Shall import-export duties be paid in foreign currency in Vietnam?

Shall import-export duties be paid in foreign currency in Vietnam?

Pursuant to Article 41 of Circular 38/2015/TT-BTC regulating the currency used for paying import-export duties as follows:

Currency for Tax Payment

1. duties on exported and imported goods are to be paid in Vietnamese Dong. In cases where duties are paid in foreign currency, the taxpayer must use a freely convertible foreign currency as regulated. The exchange rate for converting foreign currency to Vietnamese Dong is implemented according to the stipulations in Clause 2, Article 35 of this Circular.

2. In case duties must be paid in foreign currency but there is no official price at the time of declaring:

a) The taxpayer is allowed to temporarily pay duties in foreign currency before customs clearance or release of goods. After the official price is available, if the taxpayer receives foreign currency payment from an international client, any differential tax (if any) is to be paid in foreign currency; or

b) The taxpayer is allowed to temporarily pay duties in Vietnamese Dong before customs clearance or release of goods. After the official price is available, if the taxpayer receives foreign currency payment from an international client, any differential tax (if any) is to be paid in foreign currency. The exchange rate for converting foreign currency to Vietnamese Dong is implemented according to the stipulations in Clause 2, Article 35 of this Circular.

From the above regulation, it can be seen that taxpayers can indeed pay import-export duties in foreign currency if it is a freely convertible foreign currency.

However, it should be noted that if the taxpayer pays duties in foreign currency but there is no official price at the time of declaration, the situation should be handled in one of the following two ways:

- Method 1: The taxpayer is allowed to temporarily pay duties in foreign currency before customs clearance or release of goods. After the official price is available, if the taxpayer receives foreign currency payment from an international client, any differential tax (if any) is to be paid in foreign currency;

- Method 2: The taxpayer is allowed to temporarily pay duties in Vietnamese Dong before customs clearance or release of goods. After the official price is available, if the taxpayer receives foreign currency payment from an international client, any differential tax (if any) is to be paid in foreign currency.

Shall import-export duties be paid in foreign currency in Vietnam? (Image from the Internet)

What is the exchange rate for converting foreign currency to Vietnamese Dong when paying import-export duties?

According to Clause 2, Article 35 of Circular 38/2015/TT-BTC, the exchange rate for converting foreign currency to Vietnamese Dong when paying import-export duties is determined as follows:

- The tax calculation exchange rate is implemented according to the provisions of Decree 08/2015/ND-CP.

- The General Department of Customs cooperates with Vietcombank to update the foreign currency buying exchange rate via wire transfer of the main head office at the end of Thursday or the previous working day if Thursday is a holiday; publishes this exchange rate on the General Department of Customs' electronic portal and updates it into the electronic customs data system to apply for determining the tax calculation exchange rate for customs declarations registered in the subsequent week;

- For foreign currencies not published by Vietcombank’s main head office, the General Department of Customs updates the exchange rates published by the State Bank of Vietnam, most recently reported on the electronic page of the State Bank of Vietnam, to publish on the General Department of Customs’ electronic portal and updates into the electronic customs data system to apply for determining the tax calculation foreign exchange rate for exported and imported goods.

What is the basis for determining the amount of import-export duty in Vietnam?

According to Clause 1, Article 5 of the Law on Export and Import Duties 2016, the basis for determining the amount of import-export duty is as follows:

Basis for calculating export and import duties for goods subject to tax calculation by percentage rate

...

1. The amount of export or import duties is determined based on the dutiable value and the tax rate as a percentage (%) for each item at the time of tax calculation.

2. Tax rates on exported goods are specified for each item in the export tariff.

In cases where goods are exported to countries, groups of countries, or territories with preferential agreements on export duties in trade relations with Vietnam, these agreements will be implemented.

...

Therefore, the basis for determining the amount of import-export duty is the dutiable value and the tax rate as a percentage (%) for each item at the time of tax calculation.