Are components imported for repair of exports under warranty subject to import duty in Vietnam?

Are components imported for repair of exports under warranty subject to import duty in Vietnam?

Pursuant to Clause 1, Article 12 of Decree 134/2016/ND-CP (as amended by Clause 6, Article 1 of Decree 18/2021/ND-CP) which provides regulations on imported goods for the production of exported goods, exempt from import duties as follows:

Exemption of duties for imported goods intended for the production of exported goods

1. Goods imported for the production of exported goods shall be exempt from import duty as provided in Clause 7, Article 16 of the Law on Export and Import Duties, including:

a) Raw materials, supplies (including materials for packaging or packaging of export products), components, intermediate products directly contributing to the constitution of export products or directly participating in the production process of export goods without being transformed into goods;

b) Completed products imported for packaging, labeling, or assembling into export products or combined into a synchronous set with export products;

c) Components and spare parts imported for the warranty of export products;

d) Imported goods not intended for sale, exchange, or consumption but used solely as samples;

đ) Imported goods intended for production for export that are permitted and actually destroyed in Vietnam.

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Imported components for the warranty of exported products are exempt from import duty.

Are components imported for repair of exports under warranty subject to import duty in Vietnam? (Image from the Internet)

What does the application for exemption from import duty on components imported for repair of exports under warranty include in Vietnam?

Pursuant to Clause 3, Article 12 of Decree 134/2016/ND-CP (as amended by Clause 6, Article 1 of Decree 18/2021/ND-CP) stipulating the documentation for exemption from import duty on components imported for repair of exports under warranty as follows:

Article 12. Exemption of duties for imported goods intended for the production of exported goods

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3. Documentation and procedures for tax exemption shall be implemented according to the provisions at Article 31 of this Decree.

When conducting on-the-spot export procedures for goods stipulated in this Article, besides the tax exemption documentation as prescribed in Article 31 of this Decree, the on-site exporter must submit an additional document from the foreign organization or individual designating the delivery of goods in Vietnam: one photocopy.

The documentation for exemption from import duty on imported components for the warranty of exported products is in accordance with Clause 1, Article 31 of Decree 134/2016/ND-CP which involves customs documentation as stipulated in the Customs Law 2014 and guiding documents.

According to Clause 1, Article 24 of the Customs Law 2014, customs documentation includes:

- Customs declaration or documents replacing the customs declaration;

- Related documents.

Depending on the case, the customs declarant must submit or present the sales contract, commercial invoice, transportation documents, certificate of origin of goods, export/import licenses, notice of examination results or exemptions from specialized examination, and related documents according to relevant legal regulations.

What are procedures for exemption from import duty on components imported for repair of exports under warranty in Vietnam?

The procedures for exemption from import duty on components imported for repair of exports under warranty are in accordance with Clause 3, Article 31 of Decree 134/2016/ND-CP (Item c, Clause 3 of this Article is amended by Clause 14, Article 1 of Decree 18/2021/ND-CP)

Step 01: Taxpayers determine and declare goods and tax amounts that are exempt (except for declaring payable tax amounts on goods exported, imported for processing as provided by the processing tax provider) on the customs declaration during customs procedures and are responsible before the law for their declarations.

Step 02: The customs office, where the customs procedures are carried out, shall base on the exemption dossier, compare with current regulations to implement tax exemption as specified.

If it is determined that imported goods are not eligible for tax exemption as declared, taxes will be collected and violations penalized (if any) according to the regulations.

Step 03: The electronic data processing system automatically deducts the quantity of exported, imported goods corresponding to the quantity in the Tax Exemption List.

In case of notifying the Tax Exemption List in paper form, the customs office updates and deducts the number of exported, imported goods corresponding to the quantity in the Tax Exemption List.

For import of tax-exempt goods by assembly or line, the taxpayer must conduct customs procedures at the customs office where the machinery and equipment are installed.

+ At the time of registering the customs declaration, the taxpayer must detail the goods on the customs declaration.

+ If not detailed on the customs declaration, the taxpayer prepares a detailed list of imported goods according to the information criteria set in Form No. 04, Appendix VIIa issued with Decree 18/2021/ND-CP via the electronic data processing system or Form No. 15, Appendix VII issued with Decree 18/2021/ND-CP and attach the customs declaration.

+ Within 15 days from the date of completion of the final import shipment of each assembly or line, the taxpayer must notify the customs office where the Tax Exemption List was notified according to the information criteria set in Form No. 05, Appendix VIIa issued with Decree 18/2021/ND-CP via the electronic data processing system or Form No. 16, Appendix VII issued with Decree 18/2021/ND-CP.