Vietnam issues Decree 34 of 2025 amending Decrees in the maritime in Vietnam: What is the VAT rate applicable when a vessel is sold to a foreign organization?

Vietnam issues Decree 34 of 2025 amending Decrees in the maritime in Vietnam?

On February 25, 2025, the Government of Vietnam issued Decree 34/2025/ND-CP to amend and supplement a number of articles of the Decrees in the maritime sector.

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Article 4 of Decree 34/2025/ND-CP stipulates as follows:

- For ports and piers that have been authorized to receive load-reducing ships with technical specifications exceeding those of the ships released in decisions promulgated before this Decree took effect, and which are currently being safely operated but lack an approved Maritime Safety Plan as required by clause 4 Article 1 of Decree 34/2025/ND-CP, such ports are allowed to continue receiving load-reducing ships with specifications exceeding those previously announced. However, they must obtain approval for a Maritime Safety Plan from the competent authority no later than 12 months from when this Decree becomes effective.

- After 12 months from the effective date of Decree 34/2025/ND-CP, ports and piers without an approved Maritime Safety Plan from the competent authority will not be authorized to receive load-reducing ships with technical specifications exceeding those previously announced.

What is the procedure for announcing the opening of ports, piers, floating docks, and water areas, or temporarily putting ports, piers into operation in Vietnam according to Decree 34 of 2025?

As stated in clause 8 Article 1 of Decree 34/2025/ND-CP, which amends and supplements Article 14 Decree 58/2017/ND-CP (as amended and supplemented by point a clause 4 Article 4 Decree 69/2022/ND-CP), the procedure for announcing the opening of ports, piers, floating docks, water areas, or temporarily putting ports, piers into operation is as follows:

(1) After completing the construction of ports, piers, floating docks, water areas, or partial construction of port facilities that meet legal construction requirements, the investor shall submit 01 set of documents directly or via postal service or online public service system to the Vietnam Maritime Administration to request the announcement of the opening or temporary operation of the port, pier, floating dock, and water areas.

(2) The investor is responsible for choosing an organization with the function of conducting surveys, identifying obstacles, and clearing obstacles (if any) in the water area of the floating dock, in front of the port, pier, and maritime channel as per regulations.

After completing the survey, identification, and clearing of obstacles according to regulations, parties must organize acceptance and create an Acceptance Record for the survey results, obstacle identification, and clearing in the water area of the floating dock, in front of the port, pier, and maritime channel.

(3) The application for announcing the opening of ports, piers, floating docks, and water areas includes:

- Original or electronic form of the Request Letter in Form No. 06 specified in the Annex issued with Decree 34/2025/ND-CP;

- Copy or electronic copy of the Acceptance Record for putting completed constructions into use, including a copy or electronic copy of the Notification of Examination Results for construction acceptance as per construction regulations, as-built drawing, elevation plan, and cross-section drawing of the port, pier, and water area;

- Copy or electronic copy of the Decision approving the environmental impact assessment report of the project;

- Copy or electronic copy of the Fire Prevention and Fighting Acceptance Record as per fire prevention regulations.

(4) The application for temporary operation of ports, piers includes:

- Original or electronic version of the Request Letter for temporary operation of ports, piers according to Form No. 06 stipulated in the Annex issued with Decree 34/2025/ND-CP,

- Copy or electronic copy of the Acceptance Record for finished construction items, construction according to construction law, as-built drawing, elevation plan, and cross-section drawing of construction items, port, pier construction;

- Copy or electronic version of the Decision approving the result of the environmental impact assessment report of the project;

- Copy or electronic version of the Fire Prevention and Fighting Acceptance Record as per fire prevention law.

(5) Procedure for receiving and processing documents:

Step 1: The Vietnam Maritime Administration receives the documents. If the documents are not valid, within 03 working days from the date of receipt, the Vietnam Maritime Administration will guide the completion of the documents as per the Decree.

Step 2: If the documents are valid, within 03 working days from the date of receipt, the Vietnam Maritime Administration announces the opening of ports, piers, floating docks, and water areas or temporary operation of the port, pier according to Form No. 07 in the Annex issued with Decree 34/2025/ND-CP and sends it directly or via postal service or online public service system to the investor.

(6) For seaports with only one port, pier, after completing the procedure for opening the seaport, before putting the port, pier into use, the investor must complete the procedure to announce the opening as stipulated in Article 14 Decree 58/2017/ND-CP.

(7) For water areas or facilities served solely for pilot transfers, quarantine, storm haven, or ship waiting to dock at a port, pier, or berth, or public service ships with no transference of goods or other transport services, documents at points c and d of clause 3 in this Article and the Notification Document for completion and use acceptance are not required when declaring operational deployment.

(8) The temporary operations period of ports, piers according to the project acceptance record does not exceed 12 months maximum.

(9) For temporary maritime infrastructure services specified in Article 25 Decree 58/2017/ND-CP made for project construction purposes, when announced for use, submission of documents under points c and d, clause 3 of Article 14 Decree 58/2017/ND-CP and the Notification Document of acceptance approval for project completion and use is not required.

(10) For water areas established solely for ship docking and cargo transshipment without construction investment, when announced for use, submission of documents under point d clause 3 Decree 58/2017/ND-CP and the Notification Document of acceptance approval for project completion and use is not required.

Vietnam: What is the VAT rate applicable when a vessel is sold to a foreign organization?

Based on guidance in Official Dispatch 27084/CTHN-TTHT of 2023 regarding Value Added Tax (VAT) rates as follows:

"Based on the regulatory provisions, if Vietnam Joint Stock Commercial Maritime Bank sells the vessel named Cong Minh 18 (which is permitted only for international transport, not domestic transport) to a foreign entity or individual for use outside of Vietnam, the 0% VAT rate applies if conditions under point a Clause 2 Article 9 Circular 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance are met."

"If Vietnam Joint Stock Commercial Maritime Bank sells the vessel named Cong Minh 18 (a domestic trading vessel) to a foreign entity or individual for use in Vietnam, the VAT rate applied is 10% as stated in Article 11 of Circular 219/2013/TT-BTC."

Furthermore, referencing point a clause 2 Article 9 Circular 219/2013/TT-BTC which specifies the conditions for applying a 0% tax rate to exported goods as follows:

0% Tax Rate

....

2. Conditions for applying a 0% tax rate:

a) For exported goods:
- An export sales or processing contract; an export authorization contract;
- Documentation of payment for exported goods through a bank and other legal documents;
- A customs declaration in accordance with clause 2 Article 16 of this circular.

For goods sold with the delivery point outside Vietnam, the business establishment (seller) must have paperwork evidencing the delivery of goods outside Vietnam, such as: purchase contract with the seller of goods abroad, sales contract to the buyer, documents confirming goods delivery outside Vietnam like commercial invoice in international practice, bill of lading, packing list, certificate of origin, etc.; documents for bank payment include: documentation of the business establishment's payment to the foreign seller, documentation of the payment by the buyer to the business establishment through the bank.

...

Based on these provisions, a vessel sold to a foreign organization for use outside of Vietnam is eligible for a 0% VAT rate if the following conditions are met:

- Presence of an export sales or processing contract; an export authorization contract.

- Documentation of payment for exported goods through a bank and other legal documents as required by law.

- If the delivery and receipt of goods occur outside of Vietnam, the seller must provide documentation proving it according to legal requirements.