Are components imported for building vessels and sea-going ships for export in Vietnam subject to import duty exemption?

Are components imported for building vessels and sea-going ships for export in Vietnam subject to import duty exemption?

Under Article 17 of Decree 134/2016/ND-CP on exemption of duties on imports serving the building of vessels and sea-going ships for export:

Exemption of duties on imports serving the building of vessels and sea-going ships for export

1. 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.

2. The Ministry of Science and Technology shall establish criteria for identification of vehicles in the technological line directly serving shipbuilding activities.

3. The Ministry of Planning and Investment shall establish criteria for identification of goods that cannot be domestically manufactured.

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

Clause 16 Article 16 of the Law on Export and Import Duties 2016 stipulates as follows:

Duty exemption

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16. 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;

Thus, components imported for building vessels and sea-going ships for export in Vietnam are subject to import duty exemption according to the tax law.

Are components imported for building vessels and sea-going ships for export in Vietnam subject to import duty exemption? (Image from the Internet)

Which entities are import duty payers in Vietnam according to the current regulations?

Under Article 3 of the Law on Export and Import Duties 2016, the import duty payers include:

- Owners of imports.

- Entrusted importers.

- People entering and leaving Vietnam carrying 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:

+ Customs brokerage agents in case authorized by the taxpayer to pay import duty;

+ Providers of postal services or international express mail services paying tax on behalf of taxpayers;

+ Credit institutions or other organizations operating under the Law on credit institutions that provide guarantee or pay tax on behalf of taxpayers;

+ People authorized by goods owners in case goods are gifts of individuals; any luggage sent before or after its owner’s arrival or departure;

+ Any branch of an enterprise authorized to pay tax on its behalf;

+ 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  imports at bordering markets as prescribed by law.

- Owners of imports that are initially tax-free but then taxed.

- Other cases prescribed by law.

What is the duration for providing a guarantee for the payable import duty by credit institutions in Vietnam?

Under Article 9 of the Law on Export and Import Duties 2016, the regulation is as follows:

Tax payment deadline

1. 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.

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Thus, the maximum duration for providing a guarantee for the payable import duty by credit institutions in Vietnam is 30 days from the date of registering the customs declaration.