What does transit guarantee mean in taxation in Vietnam?

What does transit guarantee mean in taxation in Vietnam?

Based on Clause 5, Article 3 of Decree 46/2020/ND-CP, which stipulates the transit guarantee as follows:

Definitions

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

1. ACTS system is an integrated information technology system established and connected by ASEAN member countries to exchange information for implementing electronic transit procedures, controlling the transportation of transit goods through the territory of ASEAN member countries, and assisting the customs authorities of ASEAN member countries in calculating customs duties, guarantees, and exchanging information on tax debt recovery based on the provisions of Protocol 7 on the customs transit system (hereinafter referred to as Protocol 7).

2. Customs transit declaration is an electronic customs declaration form containing the information criteria that the customs declarant must declare when conducting the transit goods through the ACTS system.

A customs transit declaration is only used to declare transit goods transported on a single mode of transport for a transit journey through the ACTS system.

3. Accompanying transit documents (abbreviated as TAD) are the customs transit declarations approved by the departure customs authority and printed from the ACTS system.

4. Transit journey is the journey transporting transit goods from one customs authority at the departure point to another customs authority at the destination point through the ACTS system.

5. Transit guarantee is the guarantor's assurance of the payment of customs duties that may arise during the transit journey.

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Thus, according to the above regulation, it can be understood that transit guarantee in taxation is a form of financial assurance provided by a credit institution or bank to the customs authority to ensure that the taxpayer will fulfill all tax obligations for the transit goods.

Are goods that are grant aid subject to import and export duties in Vietnam?

Based on Article 2 of the Law on Export and Import Taxes 2016, which stipulates the objects subject to import and export duties, including:

- Goods exported and imported through Vietnam's border ports.

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

- Goods exported, imported on the spot, and goods exported, imported by enterprises exercising export rights, import rights, and distribution rights.

- In addition, objects subject to export and import tax do not apply to the following cases:

+ Transited, transshipped, and transshipped goods;

+ Humanitarian aid goods, goods that are grant aid;

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

+ Crude oil used to pay resource taxes to the State when exported.

Thus, according to the regulations, goods that are grant aid are not subject to import and export duties.

What does transit guarantee mean in taxation in Vietnam? (Image from the Internet)

May an individual with taxable goods authorize an agent to perform import and export duty payment procedures in Vietnam?

Based on Article 3 of the Law on Export and Import Taxes 2016 stipulates as follows:

Taxpayers

1. Owners of exported or imported goods.

2. Organizations entrusted to export or import.

3. Persons exiting and entering with exported and imported goods, sending or receiving goods through Vietnam's border ports.

4. Persons authorized, guaranteeing, and paying tax on behalf of taxpayers, including:

a) Customs agents in case of being authorized by taxpayers to pay export and import taxes;

b) Enterprises providing postal services, international express services in case of paying taxes on behalf of taxpayers;

c) Credit institutions or other organizations operating under the Law on Credit Institutions in case of guaranteeing and paying taxes on behalf of taxpayers;

d) Persons authorized by the owners of goods in case the goods are gifts, presents of individuals; luggage sent before or after the trip of persons exiting and entering;

dd) Branches of enterprises authorized to pay taxes on behalf of enterprises;

e) Other persons authorized to pay taxes on behalf of taxpayers according to the law provisions.

5. Persons purchasing and transporting goods within the duty-free quota of border residents but not used for production or consumption and selling them on the domestic market, and foreign traders allowed to trade export and import goods at border markets under the legal provisions.

6. Persons with exported and imported goods exempt from tax but later on being transferred to taxable objects according to the law provisions.

7. Other cases as provided by law.

Thus, according to the regulations, individuals with taxable import and export goods can authorize an agent to perform customs procedures and pay taxes on their behalf.