What are 3 steps to recognize a tax-suspension warehouse in Vietnam? How often must the tax-suspension warehouse owner notify the Customs Department managing the tax-suspension warehouse?

What is the purpose of a tax-suspension warehouse in Vietnam?

Based on Clause 9 Article 4 of the Law on Customs 2014, the regulation is as follows:

Terminology Explanation

In this Law, the following terms are understood as follows:

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9. A tax-suspension warehouse is a warehouse used to store imported raw materials and supplies that have been cleared through customs but for which taxes have not yet been paid, to manufacture export goods by the owner of the tax-suspension warehouse.

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Thus, a tax-suspension warehouse is used to store imported raw materials and supplies that have been cleared through customs but for which taxes have not yet been paid.

Where must a tax-suspension warehouse be established in Vietnam?

According to Clause 2 Article 62 of the Law on Customs 2014, the regulation is as follows:

Conditions for establishing a tax-suspension warehouse, bonded facility, and consolidation hub

1. A tax-suspension warehouse, consolidation hub can be established in areas with the following features:

a) Seaports, international civil airports, export and import goods ports established inland, land border gates, international railway stations;

b) Industrial zones, high-tech zones, non-tariff zones, and other areas as stipulated by law.

2. A tax-suspension warehouse is established within the factory area of enterprises manufacturing export goods.

3. The General Director of the General Department of Customs decides on the establishment, extension of operational times, temporary suspension, and termination of the operation of tax-suspension warehouses, bonded facilities, or consolidation hubs.

4. the Government of Vietnam stipulates in detail the establishment and operation of tax-suspension warehouses, bonded facilities, and consolidation hubs.

A tax-suspension warehouse is established within the factory area of enterprises manufacturing export goods.

What are 3 steps to recognize a tax-suspension warehouse in Vietnam? How often must the tax-suspension warehouse owner notify the Customs Department managing the tax-suspension warehouse? (Image from the Internet)

What are 3 steps to recognize a tax-suspension warehouse in Vietnam?

Export goods manufacturing enterprises with an export turnover of 40 million USD or more can have a tax-suspension warehouse recognized under conditions as per Clause 2 Article 16 of Decree 68/2016/ND-CP, which are as follows:

- Have an accounting system and information technology applications that meet the standards of state management agencies for tracking and managing goods imported, exported, stored, and remaining in stock;

- Located within the facility area of the enterprise, separated from areas containing non-bonded raw materials and supplies, and equipped with a camera surveillance system meeting data exchange standards with the customs agency to monitor goods entering and leaving the tax-suspension warehouse.

- Have been exporting for at least 2 consecutive years without violating customs and tax laws;

- Comply with accounting and statistical laws;

- Conduct bank payments as prescribed by law.

In addition, the procedure for recognizing a tax-suspension warehouse is followed as prescribed in Article 18 of Decree 68/2016/ND-CP as follows:

Step 1. The enterprise submits the application dossier directly, via post, or through the electronic information reception system of the customs agency to the General Department of Customs.

Application dossier for recognizing a tax-suspension warehouse

- A written request for recognition of a tax-suspension warehouse according to Form No. 01 in the Appendix issued together with Decree 68/2016/ND-CP: 01 original copy. (Download)

- Warehouse design diagram: 01 copy.

Step 2. Within 10 working days from the date of full receipt of the enterprise's dossier, the General Department of Customs completes the dossier and actual warehouse inspection. After the inspection, the customs agency and the enterprise sign a record of inspection results.

Step 3. Within 5 working days from the date of completion of the dossier and actual warehouse inspection, the General Director of the General Department of Customs issues a decision to recognize a tax-suspension warehouse or provides a written response to the enterprise if the conditions are not met according to regulations.

If the dossier is not complete, within 5 working days from the date of receipt of the enterprise's dossier, the General Department of Customs issues a notification requesting the enterprise to supplement the dossier.

If more than 30 working days pass from the notification date without a written response from the enterprise, the General Department of Customs has the authority to cancel the dossier.

How often must the tax-suspension warehouse owner notify the Customs Department managing the tax-suspension warehouse in Vietnam?

According to clauses 2 and 4 Article 63 of the Law on Customs 2014, the tax-suspension warehouse owner has the following rights and obligations:

- Store goods as imported materials and supplies for the production of export goods;

- Rearrange, repack, and move goods within the warehouse;

- Notify the customs agency in advance about the anticipated plan to bring materials and supplies from the tax-suspension warehouse into production;

- Periodically every 3 months, notify in writing to the Customs Department managing the tax-suspension warehouse about the status of goods and the operation of the tax-suspension warehouse;

- No later than January 31 every year, compile a summary of import customs declarations and the quantity of raw materials and supplies introduced into the tax-suspension warehouse, and a summary of export customs declarations and the quantity of goods exported in the preceding year to the Customs Department managing the tax-suspension warehouse.

- The tax-suspension warehouse owner is responsible for implementing accounting and statistical policies, equipping technical means, managing goods by electronic methods, and networking with the customs agency to carry out customs inspection and monitoring according to the Law on Customs.

Thus, one of the obligations of the tax-suspension warehouse owner is to notify in writing to the Customs Department managing the tax-suspension warehouse about the status of goods and the operation of the tax-suspension warehouse every 3 months.