hanoi, April 06, 2016

THE LAW

ON EXPORT AND IMPORT DUTIES

Pursuant to the Constitution of Socialist Republic of Vietnam;
The National Assembly promulgates the Law on Export and import duties.
Chapter I
GENERAL PROVISIONS
Article 1. Scope
This Law provides for taxed goods, taxpayers, basis for tax calculation, time for tax calculation, tariff schedules, anti-dumping duty, countervailing duty, safeguard duty imposed upon exports and imports; tax exemption, tax reduction, refund of export and import duties.
Article 2. Taxed goods

Goods exported and imported through Vietnam’s border and border checkpoints.
Goods exported from the domestic market into free trade zones; goods imported from free trade zones into the domestic market.
Goods indirectly exported-imported; goods exported and imported by enterprises exercising their right to export, import, or distribute.
The following goods do not incur export and import duties:
a) Goods in transit;
b) Goods that are humanitarian aid or grant aid;
c) Goods exported from a free trade zone to abroad; goods imported from abroad to a free trade zone and used within such free trade zone; goods transported from one free trade zone to another;
d) Amounts of petroleum used as severance tax paid to the State upon its exportation.
The Government shall regulate this Article.

Article 3. Taxpayers

Owners of exports and imports.
Entrusted exporters and importers.
People entering and leaving Vietnam carrying exports or imports, sending or receiving goods through Vietnam’s border and border checkpoints.
Taxpayers’ guarantors and other entities authorized to pay tax on behalf of taxpayers, including:
a) Customs brokerage agents in case authorized by the taxpayer to pay export and import duties;
b) Providers of postal services or international express mail services paying tax on behalf of taxpayers;
c) Credit institutions or other organizations operating under the Law on credit institutions that provide guarantee or pay tax on behalf of taxpayers;
d) People authorized by goods owners in case goods are gifts of individuals; any luggage sent before or after its owner’s arrival or departure;
dd) Any branch of an enterprise authorized to pay tax on its behalf;
e) Other people authorized to pay tax on behalf of taxpayers as prescribed by law.
Any person who purchases or transports goods within the tax-free allowance applied to border residents which are sold domestically instead of being consumed or used for manufacture; foreign traders permitted to deal in exports and imports at bordering markets as prescribed by law.
Owners of exports or imports that are initially tax-free but then taxed.
Other cases prescribed by law.

Article 4. Definitions
For the purpose of this Law, the terms below are construed as follows:

Free trade zone means an economic zone located within Vietnam’s territory, established in accordance with law, having a definite geographic boundary, and separated from the outer area by hard fences in order to facilitate customs inspection and customs control by the customs authority and relevant agencies with regard to exports and imports, inbound and outbound vehicles and passengers; the trading relationship between the free trade zone and the outside area is consider exportation and importation.
Mixed duty means the total amount of proportional tax and fixed tax.
Proportional duty means tax expressed as a percentage of the taxable value of exports and imports.
Fixed duty means a fixed amount of tax imposed upon a unit of exports and imports.
Anti-dumping duty means an additional import duty imposed upon dumped imports in Vietnam that cause or threaten to cause considerable damage to domestic manufacturing or prevents the formation of domestic manufacturing.
Countervailing duty means an additional import duty imposed upon subsidized goods imported into Vietnam that causes or threatens to cause considerable damage to domestic manufacturing or prevents the formation of domestic manufacturing.
Safeguard duty means an additional import duty that is imposed in case the quantity of goods imported into Vietnam is above the acceptable level and thus causes or threatens to cause considerable damage to domestic manufacturing or prevents the formation of domestic manufacturing.

Chapter II
BASIS AND TIME FOR TAX CALCULATION, TAX SCHEDULES
Article 5. Basis for calculation of proportional duties

The amount of export or import duty is determined according to the taxable value and duty rate (%) of each article at the time of tax calculation.
Export duty rate of each article is specified in the export duty schedule.

Where goods are exported to a country or group of countries or territories having an agreement on concessional export duties with Vietnam, such agreement shall apply.

Import duty rates include preferential rates, special preferential rates, and ordinary rates as follows:
a) Preferential rates apply to imports originated in any country or group of countries or territories that accord Vietnam most-favored nation treatment; goods that are imported from a free trade zone to the domestic market and originating in a country or group of countries or territories that accord Vietnam most-favored nation treatment;
b) Special preferential rates apply to imports originated in any country or group of countries or territories that have an agreement on special preferential import duties with Vietnam; goods that are imported from a free trade zone to the domestic market and originating in a country or group of countries or territories that have an agreement on special preferential import duties with Vietnam;
c) Ordinary rates apply to imports other than those mentioned in Point a and Point b of this Clause. The ordinary rate is 150% of the preferential rate applied to the corresponding article. In case preferential rate is 0%, the Prime Minister shall decide the application of ordinary rate pursuant to Article 10 of this Law.

Article 6. Basis for calculation of fixed duties and mixed duties

The amount of fixed export or import duty imposed depends on the actual quantity of exports or imports and the amount of duty per unit of goods at the times of tax calculation.
The amount of mixed duty imposed upon exported or imported goods is the total amount of proportional tax and fixed tax as prescribed by Clause 1 Article 5 and Clause 1 Article 6 hereof.

Article 7. Duties imposed upon imports applying tariff quotas

Goods imported inside the tariff quota shall apply the duty rates and fixed duties specified in Clause 3 Article 5 and Article 6 hereof.
Goods imported outside the tariff quota shall apply the out-quota rates and fixed duties specified in Clause 3 Article 5 and Article 6 hereof.

Article 8. Taxable value and time for tax calculation

The taxable value is the customs value prescribed by the Law on Customs.
The time for calculating export or import duty is the time of registration of the customs declaration.

In case of exports or imports that are not subject to taxation, exempt from export or import duties, or applying in-quota duty rates or fixed duty but then the eligibility for tax exemption or in-quota duties is changed as prescribed by law, the time for tax calculation is the time of registration of the new customs declaration.
The time of registration of the customs declaration shall comply with regulations of law on customs.
Article 9. Tax payment deadline

Duties on exports and imports have to be paid before customs clearance or release as prescribed by the Law on Customs, except for the case in Clause 2 hereof.

Where a credit institution provides guarantee for the amount of tax payable, customs clearance or release shall be granted. However, late payment interest shall be paid for the period from the date of customs clearance or release to the tax payment date in accordance with the Law on Tax administration. The guarantee period shall not exceed 30 days from the day on which the customs declaration is registered.
If the taxpayer fails to pay tax and late payment interest by the end of the guarantee period, the guarantor shall fully pay tax and late payment interest on behalf of the taxpayer.

The taxpayer given priority as prescribed by the Law on Customs shall pay tax on the customs declarations granted customs clearance or release in the month by the 10^th of the next month. If the taxpayer fails to pay tax by the aforesaid deadline, the taxpayer shall fully pay outstanding tax and late payment interest as prescribed by the Law on Tax administration.

Article 10. Rules for imposition of tariff schedules and duty rates

Encouragement of import of raw materials that cannot be manufactured domestically; focus on development of high technology, source technology, energy-saving, and environmental protection.
Suitability for the orientation of socio-economic development and commitments on export and import duties in international treaty to which Socialist Republic of Vietnam is a signatory.
contribution to stabilization of the market and state budget revenues.
Simplicity and transparency, facilitation of tax payment and of tax formalities.
Uniform imposition of duty rates upon goods of the same nature, composition, uses, or technical features; import duties are regressive from finished products to raw materials; export duties are progressive from finished products to raw materials.

Article 11. The power to impose tariff schedules and duty rates

Pursuant to Article 10 hereof, the export duty schedule enclosed herewith, the Schedule of Concessions annexed to the Protocol of Accession to WTO approved by the National Assembly and other international treaties to which Socialist Republic of Vietnam is a signatory, the Government shall promulgate:
a) Preferential export duty and special preferential export duty schedules;
b) Preferential import duty and special preferential import duty schedules;
c) Lists of goods and fixed duties, mixed duties, and out-quota import duties.
Where necessary, the Government shall request Standing Committee of the National Assembly to amend the Export duty Schedule enclosed herewith.
The power to impose anti-dumping duties, countervailing duties, and safeguard duties is specified in Chapter III hereof.

Chapter III
ANTI-DUMPING DUTIES, COUNTERVAILING DUTIES, SAFEGUARD DUTIES
Article 12. Anti-dumping duties

Conditions for applying anti-dumping duties:
a) The imports being dumped in Vietnam and the dumping margin must be determined;
b) The dumping causes or threatens to cause considerable damage to domestic manufacturing or prevents the formation of domestic manufacturing.
Rules for applying anti-dumping duties:
a) Anti-dumping duty may only be applied to a reasonable extent to prevent or minimize damage to domestic manufacturing;
b) The anti-dumping duties shall be applied after an investigation is carried out and conform to the investigation conclusion as prescribed by law;
c) Anti-dumping duty shall be imposed upon dumped imports in Vietnam;
d) The application of anti-dumping duties must not cause damage to domestic socio-economic interest.
Anti-dumping duties shall be applied for a period not exceeding 5 years from the day on which the decision to apply anti-dumping duty takes effect. Such decision may be extended where necessary.

Article 13. Countervailing duties

Conditions for applying countervailing duties:
a) It is determined that imports are subsidized as prescribed by law;
b) The imports cause or threaten to cause considerable damage to domestic manufacturing or prevent the formation of domestic manufacturing.
Rules for applying countervailing duties:
a) Countervailing duties may only be applied to a reasonable extent to prevent or minimize damage to domestic manufacturing;
b) The countervailing duties shall be applied after an investigation is carried out and conform to the investigation conclusion as prescribed by law;
c) Countervailing duties shall be imposed upon subsidized imports in Vietnam;
d) The application of countervailing duties must not cause damage to domestic socio-economic interest.
Countervailing duties shall be applied for a period not exceeding 5 years from the day on which the decision to apply anti-dumping duty takes effect. Such decision may be extended where necessary.

Article 14. Safeguard duties

Conditions for applying safeguard duties:
a) The volume, quantity or value of imports drastically increases compared to the volume, quantity, or value of like or directly competitive domestic goods;
b) The increase of volume, quantity or value of imports mentioned in Clause a of this Clause causes or threatens to cause considerable damage to domestic manufacturing of like or directly competitive goods or prevents the formation of domestic manufacturing.
Rules for applying safeguard duties:
a) Safeguard duties may only be applied to a reasonable extent to prevent or minimize serious damage to domestic manufacturing and facilitate the improvement of competitiveness of manufacturing;
b) The application of safeguard duties shall take into account the investigation conclusion, unless temporary safeguard duties are applied;
c) Safeguard duties are applied in a non-discriminatory manner and regardless of goods origins.
Safeguard duties shall be applied for a period not exceeding 4 years, including the period of applying temporary safeguard duties. The period of application of safeguard duties may be extended for up to 06 more years if serious damage or the threat of serious damage to domestic manufacturing still remains and there is evidence that the manufacturing is improving its competitiveness.

Article 15. Application of anti-dumping duties, countervailing duties, safeguard duties

The application, adjustment, removal of anti-dumping duties, countervailing duties, safeguard duties shall comply with this Law, regulations of law on anti-dumping, anti-subsidy, and safeguard measures.
In consideration of duty rates, quantity, or value of goods subject to anti-dumping duties, countervailing duties, or safeguard duties, the declarant shall declare and pay duties in accordance with regulations of law on tax administration.
The Ministry of Industry and Trade shall decide the application of anti-dumping duties, countervailing duties, safeguard duties.
The Ministry of Finance shall provide for the declaration, collection, payment, and refund of anti-dumping duties, countervailing duties and safeguard duties.
Where the interests of Socialist Republic of Vietnam are infringed or violated, pursuant to international treaties, the Government shall propose to the National Assembly other appropriate safeguard duty measures.

Chapter IV
TAX EXEMPTION, REDUCTION, AND REFUND
Article 16. Tax exemption

Exported or imported goods of foreign entities granted diplomatic immunity and privileges in Vietnam within the allowance under an international treaty to which Socialist Republic of Vietnam is a signatory; luggage within the tax-free allowance of inbound and outbound passengers; imports to be sold at duty-free shops.
Personal belongings, gifts from foreign entities to Vietnamese entities and vice versa within the tax-free allowance.

If the quantity or value of personal belongings or gifts exceeds the tax-free allowance, the excess amount or value shall be taxed, unless the recipient is an entity funded by state budget and permitted by a competent authority to receive them or they are meant to serve humanitarian or charitable purposes.

Goods traded across the border of border residents on the List of goods and within the tax-free allowance serving the manufacturing or consumption by border residents.

Goods that are purchased or transported within the tax-free allowance but do not serve the manufacturing or consumption by border residents, exports and imports of foreign traders permitted to be sold at bordering markets shall be taxed.

Goods exempt from export and import duties under international treaties to which Socialist Republic of Vietnam is a signatory.
Goods whose value or tax payable is below the minimum level.
Imported raw materials, supplies, components serving processing of exports; finished products imported to be fixed on processed products; outward processing products.

Regarding outward processing products derived from domestic raw materials that subject to export duties, the amount of domestic raw materials incorporated into the products shall be taxed.
Goods exported for processing and then imported are exempt from export duty and import duty on the value of exported raw materials incorporated into the processed products. Goods exported for processing and then imported that are natural resources, minerals, or products whose the total value of natural resources or minerals plus energy costs makes up at least 51% of the product price shall be taxed.

Materials, supplies, components imported for manufacture of exports. products.
Goods manufactured, processed, recycled, assembled in a free trade zone without using imported raw materials or components when they are imported into the domestic market.
Goods temporarily imported for re-export or goods temporarily exported for re-import within a certain period of time, including:
a) Goods temporarily imported or exported to participate in fairs, exhibitions, product introduction, sports or art events, or other events; machinery and equipment temporarily imported for re-export for testing, research and development; machinery and equipment, tools temporarily imported or exported to be used for certain period of time or serve overseas processing, except for machinery, equipment, tools, vehicles permitted to be temporarily imported too serve investment projects, construction, installation, or manufacture;
b) Machinery, equipment, components, spare parts temporarily imported for replacement or repair of foreign ships or airplanes, or temporarily exported for replacement or repair of Vietnamese ships or airplanes overseas; goods temporarily imported to supply for foreign ships or airplanes in Vietnam’s ports;
c) Goods temporarily imported or exported for warranty, repair, or replacement;
d) Vehicles temporarily imported or exported to carry exports or imports;
dd) Goods that are temporarily imported and re-exported by the deadline or extended deadline and a credit institution provides a guarantee or a deposit equivalent to import duties on the temporarily imported goods has been paid.
Non-commercial goods: samples, pictures, videos, models instead of samples; advertisement publications in small quantities.
Imports as fixed assets of an entity eligible for investment incentives as prescribed by regulations of law on investment, including:
a) Machinery and equipment; components, parts, spare parts for assembly or operation of machinery and equipment; raw materials for manufacture of machinery and equipment, components, parts, or spare parts of machinery and equipment;
b) Special-use vehicles in a technological line directly used for a manufacture project;
c) Building materials that cannot be domestically produced.

Exemption of import duty on the imports specified in this Clause also applies to new investment projects and extension projects.

Plant varieties; animal breeds, fertilizers, pesticides that cannot be domestically produced as prescribed by competent authority.
Raw materials and components which cannot be domestically manufactured and are imported serving the manufacturing of investment projects eligible for investment incentives or in an extremely disadvantaged area prescribed by regulations of law on investment, high technology enterprises, science and technology enterprises, science and technology organizations are exempt from import duties for 05 years from the commencement of manufacture.

The exemption of import duties specified in this Clause does not apply to mineral extraction projects; projects for manufacture of products where total value of natural resources or minerals plus energy costs makes up at least 51% of the product price; projects for manufacture or sale of goods/services subject to special excise tax.

Raw materials and components which cannot be domestically manufactured of investment projects for manufacture or assembly of medical equipment given priority shall be exempt from import duties for 05 years from the commencement of manufacture.
Imports serving petroleum activities, including:
a) Machinery, equipment, components, means of transport necessary for petroleum activities, including those temporarily imported for re-export;
b) Components, parts, spare parts for assembly or operation of machinery and equipment; raw materials for manufacture of machinery and equipment, components, parts, or spare parts of machinery and equipment necessary for petroleum activities;
c) Supplies necessary for petroleum activities that cannot be domestically produced.
Shipbuilding projects and shipyards eligible for incentives as prescribed by regulations of law on investment shall have tax exempted from:
a) Imports that constitute fixed assets of the shipyard, including: machinery and equipment; components, parts, spare parts for assembly or operation of machinery and equipment; raw materials for manufacture of machinery and equipment, components, parts, or spare parts of machinery and equipment; means of transport in the technological line directly serving shipbuilding; building materials that cannot be domestically produced;
c) Imported machinery, equipment, raw materials, supplies, components, semi-finished products serving shipbuilding that cannot be domestically produced;
c) Ships for export.
Imported machinery, equipment, raw materials, supplies, components, parts, spare parts serving money printing and mincing.
Imported raw materials, supplies, components serving that cannot be domestically produced serving manufacture of information technology products, digital contents, software.
Exports and imports serving environmental protection, including:
a) Imported machinery, equipment, equipment, tools, supplies that cannot be domestically produced serving collection, transport, treatment wastewater, wastes, exhaust gases, environmental monitoring and analysis, production of renewable energy, treatment of environmental pollution, response to environmental emergencies;
b) Exports that are products of waste recycling and treatment.
Imports directly serving education that cannot be domestically produced.
Imported dedicated machinery, equipment, components, supplies that cannot be domestically produced, scientific materials serving scientific research, technological development, technological cultivation, cultivation of science and technology enterprises and technological innovation.
Imported dedicated products directly serving national defense and security, the vehicles among which must be those that cannot be domestically produced.
Exports and imports serving assurance of social security, recovery from disasters, epidemics, and other special situations.
The Government shall regulate this Article.

Article 17. Procedures for tax exemption

In the cases specified in Clause 11, 12, 13, 14, 15, 16 and 18 of Article 16, the taxpayer shall notify the customs authority of goods eligible for tax exemption to be imported.
The procedures for tax exemption shall comply with regulations of law on tax administration.

Article 18. Tax reduction

Exports and imports that are damaged or lost under customs supervision and the damage or loss is verified by a competent organization, tax reduction shall be granted.

The level of reduction shall be proportional to the loss of goods. Tax is exempt if the exports or imports are completely damaged or lost.

The procedures for tax reduction shall comply with regulations of law on tax administration.

Article 19. Tax refund

Cases of tax refund:
a) Any taxpayer who has paid export duty or import duty but has no exports or imports, or the quantity of exports or imports is smaller than the quantity on which duty is paid;
b) Any taxpayer who has paid export duty but the exports has to be re-imported shall receive a refund of export duty and does not have to pay import duty;
c) Any taxpayer who has paid import duty but the imports has to be re-exported shall receive a refund of import duty and does not have to pay export duty;
d) Any taxpayer who has paid tax on goods imported to serve manufacture or business operation and they have been used for manufacture of exports and the products are already exported;
dd) Any taxpayer who has paid tax on machinery, equipment, tools, vehicles of organizations and individuals that are permitted to be temporarily imported for re-export, except for those rented to execute investment projects, construction and installation, manufacture, when they are re-exported to abroad or exported to a free trade zone.

The amount of import duty refunded depends on the remaining value of goods when they are re-exported according to the period of time over which they are used or stay in Vietnam. If the goods are no longer usable, import duty shall not be refunded.
Tax shall not be refunded if the refundable amount is below the minimum level specified by the Government.

Tax on the goods specified in Point a through c of Clause 1 of this Article shall be refunded if such goods have not been used or undergone working or processing.
The procedures for tax refund shall comply with regulations of law on tax administration.

Chapter V
IMPLEMENTATION
Article 20. Effect

This Law comes into force from September 01, 2016.
The Law on Export and import duties No. 45/2005/QH11 is null and void from the effective date of this Law.

Article 21. Transition

Any project given export duty or import duty incentives that are more advantageous than the incentives specified in this law may keep having such incentives for the remaining incentive period of the project. If the incentives given are less advantageous or incentives have not been given as prescribed by this Law, incentives specified in this Law shall be given for the remaining incentive period of the project.
This Law shall apply to raw materials, supplies, components imported for manufacture of exports but the products have not been exported; goods temporarily imported that have not been re-exported under declarations registered with customs authorities before the effective date of this Law and tax on which have not been paid.

Article 22. Elaboration
The Government shall elaborate the Articles and Clauses of this Law.
This Law is adopted by the 13^th National Assembly of Socialist Republic of Vietnam on this 6^th of April 2016.

PRESIDENT OF THE NATIONAL ASSEMBLY
Nguyen Thi Kim Ngan

The post Law No. 107/2016/QH13 of April 06, 2016, on export and import duties appeared first on MP Law Firm.

Law No. 106/2016/QH13 of April 06, 2016, amendments to some articles of the law on value-added tax, the law on special excise duty, and the law on tax administration

mplawadmin — Wed, 06 Apr 2016 15:38:51 +0000

THE NATIONAL ASSEMBLY ——–	SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness —————
Law No. 106/2016/QH13	Hanoi, April 06, 2016

LAW

AMENDMENTS TO SOME ARTICLES OF THE LAW ON VALUE-ADDED TAX, THE LAW ON SPECIAL EXCISE DUTY, AND THE LAW ON TAX ADMINISTRATION

Pursuant to the Constitution of Socialist Republic of Vietnam;
The National Assembly promulgates the Law on amendments to some Articles of the Law on Value-added tax No 13/2008/QH12, which is amended under the Law No. 31/2013/QH13, the Law on special excise duty No. 27/2008/QH12 which is amended under the Law No. 70/2014/QH13, the Law on Tax administration No. 78/2006/QH11 which is amended under the Law No. 21/2012/QH13 and the Law No. 71/2014/QH13.
Article 1
Amendments to some Articles of the Law on Value-added tax No. 13/2008/QH12, which is amended under the Law No. 31/2013/QH13:

Clauses 1, 9 and 23 of Article 5 are amended as follows:

“1. Farming, breeding, aquaculture produces that have not been processed into other products or have only been preliminary processed by the manufacturers or catchers when they are sold and imported.
Enterprises and cooperatives buying farming, breeding, aquaculture produces that have not been processed into other products or have only been preliminary processed and selling them to other enterprises or cooperatives are not required to declare and pay VAT but may deduct input VAT.”
“9. Health services, veterinary medicine services including medical examination and treatment services for human and animals; care services for elderly people and disabled people.”
“23. Exports that are raw natural resources or minerals which have not been processed into other products; exports that are goods processed from natural resources or minerals where the total value of natural resources or minerals plus energy costs makes up at least 51% of the product price.”

Point g Clause 1 of Article 8 is amended as follows:

“g) The exports specified in Clause 23 Article 5 of this Law.
Exported goods/services that are consumed outside Vietnam, within free trade zones; goods/services provided for foreign customers as prescribed by the Government.”

Clause 1 and Clause 2 of Article 13 is amended as follows:

“1. A business establishment that pays VAT using credit-invoice method may offset input VAT that remains after deduction in the month or the quarter against VAT incurred in the next period.
Where a business establishment has registered to pay VAT using credit-invoice method has a new investment project which is still in its investment stage, VAT on goods/services purchased serving the investment has not been deducted, and the remaining tax is at least VND 300 million, VAT shall be refunded.
The VAT that has not been deducted shall not be refunded and instead be carriedforward to the next period in the following cases:

a) The investment project does not have adequate charter capital as registered; engages in conditional business lines while the corresponding conditions have not been fully satisfied as prescribed by the Law on Investment or the fulfillment of such conditions is not maintained throughout its operation;
b) The project is a natural resource extraction project or mineral extraction project licensed from July 01, 2016 or a manufacture project where the total value of natural resources or minerals plus energy costs makes up at least 51% of the product price.

The Government shall regulate this Clause.

A business establishment whose exported goods/services incur an input VAT of at least VND 300 million which has not been deducted in the month or quarter shall receive VAT refund for that month or quarter, unless such goods are imported for exportation or exports are not exported within a customs controlled area as prescribed by the Law on Customs. Inspection after refund shall apply to any manufacturer of exports that does not violate regulations of law on taxation or customs for two consecutive years; any taxpayer that is not considered high-risk as prescribed by the Law on Tax administration.”

Article 2
Amendments to some Articles of the Law on special excise duty No. 27/2008/QH12, which is amended under the Law No. 70/2014/QH13:

Clause 1 and Clause 2 of Article 6 is amended as follows:

“1. Taxable prices of goods domestically produced and imports are selling prices imposed by manufacturers or importers.
Where goods subject to special excise tax are sold to a trading establishment which has a parent company-subsidiary company relationship or subsidiaries in the same parent company as the manufacturer or importer, or a trading establishment has an association therewith, the taxable price must not fall below the percentage (%) of average price paid by the trading establishments directly buying from the manufacturers or importers prescribed by the Government;

Taxable prices of imports at importation are the prices subject to import duty plus (+) import duty. If imports are eligible for exemption or reduction of import duty, taxable price shall not include the reduction or exemption. Special excise tax on goods that was paid at importation may be deducted when determining the special excise tax on goods when they are sold;”
Clause 4 of Section I of Special excise tax schedule in Article 7 is amended as follows:

No.	Goods/service	Tax rate (%)
4	Motor vehicles for the transport of fewer than 24 people
	a) Motor vehicles for the transport of not more than 9 people, except for those specified in Point 4dd, 4e, and 4g of this Schedule
	– Of a cylinder capacity not exceeding 1,500 cm³
	+ From July 01, 2016 to December 31, 2017 inclusive	40
	+ From January 01, 2018	35
	– Of a cylinder capacity exceeding 1,500 cm³ but not exceeding 2,000 cm³
	+ From July 01, 2016 to December 31, 2017 inclusive	45
	+ From January 01, 2018	40
	– Of a cylinder capacity exceeding 2,000 cm³ but not exceeding 2,500 cm³	50
	– Of a cylinder capacity exceeding 2,500 cm³ but not exceeding 3,000 cm³
	+ From July 01, 2016 to December 31, 2017 inclusive	55
	+ From January 01, 2018	60
	– Of a cylinder capacity exceeding 3,000 cm³ but not exceeding 4,000 cm³	90
	– Of a cylinder capacity exceeding 4,000 cm3 but not exceeding 5,000 cm3	110
	– Of a cylinder capacity exceeding 5,000 cm³ but not exceeding 6,000 cm³	130
	– Of a cylinder capacity exceeding 6,000 cm³	150
	b) Motor vehicles for the transport of 10 – 15 people, except for those specified in Point 4dd, 4e, and 4g of this Schedule	15
	c) Motor vehicles for the transport of 16 – 23 people, except for those specified in Point 4dd, 4e, and 4g of this Schedule	10
	d) Motor vehicles for the transport of both passengers and cargoes, except for those specified in Point 4dd, 4e, and 4g of this Schedule
	– Of a cylinder capacity not exceeding 2,500 cm³	15
	– Of a cylinder capacity exceeding 2,500 cm³ but not exceeding 3,000 cm³	20
	– Of a cylinder capacity exceeding 3,000 cm³	25
	dd) Motor vehicles running on both gasoline and electricity or bioenergy, the proportion of gasoline consumption does not exceed 70% of total energy used	70% of tax rates applied to vehicles of the same kind specified in Point 4a, 4b, 4c, and 4d of this Schedule
	e) Motor vehicles running on bioenergy	50% of tax rates applied to vehicles of the same kind specified in Point 4a, 4b, 4c, and 4d of this Schedule
	g) Motor vehicles running on electricity
	– For the transport of not more than 9 people	15
	– For the transport of 10 – 15 people	10
	– For the transport of 16 – 23 people	5
	– For the transport of both passengers and cargoes	10
	h) Motorhomes regardless of cylinder capacity
	– From July 01, 2016 to December 31, 2017 inclusive	70
	– From January 01, 2018	75

Article 3
amendments too some Articles of the Law on Tax administration No. 78/2006/QH11, which is amended under Law No. 21/2012/QH13 and Law No. 71/2014/QH13:

Article 61 is amended as follows:

“Article 61. Tax exemption and tax reduction
The tax authority shall grant tax exemption and tax reduction to the entities eligible for tax exemption and tax reduction specified in legislative documents on taxation, and tax exemption too households and individuals whose annual levies on non-agricultural land do not exceed VND 50,000.”

Clause 4 of Article 92 is amended as follows:

“4. Tax enforcement measures may be postponed if the taxpayer is permitted by the tax authority to pay the tax debt by installments for a period not exceeding 12 months from the beginning of the tax enforcement period. The payment of tax by installments shall be considered according to the taxpayer’s request, provided a credit institution offers a guarantee. The taxpayer shall pay late payment interest on the unpaid tax at 0.03% per day.”

Clause 1 of Article 106 is amended as follows:

“1. Any taxpayer who fails to pay tax by the deadline or extended deadline or the deadline specified in the tax authority’s notice or the deadline specified in the tax authority’s decision shall fully pay tax and late payment interest on the unpaid tax at 0.03% per day.
From July 01, 2016, the rate of late payment interest specified in this Clause shall apply to tax debts incurred before July 01, 2016 that have not been paid by taxpayers, including those discovered after inspections by competent authorities.
Where a taxpayer that provides goods/services which are supposed to be paid by state budget incurs a tax debt because such goods/services have not been paid for, such taxpayer is exempt from paying the late payment interest on the unpaid tax, provided such unpaid tax does not exceed the amount owed by state budget.”

Clause 3 of Article 42 is annulled.

Article 4

This Law comes into force from July 01, 2016, except for the provisions specified in Clause 2 of this Article.
Clause 4 Article 3 of this Law comes into force from September 01, 2016.
The Government shall elaborate the Articles and Clauses of this Law within its responsibility.

This Law is adopted by the 13^th National Assembly of Socialist Republic of Vietnam on this 6^th of April 2016.

PRESIDENT OF THE NATIONAL ASSEMBLY
Nguyen Thi Kim Ngan

The post Law No. 106/2016/QH13 of April 06, 2016, amendments to some articles of the law on value-added tax, the law on special excise duty, and the law on tax administration appeared first on MP Law Firm.

Law No. 71/2014/QH13 of November 26, 2014, amendments to tax laws

mplawadmin — Wed, 26 Nov 2014 15:35:17 +0000

THE NATIONAL ASSEMBLY ——–	SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness —————
Law No. 71/2014/QH13	Hanoi, November 26, 2014

LAW

AMENDMENTS TO TAX LAWS

Pursuant to Constitution of Socialist Republic of Vietnam;
The National Assembly promulgates the Law on amendments to The Law on Corporate income tax No. 14/2008/QH12, some Articles of which are amended in Law No. 32/2013/QH13; the Law on Personal income tax No. 04/2007/QH12, some Articles of which are emended in Law No. 26/2012/QH13; the Law on value-added tax No. 13/2008/QH12, some Articles of which are amended in Law No. 31/2013/QH13; the Law on special excise duty No. 27/2008/QH12; the Law on Severance tax No. 45/2009/QH12; the Law on Tax administration No. 78/2006/QH11, some Articles of which are amended in Law No. 21/2012/QH13; the Law on Export and import tax No. 45/2005/QH11; and the Law on Customs No. 54/2013/QH13.
Article 1.
Amendments on some Articles of the Law on Corporate income tax No. 14/2008/QH12, some Articles of which are amended in Law No. 32/2013/QH13.

Clause 2 Article 3 is amended as follows:

“2. Other incomes include: income from transfer of capital, transfer of the right to capital contribution; income from real estate transfer, transfer of construction projects, transfer of the right to participate in construction projects, transfer of the right to mineral exploration, mineral extraction, and mineral processing; income from the right to enjoyment of property, right to ownership of property, including income from intellectual property rights defined by law; income from transfer, lease, liquidation of assets, including valuable papers; income from deposit interest, loan interest, sale of foreign exchange; collection of debts that were cancelled; receipts from debts without creditors; incomes from business operation in previous years that were committed, and other incomes.
With regard to Vietnamese companies making investments in the countries with which Vietnam have Double Taxation Agreement and transfer incomes exclusive of corporate income tax paid overseas to Vietnam, regulations of such Double Taxation Agreements shall apply. If investments are made in countries with which Vietnam has not had Double Taxation Agreements, and if corporate income tax incurred in such countries is lower than that imposed by the Law on Corporate income tax of Vietnam, the tax difference shall be paid.

Clause 1 Article 4 is amended as follows:

“1. Income from farming, breeding, cultivation and processing of agriculture and aquaculture products, salt production of cooperatives; income of cooperatives engaged in agriculture, forestry, aquaculture, or salt production in disadvantaged areas or extremely disadvantaged areas; income of companies from farming, breeding, cultivation and processing of agriculture and aquaculture products in disadvantaged areas; income from marine fisheries.”

Point a Clause 1 Article 9 is amended as follows:

“a) Actual expenditures on business operation of the company; expenditures on vocational education; expenditures on the company’s national defense and security duties as prescribed by law;”.

Point m Clause 2 Article 9 is annulled.
Point dd and Point e are added to Clause 1 Article 13 as follows:

“dd) Income of a company from execution of a project of investment in manufacturing of products on the List of ancillary products given priority and satisfying one of the following conditions:
– Ancillary products supporting high-technology defined in the Law on High-technology;
– Ancillary products serving the manufacturing of the following industries: textile – garment; leather – footwear; electronic – IT; automobile manufacturing & assembling; mechanical engineering, provided they cannot be manufactured in Vietnam up to January 01, 2015, or can be manufactured in Vietnam and satisfy technical standards established by EU or the equivalent.
The government shall compile the List of ancillary products given priority mentioned in this Point.

e) Income of a company from execution of a project of investment in manufacturing, except for manufacturing of products subject to special excise tax and mineral extraction, the capital investment in which is not smaller than VND 12,000 billion, the technologies applied are assessed in accordance with the Law on High-technology, the Law on Science and Technology, and the registered capital is disbursed within 05 years from the day on which the investment is permitted as prescribed by regulations of law on investment.”
Point d Clause 2 Article 13 is amended as follows:

“d) Income from a company from: planting, cultivating, protecting forests; cultivating, processing agriculture and aquaculture products in a disadvantaged area; producing forestry products in a disadvantaged area; producing, propagating, cross-breeding plants and animals; producing and refining salt, except for the types of salt defined in Clause 1 Article 4 of this Law; investment in preservation of harvested farm produce, preservation of agriculture products, aquaculture products, and foods;”

Clause 3a is added to Clause 1 Article 13 as follows:

“3a. 15% tax is applied to: income of the company from farming, breeding, processing of agriculture and aquaculture products in an area other than disadvantaged areas or particularly disadvantaged areas.”

Clause 5 Article 13 is amended as follows:

“5. Extension of preferential tax period:

a) With regard to any special project that needs to attract substantial investment and requires high technologies, the preferential tax period may be extended for up to 15 years.
b) If a project mentioned in Point e Clause 1 of this Article satisfy one of the following conditions:

– The products are able to go into global competition and generate a revenue of more than VND 20,000 billion per year after not more than five years from the first year in which revenue is earned from the project;
– More than 6,000 employees are hired;
– The project of investment involves economic – technical infrastructure, including: investment in water plants, power plants, water supply and drainage systems, bridges, roads, railroad, airports, seaports, river ports, train stations, new energies, clean energies, energy-saving industry, oil refinery.
The Prime Minister shall decide the extension of preferential tax period mentioned in this Point, provided the extension is not longer than 15 years.”.

Clause 3 Article 2 of the Law No. 32/2013/QH13 is amended as follows:

“3. Any company having a project of investment eligible for enterprise income tax incentives according to regulations of law on corporate income tax at the time when the license for investment or certificate of investment is granted. If regulations of law on corporate income tax are changed and the company still satisfies the conditions for concessional tax according to new regulations, it may choose between preferential tax rates and duration of tax exemption/reduction prescribed by the old or new regulations for the remaining period.
At the end of the tax year 2015, if the project of the company is applying the preferential tax rate of 20% prescribed in Clause 3 Article 13 of the Law on Corporate income tax No. 14/2008/QH12, which is amended in Law No. 32/2013/QH13, the company may apply 17% tax for the remaining period from January 01, 2016.”.
Article 2
Amendments to some Articles of the Law on Corporate income tax, some Articles of which are amended in Law No. 26/2012/QH13.

Clause 1 Article 3 is amended as follows:

“1. Incomes from business include:

a) Incomes from manufacturing, sale of goods or services;
b) Income from freelance works of individuals having licenses or practicing certificates as prescribed by law.

A sole trader’s income of VND 100 million per year or less is not considered income from business prescribed in this Clause.”.

Point c Clause 6 Article 3 is amended as follows:

“c) Prizes won from betting;”

Clause 15 and Clause 16 are added to Article 4 as follows:

“15. Income from salaries, remunerations of Vietnamese crewmembers working for foreign shipping companies or Vietnamese shipping companies that provide international transport services.

Incomes from provision of goods/services directly serving offshore fishing earned by individuals being ship owners, individuals having the right to use ships, and incomes of crewmembers on ships.”.
Article 10 is amended as follows:

“Article 10. Tax incurred by sole traders

Sole traders shall pay personal income tax directly on their incomes; tax rates vary depending on the fields, works of the individuals.
Revenue means the amounts earned from goods sale, goods processing, commission, payments for service provision during the tax period from manufacturing, sale of goods/services.

If a sole trader fails to determine his/her income, the competent tax authority shall calculate the income in accordance with regulations of law on tax administration.

Tax rates:

a) Distribution, supply of goods: 0.5%;

b) Service provision, construction exclusive of building materials: 2%.

Asset lease, insurance brokerage, lottery brokerage, multi-level marketing brokerage: 5%;

c) Manufacturing, transport, services associated with goods, construction inclusive of building materials: 1.5%.

d) Other business activities: 1%.”

Article 13 is amended as follows:

“Article 13. Taxable income from capital transfer

Taxable income from capital transfer equals (=) selling price minus (-) buying price and other reasonable costs related to the generation of income from capital transfer.

Taxable income from securities transfer is the price of each transfer.

Taxable income from capital transfer shall be determined when the transfer is completed as prescribed by law.

The government shall elaborate this Article.”.

Article 14 is amended as follows:

“Article 14. Taxable income from real estate transfer

Taxable income from real estate transfer is the price of each transfer.
The government shall decide the principles and methods for determination of real estate transfer prices.
Taxable income from real estate transfer shall be determined when the transfer contract takes effect as prescribed by law.
Clause 2 Article 23 is amended as follows:

“2. Tax schedule:

Assessable income	Tax rate (%)
a) Income from capital investment	5
b) Income from royalties, franchise	5
c) Income from prize winning	10
d) Income from inheritance, gifts	10
dd) Income from capital transfer prescribed in Clause 1 of this Law Income from securities transfer prescribed in Clause 1 Article 13 of this Law	20 0.1
e) Income from real estate transfer	2

Article 3
Amendments to some Articles of the Law on Value-added tax No. 13/2008/QH12, some Articles of which are amended in Law No. 31/2013/QH13.

Clause 3a is added to Clause 3 Article 5 as follows:

“3a. Fertilizers, specialized machinery and equipment serving agricultural production; offshore fishing vessels; feed for cattle, poultry, and other animals;”.

Point b Clause 2 Article 8 is amended as follows:

“b) Ores for production of fertilizers; pesticides, and growth stimulants for animals, plants;”.

Point c and Point k Clause 2 Article 8 is annulled.

Article 4. Amendments to the Law on Severance tax No. 45/2009/QH12

Clause 7 Article 2 is amended as follows:

“7. Natural water, including surface water and underground water, except for natural water used for agriculture, forestry, aquaculture, and salt production.”.

Clause 5 Article 9 is amended as follows:

“5. Tax on natural water used by households and individuals for their everyday life is exempt.”.
Article 5
Amendments to some Articles of the Law on Tax administration No. 78/2006/QH11, some Articles of which are amended in Law No. 21/2012/QH13.

Clause 1, Clause 1a, and Clause 6 Article 31 is amended as follows:

“1. Taxes that must be declared and paid monthly shall be declared using monthly tax declarations;
1a. Taxes that must be declared and paid quarterly shall be declared using quarterly tax declarations;
“6. The Government shall specify taxes that must be declared monthly, quarterly, annually, and whenever tax is incurred; criteria for determination of taxpayers eligible to declare tax monthly, and tax declarations in each case.”.

Article 43 is amended as follows:

“Article 43. Currencies of revenues, expenditures, taxable prices, and taxes
Taxpayers shall determine their revenues, expenditure, taxable prices, and taxes in Vietnam dong, except for the cases in which such amounts may be paid in foreign currencies as prescribed by the Government. If there are revenues, expenditure, taxable prices in foreign currencies, or amounts payable by the taxpayer in foreign currencies, but a competent authority permits payment in VND, foreign currencies shall be exchanged into VND according to the exchange rate at that time.
The Government shall elaborate this Article .”.

Clause 11 is added to Article 7 as follows:

“11. Depending on the actual conditions and availability of IT equipment, the Government shall decide whether or not taxpayers have to submit documents attached to the tax declaration, tax payment documents, application for tax refund, and other tax documents that regulatory already have.”.

Clause 1 Article 106 is amended as follows:

“1. If a taxpayer pays tax after the deadline, extended deadline, or the deadline written in the notification or tax decision issued by a tax authority, such taxpayer shall pay tax in full and a late payment interest at 0.05% per day on the tax paid behind schedule.
With regard to any taxpayer that provides products or services and gets paid by government budget, if such taxpayer fails to pay tax on schedule because no payments are made by government budget, the taxpayer shall not pay late payment interest on the outstanding tax, which is incurred before payments are made by government budget, provided such outstanding tax does not exceed the amount that is yet to be paid by government budget.”.
Article 6. Implementation

This Law takes effect on January 01, 2015.
Regulations on exchange rates when determining revenues, expenditure, taxable prices, and taxes in the documents below are annulled:
a) Article 8 and Clause 3 Article 9 of the Law on Corporate income tax No. 14/2008/QH12, some Article of which are amended in Law No. 32/2013/QH13;
b) Clause 1 Article 6 of the Law on Personal income tax No. 04/2007/QH11, some Articles of which are amended in Law No. 26/2012/QH13;
c) Clause 3 Article 7 of the Law on Value-added tax No. 13/2008/QH12, some Articles of which are amended in Law No. 31/2013/QH13;
d) Article 6 of the Law on special excise duty No. 27/2008/QH12;
dd) Clause 3 Article 9 and Article 14 of the Law on Export and import tax No. 45/2005/QH11;
e) Clause 4 Article 86 of the Law on Customs No. 54/2013/QH13.
Point c Clause 1 Article 49 of the Law on Tax administration No. 78/2006/QH11, some Articles of which are amended in Law No. 21/2012/QH13 is annulled.
Regulations on determination of tax incurred by sole traders in Clause 1 Article 19, Clause 1 Article 20, and Clause 1 Article 21 of the Law on Personal income tax No. 04/2007/QH12, some Article of which are amended in Law No. 26/2012/QH13, are annulled.
The Government shall elaborate Clauses and Articles mentioned above.

This Law is passed by the 13^th National Assembly of Socialist Republic of Vietnam on November 26, 2014 during the 8^th session.

PRESIDENT OF THE NATIONAL ASSEMBLY
Nguyen Sinh Hung

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Decree No. 91/2014/ND-CP dated October 1, 2014, on amendments to Decrees on Taxes

mplawadmin — Wed, 01 Oct 2014 07:14:11 +0000

THE GOVERNMENT ——–	SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness —————
No. 91/2014/ND-CP	Hanoi, October 1, 2014

DECREE

ON AMENDMENTS TO DECREES ON TAXES

Pursuant to the Law on Government organization dated December 25, 2001;
Pursuant to the Law on Tax administration dated November 29, 2006; the Law on the amendments to the Law on Tax administration dated November 20, 2012;
Pursuant to the Law on Tax administration dated November 29, 2006; the Law on the amendments to the Law on Tax administration dated November 20, 2012;
Pursuant to the Law on Value-added tax dated June 3, 2008; Law on amendments to the Law on Value-added tax dated June 19, 2013;
Pursuant to the Law on Corporate income tax dated June 3, 2008; Law on amendments to the Law on Corporate income tax dated June 19, 2013;
At the request of the Minister of Finance,
The Government issues the Decree on amendments to Decrees on taxes.
Article 1. Decree No. 218/2013/ND-CP dated December 26, 2013 of the Government providing guidance on the implementation of the Law on Corporate income tax shall be amended as follows:
1. Point m Clause 2 of Article 3 shall be amended as follows:
“m) Differences from revaluation of assets as prescribed to contribute capital or transfer upon division, splitting, merger, consolidation or conversion, except for equitization or restructuring of the corporates whose charter capital is wholly held by the state.
Corporates receiving the assets shall be accounted for according to the re-evaluated price when determining the deductible expenses prescribed in Article 9 of this Decree.”
2. Clause 3 of Article 4 shall be amended as follows:
“3. The income derived from the execution of the contract for scientific research and technological development shall be eligible for tax exemption until expiration of that contract but not more than 3 years from the day on which the revenue is earned; the income derived from the sale of products that are results of new technologies applied in Vietnam for the first time shall be eligible for tax exemption provided that it does not exceed 5 years from the day on which the revenue derived from sale of such products; the income derived from the sale of experimental products during the experimental production period shall be applied to relevant laws.”
3. Clause 9 of Article 4 shall be amended as follows:
“9. Income of the Vietnam Development Bank derived from credit extension serving investment in development, or credit extension serving export assigned by the State; income of Bank for Social Policies derived from credit extension to the poor and other subjects enjoyed preferential treatment policy; income of Vietnam Asset Management Company; income of government grants derived from profitable operations assigned by the State : Vietnam social insurance fund, Deposit insurance corporation, Health insurance fund, Apprenticeship enhancement fund, Overseas employment support fund of the Ministry of Labor, Famer support fund, Vietnam legal aid fund, Public-utility telecommunications fund, Local development investment fund, Vietnam environmental protection fund, Credit guarantee fund for small and medium-sized corporates, Cooperative development aid fund, Poor women support fund, Fund for Protection of citizens and legal entities abroad, Housing development fund, Fund for small and medium-sized corporate development, Fund for National scientific and technological development, National technological innovation fund; incomes of non-profit Fund for Land development and other funds of the State prescribed or established and operated by the Government or Prime Minister are deriving from operations assigned by the State.”
4. Point a Clause 1 of Article 9 shall be amended as follows:
“a) The actual expenditures incurred in relation to the business operations of corporates, including the following expenditures:
– Expenditures on performance of duties pertaining to security and defence education, training, activities of militia forces and other defence and security duties as prescribed; the expenditures on operation of Communist Party organizations and social-political organizations in corporates.
– The actual expenditures on HIV / AIDS prevention at workplace, including: expenditure on provision of training in HIV / AIDS prevention for employees, expenditure on raising employees’ awareness of HIV / AIDS prevention , fees for HIV consultation, examination and testing, and expenditures on supporting employees who are HIV sufferers;
– The direct expenditures on the employees’ welfare with legitimate invoices and documents such as: expenditures on employees’ family occasions ; expenditures on holiday allowance or treatment support; expenditures on professional training ; expenditures on supporting employees’ families affected by natural disasters, hostilities, accidents, illness; expenditures on providing reward for employees’ children due to their educational achievements; expenditures on allowances for traveling during holidays of the employees and other welfare expenditures prescribed in guidance of the Ministry of Finance; the total expenditure incurred in the tax year must not exceed actual average 1 month’s salary.”
5. Point d Clause 2 of Article 9 shall be amended as follows:
“d) The depreciation of fixed assets that does not comply with regulations of the Ministry of Finance, including: depreciation for cars with fewer than 9 seats (except for cars used for passenger transport, tourism, or hotel operation; cars used for display and test drive by car dealers) in proportion to the portion of cost in excess of 1.6 billion dong per car; depreciation of civil aircraft or yachts not used for transport of passengers or goods, tourism, or hotel operation.”
6. Clause 3 of Article 16 shall be amended as follows:
“3. The incomes from performing new investment projects prescribed in Clause 3, Article 15 of this Decree and income of the business from performing new investment projects in industrial parks (except for industrial parks located in socially and economically advantaged areas) shall be eligible for tax exemption for 2 years and 50% tax reduction for the next 4 years.
The socially and economically advantaged areas prescribed in this Clause are urban districts of special class cities or the first class cities affiliated to the Central and the first class cities affiliated to provinces, not including urban districts of the aforesaid cities converted from districts from January 1, 2009; where the industrial parks are located in both advantaged and disadvantaged areas, the determination of tax incentive for industrial parks based on actual location of the investment project. The determination of special class cities prescribed in this Clause shall comply with regulations of the Government on classification of cities.”
7. Clause 5a is added to Article 19 as follows:
“5a. With regard to a licensed investment project, if the investment capital, stage, and rate of progress are registered in the initial investment dossier sent to investment licensing agency provided that the subprojects conducted on schedule, the subprojects shall be treated as a subproject of the firs investment project granted the first license (except for objective difficulties or force majeure events). As a result, such subprojects shall be eligible for the same tax incentives as that provided for the initial investment project; if the investment project is issued the investment license before January 1, 2014, such subprojects shall be eligible for tax incentives for the rest of incentive period from January 1, 2014.
If an investment project is provided with tax incentives and new investments in machinery and equipment are regularly made during the period 2009 – 2013, the additional income arising from such investments shall be eligible for the same tax incentives for the remaining period.”
8. Clause 5b is added to Article 19 as follows:
“5b. If the period of tax incentives is still unexpired due to the export ratio but the business is no longer eligible for tax incentives for textile and garment products from January 11, 2007 and other products from January 01, 2012 because of commitments to WTO, it may decide whether to apply preferential tax rates and tax exemption period successively or concurrently for the rest time to textile and garment products from 2007 and to other products from 2012 depending on the business’ fulfillment of requirements (apart from export ratio and use of domestic raw materials) in accordance with the legislative documents on corporate income tax which is effective from the day on which the business is issued with the establishment license to the effective date of the Decree No. 24/2007/ND-CP dated February 14, 2007 of the Government providing guidance on implementation of Law on corporate income tax, or in accordance with regulations of legislative documents on corporate income tax at the time in which tax incentives are adjusted due to the commitments to WTO.”
9. Points 2, 3, 4, 5, 32, and 37 of the List of administrative divisions entitled to corporate income tax incentives in the Appendix enclosed with the Decree No. 218/2013/ND-CP dated December 26, 2013 of the Government as follows:

No.	Provinces	Severely disadvantaged areas.	Disadvantaged areas.
2	Cao Bang	All districts and Cao Bang city
3	Ha Giang	All districts and Ha Giang city
4	Lai Chau	All districts and Lai Chau city
5	Son La	All districts and Son La city
32	Khanh Hoa	Khanh Vinh district, Khanh Son district, Truong Sa island district and other islands affiliated to the province	Van Ninh, Dien Khanh, Ninh Hoa districts, Cam Ranh city
37	Kon Tum	All districts and Kon Tum city

Article 2. Decree No. 209/2013/ND-CP dated December 18, 2013 of the Government providing guidance on the implementation of the Law on Value-added tax shall be amended as follows:
1. Point a Clause 2 of Article 3 shall be amended as follows:
“a) Credit extension services including:
– Grant loans;
– Discount or rediscount negotiable instruments and other valuable papers;
– Issue guarantee;
– Grant finance lease;
– Issue credit card;
– Carry out domestic or international factoring;
– Sell collateral for loan, including the cases in which borrowers sell the collateral themselves by delegation of lenders to repay the secured loans.
– Provide credit information as prescribed in the regulations of Law on the State bank;
– Other methods of credit extension as prescribed.”
2. Point b Clause 2 of Article 9 shall be amended as follows:
“b) There are documents on non-cash payment for purchases, except the case in which total value of the purchases is under VND 20 million.
With regard to purchases which are VND 20 million or over and paid under a deferral plan or installment plan, taxpayers shall declare and deduct the input VAT according to sale contracts, VAT invoices and non-cash payment documents. If there is no proof of non-cash payment because the payment of contract is not due, taxpayers may still declare and deduct the input value-added tax.
The payments made by offsetting the value of purchases against value of sales are also considered non-cash payments.”
3. Point c Clause 1 of Article 9 shall be amended as follows:
“c) The input VAT on fixed assets, machinery, and equipment, including the input VAT on the lease of these assets, machinery, and equipment shall be not deducted and shall be included in costs of fixed assets or the deductible expense prescribed in Law on corporate income tax and other documents providing guidance on implementation in the following cases: specialized fixed assets used for the manufacture of weapons and military equipment for security and defense; fixed assets, machinery, equipment of credit institutions, reinsurers and life insurers, securities companies, medical facilities, training institutions; civil aircraft and yachts not used for commercial cargo transport, passenger transport, tourism, or hotel operation.
With regard to fixed assets being cars with fewer than 9 seats (except for cars used for cargo transport, passenger transport, tourism, or hotel operation; cars used for display and test drive by car dealers) whose value are over VND 1.6 billion, the input VAT amount in proportion to the amount in excess of VND 1.6 billion shall not be deducted.”
Article 3. Decree No. 65/2013/ND-CP dated June 27, 2013 of the Government provide guidance on the Law on Tax administration and the Law on the amendments to the Law on Tax administration shall be amended as follows:
1. Point dd Clause 2 of Article 3 shall be amended as follows:
“dd) Other monetary or non-monetary benefits other than salaries and wages paid by employers and taxpayers are beneficiaries in any shape or form:
– House rents, charges for electricity, water and associated services (if any), not including benefit from houses supplied by the employers to workers working in the industrial zones, economic zones or in disadvantaged or severely disadvantaged areas.
– Accumulated life insurance premium and other non-compulsory insurance premium, accumulated amount of contribution to the voluntary retirement fund, which are paid by the employers for their employees. Before paying the insurance or pension to an individual, the insurer or the company managing the voluntary retirement fund must withhold 10% of the accumulated premium or contribution , which is paid by the employer, as tax from July 01, 2013;
– Membership fees and charges for other services provided for individuals on request, such as: Healthcare, entertainment, sports, recreation, beauty care;
– Other benefits as prescribed by law.”
2. Point b Clause 5 of Article 30 shall be amended as follows:
“b) Individuals and business households that have paid their taxes as prescribed in clause 1 Article 10 of this Decree.”
3. Point e Clause 5 is added to Article 30 as follows:
“e) Individuals are insurance agents, lottery agents, or multi-level marketing agents whose personal income tax has been withheld by the income payer.”
Article 4. Decree No. 83/2013/ND-CP dated July 22, 2013 of the Government provide guidance on the Law on Tax administration and the Law on the amendments to the Law on Tax administration shall be amended as follows:
1. Clause 5 of Article 5 shall be amended as follows:
“5. If the taxpayer suspends the business operation and sends a written request to the business registration authority where taxpayer registered, the taxpayer is not required to submit tax declarations during the suspension period. If the taxpayer carries on the business after the suspension period and a written notification is sent to business registration authority where the tax payer registered, they shall submit tax declarations as prescribed. The business registration authority where businesses or business households registered must notify the tax authority of the information about the businesses or business households that suspended or resumed the business.”
2. Clause 3a is added to Article 7 as follows:
“3a. The Ministry of Finance must consider providing incentives to businesses that have been operating for less than 2 years and have large investment scale, national major projects, and/or privileged investment projects approved by the Prime Minister before granting the investment license. The Ministry of Finance shall give the status of privileged business and provide the incentives as prescribed in Clause 2 of this Article when the businesses build the infrastructure of the project.”
3. Point b Clause 1 of Article 11 shall be amended as follows:
“b) Declarations shall be made quarterly by the taxpayers whose revenue in the previous year is 50 billion VND or lower.”
4. Clause 1 of Article 12 shall be amended as follows:
“1. Declarations of corporate income tax are annual terminal tax declarations or terminal tax declarations up to time that the corporate undergoes division, splitting, consolidation, merger, conversion (not including the cases in which the receivers inheriting all tax obligation from corporate before conversion), dissolution, or shutdown; except ad hoc declarations of corporate income tax on real estate transfer and other operations defined by legislation on corporate income tax.
The tax authority must inspect the final tax declarations of business within 15 working days from the day on which the materials or dossiers relating to the finalization of tax liability are received from the taxpayer in cases of division, splitting, consolidation, merger, conversion, dissolution, or shutdown. The Ministry of Finance shall instruct tax authorities to hire independent audit companies, tax agents to inspect terminal tax declarations of dissolved or shut down businesses.”
5. Clause 2 of Article 12 shall be amended as follows:
“2. Corporate income tax declaration:
a) The declaration of corporate income tax settlement consists of:
– The declaration form of corporate income tax settlement;
– The annual financial statement or financial statement made up to the time the corporate undergoes division, splitting, consolidation, merger, conversion, dissolution, or shutdown;
b) The declaration of corporate income tax arising from real estate transfer shall be the form of declaration of the corporate income tax on real estate transfer;
c) The ad hoc declaration of corporate income tax shall be the form of declaration of corporate income tax.”
6. Clause 1a is added to Article 26 as follows:
“1a. According to the business result, the taxpayer make the provisional payment of corporate income tax in the quarter within 30 days of quarter succeeding the quarter in which tax is incurred.
Every business that makes financial statements quarterly shall determine the provisional amount of corporate income tax in each quarter according to quarterly financial statements and regulations of law on taxation.
Every business that not required to make financial statements quarterly shall determine the provisional amount of corporate income tax in each quarter according to the amount of corporate income tax of the previous year and estimated business result in that year.
If the total of four provisional tax payments is smaller than the amount payable according to the financial statement by 20% or more, the taxpayer shall incur an interest on the amount that exceeds the 20% difference.”
7. Clause 3 of Article 31 shall be amended as follows:
“3. Duration of tax deferral:
a) In the cases in Point a and c Clause 1 of this Article, tax shall be deferred for not more than 02 years from the deadline for paying tax;
In the cases in Point c Clause 1 of this Article, tax shall be deferred for not more than the owning amount of the state budget.
b) In the cases in Points b and d Clause 1 of this Article, tax shall be deferred for not more than 01 year from the deadline for paying tax.”
Article 5. Effect and implementation
1. This Decree shall come into effect from November 15, 2014, except that Article 1 of this Decree shall be applied to the corporate income tax period of 2014.
2. The Ministry of Finance shall provide guidance on implementation of this Decree.
3. The Ministers, Heads of ministerial-level agencies, Heads of Governmental agencies, the Presidents of the People’s Committee of provinces and relevant entities shall take responsibility for the implementation of this Directive./.

FOR THE GOVERNMENT
PRIME MINISTER
Nguyen Tan Dung

The post Decree No. 91/2014/ND-CP dated October 1, 2014, on amendments to Decrees on Taxes appeared first on MP Law Firm.

Circular No. 128/2014/TT-BTC dated September 05, 2014, guiding the reduction of personal income tax for …

mplawadmin — Fri, 05 Sep 2014 07:15:23 +0000

Circular No. 128/2014/TT-BTC dated September 05, 2014, guiding the reduction of personal income tax for …

THE MINISTRY OF FINANCE ——–	SOCIALIST REPUBLIC OF VIET NAM Independence – Freedom – Happiness —————-
No. 128/2014/TT-BTC	Hanoi,September 05, 2014

CIRCULAR

GUIDING THE REDUCTION OF PERSONAL INCOME TAX FOR INDIVIDUALS WORKING IN ECONOMIC ZONES AND BORDER-GATE

Circular No. 128/2014/TT-BTC dated September 05, 2014 of the Ministry of Finance guiding the reduction of personal income tax for individuals working in economic zones and border-gate economic zones
Pursuant to the Law on Personal Income Tax 2007 and the Law on amending and supplementing a number of Articles of personal income tax 2012;
Pursuant to the Law on tax administration and the Law on amending and supplementing a number of articles of the law on tax administration 2012;
Pursuant to the Decree No. 65/2013/ND-CP dated June 27, 2013 of the Goverment detailing a number of articles of the Law on Personal Income Tax and the Law Amending and Supplementing a Number of Articles of the Law on Personal Income Tax;
Pursuant to the Decree No. 83/2013/ND-CP of July 22, 2013 of the Government detailing a number of articles of the Law on Tax Administration and the Law Amending and Supplementing a Number of Articles of the Law on Tax Administration
Pursuant to the Decree 29/2008/ND-CP dated March 14, 2008 of the Goverment providing for industrial parks, export processing zones and economic zones;
Pursuant to Decree No. 164/2013/ND-CP of November 12, 2013, amending and supplementing a number of articles of the Government’s Decree No. 29/2008/ND-CP of March 14, 2008, on industrial parks, export-processing zones and economic zones
Pursuant to the Decision No. 72/2013/QD-TTg of November 26, 2013 of the Prime Minister prescribing mechanisms and financial policies applicable to border-gate economic zones;
Pursuant to Decision No. 215/2013/ND-CP dated December 23, 2013 of the Goverment defining the functions, tasks, powers and organizational structure of the Ministry of Finance
At the proposal of the General Director of General Department of Taxation;
The Ministry of Finance guides the reduction of personal income lax for individuals working in economic zones and border-gate economic zones (below collectively referred to as economic zones) as follows:
Article 1. Tax-payers and scope of application
Eligible for reduction of personal income tax under the guidance in this Circular are individuals who are residents and non-residents according to the laws and directly work in economic zones, including:
1. Individuals persons who sign labor contracts with economic zone management boards and state management agencies in economic zones and actually work in economic zones.
2. Individuals persons who labor contracts with organizations and individuals having business establishments in economic zones and actually work in economic zones.
3. Individuals persons who work for organizations and individuals located outside economic zones who are sent to work in economic zones to perform economic contracts signed between these organizations and individuals and economic zone management boards or organizations or individuals conducting investment, production and business activities in economic zones.
4. Individuals and groups of individuals, who have fixed places of business in economic zones, conduct production and business activities under business registration certificates in economic zones.
5. Individuals who sign contracts with organizations in economic zones and are working in the hazardous waste treatment plants in economic zones but according to the law on environment and the plan of the economic zone as approved, the hazardous waste treatment plants must be located outside economic zone.
Article 2. Taxable incomes used as a basis for consideration for tax reduction
Incomes used as a basis for calculation of personal income tax amounts to be reduced under this Circular include:
1. Taxable incomes from salaries or wages paid by state management agencies or organizations and individuals having business establishments in economic zones to those who work in economic zones or paid by organizations or individuals conducting business activities in economic zones;
2. Taxable incomes from salaries or wages paid by organizations or individuals located outside economic zones to those who are sent to work in economic zones to perform economic contracts signed with economic zone management boards or State management agencies in economic zones or organizations, individuals conducting investment, production and business activities in economic zones;
3. Taxable incomes from production and business activities conducted in economic zones of individuals or groups of individuals who are granted business registration certificates in economic zones.
4. Taxable incomes from salaries, wages and incomes from business activities in accordance with the regulations on personal income tax.
The determination of taxable incomes from salaries, wages and incomes from business activities shall be implemented according to the law on personal income tax.
Article 3. Determination of reduced tax amounts
1. For residents:
a) For residents having taxable incomes as guided under Article 2 of this Circular (hereinafter referred to as taxable incomes in economic zone):
a.1. Determination of temporarily paid income tax amount reduced:
Temporarily paid income tax amount reduced is equal to the temporarily paid or deducted personal income tax amount (monthly, quarterly or each arising time) multiplied by 50%
a.2. Determination of to be reduced income tax amount:
The to-be-reduced income tax amount is equal to the total payable income tax amount multiplied by 50%.
b. In case residents earn both incomes from salaries or wages and incomes from business activities in economic zones and incomes arising outside economic zones:
b.1. Determination of temporarily paid income tax amount reduced:

Temporarily paid personal income tax amount reduced

The temporarily paid or deducted personal income tax amount (monthly, quarterly or each arising time) corresponding with taxable incomes in economic zones

50%

b.2. Determination of to be reduced income tax amount:

Temporarily paid income tax amount reduced in the year	=	The total paid personal income tax amount in the year	x	the taxable incomes in economic zone	x	50%
				the total payable income tax amount in the tax period

In which, the total payable personal income tax amount in the year is determined on the basis of the total taxable income from salaries, wages and incomes from business activities arising in the tax period as stipulated by the law on personal income tax.
2. For non-residents:
To be reduced personal income tax amount = the total taxable income in economic zones multiplied by (x) the tax rate applicable to non-residents multiplied by (x) 50%.
Article 4. Tax declaration, payment and finalization
Individuals stated in Article 1 of this Circular who have taxable incomes as guided under Article 2 of this Circular shall declare, pay and final the personal income tax amount as stipulated by the law on tax management.
Article 5. Effect
1. This Circular takes effect on October 20, 2014 and replaces the Circular No. 176/2009/TT-BTCdated September 09, 2009 of the Ministry of Finance.
2. For individuals doing business in economic zones before January 1, 2009, and earning incomes from their business who are entitled to investment incentives under the Law on Enterprise Income Tax by the end of December 31, 2008, if the enterprise income tax exemption period has not yet expired, they will enjoy personal income tax exemption till the expiration of the remaining tax exemption period and after that, enjoy 50% reduction of personal income tax under this Circular.
3. Any problems arising in the course of implementation should be reported to the Ministry of Finance (General Department of Taxation) for consideration and settlement.

FOR THE MINISTER
DEPUTY MINISTER
Do Hoang Anh Tuan

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Circular No.103/2014/TT-BTC dated August 06, 2014

mplawadmin — Wed, 06 Aug 2014 07:17:31 +0000

MINISTRY OF FINANCE ——–	SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness —————
No. 103/2014/TT-BTC	Hanoi, August 06, 2014

CIRCULAR

GUIDELINES FOR FULFILLMENT OF TAX LIABILITY OF FOREIGN ENTITIES DOING BUSINESS IN VIETNAM OR EARNING INCOME IN VIETNAM

Pursuant to the Law on Value-added tax No. 13/2008/QH12 dated June 03, 2008; the Law No.31/2013/QH13 dated June 19, 2013 on amendments to the Law on Value-added tax; the Government’s Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on the implementation of the Law on Value-added tax;
Pursuant to the Law on Value-added tax No. 13/2008/QH12 dated June 03, 2008; the Law No. 31/2013/QH13 dated June 19, 2013 on amendments to the Law on Value-added tax; the Government’s Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on the implementation of the Law on Value-added tax;
Pursuant to the Law on Tax administration No. 78/2006/QH11 dated November 29, 2006 and the Law No. 21/2012/QH13 dated November 20, 2012 on amendments to the Law on Tax administration;
Pursuant to the Government’s Decree No. 215/2013/ND-CP dated December 23, 2013 defining the functions, tasks, entitlements and organizational structure of the Ministry of Finance;
At the request of the Director of the General Department of Taxation;
The Ministry of Finance promulgates a Circular on guidelines for fulfillment of tax liability of foreign entities doing business in Vietnam or earning income in Vietnam.
Chapter I

GENERAL REGULATIONS

Article 1. Regulated entities
This Circular is applied to the entities below (except for the cases in Article 2 Chapter I):
1. Foreign business organizations having permanent establishments in Vietnam or not; foreign business individuals that are residents of Vietnam or not (hereinafter referred to as foreign contractors and foreign sub-contractors) who do business in Vietnam or earn income in Vietnam under contracts, agreements, or commitments between the foreign contractor and a Vietnamese entity or between a foreign sub-contractor and a foreign sub-contractor to perform part of the main contract.
2. Foreign entities providing goods in Vietnam in the form of domestic export and earn income in Vietnam under contracts between them and Vietnamese companies (except for cases in which goods are processed and then returned to foreign entities) or distribute goods in Vietnam or provide goods under Incoterms rules that require the sellers to be responsible for goods that have been taken into Vietnam’s territory.
Example 1:
– Case 1: Company X who is located overseas signs a contract to buy cloth from Vietnamese company A and requests company A to deliver the goods to Vietnamese company B (in the form of domestic export defined by law). Company X earns an income in Vietnam under a contract between company X and company B (company X sells cloth to company B).
In this case, company X is regulated by this Circular and thus, company B shall declare and pay tax on behalf of company X in accordance with this Circular.
– Case 2: Company Y who is located overseas signs a contract to process cloth with Vietnamese company C and requests company C to deliver the goods to Vietnamese company D for further processing (in the form of domestic export defined by law). Company Y earns an income in Vietnam under a contract between company Y and company D (company Y sells goods to company D).
In this case, company Y is regulated by this Circular and company D shall declare and pay tax on behalf of company Y in accordance with this Circular.
– Case 3: Company Z who is located overseas signs a contract to process or buy cloth with Vietnamese company E (company Z provides raw materials for company E) and requests company E to deliver the goods to Vietnamese company G for further processing (in the form of domestic export defined by law). After processing, company G returns the goods to company Z and company Z must pay company G for the processing under the contract.
In this case, company Z is not regulated by this Circular.
3. Any foreign entity that performs the whole or part of goods distribution or service provision in Vietnam, who is still the owner of goods that are delivered to Vietnamese organizations or take responsibility for the cost of distribution, advertising, marketing, quality of goods/services delivered to Vietnamese organizations, or impose prices (including the cases in which the foreign entity authorities or hires some Vietnamese organization to perform part of the distribution or service provision pertaining to goods sale in Vietnam).
Example 2:
Company A who is located overseas delivers goods to a Vietnamese company B or authorizes company B to perform some services (delivery, distribution, marketing, advertising) while company A is still the owner of goods delivered to company B or still take responsibility for the cost, quality of goods/services delivered to company B, or the one who impose prices for goods/services. In this case, company A is regulated by this Circular.
4. Any foreign entity that negotiates or concludes contracts via a Vietnamese entity.
5. Any foreign entity that exercises its right to export, import, distribute goods in Vietnam, buy goods to export, or sell goods to Vietnamese traders in accordance with trading laws.
Article 2. Entities not regulated by this Circular
This Circular does not apply to:
1. Any foreign entity doing business in Vietnam under the Law on Investment, the Law on Petroleum, and the Law on credit institutions.
2. Any foreign entity that provides goods for Vietnamese entities without ancillary services in Vietnam in the form of:
– Delivery at the foreign border checkpoint: the seller incurs all responsibility, costs, and risk to the transport and delivery of goods at the foreign checkpoint; the buyer incurs all the responsibility, cost and risk to the receipt and transport of goods from the foreign checkpoint to Vietnam (even if goods are delivered at a foreign border checkpoint under a contract which prescribes that the seller is responsible for warranty).
– Delivery at a Vietnam’s border checkpoint: the seller incurs all responsibility, costs, and risk until goods reaches the Vietnam’s checkpoint; the buyer incurs all the responsibility, cost and risk to the receipt and transport of goods from the Vietnam’s checkpoint (even if goods are delivered at a Vietnam’s border checkpoint under a contract which prescribes that the seller is responsible for warranty).
Example 3:
Company C who is located in Vietnam signs a contract to import excavators and bulldozers with company D who is located overseas. Goods are delivered at a Vietnam’s border checkpoint. Company D incurs all responsibility and costs related to the goods until they arrive at the Vietnam’s border checkpoint; company C is incurs responsibility and costs related to the receipt and transport of goods from the Vietnam’s checkpoint. The contracts prescribes that the goods come with a one-year warranty by company D. Other than that, company D does not provide any services related to such goods in Vietnam. In this case, company D’s provision of goods are not regulated by this Circular.
3. Any foreign entity that earns income from services provided and used outside Vietnam.
Example 4:
Company H of Hong Kong provides material handling services at a port in Hong Kong for company A in Vietnam. Company A pays company H for material handling services at the Hong Kong port.
In this case, material handling services at Hong Kong port are provided in Hong Kong, thus they are not taxable in Vietnam.
Example 5:
Professional services, bond management and issuance services, legal counseling, depository services, roadshow services provided by a foreign organization for company A in Vietnam at the countries where company A issues its GDRs (Global Depository Receipt) and international bonds are not regulated by this Circular.
4. Any foreign entity that provides any of the services below for Vietnamese entities, provided the services are provided overseas:
– Repair of means of transport (aircraft, aircraft engine, aircraft and ship parts), machinery and equipment (including undersea cables and transmission devices), with or without spare parts;
– Advertising and marketing (except for online advertising and online marketing);
Example 6:
A Vietnamese company signs a contract with a organization in Singapore to run advertisements for products in Singapore. This advertising service is not regulated by this Circular. A Vietnamese company signs a contract with an organization in Singapore to run advertisements on the Singapore’s market. This advertising service is not regulated by this Circular.
– Trade promotion and investment encouragement;
– Brokering goods sale and services provision overseas;
Example 7:
A Vietnamese company signs a contract to hire a company in Thailand to broker the sale of its goods in Thailand or on the international market. This brokerage service is not regulated by this Circular. In case the Vietnamese company hires a company in Thailand to broker a transfer of the Vietnamese company’s real estate in Vietnam, then this brokerage service is regulated by this Circular.
– Training (except for online training);
Example 8:
Company A in Vietnam signs a contract with University B of Singapore for provision of training for Vietnamese employees at University B. The training services provided by University B are not regulated by this Circular. In case Company A in Vietnam signs a contract with University B which requires University B to provide training for Vietnamese employees in Vietnam in the form of online training, the online training services provided by University B are regulated by this Circular.
– Division of charges for international telecommunications services between Vietnam and foreign contractors, which are provided outside Vietnam, lease of transmission lines and satellite frequency bands overseas as prescribed by the Law on telecommunications; division of charge for international postal services between Vietnam and other countries as prescribed by the Law on Postal services and international agreements on postal services to which Vietnam is a signatory, provided such services are provided outside Vietnam.
5. Any foreign entity using a bonded warehouse or inland clearance depot (ICD) as a warehouse serving international transport, transit of goods, or storage of goods to be processed by other companies.
Article 3. Interpretation of terms
In this Circular, the terms below are construed as follows:
1. “Main contract” means a contract or agreement between a foreign contractor and a Vietnamese party.
2. “Subcontract” means a contract or agreement between a foreign contractor and a subcontractor.
Subcontractors include foreign sub-contractor and Vietnamese sub-contractors.
3. Vietnam’s territory include Vietnam’s territorial land, islands, inland waters, territorial sea and the sky above, the waters beyond territorial sea, including sea bed and the underground earth over which Vietnam exercises its full national sovereignty and jurisdiction.
Article 4. Taxpayers
1. Foreign contractors and foreign sub-contractors who meet the requirements in Article 8 Section 2 Chapter II or Article 14 Section 4 Chapter II, do business in Vietnam, or earn income in Vietnam. The business is done under the main contract with a Vietnamese entity or another foreign entity doing business in Vietnam under the subcontract.
Foreign contractors and foreign sub-contractors that have permanent establishments in Vietnam or are residents of Vietnam shall be determined in accordance with the Law on Corporate income tax, the Law on Personal income tax, and guiding documents.
If permanent establishments and residents are defined otherwise by a Double Taxation Agreement to which Vietnam is a signatory, such Agreement shall apply.
2. Organizations established and operated under Vietnam’s law or registers its operation under Vietnam law; business entities that purchase services, services attached to goods, or pay income in Vietnam under main contracts or subcontracts; purchase goods in the form of domestic import or under Incoterms; distribute goods or provide services on behalf of foreign entities in Vietnam (hereinafter referred to as Vietnamese entities) include:
– Business organizations established under Company law, the Law on Investment, and the Law on Cooperatives;
– Business organizations of political organizations, socio-political organizations, social organizations, socio-professional organizations, armed force units, public service providers, and other organizations;
– Petroleum contractors defined in the Law on Petroleum;
– Branches of foreign companies permitted to operate in Vietnam;
– Foreign organizations or representatives of foreign organizations permitted to operate in Vietnam;
– Air ticket outlets or agents in Vietnam of foreign airlines that are entitled to enter and leave Vietnam to provide transport services directly or in cooperation;
– Organizations and individuals that provide sea transport services of foreign shipping companies; agents in Vietnam of foreign logistics companies;
– Securities companies, securities issuers, asset management companies, commercial banks where securities investment funds or foreign organizations open their securities investment accounts
– Other organizations in Vietnam;
– Businesspeople in Vietnam.
Taxpayers defined in Clause 2 Article 4 Chapter I are obliged to withhold VAT and corporate income tax as prescribed in Section 3 Chapter II before paying foreign contractors and foreign sub-contractors.
Article 5. Taxes
1. Taxpayers defined in Clause 2 Article 4 Chapter I are obliged to withhold VAT and corporate income tax as prescribed in Section 3 Chapter II before paying foreign contractors and foreign sub-contractors.
2. Foreign contractors and foreign sub-contractors are foreign businesspeople that pay VAT as prescribed in this Circular or pay personal income tax as prescribed by regulations of law on personal income tax.
3. Foreign contractors and foreign sub-contractors shall pay other taxes, fees and charges in accordance with applicable regulations of law on taxes, fees and charges.
Chapter II

BASIS AND METHODS FOR TAX CALCULATION

Section 1. Items subject to VAT and income subject to corporate income tax
Article 6. Items subject to VAT
1. Services or services attached to goods subject to VAT that are provided by foreign contractors and foreign sub-contractors under main contracts and subcontracts and used for manufacture, sale, and consumption in Vietnam (except for the case in Article 2 of Chapter I), including:
– Services or services attached to goods subject to VAT that are provided in Vietnam by foreign contractors and foreign sub-contractors and consumed in Vietnam;
– Services or services attached to goods subject to VAT that are provided outside Vietnam by foreign contractors and foreign sub-contractors and consumed in Vietnam.
2. If a contract stipulate that goods shall be delivered to a location in Vietnam (except for the case in Clause 5 Article 2 Chapter I), or goods supply is attached to services provided in Vietnam such as installation, test run, warranty, maintenance, replacement, or other services (including complimentary services), the value of goods is only subject to VAT at importation, whether or not such services are part of the goods supply contract. The value of services is subject to VAT as prescribed in this Circular. If the contract does not separate the value of goods from that of attached services (including complimentary services), the whole contract is subject to VAT.
Example 9:
Company A in Vietnam signs a contract to buy a production line for a cement factory contract with company B overseas. The total contract value is USD 100 million, including USD 80 million of machinery and equipment (some of them are subject to 10% VAT) and USD 20 million of installation guide, supervision, warranty, and maintenance.
VAT payable by company B is determined as follows:
– VAT applies to value of services (USD 20 million), not value of imported machinery and equipment.
– If the value of services cannot be separated from the value of machinery and equipment, VAT shall apply to the whole contract value (USD 100 million).
Article 7. Income subject to corporate income tax
1. Income subject to corporate income tax of foreign contractors and foreign sub-contractors are income from provision of goods, services, and services attached to goods in Vietnam under main contracts and subcontracts (except for the case in Article 2 Chapter I).
2. If goods is delivered to a location in Vietnam (except for the case in Clause 5 Article 2 Chapter I), or goods provision is attached to some services provided in Vietnam such as marketing, sale promotion, installation, test run, warranty, maintenance, replacement, and other services (including complimentary services), whether or not such services are part of the goods supply contract, then income subject to corporate income tax of foreign contractors and foreign sub-contractors is the total value of goods/services.
Example 10:
Company A in Vietnam signs a contract to buy a production line for a cement factory project with company B overseas. The total contract value is USD 100 million (VAT-exclusive), including USD 80 million of machinery and equipment and USD 20 million of installation guide, supervision, warranty, and maintenance.
Corporate income tax payable by company B is determined as follows:
– Corporate income tax on the value of imported machinery and equipment (USD 80 million) and VAT on the value of services (USD 20 million) shall be calculated separately at specific rates.
– If the value of machinery and equipment cannot be separated from the value of services, corporate income tax shall apply to the total contract value (USD 100 million) at a specific rate.
3. Incomes earned in Vietnam by foreign contractors and foreign sub-contractors are any incomes they receive under main contracts or subcontracts (except for the case described in Article 2 Chapter I), regardless of their business locations. Taxable incomes of foreign contractors and foreign sub-contractors in some cases:
– Income from transfer of the right to ownership or the right to enjoyment of property, transfer of the right to participate in business contracts/projects in Vietnam, transfer of right to property in Vietnam.
– Income from copyright means any income paid for the right to use, transfer of intellectual property rights and technology transfer, software copyright (including payments for the right to use, transfer of copyright, transfer of industrial property rights, transfer of technologies and software copyright.
“Copyright”, “industrial property rights”, “technology transfer” are defined in the Civil Code, the Law on Intellectual property, the Law on Technology transfers, and their guiding documents.
– Income from transfer and liquidation of assets.
– Income from loan interest means income of the creditor from loans, whether or not such loans are secured, whether or not the creditor receive profits of the borrower; income from deposit interest (except for deposit interest of foreigners and interest derived from deposit accounts meant to sustain operation in Vietnam of diplomatic missions, representative offices of international organizations and non-governmental organizations in Vietnam), including associated bonuses (if any); income from interest on late payment under contracts; income from bond interest and bond discounts (except for tax-free bonds), treasury bills, income from certificates of deposit.
Loan interest includes the fees payable by the Vietnamese party under the contract.
– Income from securities transfer.
– Fines and damages paid by parties breaching contracts.
– Other incomes defined by law.
Section 2. PAYING VAT USING CREDIT-INVOICE METHOD, PAYING CORPORATE INCOME TAX ACCORDING TO DECARED REVENUE AND EXPENSE
(hereinafter referred to as declaration method)
Article 8. Requirements and regulated entities
A foreign contractor or foreign sub-contractor shall pay tax in accordance with instructions in section 2 Chapter II if the requirements below are satisfied:
1. The contractor/subcontractor has a permanent establishment in Vietnam or the contractor/subcontractor is a resident of Vietnam;
2. The period of business operation on Vietnam under the main contract or subcontract is 183 days or longer from the effective date of the contract.
3. The contractor/subcontractor applies Vietnam’s accounting practice, has applied for tax registration and issued with a taxpayer ID number (TIN) by a tax authority.
Article 9. VAT
The Law on Value-added tax and its guiding documents shall apply.
Article 10. Corporate income tax
The Law on Corporate income tax and its guiding documents shall apply.
Section 3. PAYING VAT AND CORPORATE INCOME TAX ACCORDING TO FIXED RATES
(hereinafter referred to as direct method)
Article 11. Requirements and regulated entities
If the foreign contractor or foreign sub-contractor fails to meet any of the requirements mentioned in Article 8 Section 2 Chapter II, the Vietnamese party shall pay tax on their behalf in accordance with instructions in Article 12 and Article 13 Section 3 of Chapter II.
Article 12. VAT
The basis for tax calculation is the revenue subject to VAT and tax rate (%).

VAT payable

Revenue subject to VAT

VAT rate

Foreign contractors and foreign sub-contractors paying tax using direct method must not deduct VAT on goods/services purchased to execute main contracts and subcontracts.
1. Revenue subject to VAT
a) Revenue subject to VAT:
Revenue subject to VAT is total revenue from provision of services and services attached to goods subject to VAT received by the foreign contractor or foreign sub-contractor inclusive of subtracting taxes payable and any costs (if any) paid by the Vietnamese party instead of the foreign contractor or foreign sub-contractor.
b) Determination of revenue subject to VAT in some cases:
b.1) If the main contract or subcontract stipulates that revenue earned by the foreign contractor or foreign sub-contractor does not include VAT, the revenue subject to VAT must be converted into VAT-inclusive revenue and shall be calculated as follows:

Revenue subject to VAT	=	VAT-exclusive revenue
		1 – VAT rate

Example 11:
Foreign contractor A signs a contract with a Vietnamese entity to supervise the construction of cement factory Z. The contract value is USD 300,000 exclusive of VAT (but inclusive of corporate income tax). Furthermore, the Vietnamese entity provides accommodations and workplaces for managers of foreign contractor A, which are valued at USD 40,000 exclusive of VAT. According to the contract, the Vietnamese party is responsible for paying VAT on behalf of the foreign contractor. The revenue subject to VAT earned by foreign contractor A is calculated as follows:

Revenue subject to VAT	=	300,000 + 40,000	=	357,894.73 (USD)
		(1- 5%)

No.	Trade	VAT rate
1	Services, rental of machinery and equipment, insurance; construction, installation exclusive of raw materials, machinery and equipment.	5
2	Production, transportation, services attached to goods; construction, installation inclusive of raw materials, machinery and equipment.	3
3	Other trades	2

b) Determination of revenue VAT rates in some cases:
b.1) If the main contract or subcontract consists of various business activities or part of the contract value is not subject to VAT, VAT rates shall be applied separately on each business activity carried out by the foreign contractor or foreign sub-contractor. If the value of each business activity cannot be separated, the highest VAT rate shall apply to the whole contract value.
With regard to construction/installation inclusive of raw materials or machinery and equipment: if the value of each activity can be separated, the foreign contractor is not required to pay VAT on the value of raw materials or machinery and equipment, which has been paid during importation or is exempt from VAT; corresponding VAT rate shall apply to the remaining value. With regard to construction/installation inclusive of raw materials or machinery and equipment: if the value of each activity can be separated, the foreign contractor is not required to pay VAT on the value of raw materials or machinery and equipment, which has been paid during importation or is exempt from VAT; corresponding VAT rate shall apply to the remaining value. Where the foreign contractor signs contracts with subcontractors to delegate the works inclusive of raw materials or machinery and equipment, and the foreign contractor only provide the other services under the main contract, 5% VAT on service provision shall apply.
Example 15:
Foreign contractor A signs a contract to build power plant X with a Vietnamese entity. The contract value is USD 75 million (inclusive of VAT).
Case 1: Value of each business activity can be separated:
+ Value of machinery and equipment provided for the construction: USD 50 million.
Value of machinery and equipment subject to VAT: USD 30 million.
Value of machinery and equipment not subject to VAT: USD 15 million.
Value of warranty services attached thereto: USD 5 million.
+ Value of technological line design and other design services: USD 5 million.
+ Value of workshops, other auxiliary systems, construction, and installation: USD 15 million.
+ Value of supervision services and installation guide: USD 3 million.
+ Value of operation training and test run services: USD 2 million.
During importation, VAT on USD 30 million of machinery and equipment has been paid. Value of machinery and equipment not subject to VAT is USD 15 million.
Foreign contractor shall only pay VAT on the value of services and construction/installation in the contract signed with the Vietnamese entity. Value of services (warranty, design, supervision, installation guide, technical training, test run) is USD 15 million, which applies 5% VAT on revenue from service provision; value of construction and installation is USD 15 million, which applies 3% VAT on revenue from construction and installation (VAT is not imposed on value of imported machinery and equipment).
Case 2: The main contract does not separate value of each business activity and only specifies that the contract value include machinery, equipment, design services, supervision services, installation guide, technical training, and test run services. If there are not adequate documents proving the payment of VAT on machinery and equipment during importation, foreign contractor A shall pay 3% VAT on the whole contract value, which is USD 75 million.
Case 3: Where foreign contractor A signs contracts with subcontractors to delegate the works inclusive of raw materials and foreign contractor A only provide the other services (such as supervision service, installation guide) the value of such services shall apply 5% VAT.
b.2) With regard to contracts to provide machinery and equipment that include services performed in Vietnam, if value of machinery and equipment can be separated from value of services, corresponding VAT rates shall apply to corresponding parts of the contract. If the value of services cannot be separated from the value of machinery and equipment, 3% VAT shall apply.
Example 16:
Korean contractor H, who does not follow Vietnam’s accounting practice, signs a contract with company B in Vietnam to provide machinery and equipment attached to installation and test run services for USD 10 million. The contract does not separate the value of machinery and equipment from the value of services, 3% VAT shall apply.
3. VAT incurred by foreign contractors and foreign sub-contractors that provide goods/services serving petroleum exploration and extraction
a. Any foreign contractor or foreign sub-contractor that provides goods/services serving petroleum exploration and extraction fails to satisfy one of the requirements in Article 8 Section 2 Chapter II, the Vietnamese entity shall withhold and pay VAT before paying the foreign contractor or foreign sub-contractor. The amount of tax paid on behalf of the foreign contractor or foreign sub-contractor equals (=) the total payment exclusive of VAT multiplied by (x) VAT rate applied to the goods/services provided by the foreign contractor.
b. In case the foreign contractor or foreign sub-contractor provides goods/services serving petroleum exploration and extraction satisfy all three requirements in Article 8 Section 2 Chapter II or two requirements in Clause 1, Clause 2 Article 8 Section 2 Chapter II, and adheres to regulations of law on accounting and instructions of the Ministry of Finance:
– If the Vietnam entity pays the foreign contractor or foreign sub-contractor before they obtain the tax registration certificate to declare and pay tax using credit-invoice method, the Vietnam entity shall withhold and pay VAT on their behalf before making the payment. The amount of tax paid on behalf of the foreign contractor equals (=) the total payment exclusive of VAT multiplied by (x) VAT rate applied to the goods/services provided by the foreign contractor.
– When the foreign contractor or foreign sub-contractor is issued with the tax registration certificate by the tax authority, they may transfer invoices and receipts made during the tax period to the Vietnamese entity in order for the Vietnamese entity to declare and pay VAT on their behalf.
Input VAT incurred by the foreign contractor or foreign sub-contractor before the tax registration certificate is issued must not be deducted.
Example 17:
In January 2015, foreign contractor A signs a contract with a Vietnamese entity to provide petroleum services for USD 01 million. Before obtaining the tax registration certificate, foreign contractor A incurs a VAT of USD 5,000 on purchased goods/services. On March 15, 2015, the Vietnamese entity pays USD 100,000 to foreign contractor A (exclusive of VAT and inclusive of corporate income tax). The Vietnamese entity shall pay VAT on behalf of foreign contractor A, which equals (=) 100,000 x 10% = 10,000 (USD).
On May 01, 2015, foreign contractor A applies for a registration and is issued with a tax registration certificate by the tax authority. In May 2015, the Vietnamese entity pays USD 200,000 to foreign contractor A (exclusive of VAT and inclusive of corporate income tax). Thus, output VAT incurred by foreign contractor A in May is USD 20,000 (= 200,000 x 10%).
Input VAT of foreign contractor A incurred during the period from May 01, 2015 to May 30, 2015 is USD 2,000 (foreign contractor A has a taxpayer ID number during this period). Foreign contractor A shall transfer all invoices and receipts made in May 2015 to the Vietnamese entity in order for the Vietnamese entity to declare and pay VAT on behalf of foreign contractor A.
VAT payable by foreign contractor A in the tax period May 2015 is 18,000 USD (= 20,000 USD – 2,000 USD).
Foreign contractor A must not deduct USD 5,000 of input VAT incurred before May 01, 2015.
Article 13. Corporate income tax
The basis for tax calculation is the revenue subject to corporate income tax CIT and tax rate (%).

CIT payable

Revenue subject to CIT

CIT rate

1. Revenue subject to CIT
a) Revenue subject to CIT
Revenue subject to CIT is the total revenue exclusive of VAT received by the foreign contractor or foreign sub-contractor, exclusive of taxes payable. Revenue subject to CIT includes the costs paid by the Vietnamese entity on behalf of the foreign contractor or foreign sub-contractor (if any).
b) Determination of revenue subject to CIT in some cases:
b.1) If the main contract or subcontract stipulates that revenue received by the foreign contractor or foreign sub-contractor is exclusive of CIT, the revenue subject to CIT shall be calculated as follows:

Revenue subject to CIT	=	CIT-exclusive revenue
		1 – CIT rate

Example 18:
Foreign contractor A signs a contract with a Vietnamese entity to supervise the construction of cement factory Z. The contract value is USD 285,000 exclusive of VAT and CIT. Furthermore, the Vietnamese entity provides accommodations and workplaces for managers of foreign contractor A, which are valued as USD 38,000 exclusive of VAT and CIT. According to the contract, the Vietnamese entity is responsible for paying VAT and CIT on behalf of the foreign contractor. CIT payable by foreign contractor A is calculated as follows:
Revenue subject to CIT:

Revenue subject to CIT	=	285,000 + 38,000	=	340,000 (USD)
		(1- 5%)

b.2) If a foreign contractor signs a contract with Vietnamese sub-contractors or foreign sub-contractors who pay tax using direct method or foreign sub-contractors who pay tax using mixed methods to do part of the works in the main contract signed with the Vietnamese entity, and a list of such Vietnamese sub-contractors and foreign sub-contractors is enclosed with the main contract, the revenue subject to CIT of the foreign contractor does not include the value of works carried out by Vietnamese sub-contractors or foreign sub-contractors.
In case the foreign contractor signs a contract with suppliers in Vietnam to buy raw materials, machinery and equipment to execute the main contract, buy goods/services serving internal use or the works other than those in the main contract, the values of such goods/services shall not be deductible when calculating revenue subject to CIT of the foreign contractor.
Example 19:
Foreign contractor A signs a contract to build cement factory Z with a Vietnamese entity. The total contract value is USD 9 million exclusive of VAT. According to the main contract, foreign contractor A shall delegate part of the construction (stipulated in the main contract signed with the Vietnamese entity) to Vietnamese sub-contractor B, which is valued at USD 01 million exclusive of VAT. Furthermore, during the construction process, foreign contractor A buys building materials (bricks, cement, sand, etc.), other goods and services such as stationery, car rental and hotel rooms for experts, etc. to serve the contract execution.
In this case, the revenue subject to CIT earned by foreign contractor A is calculated as follows:
Revenue subject to CIT = USD 9 million – USD 1 million = USD 8 million
Do not subtract the value of raw materials, goods and services such as car rental, hotel rooms, stationery, etc. from the revenue subject to CIT of foreign contractor A.
b.3) If the foreign sub-contractors that sign contracts with the foreign contractor pay tax using direct method, the Vietnamese entity shall declare and pay CIT on behalf of the foreign contractor and foreign sub-contractors at corresponding VAT rates under the main contract and subcontracts. Foreign sub-contractors are not required to declare and pay CIT on the value of works they carry out under subcontracts signed with the foreign contractor, which has been paid by the Vietnamese entity on their behalf.
b.4) Revenue subject to CIT from lease of vehicles, machinery and equipment is the total rent. If the revenue from renting out vehicles machinery and equipment includes the costs directly paid by the renters such as insurance, costs of maintenance, registration, operators, and shipment to Vietnam, the revenue subject to CIT does not include such costs if proving documents are presented.
b.5) Revenue subject to CIT of a foreign airline is the revenue from selling tickets, airway bills, and other revenues (except for those collected on behalf of the State or other organizations as prescribed by Vietnam’s law) in Vietnam from transport of passengers, cargo, and other objects by their own flights or flights in cooperation with other airlines.
Example 20:
In the 1^st quarter of 2013, foreign airline A earns a revenue of USD 100,000, including USD 85,000 from passenger air tickets, USD 10,000 from airway bills, and USD 5,000 from miscellaneous charges orders (MCOs); USD 1,000 of airport fees is collected on behalf of the state; USD 2,000 is paid for returned tickets.
Revenue subject to CIT earned by foreign airline A in the 1^st quarter of 2013 is calculated as follows:
Revenue subject to CIT = 100,000 – (1,000 + 2,000) = 97,000 (USD)
b.6) Revenue subject to CIT of a foreign marine shipping company is the total charge for transport of passengers, cargo, and other surcharges received by the shipping company from the loading port to the unloading port (including charge for the consignments transit through intermediate ports) and/or charge fro transport of cargo between Vietnam’s ports.
The charge being the basis for calculating CIT does not include the charge on which CIT has been paid at a Vietnam’s port and the charge paid to a Vietnamese courier for transporting goods from a Vietnam’s port to an intermediate port.
Example 21:
Company A acts as an agent of foreign marine shipping company X. According to the agent contract, company A, on behalf of company X, receives goods to be transported abroad, issues bills of lading, collects charges, etc.
Company B of Vietnam hires company X (via company A) to transport goods from Vietnam to America for USD 100,000.
Company A hires ships from Vietnamese or foreign companies to carry goods from Vietnam to Singapore for USD 20,000. From Singapore, goods shall be transported to the USA by ships of company X.
Revenue subject to CIT of company X is calculated as follows:
Revenue subject to CIT = 100,000 – 20,000 = 80,000 USD
b.7) Revenue subject to CIT from outbound logistics services (whether the service charge is paid by the consignor or consignee) is the whole revenue received by the foreign contractor exclusive of international transport charge payable to the courier (by air or by sea).
b.8) Revenue subject to CIT from outbound postal services (whether the service charge is paid by the consignor or consignee) is the whole revenue received by the foreign contractor.
Example 22:
Overseas company A provides postal services from Vietnam to abroad and vice versa. The revenue subject to CIT of company A is calculated as follows:
+ Revenue from inbound postal services is not subject to CIT (whether service charges are paid by the consignor or consignee);
+ The whole revenue earned by company A from outbound postal services is subject to CIT (whether service charges are paid by the consignor or consignee).
Example 23:
Vietnamese Company B provides postal services from Vietnam to abroad and vice versa. To provide these services, company B pays overseas company C an amount of x USD. CIT incurred by company C is calculated as follows:
+ The amount of x USD received by company C from inbound postal services is not subject to CIT (whether service charges are paid by the consignor or consignee) is not subject to CIT;
+ With regard to outbound postal services (whether service charges are paid by the consignor or consignee), the amount of x USD received by company C is not subject to CIT; company B shall declare, withhold, and pay CIT on the x amount paid to company C.
b.9) Revenue subject to CIT from reinsurance is calculated as follows:
– Revenue subject to CIT from ceding reinsurance abroad is the charge for ceding reinsurance abroad received by the foreign contractor (including reinsurance commission and indemnity paid to clients as agreed).
– Revenue subject to CIT from receipt of reinsurance from abroad is the reinsurance commission received by the foreign contractor.
b.10) Revenue subject to CIT from securities transfer is calculated as follows:
Revenue subject to CIT from transferring securities and certificates of deposit is the total revenue from selling securities and certificates of deposit at that time.
b.11) Revenue subject to CIT from interest rate swap (IRS) is the difference between the interest receivable and interest payable received by the foreign contractor within a calendar year. The determination of tax period according to calendar years is specified in the Law on Corporate income tax, the Law on Tax administration, and their guiding documents.
Example 24:
Bank A has a loan of USD 10 million with a monthly interest rate of 5.2%. The effective period of the contract is 03 years from February 01, 2012 to February 01, 2015. Payments shall be made every 06 months at the beginning of the period.
According to the loan contract, A negotiates with bank B overseas to execute the IRS contract, in particular:
– The effective period of the contract is 03 years from February 01, 2012 to February 01, 2015. Payments shall be made every 06 months at the beginning of the period.
– Floating interest payable to B is libor + 0.25% and B has to pay A a fixed interest rate of 5.2%. This means if libor + 0.25% is higher than the fixed interest rate in the IRS contract, B will receive a difference of interest from A, which equals (=) (libor + 0.25%) – interest payable at 5.2%. On the contrary, if libor + 0.25% is lower than the fixed interest rate in the IRS contract, A will receive a difference of interest from B, which equals (=) 5.2% – interest received by A at an interest rate of libor + 0.25%.

Payment time	Libor interest rate (%)	The rate payable to B by A (%)	The rate payable to A by B	The rate received by B or A after offsetting		Difference received by A or B in each period (USD 1,000)
Payment time	Libor interest rate (%)	The rate payable to B by A (%)	The rate payable to A by B	A	B	A	B
1/2/2012- 31/7/2012	4.80	5.05	5.20		0.15	–	15
1/8/2012 – 31/1/2013	5.00	5.25	5.20	0.05		5
1/2/2013- 31/7/2013	4.90	5.15	5.20		0.05	–	5
1/8/2013 – 31/1/2014	4.95	5.20	5.20	0.00		–	–
1/2/2014 – 31/7/2014	4.90	5.15	5.20		0.05		5
1/8/2014- 30/1/2015	5.05	5.30	5.20	0.10		10

Revenue subject to CIT received by B is calculated as follows:
– In 2012 (from January 01, 2012 to December 31, 2012): Total amount B receives from A: (15,000 – 5,000) = 10,000 (USD);
– In 2013 (from January 01, 2013 to December 31, 2013): Total amount B receives from A: (5,000 – 0) = 5,000 (USD);
– In 2014 (from January 01, 2014 to December 31, 2014): B has to pay A totally USD 5,000 (taxable revenue = 0)
– In 2015: The contract stipulates that payments are made at the beginning of the period, thus there is no transactions between A and B.
b.12) With regard to treasury bills:
Revenue subject to CIT from each type of treasury bills held by investors shall be determined on their maturity date.
Revenue subject to CIT received from treasury bills is calculated as follows:

Revenue subject to CIT

(

Face value of treasury bills

–

Weighted mean of buying prices of treasury bills held by the investor on the maturity date

)

Weighted mean of buying price of treasury bills held by the investor on the maturity date

The weighted mean of buying price of treasury bills held by the investor on the maturity date shall be calculated following 03 steps:
Step 1: determine the amount of treasury bills held on the maturity date.
Step 2: Determine the amount, time, and corresponding buying prices of the treasury bills held on the maturity date (determined in Step 1) under First-in-first-out rules.
Step 3: Determine the weighted buying price using the formula:
=∑( amount of treasury bills held on the maturity date x corresponding buying prices at on the buying date) ÷ amount of treasury bills held on the maturity date.
Example 25: On January 01, 2015, treasury bills with a face value of VND 100,000 and a term of 06 months are issued for VND 89,000 per treasury bill. After being issued, treasury bills are posted on HNX. Investor A makes the transactions below from January 02 to July 01, 2015 (maturity date):

Transaction date	Buy/Sell	Amount	Price
2/1/2015	Buy	100	90,000
1/2/2015	Buy	100	92,000
1/3/2015	Sell	70	93,000
1/4/2015	Buy	40	94,000
1/5/2015	Sell	20	95,000

Step 1: determine the amount of treasury bills held on the maturity date: (100 + 100 + 40) – (70 +20) = 150
Step 2: Determine the amount, time, and corresponding buying prices of the treasury bills held on the maturity date after subtracting the amount of sold treasury bills according to First-in-first-out rules: 150 treasury bills are held on the maturity date, including:
+ 10 treasury bills at VND 90,000 bought on January 02, 2015
+ 100 treasury bills at VND 92,000 bought on February 02, 2015
+ 40 treasury bills at VND 94,000 bought on April 02, 2015
Step 3: Determine the weighted buying price using the formula:
Weighted mean of buying prices: [(40 x 94,000 + 100 x 92,000 + 10 x 90,000)/ 150] = 92.400 (VND)
Revenue subject to CIT from the treasury bills received by the investor on the maturity date: (100,000 – 92,400) x 150 = 1,140,000 (VND).
2. CIT rate (%)
a) CIT rates (%) applied to trading:

No.	Trade	CIT rate
1	Trading: distribution, supply of goods, raw materials, supplies machinery and equipment; distribution of goods, raw materials, supplies, machinery and equipment attached to services in Vietnam (including those provided in the form of domestic exports, except for goods processed under processing contracts with foreign entities); supply of goods under Incoterms	1
2	Lease of machinery and equipment, insurance, lease of oilrig.	5
	– Restaurant, hotel, casino management services	10
	– Derivative financial services	2
3	Lease of aircraft, aircraft engines, parts of aircrafts and ships	2
4	Construction, installation, whether or not inclusive of raw materials, machinery and equipment	2
5	Other business activities, transport (including sea transport and air transport)	2
6	Transfer of securities, certificates of deposit, ceding reinsurance abroad, reinsurance commission	0.1
7	Loan interest	5
8	Income from copyright	10

b) CIT rates in some cases:
b.1) If a main contract or subcontract consists of various business activities, the application of CIT rates to each business activity carried out by the foreign contractor or foreign sub-contractor shall be specified in the contract. If the value of each business activity cannot be separated, the highest CIT rate shall apply to the whole contract value.
With regard to construction and installation services inclusive of raw materials or machinery and equipment: if the value of each business activity is separated in the main contract, corresponding CIT rate shall apply to each of them. If the value of each business activity cannot be separated, the 2% CIT shall apply to the whole contract value. Where the foreign contractor signs a contract with subcontractors to delegate the works inclusive of raw materials or machinery and equipment, and the foreign contractor only provide the other services under the main contract, 5% VAT on service provision shall apply.
Example 26:
Foreign contractor A signs a contract to build power plant X with a Vietnamese entity. The contract value is USD 75 million (exclusive of VAT and inclusive of CIT).
Case 1: Value of each business activity can be separated:
+ Value of machinery and equipment provided for the construction: USD 50 million.
Including:
Value of machinery and equipment: USD 45 million
Value of warranty services attached thereto: USD 5 million
+ Value of technological line design and other design services: USD 5 million
+ Value of workshops, other auxiliary systems, construction, and installation: USD 15 million.
+ Value of supervision and installation guide: USD 3 million.
+ Value of operation training and test run services: USD 2 million.
1% CIT shall apply to USD 45 million of machinery and equipment, 2% CIT shall apply to USD 15 million of construction and installation; 5% CIT shall apply to USD 15 million of other services (warranty, design, supervision, installation guide, technical training, and test run).
Case 2: If the value of each business activity cannot be separated, the 2% CIT shall apply to the whole contract value which is USD 75 million.
Case 3: Where foreign contractor A signs contracts with subcontractors to delegate the works inclusive of raw materials and foreign contractor A only provide the other services (such as supervision service, installation guide) the value of such services shall apply 5% VAT.
b.2) With regard to contracts to provide machinery and equipment that include services performed in Vietnam, if value of machinery and equipment can be separated from value of services, fixed CIT rates shall apply to corresponding parts of the contract. If the value of services cannot be separated from the value of machinery and equipment, 2% CIT shall apply.
Example 27:
Foreign contractor A signs a contract with a Vietnamese entity to provide a production line for USD 70 million, Including:
+ Value of machinery and equipment provided for the construction: USD 60 million.
+ Value of technological line design and other design services: USD 5 million
+ Value of supervision and installation guide: USD 3 million.
+ Value of operation training and test run services: USD 2 million.
If the value of machinery and equipment can be separated from value of services, the value of machinery and equipment shall apply CIT rate on trading; the value of design, supervision, installation, training, and test run services shall apply CIT rate on service provision.
Otherwise, 2% CIT shall apply to the whole contract value (USD 70 million).
3. CIT on compensation paid by the party that breaches the contract, which is higher than the damage and thus considered a taxable income:
Foreign contractor may pay CIT on the income from compensation at the rate of CIT on taxable revenue or according to the declaration of revenue and expense with the common tax rate.
Section 4. PAYING VAT USING CREDIT-INVOICE METHOD, PAYING CORPORATE INCOME TAX ACCORDING TO FIXED RATES
(hereinafter referred to as mixed method)
Article 14. Requirements and regulated entities
Foreign contractors and foreign sub-contractor that meet the requirements in Clause 1 and Clause 2 Article 8 Section 2 Chapter II, and the organizations that adhere to regulations of law on accounting of the Ministry of Finance shall register with tax authority to pay VAT using credit-invoice method and pay CIT according to fixed rates.
Article 15. VAT
Article 9 Section 2 Chapter II shall apply.
Article 16. Corporate income tax
Article 13 Section 3 Chapter II shall apply.
Chapter III

IMPLEMENTATION

Article 17. Effect
1. This Circular takes effect on October 01, 2014 and supersedes Circular No. 60/2012/TT-BTCdated April 12, 2012 providing guidelines for fulfillment of tax liability of foreign entities doing business in Vietnam or earning income in Vietnam.
2. VAT and CIT on the contracts and subcontracts concluded before this Circular takes effect shall be determined in accordance with corresponding legislative documents effective on the conclusion dates.
3. In case any international agreements to which Vietnam is a signatory contains regulations tax liabilities of foreign contractors and foreign sub-contractors that are at odds with instructions in this Circular, such international agreements shall apply.
Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Finance for consideration./.

PP THE MINISTER
DEPUTY MINISTER
Do Hoang Anh Tuan

The post Circular No.103/2014/TT-BTC dated August 06, 2014 appeared first on MP Law Firm.

Decree No.129/2013/NĐ-CP of October 16, 2013, on penalties for administrative violations pertaining to taxation and enforcement of administrative decisions on taxation

mplawadmin — Wed, 16 Oct 2013 06:37:11 +0000

THE GOVERNMENT ——-	SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness —————
No. 129/2013/ND-CP	Hanoi, October 16, 2013

DECREE

ON PENALTIES FOR ADMINISTRATIVE VIOLATIONS PERTAINING TO TAXATION AND ENFORCEMENT OF ADMINISTRATIVE DECISIONS ON TAXATION

Pursuant to the Law on Government organization dated December 25, 2001;
Pursuant to the Law on Handling administrative violations dated June 20, 2012;
Pursuant to the Law on Tax administration dated November 29, 2006;
Pursuant to the Law on the amendments to the Law on Tax administration dated November 20, 2012;
At the request of the Minister of Finance;
The Government promulgates a Decree on penalties for violations pertaining to taxation and enforcement of administrative decisions on taxation,
Chapter 1.

ADMINISTRATIVE PENALTIES FOR VIOLATIONS PERTAINING TO TAXATION

SECTION 1. GENERAL PROVISIONS
Article 1. Scope of regulation and objects of administrative penalties for violations pertaining to taxation
1. Scope of regulation:
This Chapter deals with the violations pertaining to taxation, penalties, remedial measures, the power to impose penalties and implement decisions on administrative penalties for violations pertaining to taxation.
Administrative violations pertaining to taxation include violations against the Law on Tax administration, the Law on the amendments to the Law on Tax administration (hereinafter referred to as the Law on Tax administration); taxes, land rents, water surface rents, land levy; revenues from mineral extractions and other government revenues collected by tax authorities as prescribed by law.
This Decree does not apply to administrative violations pertaining to fees, charges, invoices, and administrative violations pertaining to taxation on exported and imported goods.
If International Agreements to which Vietnam is a signatory prescribes penalties for administrative violations pertaining to taxation differently from this Decree, such International Agreements shall apply.
2. Objects of penalties for administrative violations pertaining to taxation
a) The taxpayers that commit administrative violations pertaining to taxation;
b) The credit institutions defined by the Law on credit institutions (hereinafter referred to as credit institutions) that commit administrative violations pertaining to taxation;
c) Relevant organizations and individuals;
Article 2. Statute of limitation, time limit for imposition of penalties for administrative violations pertaining to taxation
1. For violations against tax procedures the time limit for issuing the decision on penalties is 02 years from the day on which the violation is committed. The day on which the violation is committed is the day succeeding the deadline for tax procedure according to the Law on Tax administration. For electronic tax procedure, the day on which the violation is committed is the day succeeding the deadline for procedure prescribed by a competent authority.
2. For tax evasion that are not liable to criminal prosecutions, understatement of tax payable or overstatement of tax refund, the time limit for issuing the decision on penalties is 05 years from the day on which the violation is committed.
The day on which the aforesaid violation is committed is the day succeeding the deadline for submitting the tax statement on which tax is overstated, evaded, falsified, or the day succeeding the date of the decision on tax refund, tax exemption or tax reduction.
3. Where an individual is charged or prosecuted, or a decision to bring the individual to criminal proceedings is issued, then a decision to suspend the investigation or the case is issued, but signs of administrative violations pertaining to taxation are found, the agency that issues the decision to suspend the investigation or suspend the case shall send the decision together with the case documents to the agency competent to impose penalties for administrative violations pertaining to taxation within 03 days from the day on which the decision on suspension is issued. In this case, the statute of limitations shall comply with Clause 1 and Clause 2 of this Article. The period during which the case is examined is included to the time limit for imposing penalties for administrative violations.
4. Time limit for collecting tax arrears
After the deadline for imposing penalties for administrative violations pertaining to taxation, the taxpayer is exempt from penalties but still have to pay the outstanding tax and late payment interest over the previous 10 years from the day on which the violation is discovered. If the taxpayer does not apply for tax registration, he shall pay the outstanding tax and late payment interest over the entire period before the violation is discovered.
Article 3. Penalties for administrative violations pertaining to taxation
1. Warnings.
A warning shall be given if the violation is not severe, under mitigating circumstances, and must receive a warning as prescribed.
2. Fines
a) For violations against tax procedures:
A fine of up to 200 million VND shall be incurred by an organization that violates tax procedure. The maximum fine incurred by an individual that violates tax procedure is 1/2 the fine incurred by an organization according to the Law on Handling administrative violations.
The fines mentioned in Articles 5, 6, 7, 8 and 9 of this Decree are applied to organizations. The fines incurred by individuals are 1/2 of those. Households shall incur the same level of fines as individuals.
When imposing a fine for a violation against tax procedure, it is the average level of the fine bracket for such violation. For every aggravating circumstance or mitigating circumstance, the average level shall be respectively increased or decreased by 20%.
A mitigating circumstance shall cancel out an aggravating circumstance and vice versa. The fine must not be reduced below the minimum level of the fine bracket, and must not be increased over the maximum level of the fine bracket.
b) For understatement of tax payable or overstatement of tax refund: a fine of 20% of the outstanding tax or tax refund shall be imposed, regardless the taxpayer is an organization or an individual.
c) For tax evasion: a fine of 1 – 3 times of the evaded tax. The fines mentioned in Article 11 of this Decree are applied to organizations. The fines incurred by individuals are 1/2 of those.
d) A fine in proportion to the amount that is not withdrawn and transferred to government budget shall be imposed for the violations mentioned in Article 12 of this Decree.
Article 4. Cases in which penalties for administrative violations pertaining to taxation are exempt
1. The cases mentioned in Article 11 of the Law on Handling administrative violations
2. The taxpayer has corrected the misstatement and paid tax sufficiently before the tax authority issues a decision on tax inspection at the taxpayer’s premises.
SECTION 2. ADMINISTRATIVE VIOLATIONS PERTAINING TO TAXATION, PENALTIES, AND REMEDIAL MEASURES
Article 5. Penalties for late submission of the application for tax registration, late notification of changes in the application for tax registration
1. A warning shall be imposed for submitting the application for tax registration or notifying changes in the application for tax registration to the tax authority 01 – 10 days behind schedules with mitigating circumstances.
2. A fine of from 400,000 VND to 1,000,000 VND shall be imposed for submitting the application for tax registration or notifying changes in the application for tax registration to the tax authority 01 – 30 days behind schedule (except for the case mentioned in Clause 1 of this Article).
3. A fine of from 800,000 VND to 2,000,000 VND shall be imposed for one of the violations below:
a) Submitting the application for tax registration or notifying changes in the application for tax registration more than 30 days behind schedule.
b) Failing to notify changes in the application for tax registration.
c) Failing to submit the application for tax registration without incurring tax.
Article 6. Penalties for providing insufficient information in the tax statement
If the incorrect or insufficient provision of information in the tax statement mentioned in Article 31 of the Law on Tax administration (unless the taxpayer is permitted to make a supplementary statement) is discovered after the deadline for submitting the tax statement:
1. A fine of from 400,000 VND to 1,000,000 VND shall be imposed for making a tax statement with insufficient or incorrect information on the list of sale invoices of purchased and sold goods/services, or on other documents related to tax obligations.
2. A fine of from 600,000 VND to 1,500,000 VND shall be imposed for making a tax statement with insufficient or incorrect information on invoices and other documents related to tax obligations.
3. A fine of from 600,000 VND to 2,500,000 VND shall be imposed for making a tax statement with insufficient or incorrect information on the provisional tax statement or final tax statement.
4. A fine of from 1,200,000 VND to 3,000,000 VND shall be imposed for one of the violations below:
a) The violations mentioned in Clause 5 Article 10 and Clause 7 Article 11 of this Decree.
b) Making understatement of tax payable in the quarterly tax statement before the deadline for submitting the final tax statement.
Article 7. Penalties for late submission of the tax statement
1. A warning shall be given for late submission of the tax statement 01 – 05 days behind schedule under mitigating circumstances.
2. A fine of from 400,000 VND to 1,000,000 VND shall be imposed for late submission of the application for tax registration 01 – 10 days behind schedule (except for the case mentioned in Clause 1 of this Article).
3. A fine of from 800,000 VND to 2,000,000 VND shall be imposed for late submission of the application for tax registration 10 – 20 days behind schedule.
4. A fine of from 1,200,000 VND to 3,000,000 VND shall be imposed for late submission of the application for tax registration 20 – 30 days behind schedule.
5. A fine of from 1,600,000 VND to 4,000,000 VND shall be imposed for late submission of the application for tax registration 30 – 40 days behind schedule.
6. A fine of from 2,000,000 VND to 5,000,000 VND shall be imposed for one of the violations below:
a) Submitting the tax statement 40 – 60 days behind schedule.
b) Submitting the tax statement 90 days behind schedule without incurring tax.
c) Failing to submit the application for tax registration without incurring tax.
d) Submitting the quarterly provisional tax statement 90 days behind schedule before the deadline for submitting the final tax statement.
7. The deadline for submitting the tax statement mentioned in this Article is the extended deadline mentioned in Article 33 of the Law on Tax administration.
8. The fines mentioned in this Article shall not apply to the cases in which the deadline for submitting the tax statement or paying tax is extended as prescribed by legislation on tax administration.
9. Apart from incurring the penalties mentioned in Clauses 1, 2, 3, 4, 5, 6 of this Article, the taxpayer shall pay a late payment interest if the late submission of the tax statement leads to late payment of tax as prescribed by law.
Article 8. Penalties for violations against regulations on providing information related to the determination of tax obligations
The violations of the regulations on providing information related to the determination of tax obligations but do not lead to insufficient tax payment or tax evasion shall incur the penalties below:
1. A fine of from 400,000 VND to 1,000,000 VND shall be imposed for one of the violations below:
a) Providing information, documents, and legal documents related to tax registration at the request of the tax authority 05 working days or more behind schedule.
b) Providing information, documents, and accounting books related to tax calculation at the request of tax authority 05 working days or more behind schedule.
c) Providing incorrect information, documents, and accounting books related to tax calculation at the request of the tax authority.
2. A fine of from 800,000 VND to 2,000,000 VND shall be imposed for one of the violations below:
a) Providing incorrect, insufficient information, documents, receipts, invoices, and accounting books related to tax calculation, the account numbers, deposit account balance to competent authorities on request.
b) Providing insufficient, incorrect data, information about the tax obligation that must be registered without reducing the tax obligation to government budget.
a) Not providing, providing incorrect, insufficient information and documents related to the deposit accounts at credit institutions, State Treasuries, and debts owed by third parties within 03 working days from the day on which the request of the tax authority is received.
Article 9. Penalties for violations against regulations on implementation of decisions on tax inspections, enforcement of administrative decisions on taxation.
1. A fine of from 800,000 VND to 2,000,000 VND shall be imposed for one of the violations below:
a) Refusing to receive the decision on inspection or enforcement of administrative decisions on taxation.
b) Failing to implement the decision on tax inspection within 03 working days from the deadline for implementation.
c) Denying, delaying, avoiding providing documents, invoices, receipts, accounting books related to tax obligation within 06 working hours since the receipt of the request from of the competent authority during the inspection at the taxpayer’s premises.
d) Denying, delaying, avoiding providing documents, invoices, receipts, accounting books related to tax obligation within 06 working hours since the receipt of the request of the competent authority during the inspection at the taxpayer’s premises.
2. A fine of from 2,000,000 VND to 5,000,000 VND shall be imposed for one of the violations below:
a) Failing to provide information, documents and accounting books related to tax calculation at the request of the competent authority during the inspection at the taxpayer’s premises.
b) Failing to implement or wrongly implementing the decision on sealing documents, safes, warehouses, materials, machinery, equipment, workshops being the basis for verifying tax calculation.
c) Breaking or changing the seal of the competent authority without permission.
d) Failing to sign the inspection record within 05 working days from the receipt of the inspection record.
dd) Failing to implement the conclusion on tax inspection, decision on enforcement of administrative decisions on taxation made by competent authorities.
Article 10. Penalties for understatement of tax payable or overstatement of refundable tax
1. The cases of understatement of tax payable and overstatement of refundable tax include:
a) The taxpayer understates the amount of tax payable or overstates the amount of tax refunded, exempted, or reduced, but the operations that incur tax are sufficiently recorded in accounting books, invoices and receipts.
b) The taxpayer mentioned in Point a Clause 1 of this Article has paid the outstanding tax to government budget when the understatement or overstatement is discovered by a competent authority before a record on administrative violations pertaining to taxation is made by the competent authority or record on tax inspection is made by the tax authority.
c) The false statement of the taxpayer has been confirmed and considered tax invasion by the tax inspector, but it is the offence of the taxpayer under mitigating circumstances, and the taxpayer has voluntarily pay tax to government budget before a decision on penalties is issued by the competent authority. In this case the tax authority shall make a record on insufficient tax statement.
d) Illegal invoices and receipts are used for recording values of purchased goods and services in order to reduce the amount of tax payable or increase the amount of tax refunded, exempted, or reduced, but the buyer proves that the sellers are responsible for the use of illegal invoices, and bookkeeping has been sufficiently done by the buyer.
2. The fines for the violations mentioned in Clause 1 of this Article is 20% of the outstanding tax, the excess refund, reduction, or exemption of tax as prescribed by legislation on taxation.
3. The tax authority shall calculate outstanding tax, the number of days of late payment, the late payment interest, fines, and issue a decision on penalties for administrative violations.
4. In the cases mentioned in Clause 1 of this Article, the outstanding tax and late payment interest shall be paid to government budget apart from the penalties mentioned in Clause 2 of this Article.
5. If the false statement made by the taxpayer does not lead to an increase in the amount of tax payable or a decrease in the amount of tax exempted or reduced, or tax refund has not been given, no penalty shall be imposed as prescribed in this Article, and Clause 4 Article 6 of this Decree shall apply.
Article 11. Penalties for tax evasion
The taxpayer that evades tax according to Article 108 of the Law on Tax administration, the fine shall be imposed on the amount of tax evaded as follows:
1. A fine equal to the amount of tax evaded shall be imposed if tax evasion is the first offence of the taxpayer and does not fall into the cases mentioned in Article 10 of this Decree, or it is the second offence with at least 02 mitigating circumstances when the taxpayer commits one of the violations below:
a) Failing to submit the application for tax registration, failing to submit the tax statement or submit the tax statement after 90 days from the deadline for submitting the tax statement mentioned in Clauses 1, 2, 3, and 5 Article 32 of the Law on Tax administration, or from the extended deadline for submitting the tax statement mentioned in Article 33 of the Law on Tax administration, except for the cases mentioned in Clause 6 Article 7 of this Decree.
b) Using illegal or invalid invoices and documents for making the tax statement that leads to a decrease in the amount of tax payable or an increase in the amount of tax refunded, exempted, or reduced.
c) Making false documents about the destruction of goods that leads to a decrease in the amount of tax payable or an increase in the amount of tax refunded, exempted, or reduced.
d) Issuing sale invoices that contain incorrect quantities or values to understate tax.
dd) Failing to record the revenues related to tax calculation in accounting books; failing to make statements or making incorrect statements that lead to a decrease in the amount of tax payable or an increase in the amount of tax refunded, exempted, or reduced.
e) Failing to issuing invoices when selling goods or services, or writing lower values of goods than the actual values on invoices that are discovered after the deadline for submitting the tax statement.
g) Using tax-free goods, goods eligible for tax exemption for improper purposes without reporting the change of their purposes and submit tax statement to the tax authority.
h) Falsifying the accounting books and documents that leads to a decrease in the amount of tax payable or an increase in the amount of tax exempted or reduced.
i) Destroying the accounting books and documents that leads to a decrease in the amount of tax payable or an increase in the amount of tax exempted or reduced.
k) Using illegal invoices and documents in other cases to miscalculate the amount of tax payable or refunded.
l) The taxpayer carries on his business during the suspension period.
2. A fine of equal to 1.5 times the tax evaded shall be imposed if the taxpayer commits one of the violations in Clause 1 of this Article for the first time under an aggravating circumstance, or commits it for the second time under a mitigating circumstance.
3. A fine of equal to 2 times the tax evaded shall be imposed if the taxpayer commits one of the violations in Clause 1 of this Article for the first time under aggravating circumstances, or commits it for the second time under a mitigating circumstance.
4. A fine of equal to 2.5 times the tax evaded shall be imposed if the taxpayer commits one of the violations in Clause 1 of this Article for the second time under an aggravating circumstance, or commits it for the third time without any mitigating circumstance.
5. A fine of equal to 3 times the tax evaded shall be imposed if the taxpayer commits one of the violations in Clause 1 of this Article for the second time under two aggravating circumstances or more, or commits it for the third time under an aggravating circumstance, or commit it for the fourth time onwards.
6. Apart from the penalties for tax evasion mentioned in Clauses 1, 2, 3, 4, 5 of this Article, the evaded tax shall be paid to government budget. the late payment interest on the evaded tax is exempt.
The tax evaded is the amount of tax payable to government budget as prescribed by law, which is found and specified by the competent authority in the inspection record.
7. If the violations mentioned in Points b, c, d, dd, e, g, h, i, k Clause 1 of this Article are discovered before the deadline for submitting the tax statement, or discovered after such deadline but the amount of tax payable is not reduced, or tax refund is not given, or the amount of tax refunded or reduced is not increased, only the violations pertaining to tax procedure mentioned in Clause 4 Article 6 of this Decree shall be penalized.
Article 12. Penalties for administrative violations committed by credit institutions
The credit institution that fails to transfer tax, fines, interest on late payment of tax, interest on late payment of fines from the taxpayer’s account to the state account under the decision on enforcement made by the tax authority shall incur penalties if at that time, the account balance of the taxpayer is ample to pay such amounts. Within 10 days from the deadline for making the transfer as prescribed in Clause 2 Article 28 of this Decree, the tax authority shall make a record and issue a decision to penalize the credit institution. The fine is proportional to the amount of money that is not transferred to government budget under the decision on enforcement.
The credit institution is exempt from penalties in the case mentioned in Point a Clause 1 Article 114 of the Law on Tax administration. In this case, the tax authority still take measures for sufficiently collecting tax, interest of late payment of tax, fine, and interest on late payment of fine from the taxpayer.
Article 13. Penalties for administrative violations committed by relevant organizations and individuals
1. A fine of from 2,500,000 VND to 5,000,000 VND shall be incurred by any individual, or a fine of from 5,000,000 VND to 10,000,000 VND shall be incurred by any organization that collaborates, conceals the tax evasion of the taxpayer, fails to implement the decision on enforcement, (except for the failure to transfer money from the taxpayer’s account prescribed in Article 12 of this Decree). A criminal prosecution shall be initiated if signs of criminal offences are found.
2. Any organization or individual that fails to provide information or provides insufficient information about tax payable by the taxpayer, his account at credit institutions or State Treasuries shall incur the penalties mentioned in Clause 1 of this Article.
3. The party the guarantee the fulfillment of tax obligation shall pay tax, interest on late payment of tax, fines, and interest on late payment of fines on the taxpayer behalf’s in accordance with the guarantee agreements if the taxpayer fails to pay them to government budget.
The guarantor fails to pay the outstanding tax, interest on late payment of tax, fines, and interest on late payment of fines (if any) on the taxpayer’s behalf when the taxpayer fails pay them by the deadline imposed by the tax authority, the guarantor shall pay an interest on the deferred payment of tax at 0.07% per day, and an interest on the deferred payment of fine at 0.05% per day, and be subject to enforcement measures prescribed in Clause 3 Article 18 and Article 19 of this Decree,. The procedure for taking enforcement measures are similar to those applied to taxpayers.
SECTION 3. THE POWER TO IMPOSE PENALTIES, EXEMPT, REDUCE FINES FOR ADMINISTRATIVE VIOLATIONS PERTAINING TO TAXATION
Article 14. The power to impose penalties for administrative violations pertaining to taxation of tax authorities
1. Duty officials of tax authorities are entitled to:
a) Give warnings.
b) Impose fines of up to 1,000,000 for the violations pertaining to tax procedure prescribed in this Decree.
2. The leader of the tax team is entitled to:
a) Give warnings.
b) Impose fines of up to 5,000,000 for the violations pertaining to tax procedure prescribed in this Decree.
3. Directors of Sub-departments of taxation, within the locality under their management, are entitled to:
a) Give warnings.
b) Impose fines of up to 5,000,000 for the violations mentioned in Articles 5, 6, 7, 8, 9 and 13 of this Decree.
c) Impose fines for the violations mentioned in Articles 10, 11, and 12 of this Decree.
d) Take the remedial measures mentioned in Clause 4 Article 10 and Clause 6 Article 11 of this Decree.
4. Directors of Departments of taxation, within the locality under their management, are entitled to:
a) Give warnings.
b) Impose fines of up to 140,000,000 for the violations pertaining to tax procedure prescribed in Articles 5, 6, 7, 8, 9 and 13 of this Decree.
c) Impose fines for the violations mentioned in Articles 10, 11, and 12 of this Decree.
d) Take the remedial measures mentioned in Clause 4 Article 10 and Clause 6 Article 11 of this Decree.
5. The Director of the General Department of Taxation is entitled to:
a) Give warnings.
b) Impose fines of up to 200,000,000 for the violations pertaining to tax procedure prescribed in Articles 5, 6, 7, 8, 9 and 13 of this Decree.
c) Impose fines for the violations mentioned in Articles 10, 11, and 13 of this Decree.
d) Take the remedial measures mentioned in Clause 4 Article 10 and Clause 6 Article 11 of this Decree.
6. The power to impose penalties for violations pertaining to tax procedure of the persons mentioned in Clauses 1, 2, 3, 4, and 5 of this Article is applied to violations committed by organizations. The level of fine they may impose on individuals is 1/2 of that applied to organizations. The power to impose penalties for understatement of the amount of tax payable or overstatement of the amount of tax refunded, or tax evasion shall comply with Clause 2 Article 109 of the Law on Tax administration.
Article 15. The power to impose penalties for administrative violations pertaining to taxation of Presidents of the People’s Committees
Article 15. The power to impose penalties for administrative violations pertaining to taxation of Presidents of the People’s Committees shall comply with legislation on handling administrative violations.
Article 16. Exemption, reduction of fines for administrative violations pertaining to taxation; exemption and reduction procedure
1. The individual that carries a fine from 3,000,000 for administrative violations pertaining to taxation is entitled to request a reduction or exemption of the fine if they face special or unexpected economic difficulties due to natural disasters, conflagration, calamities, accidents, epidemics, or fatal diseases.
The maximum reduction is the remaining fine in the decision on penalties and shall not exceed the value of damaged assets, goods, and treatment cost.
2. An application for fine exemption or reduction consists of:
a) A written request for fine exemption or reduction, specifying:
– The reasons for requesting the exemption or reduction;
– The values of damaged assets and goods due to natural disasters, conflagration, calamities, accidents, epidemics, the cost of treatment for fatal diseases;
– The amount of fine incurred.
b) If the damage to assets or disease treatment cost is covered by an insurer, the application must be enclosed with a notarized photocopy of the certification of insurance payout for damage or treatment cost made by the insurer.
c) A certification made by the People’s Committee of the commune where the taxpayer resides or where damaged assets are situated. If the individual suffers from a fatal disease, it is required to have a certification of the medical facility and documents proving the treatment cost.
3. The procedure and power to decide fine exemption or reduction shall comply with Clause 2 Article 77 of the Law on Handling administrative violations.
4. No reduction of exemption shall be given if the decision on penalties for administrative violations pertaining to taxation has been implemented or the time limit for resolving complaints has passed as prescribed by law.
Chapter 2.

ENFORCEMENT OF ADMINISTRATIVE DECISIONS ON TAXATION

SECTION 1. GENERAL PROVISIONS
Article 17. Scope of regulation and subjects of application
1. Scope of regulation:
This Chapter deals with the cases of enforcement, measures for enforcement of administrative decisions on taxation, principles, power, procedure for taking measures for enforcement of administrative decisions on taxation (except for suspension of customs procedure for exported and imported goods).
The enforcement mentioned in this Article is applied to administrative decisions on taxation, including: decision on penalties for administrative violations pertaining to taxation, decision on remedial measures, decisions on damage compensation, and other administrative decisions on taxation as prescribed by law, notification on tax imposition, notification of outstanding tax, notification of interest on late payment of tax.
2. Subjects of application
a) The organizations and individuals subject to enforcement of administrative decisions on taxation as prescribed by the Law on Tax administration.
b) Tax authorities and tax officials.
c) The persons entitled and obliged to enforce administrative decisions on taxation.
d) State agencies, organizations and individuals related to the enforcement of administrative decisions on taxation.
Article 18. Cases of enforcement of administrative decisions on taxation.
1. The cases in which taxpayers are subject to enforcement of administrative decisions on taxation:
a) The taxpayer owes tax and interest on late payment of tax over 90 days from the deadline for paying tax or the extended deadline for paying tax.
b) The taxpayer that owes tax, interest on late payment of tax and fines is suspected of concealing goods or making a getaway.
c) The taxpayer fails to comply with the decision on penalties within 10 days from the day on which the decision is received. If the taxpayer fails to implement the decision on penalties within the time limit that is longer than 10 days, the decision shall be enforced (unless the decision on penalties is delayed or suspended).
2. The credit institution fails to comply with the decision on administrative penalties for violations pertaining to taxation according to the Law on Tax administration and the Law on Handling administrative violations.
3. If the payment of tax, interest on late payment of tax, fines, and interest on late payment of fines is guaranteed and the taxpayer fails to make such payment to government budget by the deadline, the guarantor shall make such payment on the taxpayer’s behalf. If those amounts are not sufficiently paid after 90 days from the deadline, the guarantor shall be subject to enforcement in accordance with the Law on Tax administration and the Law on Handling administrative violations.
4. State Treasury fails to transfer money from the account of the entity subject to enforcement (hereinafter referred to as subject) to government budget under the decision on administrative penalties for violations pertaining to taxation issued by the tax authority.
5. Relevant organizations and individuals fail to comply with decision on administrative penalties for violations pertaining to taxation issued by competent authorities.
6. Where the tax authority issues a decision to allow the taxpayer to pay outstanding tax and fines in installments according to the Decrees elaborating the implementation of the Law on Tax administration, the Law on the amendments to the Law on Tax administration, and Article 79 of the Law on Handling administrative violations, enforcement measures shall not be taken during the payment term.
Article 19. Enforcement measures
The measures for enforcing administrative decisions on taxation include:
1. Withdraw money from the subject’s accounts at State Treasuries and credit institutions; request account blockade.
2. Deduct part of the salary or income.
3. Invalidate invoices.
4. Distrain assets, sell distrained assets at auctions to recover outstanding tax, interest on late payment of tax, fines, interest on late payment of fines.
5. Collect money or other assets of the subject that are held by other organizations or individuals.
6. Revoke the Certificate of Business registration, Certificate of Enterprise registration, license for establishment and operation, or practice certificate.
7. The application for the enforcement measures mentioned in Clauses 1, 2, 3, 4, 5 and 6 is specified in Sections 2, 3, 4, 5, 6, and 7 of this expenses. If a decision on taking the next measure has been issued but the conditions for taking the previous measure are available, the issuer of the decision on enforcement is entitled to take the previous measure to sufficiently collect tax and fines.
If the taxpayer that owes outstanding tax, interest on late payment of tax, fines, or interest on late payment of fines is suspected of making a getaway or concealing his assets, the person competent to issue the enforcement decision shall take appropriate enforcement measures to ensure the repayment of tax debt.
The Ministry of Finance shall specify the order and time limit for each enforcement measure, the procedure for identifying taxpayers suspected of making a getaway or concealing their assets.
Article 20. Sources of money and distrained assets of the organizations enforced to implement administrative decisions on taxation
The sources of money and distrained assets of the organizations enforced to implement administrative decisions on taxation shall comply with legislation on penalties for administrative violations and relevant laws.
Article 21. The power to decide enforcement of administrative decisions on taxation
The persons below have the power to issue decisions on enforcement of administrative decisions on taxation mentioned in Article 19 of this Decree, and are responsible for organizing the enforcement:
1. Directors of Sub-departments of taxations, Directors of Departments of Taxation, the Director of the General Department of Taxation have the power to decide enforcement of administrative decisions on taxation and take the enforcement measures mentioned in Clauses 1, 2, 3, 4, 5, Article 19 of this Decree.
2. Presidents of the People’s Committees of districts and provinces have the power to decide the enforcement of decision on penalties for administrative violations pertaining to taxation under their management.
3. If the enforcement measures in Clause 6 Article 19 of this Decree are taken, the tax authority shall request the agency that issued the Business certificates, Certificate of Business registration, license for establishment, or practice certificate to revoke such certificate or license.
Article 22. The power to decide enforcement of administrative decisions on taxation
1. The persons mentioned in Article 21 of this Decree have the power to issue decision on enforcement of administrative decisions on taxation they issue or their inferiors issue without adequate resources to carry out and request the superior agency in writing to issue the decision on enforcement..
2. The Directors of Departments of Taxation shall issue decisions on if the Director of the Sub-department of taxation but the subject is under the management of multiple sub-departments of taxation in the same province.
3. The Director of the General Department of Taxation shall issue decisions on enforcement if the subject is under the management of multiple Departments of Taxation.
Article 23. Responsibility to implement decisions on enforcement
1. The person that issues the decision on enforcement of administrative decisions on taxation is responsible for organizing the implementation of the decision on enforcement.
The person that issues the decision on enforcement of administrative decisions on taxation shall immediately send the decision on enforcement to relevant organizations and individuals, and organize the enforcement of the decisions on penalties they and their inferiors issue.
2. The organization or individual that receives the decision on enforcement shall implement it and incur the cost of enforcement.
3. The People’s Committee of the commune where the subject is situated shall direct relevant agencies to cooperate with the tax authority in the enforcement of administrative decisions on taxation.
4. The police are responsible for the order, safety, and shall cooperate with the tax authority during the enforcement at the request of the person that issues the decision on enforcement.
5. The organizations and individuals related to the subject shall cooperate in the enforcement at the request of the person that issues the decision on enforcement.
Article 24. Time limits for implementing decisions on enforcement
1. A decision on enforcement of administrative decisions on taxation takes effect within 01 year from its issuance date. The decisions on enforcement of administrative decisions on taxation by transferring money from the subject’s account shall take effect within 30 days from its issuance date.
2. If the subject deliberately avoids or delays the implementation of the decision on enforcement, the time limit shall begin again when the avoidance or delay is stopped.
3. The measures for enforcement of administrative decisions on taxation mentioned in Clause 1 of this Article are terminated when the enforced tax, interest on late payment of tax, fines, interest on late payment of fines are paid to government budget. The basis for terminating the decision on tax enforcement is the documents proving the sufficient payment of tax, interest on late payment of tax, fines, interest on late payment of fines to government budget that are certified by State Treasuries, tax collectors, or the credit institutions that transfer money from the subject’s accounts.
SECTION 2. ENFORCEMENT BY WITHDRAWING MONEY FROM TAXPAYER’S ACCOUNTS; REQUEST FOR ACCOUNT BLOCKADE
Article 25. Entities having their accounts withdrawn
The organizations and individuals that fail to comply with the decisions on penalties, decisions on remedial measures, administrative decisions on taxation, or fails to pay for the enforcement cost shall have their accounts at credit institutions and State Treasury withdrawn.
Article 26. Verifying information about subject’s accounts
1. The taxpayer shall notify the tax authority of the account numbers and the credit institutions and State Treasuries where their accounts are opened.
2. The person entitled to issue the decision to withdraw money from the subject’s accounts at credit institutions and State Treasuries are entitled to request credit institutions and State Treasuries in writing to provide information about the subject’s account numbers and balance.
The person entitled to issue the decision on enforcement is responsible for the confidentiality of the information about the subject’s accounts, which is provided by credit institutions and State Treasuries.
Article 27. Decision on enforcement by withdrawing money from accounts
1. The decision on enforcement by withdrawing money from accounts must specify its issuance date, its basis, full name and workplace of the decision issuer, the amount of money being withdrawn (written on the decision on administrative penalties and the cost of enforcement until the end of the 5-day time limit before the enforcement); the reasons for withdrawal; full name, tax codes, account numbers of the subject, names and addresses of the credit institutions where the accounts are opened; state account numbers; names, addresses of State Treasuries where state accounts are opened, method of transfer; deadline for implementation; signature and seal of the issuer of the decision on enforcement.
2. If the subject’s accounts must be blocked, the decision on enforcement must specify whether part or the whole account is blocked, which is equal to the amount of money being withdrawn from the account to enforce the administrative decisions.
3. The decision on enforcement by withdrawing money from accounts shall be sent to the organization or individual whose money is withdrawn, the State Treasuries and credit institutions where the accounts are opened, and relevant agencies at least 05 days before the enforcement.
Article 28. Responsibilities of State Treasuries and credit institutions where the subject’saccounts are opened
1. Provide necessary information about the numbers and balance of the subject’s accounts opened at their unit within 03 working days from the receipt of the request from the issuer of the decision on enforcement.
2. Transfer money to the state account at a State Treasury written in the decision on enforcement within 05 days from the day on which the decision on enforcement is received, and notify the transfer to the agency that issued the decision on enforcement and the subject.
3. If the account balance is lower than the amount payable, it is still transferred to the state account written in the decision on enforcement. The subject shall be notified of the transfer. The transfer shall be made without the consent of the subject.
4. Part or the whole account of the subject shall be blocked upon the receipt of the decision on enforcement (if the blockade is required by the decision on enforcement).
5. Notify the agency that issued the decision on enforcement of the expiration of the decision on enforcement while the subject’s account balance is not sufficient.
6. If the money in the subject’s account is not transfer to government budget under the decision on enforcement, penalties for administrative violations pertaining to taxation shall be imposed as prescribed in Article 12 of this Decree.
Article 29. Procedure for collecting money by withdrawing money from accounts
Money in the subject’s accounts shall be withdrawn based on the receipts. Receipts shall be used for transferring money withdrawn from the accounts to relevant parties.
The Ministry of Finance shall specify the time and procedure for taking the enforcement measure prescribed in this Section.
SECTION 3. ENFORCEMENT BY DEDUCTING PART OF SALARIES OR INCOMES
Article 30. Entities that have part of their salaries or incomes deducted.
The enforcement by deducting part of salaries or incomes is applied to the subjects that earn salaries or incomes at an organization as prescribed by law.
Article 31. Decision on deducting part of an individual’s salary or income
1. The decision on deducting part of an individual’s salary or income must specify its issuance date, name and address of the organization that manage the individual’s salary or income; the amount of deducted income (written on the decision on penalties for administrative violations and enforcement cost until the end of the 5-day time limit before the enforcement), the reasons for deduction, name and address of the State Treasury to which money is transferred, the method of transfer, time of transfer; signature and seal of the decision issuer.
2. The decision on enforcement shall be sent to the individual or the organization that manages his salary or income, and relevant organizations at least 05 days before the enforcement.
Article 32. Level of deduction of part of an individual’s salary or income
1. Only part of the salary, wage, or income equal to the amount of money written in the administrative decision on taxation made shall be deducted.
2. The deduction is not lower than 10% and not over 30% of total salary and monthly allowance of the individual. Deduction from other incomes shall depend on the actual incomes, but not to exceed 50% of the total income.
Article 33. Obligations of the employer that manages the individual’s salary, wage or income
The organization that manages the individual’s salary, wage or income (hereinafter referred to as income manager) is obliged to:
1. Transfer part of the salary or income of the subject to government budget in accordance with the decision on enforcement from the latest salary or income payment until tax, interest on late payment of tax, fines, and interest on late payment of fines are sufficiently paid according to the decision on enforcement, notify the transfer to the issuer of the decision on enforcement and the subject;
2. Transfer part of the subject’s salary or income of the individual to government budget in accordance with the decision on enforcement, and notify the issuer of the decision on enforcement;
3. If the subject’s labor contract is terminated while tax, interest on late payment of tax, fines, and interest on late payment of fines are not sufficiently deducted from the salary, the employer shall notify the issuer of the decision on enforcement within 05 working days from the termination date of the labor contract;
4. The income managers that deliberately avoid implementing decision on enforcement shall incur administrative penalties as prescribed in Article 13 of this Decree.
SECTION 4. ENFORCEMENT BY INVALIDATING INVOICES
Article 34. Entities that have their invoices invalidated
Invoices shall be invalidated when all conditions below are satisfied:
1. The tax authority fails to take the enforcement measures mentioned in Clause 1 and Clause 2 Article 19 of this Decree, or tax, interest on late payment of tax, fines, and interest on late payment of fines are not sufficiently collected by the deadline imposed by the Ministry of Finance, or in the case mentioned in Clause 7 Article 19 of this Decree, or at the request of the customs according to the Decrees on penalties for administrative violations and enforcement of current provisions on customs.
2. The invoices are purchased from Departments of Taxation, or printed, ordered by the organization or individual; the electronic invoices of which the issuance has been announced.
Article 35. Decision on invoice invalidation
1. A decision on invoice invalidation must specify: the date of the decision, basis for the decision, full name, position and workplace of the decision issuer; full name, residence address and office address of the subject, reasons for invoice invalidation, enforcement duration, the agency organizing the implementation of the decision on enforcement, cooperating agencies, signature of the decision issuer, seal of the agency that issues the decision.
2. The notice of invoice invalidation must specify: the date of the notice, the basis for the notice, full name, position, and workplace of the notice issuer, full name, residence address and office address of the subject, tax code (if any); reasons for invoice invalidation, numbers of invalidated invoices.
Article 36. Procedure for invoice invalidation
1. The head of the tax authority shall notify the subject at least 03 working days before issuing the notice of invoice invalidation.
2. When taking this enforcement measure, the tax authority must issue a decision on enforcement and announce the numbers of invalidation invoices on the media.
3. The tax authority shall announce the termination of this enforcement measure when the subject sufficiently pays the outstanding tax, interest on late payment of tax, fines, and interest on late payment of fines to government budget (unless the time limit for implementing the decision on enforcement is over according to Clause 1 Article 24 of this Decree).
4. Where the customs authority requests the tax authority issues a decision on enforcement by invoice invalidation, the tax authority shall follow the procedure mentioned in Clauses 1, 2, and 3 of this Article and send it to the customs authority. The customs authority shall immediately notify the tax authority when sufficient outstanding tax, interest on late payment of tax, fines, and interest on late payment of fines are collected for the tax authority to announce the termination of this enforcement measure.
The Ministry of Finance shall specify the procedure for taking this enforcement measure.
SECTION 5. ENFORCEMENT BY DISTRAINING ASSETS AND SELLING DISTRAINED ASSETS AT AUCTION
Article 37. Entities having their assets distrained for sale at auction
Organizations and individuals that have their assets distrained for sale at auction when they fail to voluntarily implement the administrative decisions on taxation or fail to pay for the enforcement costs, including:
1. Freelance workers without salary or income managers.
2. The organizations and individuals without accounts at credit institutions or of which account balance is not sufficient to deduct.
3. The organizations and individuals that are not subject to the enforcement measures mentioned in Clauses 1, 2, and 3, Article 19 of this Decree, or fines, interest on late payment of tax, fines and interest on late payment of fines are not sufficiently collected after taking such measures, or in the cases in Clause 7 Article 19 of this Decree.
4. Assets shall not be distrained if the taxpayer is an individual undergoing medical treatment at a legitimate medical facility.
Article 38. The assets below shall not be distrained
1. For individuals:
a) The only house of the subject and his family.
b) Drugs, food serving essential needs of the subject and his family.
c) Necessary working instruments as the primary or only means of subsistence of the subject and his family.
d) Clothes and primary appliances of the subject and his family.
dd) Objects of worship; relics, medals, certificates of merit.
2. For businesses:
a) Drugs, equipment, instruments and assets that belong to medical facilities, unless they are for sale; food, instruments and assets serving mid-shift meals of workers.
b) Kindergartens, schools and the equipment, instruments that belong to such facilities, provided they are not for sale.
c) Equipment, instruments and tools for assurance of occupational safety, fire safety, and prevention of environmental pollution.
d) Infrastructure serving public interests, national defense and security.
dd) Materials, finished products, semi-finished products being harmful chemicals banned from sale.
e) Materials and semi-finished products in a closed production line.
3. For state agencies, political organizations, socio-political organizations, socio-professional organizations (hereinafter referred to as agencies and organizations) that are funded by government budget , the assets bought with government budget shall not be distrained. The agency or organization shall request competent authorities in writing to provide financial supports to implement the decision on enforcement.
If the agency or organization earns incomes from other legitimate operations, the assets bought with such incomes shall be distrained, except for:
a) Drugs, equipment, instruments and assets that belong to medical facilities, unless they are for sale; food, instruments and assets serving mid-shift meals of officials.
b) Kindergartens, schools and the equipment, instruments that belong to such facilities, provided they are not for sale.
c) Equipment, instruments and tools for assurance of occupational safety, fire safety, and prevention of environmental pollution.
d) Office premises.
Article 39. Decision on enforcement by asset distraint
1. The decision on asset distraint must specify its issuance date, basis for decision, full name, position and workplace of the decision issuer; full name, residence address, office address of the asset owner; the amount of fines, location of distraint, signature of the decision issuer, seal of the agency that issues the decision.
2. The asset distraint must be notified to the asset owner, the People’s Committees of the commune where the individual resides or the organization is situated at least 05 days before the enforcement, unless the notification would obstruct the distraint.
Article 40. Procedure for asset distraint
1. Assets shall be distraint in daylight and during working hours of the locality.
2. The person that issues the decision on enforcement or the person assigned to implement the decision on enforcement shall organize the distraint.
3. The subject or an adult in his family, the representative of the organization that has its assets distrained, the representative of the local government, and witnesses must be present during the distraint.
The individual or adult in his family is deliberately absent, the asset distraint shall be carried out at the presence of the representative of the local governments and the witnesses.
4. The subject is entitled to decide which assets to be distrained first. The person that organizes the distraint must accept such request if it does not affect the distraint.
If the subject does not decide which assets to be distrained first, the assets under private ownership shall be distrained first.
5. The assets under a co-ownership of the subject and other people shall only be distrained if the subject has no private assets or his private assets are not sufficient to implement the decision on enforcement. If assets are under dispute, they shall still be distrained. The co-owners of such assets shall be provided with information about their rights to file lawsuits.
The agency that carries out the distraint shall notify the co-owners of the time and location of distraint. If no lawsuit is filed after 03 months from the date of distraint, the distrained assets shall be sole at auction as prescribed by legislation on asset auction.
6. If the subject fails to sufficiently pay outstanding tax, interest on late payment of tax, fines, and interest on late payment of fines within 30 days from the date of distraint, the tax authority is entitled to sell the distrained assets at auction to collect such amounts.
Article 41. Record on asset distraint
1. The asset distraint must be recorded in writing. The record on asset distraint must specify the time and location of asset distraint, the full name and position of the distraint organizer; the representative of the organization that has its assets distrained, the individual that has his asset distrained or his representative; the witnesses; the representative of the local governments (or the workplace of the individual); names, condition, and characteristics of all distrained assets.
2. The distraint organizer, the representative of the organization that has its assets distrained, the individual that has his asset distrained or his representative; the witnesses, the representative of the local governments (or the workplace of the individual) shall sign on the record. If one of them is absent or refuses to sign on the record, the absence or refusal and its reasons must be written in the record.
3. The record on distraint shall be made into 02 copies. 01 copy is kept by the agency that issues the decision on enforcement, 01 copy is sent to the individual or organization that has their assets distrained right after the record is made.
Article 42. Transfer of distrained assets
1. The distraint organizer shall select one of the following methods to preserve the distrained assets:
a) Request the subject or his family, the asset manager or user to preserve them.
b) Request one of the co-owner to preserve the assets if they are under a co-ownership
c) Request a capable organization or individual to preserve assets.
2. Assets being jewels gold, silver, precious metals, jewels, foreign currencies, shall be managed by State Treasuries; Assets being industrial explosives, gadgets, historical or cultural items, national treasures, relics, valuable forestry products shall be managed by specialized agencies.
3. When transferring distrained assets, the distraint organizer shall make a record specifying: the date of transfer, full name of the organizer, representative of the subject, the person requested to preserve assets; the witnesses; quantity and condition (quality) of assets; rights and obligations of the person assigned to preserve assets.
The distraint organizer, the person assigned to preserve assets, the representative of the subject, and the witnesses shall sign on the record. If one of them is absent or refuses to sign on the record, the absence or refusal and its reasons must be written in the record.
Each copy of the record shall be kept by the distraint organizer, the person assigned to preserve assets, the representative of the subject, and the witnesses.
4. The person assigned to preserve assets shall have the preservation cost covered, except for the persons mentioned in Point a Clause 1 of this Article.
5. if assets are damaged, swapped, lost, or destroyed, the person assigned to preserve assets shall provide compensation and incur penalties as prescribed in this Decree or face a criminal prosecution as prescribed by criminal law.
Article 43. Valuation of distrained assets
1. The distrained assets shall be valuated at the office of the organization or house of the individual that has their assets distrained, or where distrained assets are kept (unless a Valuation council must be established).
2. Distrained assets shall be valuated under an agreement between the organizer and the representative of the subject (and the co-owner if distrained assets are under a co-ownership). The time limit for reaching an agreement on prices is 05 working days from the date of distraint.
If an agreement on the price of the distrained asset that is valued under 1,000,000 VND or quickly degenerates cannot be reached, the issuer of the decision on enforcement shall impose the price.
3. If the distrained asset valued at 1,000,000 VND or more is hard to be valuated or the parties fail to reach an agreement on the price, the issuer of the decision on enforcement shall request the competent authority to establish a Valuation council within 15 days from the date of distraint. The issuer of the decision on enforcement is the president of the council, the representatives of relevant finance agencies and specialized agencies are members.
Within 07 working days from the date of establishment, the Valuation council shall carry out the valuation. The representative of the organization or individual may offer opinions about the valuation, but the final decision shall be made by the Valuation council.
Assets shall be valuated based on current market prices at that time. The assets of which prices are under the management of the state shall be valuated based on the prices imposed by the state.
4. The asset valuation must be recorded in writing, specifying the time and location of valuation, participants in the valuation, names and values of the valuated assets, signatures of the participants and asset owners.
Article 44. The power to establish the Valuation council
1. The President of the People’s Committees of the district shall decide the establishment of valuation councils if the administrative enforcement is within the competence of the government of the district or commune.
2. The President of the People’s Committees of the province shall decide the establishment of valuation councils if the administrative enforcement is within the competence of the provincial government.
3. The establishment of the Valuation council at central agencies shall be decided by relevant Ministers, after reaching an agreement with the Minister of Finance and relevant Ministries.
Article 45. Tasks of the Valuation council
1. Study and suggest the organization and contents of the valuation council’s meeting.
2. Prepare necessary documents for the valuation.
3. Carry out the valuation.
4. Make the valuation record.
Article 46. Transferring assets distrained for sale at auction
1. Within 03 days from the day on which the decision on distraint is issued, the organizer shall sign an auction contract with a professional auction organizer to sell assets at auction.
2. The transfer of distrained assets to the auction organizer must be recorded in writing. The record must specify: the date of transfer, the transferor, the transferee and their signatures; the quantity and condition of assets. The asset transfer dossier consists of: the decision on asset distraint, documents related to the legitimate ownership and rights to use (if any); the valuation record and transfer record.
3. If the distrained assets are so bulky that the auction organizer cannot keep, a preservation contract may be signed with the place where the assets are kept after the transfer is completed. The preservation cost shall be defrayed by the money collected from the auction.
4. After the distrained assets are transferred to the auction organizer, the procedure for auction shall comply with legislation on property auction.
5. If the assets are under a co-ownership, the co-owners shall be favored at the auction.
6. If the money collected from the auction is more than the sum of amount written in the decision on penalties and the enforcement cost, the difference shall be returned to the subject within 10 days from the date of auction.
Article 47. Transferring the asset ownership
1. The buyer of distrained assets has the ownership of such assets recognized and protected by law.
2. A competent state authority shall carry out the procedure for transferring the ownership to the buyer as prescribed by law.
3. An ownership transfer dossier consists of:
a) A copy of the decision on distraining assets for sale at auction.
b) The auction record.
c) Other papers related to the assets (if any).
SECTION 6. ENFORCEMENT BY COLLECTING THE SUBJECT’S MONEY OR ASSETS THAT ARE HELD BY ANOTHER ORGANIZATION OR INDIVIDUAL
Article 48. The scope of collecting the subject’s money or assets that are held by a third party
The subject’s money or assets that are held by a third party shall be collected when all the conditions below are satisfied:
1. The tax authority fails to take the enforcement measures mentioned in Clauses 1, 2, 3, and 4 Article 19 of this Decree, or such measures have been taken but the outstanding tax, interest on late payment of tax, fines and interest on late payment of fines are not sufficiently collected, or in the cases mentioned in Clause 7 Article 19 of this Decree.
2. The tax authority has evidence that a third party owes a debt to the subject or is holding the subject’s assets or money.
Article 49. Rules for collecting the subject’s money or assets that are held by the third party
1. The third party owes a due debt to the subject, or is holding the subject’s assets or money.
2. If the subject’s money or assets is held by a third party being a subject of secured transactions or bankruptcy, the money and assets shall be collected from the third party in accordance with legislation on bankruptcy and secured transactions.
3. The amount of money paid to government budget by the third party on behalf of the subject is considered a payment on behalf of the subject.
The competent authority shall notify the subject and relevant agencies of such payment
Article 50. Procedure for collecting the subject’s money/assets held by the third party
1. The tax authority shall request the third party, which is holding the subject’s money/assets, in writing to provide information about such money/assets or the debt owed to the subject. The third party shall submit a written explanation to the tax authority within 05 working days from the day on which the request of the tax authority is received if it fails to comply with the request.
2. Based on the information provided by the third party, the tax authority shall issue a decision to collect the subject’s money/asset that are held by the third party, or claim the debt owed to the subject.
The decision on enforcement must be immediately sent to the subject and the third party. The tax authority shall request the third party in writing to implement the decision on enforcement. The third party shall pay the outstanding tax, interest on late payment of tax, fines, and interest on late payment of fines on behalf of the subject, or transfer the subject’s assets to the tax authority for distraint. The asset distraint shall comply with Section 5 of this Chapter.
The tax authority shall implement the decision on enforcement in accordance with Article 24 of this Decree.
Article 51. Obligations of the third party
1. Provide the tax authority with information about the debt owed to the subject or the subject’s money/assets they are holding, specifying the amount of money, the deadline for repaying debt, categories, quantity and condition of assets.
2. Do not transfer money/asset to the subject when receiving the written request of the tax authority until money is paid to government budget or assets are transferred to the tax authority for sale at auction.
3. The third party shall submit a written explanation to the tax authority within 05 working days from the day on which the request of the tax authority is received if it fails to comply with the request.
4. The third party that fails to pay tax on the subject’s behalf within 15 days from the receipt of the request from the tax authority shall face the enforcement measures mentioned in Clause 1 Article 93 of the Law on Tax administration.
SECTION 7. ENFORCEMENT BY REVOKING THE CERTIFICATE OF BUSINESS REGISTRATION, CERTIFICATE OF ENTERPRISE REGISTRATION, LICENSE FOR ESTABLISHMENT AND OPERATION, OR PRACTICE CERTIFICATE
Article 52. The entities having their Certificates of Business registration, Certificates of Business registration, licenses for establishment and operation or practices certificates revoked
1. This enforcement measure shall be taken if the outstanding tax, interest on late payment of tax, fines, and interest on late payment of fines are not sufficiently collected after the tax authority takes the enforcement measures in Clauses 1, 2, 3, 4, 5 Article 19 of this Decree, or in the case mentioned in Clause 7 Article 19 of this Decree.
2. When taking this enforcement measure, the competent state management authorities must make an announcement on the media.
Article 53. Procedure for revoking the Certificate of Business registration, Certificate of Enterprise registration, license for establishment and operation, or practice certificate
When this enforcement measure is taken, the agency that issued the Certificate of Business registration, Certificate of Enterprise registration, license for establishment and operation, or practice certificate shall be requested in wiring by the tax authority to revoke the Certificate of Business registration, Certificate of Enterprise registration, license for establishment and operation, or practice certificate within 03 days from the day on which this measure is taken.
Within 10 days from the receipt of the request sent by the, the certificate issuer shall issue a decision to revoke the Certificate of Business registration, Certificate of Enterprise registration, license for establishment and operation, or practice certificate, or notify the tax authority if they are not revoked.
Chapter 3.

IMPLEMENTATION

Article 54. Effect
1. This Decree takes effect on December 15, 2013.
2. The Government’s Decree No. 98/2007/ND-CP dated June 7, 2007 and the Government’s Decree No. 13/2009/ND-CP dated February 13, 2009 on penalties for violations pertaining to taxation and enforcement of administrative decisions on taxation are annulled.
3. The regulations on penalties, delay, exemption, reduction of fines, and other regulations on penalties for administrative violations pertaining to taxation that are favorable for the violations pertaining to taxation that are committed before this Decree takes effect and discovered afterwards shall be applied.
If the penalized entity files a complaint against a decision on penalties for administrative violations pertaining to taxation that is issued and implemented before this Decree takes effect, the case shall be resolved in accordance with law when the violation is committed.
Article 55. Guidance on implementation
The Ministry of Finance shall provide guidance, organize the implementation of this Decree, and cooperate with other state agencies, political organizations, socio-political organizations, social organizations, socio-professional organizations in disseminating and supervising the implementation of this Decree.
Article 56. Responsibility for the implementation
Ministers, Heads of ministerial agencies, Heads of Governmental agencies, Presidents of the People’s Committees of central-affiliated cities and provinces, relevant organizations and individuals are responsible for the implementation of this Decree./.

FOR THE GOVERNMENT
THE PRIME MINISTER
Nguyen Tan Dung

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Decree No.129/2013/NĐ-CP of October 16, 2013, on penalties for administrative violations pertaining to taxation and enforcement of administrative decisions on taxation