How long is the guarantee period for credit institutions providing guarantee for the amount of tax payable in Vietnam?

How long is the guarantee period for credit institutions providing guarantee for the amount of tax payable in Vietnam?

Based on Article 9 of the Law on export and import duties 2016 which stipulates the deadline for tax payment as follows:

Tax payment deadline

1. Exported and imported goods subject to tax must pay tax before customs clearance or release of goods as provided by the Customs Law, except for the cases specified in Clause 2 of this Article.

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

If the guarantee period has expired and the taxpayer has not yet paid the tax and late payment interest, the guarantor shall be responsible for paying the tax and late payment interest on behalf of the taxpayer.

2. Taxpayers receiving preferential treatment under the Customs Law are allowed to pay tax for cleared or released customs declarations by the tenth day of the following month. After this period, if the tax has not been paid, the taxpayer must pay all overdue taxes and late payment interest as per the Tax Administration Law.

Thus, following the above regulations, the guarantee period that a credit institution can guarantee the payment of export and import duties is a maximum of 30 days from the date of customs declaration registration.

How long is the guarantee period for credit institutions providing guarantee for the amount of tax payable in Vietnam?  (Image from the Internet)

Are goods that are temporarily imported and re-exported within the guarantee period exempt from export and import duties in Vietnam?

Based on Article 16 of the Law on export and import duties 2016 which stipulates tax exemptions as follows:

Tax Exemption

1. Exported and imported goods of foreign organizations and individuals entitled to privileges and immunities in Vietnam within the limits consistent with international treaties to which the Socialist Republic of Vietnam is a signatory; luggage within duty-free standards for exit and entry persons; imported goods for sale in duty-free shops.

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

Movable assets, gifts exceeding the tax-free limits must pay tax on the excess portion, except where the recipient is a state budget-funded agency or organization allowed to receive, or in cases of humanitarian or charitable purposes.

3. Goods traded and exchanged by border residents according to the list and within the limits for production and consumption of border residents.

If goods purchased, transported within the limits are not used for border residents’ production and consumption, or goods exported/imported by foreign merchants for trade in border markets, tax must be paid.

4. Goods exempted from export and import dutieses according to international treaties to which the Socialist Republic of Vietnam is a signatory.

5. Goods with value or tax payable below the minimum threshold.

6. Materials, supplies, and components imported for manufacturing export products; complete products imported for attaching to processed products; processed export products.

Processed export products made from domestically sourced materials subject to export tax are not exempt from tax on the value of the domestic materials contained in the exported product.

7. Materials, supplies, and components imported for the production of export goods.

8. Goods produced, processed, recycled, or assembled in the non-tariff zones not using imported materials and components when imported into the domestic market.

9. Temporarily imported, re-exported, temporarily exported, re-imported goods within a specific period, including:

a) Goods temporarily imported, re-exported, temporarily exported, re-imported for organizing or participating in fairs, exhibitions, product introductions, sports events, cultural, artistic events or other events; machinery and equipment temporarily imported, re-exported for testing, research and development; machinery, equipment, professional tools temporarily imported, re-exported, temporarily exported, re-imported to conduct certain jobs or for processing foreign merchants, except for machinery, equipment, tools, transport means allowed temporary import and re-export for investment projects, construction work, installation serving production;

b) Machinery, equipment, components, spare parts temporarily imported for replacement, repair of foreign ships or aircraft, or temporarily exported for replacement, repair of Vietnamese ships or aircraft overseas; goods temporarily imported, re-exported for supplying foreign ships or aircraft stationed in Vietnamese ports;

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

d) Rotating assets temporarily imported, re-exported or temporarily exported, re-imported for containing export, import goods;

dd) goods that are temporarily imported and re-exported in the period (including extended period) guaranteed by a credit institution or a deposit equivalent to the import tax of temporarily imported goods.

10. Non-commercial goods in the following cases: samples; photos, films, models replacing samples; small quantities of promotional prints.

11. Imported goods for the creation of fixed assets eligible for investment incentives under the Investment Law, including:

a) Machinery, equipment; components, spare parts, detachments, accessories for simultaneous assembly or use with machinery, equipment; materials, supplies used for manufacturing machinery, equipment or components, spare parts for machinery, equipment;

b) Special-use transport means in the production line used directly for the project’s production activities;

c) Construction materials not yet produced domestically.

Tax exemption for imported goods under this clause applies to both new and expanding investment projects.

12. Plant varieties; animal breeds; fertilizers, protective chemicals not yet produced domestically necessary for import according to competent state authority regulations.

13. Materials, supplies, components not yet produced domestically imported for production under investment projects in sectors, special investment preference locations, high-tech enterprises, scientific and technological enterprises, science and technology organizations are exempt from import tax for 5 years from the start of production.

Tax exemption under this clause does not apply to investment projects in mineral extraction; projects producing goods with the proportion of minerals plus energy costs totaling over 51% of the product cost; production, trading of goods/services subject to special consumption tax.

14. Materials, supplies, components not yet produced domestically imported under investment projects producing, assembling prioritized medical equipment are exempt from import tax for 5 years from the start of production.

15. Imported goods for petroleum activities, including:

a) Machinery, equipment, spare parts, special-use transport means necessary for petroleum activities, including temporary import and re-export cases;

b) Components, spare parts for simultaneous assembly, use with machinery, equipment; materials, supplies used for manufacturing machinery, equipment or components, spare parts for machinery, equipment necessary for petroleum activities;

c) Materials necessary for petroleum activities not yet produced domestically.

16. Projects, shipbuilding facilities under the list of sectors, preferential occupations specified by the Investment Law are exempted from tax for:

a) Imported goods for creating the shipbuilding facility’s fixed assets, including: machinery, equipment; components, spare parts, accessories used simultaneously or with machinery, equipment; materials, supplies used for manufacturing machinery, equipment, or components, spare parts, accessories for machinery, equipment; transport means in the technology line serving directly for shipbuilding activities; construction materials not yet produced domestically;

b) Imported goods, machinery, equipment, materials, supplies, components, semi-finished products not yet produced domestically for shipbuilding;

c) Export ships.

17. Machinery, equipment, materials, supplies, components, spare parts imported for money printing, money minting activities.

18. Imported goods are materials, supplies, components not yet produced domestically serving directly for producing information technology products, digital content, software.

19. Exported and imported goods for environmental protection, including:

a) Imported machinery, equipment, transport means, tools, special-use materials not yet produced domestically for collecting, transporting, processing, recycling wastewater, waste, gas, observing and analyzing environment, producing renewable energy; environmental pollution treatment, response, handling of environmental incidents;

b) Exported products are produced from waste recycling, processing activities.

20. Special-use imported goods not yet produced domestically serve directly for education.

21. Imported goods are machinery, equipment, spare parts, materials, special-use materials not yet produced domestically, scientific, specialized books used directly for scientific research, technology development, technology incubation, science and technology business incubation, technology innovation.

22. Special-use imported goods serve directly for national security, defense, transport means including special-use vehicles that are not yet produced domestically.

23. Exported and imported goods serve ensuring social security, recovery of natural disasters, disasters, diseases, and other special cases.

24. the Government of Vietnam stipulates the specific details.

Thus, according to the aforementioned regulations, goods that are temporarily imported and re-exported within the guarantee period provided by a credit institution will be exempt from export and import duties.

What are the subjects to export and import duties in Vietnam?

According to Article 2 of the Law on export and import duties 2016 which stipulates the subjects to tax as follows:

- Exported and imported goods through Vietnamese border gates.

- Goods exported from the domestic market to non-tariff zones, goods imported from non-tariff zones to the domestic market.

- Goods exported in place and goods exported, imported by enterprises exercising the right of export, right of import, and right of distribution.

- Subjects to export and import duties do not apply to the following cases:

+ Transit, transfer goods;

+ Humanitarian or non-repayable aid goods;

+ Goods exported from non-tariff zones to overseas; goods imported from overseas to non-tariff zones and only used within non-tariff zones; goods transferred from one non-tariff zone to another non-tariff zone;

+ A portion of crude oil used to pay royalties to the State when exported.

- the Government of Vietnam stipulates the specific details.