Are building materials that cannot be produced in Vietnam taxable?

Are building materials that cannot be produced in Vietnam taxable?

Pursuant to Clause 17, Article 16 of the Export and Import Taxes Law 2016, it is stipulated as follows:

Tax Exemption

1. Goods exported and imported by foreign organizations and individuals who enjoy preferential rights and immunities in Vietnam within the limits appropriate to international treaties to which the Socialist Republic of Vietnam is a member; goods within the duty-free luggage standards of persons exiting and entering the country; goods imported for sale at duty-free shops.

2. Moveable assets, gifts within the limits from foreign organizations or individuals to Vietnamese organizations or individuals, or vice versa.

Moveable assets, gifts, or donations that exceed the tax exemption limits are subject to taxes on the exceeding portion, except in cases where the recipient unit is an agency or organization ensured by the state budget and is authorized by a competent authority to receive or in humanitarian or charitable cases.

3. Goods bought, exchanged across borders by border residents according to the list of goods and within the limits to serve production and consumption of border residents.

In cases of purchasing or transporting goods within the limits but not used for production, consumption by border residents and goods exported or imported by foreign traders allowed to trade in border markets, taxes must be paid.

4. Goods exempt from export, import taxes according to international treaties that the Socialist Republic of Vietnam is a member.

5. Goods with a value or tax amount payable below the minimal level.

6. Materials, supplies, components imported for processing exported products; imported finished products for attachment to processed products; processed exported products.

Processed exported products from domestic materials, supplies with an export tax are not exempted from tax for the value of the domestic materials, supplies corresponding to the structure in the processed product.

Goods exported for processing then imported are exempt from export and import taxes on the value of exported materials forming the processed product. For goods exported for processing then imported, which are resources, minerals, products with a total resource, mineral value plus energy costs accounting for 51% or more of the product cost, they are not exempt from taxes.

7. Materials, supplies, components imported for producing exported goods.

8. Goods produced, processed, recycled, assembled in non-tariff zones without using imported materials, components from abroad when imported into the domestic market.

9. Goods temporarily imported, re-exported or temporarily exported, re-imported within a certain period, including:

a) Goods temporarily imported, re-exported, temporarily exported, re-imported for organizing or participating in fairs, exhibitions, product introduction, sports, cultural, artistic events, or other events; machinery, equipment temporarily imported, re-exported for testing, product development research; machinery, equipment, occupational tools temporarily imported, re-exported, temporarily exported, re-imported for limited-time work or processing for foreign traders, except in cases of machinery, equipment, tools, means of transportation by organizations, individuals temporarily imported, re-exported for investment projects, construction, installation works, and production purposes;

b) Machinery, equipment, components, spare parts temporarily imported for replacement, repair of foreign ships, aircraft or temporarily exported for replacement, repair of Vietnamese ships, aircraft abroad; goods temporarily imported, re-exported for supply to foreign ships, aircraft anchoring at Vietnamese ports;

c) Goods temporarily imported, re-exported or temporarily exported, re-imported for warranty, repair, replacement;

d) Circulating means under the mode of temporary import, re-export or temporary export, re-import for containing exported, imported goods;

dd) Goods traded temporarily imported, re-exported within the temporary import, re-export time limit (including the extension time) guaranteed by credit institutions or have deposited an amount equivalent to the import tax of temporarily imported, re-exported goods.

10. Goods not for commercial purposes in the following cases: samples; photos, films, models replacing samples; small quantity advertisement publications.

11. Goods imported to create fixed assets of subjects entitled to investment incentives as prescribed by law on investment, including:

a) Machinery, equipment; components, details, r detached parts, spare parts for assembling or using synchronously with machinery, equipment; materials, supplies for manufacturing machinery, equipment or for manufacturing components, details, detached parts, spare parts of machinery, equipment;

b) Specialized vehicles in the technological chain used directly for production activities of the project;

c) building materials that cannot be domestically produced.

The import tax exemption for imported goods specified in this clause applies to both new investment projects and expanded investment projects.

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Goods imported to create fixed assets of subjects entitled to investment incentives under the law on investment, including importing building materials that cannot be domestically produced, are subject to export-import tax exemption.

Are building materials that cannot be produced in Vietnam taxable? (Image from the Internet)

When is the import of building materials that cannot be domestically produced to create fixed assets of subjects entitled to investment incentives in Vietnam?

Based on Clause 1, Article 14 of Decree 134/2016/ND-CP (amended, supplemented by Clause 7, Article 1 of Decree 18/2021/ND-CP) as follows:

Tax exemption for imported goods to create fixed assets of subjects entitled to investment incentives

1. Imported goods to create fixed assets of subjects entitled to investment incentives are exempt from import taxes under the provisions of Clause 11, Article 16 of the Export and Import Taxes Law.

2. Imported goods to create fixed assets of an investment project with a part of the project entitled to investment incentives are exempt from import taxes on imported goods allocated, accounted separately to be used directly for the part of the project entitled to investment incentives.

3. Investment projects in areas entitled to investment incentives and not in industries entitled to investment incentives are exempt from taxes on imported goods to create fixed assets serving the production of investment incentive projects.

4. The basis for determining domestically unproduced building materials is made according to the regulations of the Ministry of Planning and Investment.

The basis for determining specialized transportation vehicles in the technological chain used directly for the production activities of the investment project is made according to the list or criteria to determine tax-exempt imported goods by the Ministry of Science and Technology or according to written confirmation of the Ministry of Science and Technology for specialized transportation vehicles imported in the technological chain used directly for the production activities of the investment project. Criteria to determine specialized transportation vehicles in the technological chain used directly for the production activities of the investment project is made according to the regulations of the Ministry of Science and Technology.

5. Dossiers, tax exemption procedures are implemented under the provisions of Articles 30, 31 of this Decree.

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Therefore, the importation of building materials that cannot be domestically produced to create fixed assets of subjects entitled to investment incentives is carried out according to the regulations of the Ministry of Planning and Investment to determine whether or not it is exempt from export-import taxes.

How are subjects subject to export-import taxes regulated?

According to Article 2 of the Export and Import Taxes Law 2016, the subjects subject to export-import taxes include:

- Goods exported, imported through the customs border, border of Vietnam.

- Goods exported from the domestic market into the non-tariff zone, goods imported from the non-tariff zone into the domestic market.

- Goods exported, imported on the spot, and goods exported, imported by enterprises exercising the right to export, the right to import, the right to distribute.

- Subjects subject to export, import taxes are not applied in the following cases:

+ Goods in transit, transshipment, transfer;

+ Humanitarian assistance goods, non-refundable aid goods;

+ Goods exported from non-tariff zones abroad; goods imported from abroad into non-tariff zones and used only in non-tariff zones; goods moved from one non-tariff zone to another non-tariff zone;

+ The portion of oil used to pay resource taxes for the State when exported.

- the Government of Vietnam provides detailed regulations on this Article.