What is the definition of sample product? What are the cases of exemption of import duty on sample products in Vietnam?

What is the definition of sample product in Vietnam?

Currently, there are no regulations specifying the definition of sample product. However, it can be understood that a sample product is a product used as a model for production, processing, manufacturing, or trading. In international trade, sample products are often used as models for sales contracts to ensure that the parties involved in the contract perform transactions based on the agreed-upon sample goods.

Additionally, sample products are also used in promotional campaigns. Enterprises often provide free sample products to customers to try, aiming to introduce new or improved products.

What is the definition of sample product in Vietnam? What are the cases of exemption of import duty on sample products in Vietnam? (Image from the Internet)

What are the cases of exemption of import duty on sample products in Vietnam?

Clause 1 Section 8 Official Dispatch 12166/BTC-TCHQ in 2016 stipulates:

VIII. Tax exemption for non-commercial goods

1. A non-commercial good is exempted from import duty if:

a) it is a sample product of which customs value does not exceed VND 50,000 (fifty thousand dong) or a product used as a sample product which is not traded, exchanged or consumed;

b) it is a photo of a sample product, a video of a sample product or a mockup used as replacement for a sample product;

c) it is a print advertisement referred to in Chapter 49 of the Schedule of imports and exports of Vietnam, including: flyers, trade catalogues, yearbooks, advertising materials or tourism posters used for the purpose of advertising, launching or advertising a product or service and provided free of charge. It is exempted from import duty in accordance with Clause 10 Article 16 of the Law on Export and Import Duty provided each shipment is composed of 01 type of print advertisement and the gross weight of that shipment is less than 1 kg. Where each shipment contains various print advertisements, each print advertisement has only one copy or the maximum gross weight of 01 kg.

2. Document requirements and procedures for tax exemption shall be subject to applicable regulations on tax exemptions for goods that must be registered in the Schedule of duty-exempt goods as prescribed by the Circular No. 38/2015/TT-BTC of the Ministry of Finance dated March 25, 2015.

Sample products of which customs value that does not exceed VND 50,000 (fifty thousand dong) or a product used as a sample product that is not traded, exchanged or consumed are exempt from import tax.

What are the procedures for tax exemption for sample products in Vietnam?

Clause 2 Section 8 Official Dispatch 12166/BTC-TCHQ in 2016 stipulates:

VIII. Tax exemption for non-commercial goods

...

2. Document requirements and procedures for tax exemption shall be subject to applicable regulations on tax exemptions for goods that must be registered in the Schedule of duty-exempt goods as prescribed by the Circular No. 38/2015/TT-BTC of the Ministry of Finance dated March 25, 2015.

Referring to Clause 2 Article 105 Circular 38/2015/TT-BTC, the procedures for tax exemption for sample products are conducted according to the current regulations for cases not required to register a list of tax-exempt goods as follows:

- The taxpayer shall calculate and declare the amount of exempt tax on each article (except for goods imported for processing). The customs declaration is similar to the case in which tax has to be paid. The customs authority shall compare the tax exemption documents and the amount of tax to be exempt with applicable regulations to carry out procedures for granting exemption to each of the customs declaration as prescribed.

If the customs authority determines that exports or imports are not eligible for tax exemption as declared, tax shall be collected and penalties shall be imposed (if any);

- In case the taxpayer faces objective difficulties and other cases in which export duty, import duty is exempt prescribed by the Government:

+ The taxpayer shall determine the amount of exempt tax and submit a written request (enclosed with relevant documents) to the General Department of Customs (the General Department of Customs shall send a report to the Ministry of Finance, and the Ministry of Finance shall request the Prime Minister to consider granting tax exemption);

+ The General Department of Customs shall check all documents. If documents are not satisfactory or the reasons for tax exemption must be clarified, the taxpayer shall be notified in writing. After the basis is ample, the General Department of Customs shall send a draft report to the Ministry of Finance, which is then submitted to the Prime Minister;

+ According to the directive of the Prime Minister, the Ministry of Finance shall send a notification to taxpayer and relevant customs authority;

+ The customs authority where procedures for export/import of goods are followed shall grant exemption of export duty/import duty on the corresponding quantity of goods or collect tax in full as directed by the Prime Minister.