Is exemption from import and export duty granted for gifts from foreign entities to Vietnamese entities?

Is exemption from import and export duty granted for gifts from foreign entities to Vietnamese entities?

Based on Clause 2, Article 16 of the Law on Export and Import Duties 2016, regulations on tax-exempt entities are as follows:

Tax Exemption

1. Exported and imported goods of foreign organizations and individuals that are entitled to privileges and immunities in Vietnam, within the limits appropriate to the international conventions to which the Socialist Republic of Vietnam is a signatory; goods within duty-free luggage allowances of individuals on departure and entry; imported goods sold in duty-free shops.

2. Relocating assets, gifts, and presents within the limits given by foreign organizations and individuals to Vietnamese organizations and individuals or vice versa.

Relocating assets, gifts, and presents that exceed the tax exemption limit must pay tax on the excess amount, except for cases where the recipient is an agency or organization whose operating funds are guaranteed by the state budget and who is authorized by competent authorities to receive such gifts, or in cases of humanitarian or charitable purposes.

3. Goods purchased, sold, and exchanged across the border by border residents that are on the list and within the limits for production and consumption needs of border residents.

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

According to the above regulations, gifts within the prescribed limits from foreign individuals to Vietnamese individuals are exempt from import and export duty. However, if gifts exceed the tax-exemption limits, the individual must pay tax on the excess, except in cases where gifts are given for humanitarian or charitable purposes.

In addition, tax-exempt gifts must not be on the list of prohibited import and export goods, suspended import and export goods, or on the list of goods subject to special consumption tax (except where gifts are subject to special consumption tax for national defense and security purposes) in accordance with the law.

Is exemption from import and export duty granted for gifts from foreign entities to Vietnamese entities? (Image from the Internet)

What is the limit for import-export duty exemption on gifts in Vietnam?

According to Clause 2, Article 8 of Decree 134/2016/ND-CP (amended by Clause 3, Article 1 of Decree 18/2021/ND-CP), foreign gift donations are exempt from import-export tax within the following limits:

Tax Exemption on Gifts

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2. Tax Exemption Limits:

a) Gifts from foreign organizations and individuals to Vietnamese organizations and individuals; gifts from Vietnamese organizations and individuals to foreign organizations and individuals with a customs value not exceeding 2,000,000 VND or with a customs value over 2,000,000 VND but the total payable tax is less than 200,000 VND are exempt from tax no more than 04 times/year.

b) For gifts from foreign organizations and individuals to Vietnamese agencies and organizations whose operating expenses are covered by the state budget as per budget law and are authorized by competent bodies to receive such gifts or gifts for humanitarian and charitable purposes, the entire value of the gifts is exempt from tax no more than 04 times/year.

c) Gifts from foreign organizations and individuals to Vietnamese individuals that are medicines or medical equipment for patients with diseases listed in Appendix IV of this Decree with a customs value not exceeding 10,000,000 VND are exempt from tax no more than 4 times/year.

Thus, according to the aforementioned regulations, the import-export tax exemption limit for gifts from foreign entities to Vietnamese entities is with a customs value not exceeding 2,000,000 VND or if the customs value exceeds 2,000,000 VND but the total tax payable is under 200,000 VND, it is tax-exempt no more than 04 times a year. In the case of gifts of medicines or medical equipment from foreign individuals to Vietnamese individuals for patients with serious diseases as listed in Appendix IV of Decree 134/2016/ND-CP, the customs value should not exceed 10,000,000 VND, and tax exemption is allowed no more than 4 times a year.

What is the application for import-export duty exemption on gifts in Vietnam?

The application for import-export tax exemption on gifts is specified in Clause 3, Article 8 of Decree 134/2016/ND-CP as follows:

- Customs dossier in accordance with customs legislation;

- Agreement document on gifts in cases where the recipient is an organization: 01 photocopy;

The recipient of the gift, if an individual, must accurately and truthfully declare on the customs declaration regarding exported and imported goods being gifts; including information on the name and address of the gift-giver and receiver abroad and is responsible before the law for the declarations;

- Document from the superior authority regarding acceptance for utilizing tax-free goods, and a document proving the organization is funded by the state budget concerning gifts for agencies and organizations funded by the state: 01 original;

- Document from the Chairman of the Provincial People’s Committee, cities, or ministries and central authorities for gifts with humanitarian or charitable purposes: 01 original.