What is temporary export? Is it exempt from import duty in Vietnam?

What is temporary export in Vietnam?

Based on Article 29 of the Commercial Law 2005 (Clause 3 repealed by Clause 3 of Article 112 of the Foreign Trade Management Law 2017), regulations on temporary import, temporary export of goods are specified as follows:

Temporary import; temporary export of goods

1. Temporary import of goods is the process whereby goods are brought from foreign countries or from special areas located within the territory of Vietnam, which are considered separate customs areas as prescribed by law, into Vietnam, undergo import procedures into Vietnam, and subsequently undergo export procedures to be sent out of Vietnam.

2. Temporary export of goods is the process whereby goods are sent out of Vietnam or into special areas located within the territory of Vietnam, which are considered separate customs areas as prescribed by law, undergo export procedures from Vietnam, and subsequently undergo import procedures to re-import the same goods back into Vietnam.

Accordingly, it can be understood that temporary export is the process of exporting goods to foreign countries or into special areas located within the territory of Vietnam (considered separate customs areas) and then re-importing the same goods back into Vietnam.

What is temporary export? Is it exempt from import duty in Vietnam? (Image from Internet)

Are goods temporarily exported exempt from import duty in Vietnam?

Based on point a, Clause 9, Article 16 of the Law on export and import duties 2016, the regulation is as follows:

Tax Exemption

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9. Goods temporarily imported, re-exported or temporarily exported, re-imported within a certain period, include:

a) Goods temporarily imported, re-exported, temporarily exported, re-imported for organizing or participating in fairs, exhibitions, product introduction events, sports, cultural, or artistic events or other events; machinery, equipment temporarily imported, re-exported for testing, product development research; machinery, equipment, professional tools temporarily imported, re-exported, temporarily exported, re-imported to serve work within a certain period or to serve processing for foreign traders, except for machinery, equipment, tools, means of transportation of organizations and individuals that are permitted to temporarily import, re-export to implement investment projects, construct, install works, serve production;

...

Simultaneously, based on Clause 20, Article 5 of the Value Added Tax Law 2008, it states:

Goods in transit through Vietnamese territory; goods temporarily imported for re-export; goods temporarily exported for re-import; imported materials for the production, processing of export products based on production or processing contracts with foreign parties; goods, services bought and sold between overseas and bonded warehouses and between bonded warehouses with each other.

Thus, goods that are temporarily exported and re-imported can be exempt from import duty in certain cases. Specifically, the cases of tax exemption include:

- Goods temporarily exported and re-imported for organizing or participating in fairs, exhibitions, product introduction events, sports, cultural, artistic events, or other events.

- Machinery and equipment temporarily exported and re-imported for testing and product development research.

- Machinery, equipment, and professional tools temporarily exported and re-imported to serve work within a certain period or to serve processing for foreign traders.

However, there are exceptions where tax exemption is not granted, such as machinery, equipment, tools, and means of transportation of organizations and individuals permitted to temporarily export and re-import to implement investment projects, construction, installation, and serve production.

What about other forms of temporary import in Vietnam?

Based on Article 15 of Decree 69/2018/ND-CP, the specific forms of temporary import are regulated as follows:

- Except for goods prohibited from export, prohibited from import; goods temporarily suspended from export, temporarily suspended from import, traders are allowed to temporarily import goods into Vietnam under contracts signed with foreign countries for purposes of warranty, maintenance, leasing, borrowing, or for other purposes within a certain period, and then re-export the same goods out of Vietnam according to the following regulations:

+ For goods that are not allowed to be circulated, used in Vietnam; goods subject to management by export quotas, import quotas, tariff quotas, export licenses, import licenses, except for automatic import licenses, traders must obtain a temporary import license from the Ministry of Industry and Trade. The application and procedures for obtaining the License are specified in Article 19 and Article 20 of Decree 69/2018/ND-CP.

For goods that are not allowed to be circulated, used in Vietnam, the Ministry of Industry and Trade issues a temporary import license based on the written approval of competent state authorities managing such goods.

+ Goods specified in point a, Clause 1, Article 15 of Decree 69/2018/ND-CP when used in Vietnam must comply with regulations of competent state authorities managing such goods.

+ For goods not specified in point a, Clause 1, Article 15 of Decree 69/2018/ND-CP, traders carry out temporary import procedures at the customs authority without having to obtain a temporary import license.

- Temporarily importing and re-exporting goods for display, introduction, participation in fairs, exhibitions, and trade shows.

+ Traders are allowed to temporarily import goods for display, introduction, participation in fairs, exhibitions, trade shows, except for goods prohibited from export, prohibited from import; goods temporarily suspended from export, temporarily suspended from import.

+ Temporary import procedures are conducted at the customs authority without having to obtain a temporary import license.

+ Traders must comply with regulations on display, introduction of goods, fairs, exhibitions, and trade shows as stipulated in Section 3, Section 4, Chapter 4 of the Commercial Law.