Are imported components valued over 100 million VND serving processing of exports be eligible for the tax exemption in Vietnam?

Are imported components valued over 100 million VND serving processing of exports be eligible for the tax exemption in Vietnam?

Based on Clause 6, Article 16 of the Law on Export and Import Duties 2016, it stipulates cases of tax exemption as follows:

Tax Exemption

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6. Raw materials, supplies, and components imported serving processing of exports; finished products imported to be attached to processed products; processed export products.

Processed export products produced from domestic raw materials and supplies subject to export duty shall not be exempt from the duty for the value of domestic raw materials and supplies incorporated in the export products.

Goods exported for processing, then imported, are exempt from export and import duties calculated on the value of exported raw materials incorporated into the processed products. In the case where goods exported for processing and subsequently imported involve resources, mined products, and the total value of resources, mining products plus energy costs account for 51% of the product cost or more, the goods are not exempt from the tax.

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Thus, import duty exemption cases do not include provisions regarding the value of component products but only require meeting the aforementioned criteria. Therefore, imported components valued over 100 million VND serving processing of exports will be eligible for tax exemption.

Are imported components valued over 100 million VND serving processing of exports be eligible for the tax exemption in Vietnam?  (Image from the Internet)

What are procedures for import duty exemption in Vietnam?

Pursuant to Clause 3, Article 31 of Decree 134/2016/ND-CP, amended by Clause 14, Article 1 of Decree 18/2021/ND-CP, the procedures for import duty exemption are regulated as follows:

- Step 1: The taxpayer self-identifies, declares goods, and tax amounts eligible for exemption (excluding the declaration of tax amounts payable for goods imported for processing supplied by the processing tax provider) on the customs declaration when conducting customs procedures.

- Step 2:

+ The customs authority at the site where customs procedures are conducted will base exemption on the provided documentation, compare it with current regulations, and implement tax exemption as prescribed.

+ In cases where the imported goods are determined not to be eligible for tax exemption as declared, taxes shall be collected and violations (if any) sanctioned according to regulations.

- Step 3:

+ The electronic data processing system automatically deducts quantities of exported, imported goods corresponding to the quantities in the Exemptions Catalogue.

+ In cases where a paper version of the Exemptions Catalogue is notified, the customs authority will update and deduct the quantities of exported, imported goods corresponding to the quantities in the Exemptions Catalogue.

+ For goods imported tax-free by assembly or production line:

++ The taxpayer must perform customs procedures at the customs authority where machines, equipment are installed and provide detailed goods declarations.
++ If unable to provide detailed declarations, the taxpayer should prepare a detailed list of imported goods according to the information criteria outlined in Form No. 04 Appendix VIIa issued with [Decree 18/2021/ND-CP](https://lawnet.vn/vb/Nghi-dinh-18-2021-ND-CP-sua-doi-Nghi-dinh-134-2016-ND-CP-huong-dan-Luat-Thue-xuat-nhap-khau-5E511.html#chuong_pl_27) through the electronic data processing system or Form No. 15 Appendix VII issued with [Decree 18/2021/ND-CP](https://lawnet.vn/vb/Nghi-dinh-18-2021-ND-CP-sua-doi-Nghi-dinh-134-2016-ND-CP-huong-dan-Luat-Thue-xuat-nhap-khau-5E511.html#chuong_pl_15) and attach the customs declaration.
++ Within 15 days from the date of completion of the import of the last shipment of each assembly, production line, the taxpayer is responsible for notifying the customs authority where the Exemptions Catalogue is notified according to the information criteria outlined in Form No. 05 Appendix VIIa issued with [Decree 18/2021/ND-CP](https://lawnet.vn/vb/Nghi-dinh-18-2021-ND-CP-sua-doi-Nghi-dinh-134-2016-ND-CP-huong-dan-Luat-Thue-xuat-nhap-khau-5E511.html#chuong_pl_27) through the electronic data processing system or Form No. 16 Appendix VII issued with [Decree 18/2021/ND-CP](https://lawnet.vn/vb/Nghi-dinh-18-2021-ND-CP-sua-doi-Nghi-dinh-134-2016-ND-CP-huong-dan-Luat-Thue-xuat-nhap-khau-5E511.html#chuong_pl_16).

What are the deadlines for paying import duty in Vietnam?

Based on Article 9 of the Law on Export and Import Duties 2016, the deadlines for paying import duty are regulated as follows:

- Goods that are subject to import duty must be paid before customs clearance or release according to the Customs Law, except in cases specified in Clause 2, Article 9 of the Law on Export and Import Duties 2016.

In cases where a credit institution guarantees the tax payable, customs clearance or release may proceed, but late payment interest must be paid according to the provisions of the Law on Tax Administration from the date of customs clearance or release until tax is paid. The maximum guarantee period is 30 days from the date of customs declaration registration.

Should the guarantee period expire without the taxpayer having paid the tax and late payment interest, the guaranteeing organization is responsible for fully paying the tax and late payment interest on behalf of the taxpayer.

- Taxpayers eligible for priority policies under the provisions of the Customs Law may pay taxes for customs declarations that clear or release goods within the month no later than the tenth of the following month. If this deadline is not met, they must fully pay the tax debt and late payment interest as prescribed by the Law on Tax Administration.