Are unprocessed tobacco leaves and tobacco wastes grown in Cambodia imported to Vietnam tax-free?
Can crop products imported from abroad be exempt from value added tax in Vietnam?
Pursuant to Clause 1, Article 5 of the Law on Value Added Tax 2008 (amended by Clause 1, Article 1 of the Law on Amending and Supplementing a Number of Articles of the Law on Value Added Tax, Special Consumption Tax and the Law on Tax Administration 2016) regulates :
"Article 5.- Non-taxable objects
1. Farming, breeding, aquaculture produces that have not been processed into other products or have only been preliminary processed by the manufacturers or catchers when they are sold and imported.
Enterprises and cooperatives buying farming, breeding, aquaculture produces that have not been processed into other products or have only been preliminary processed and selling them to other enterprises or cooperatives are not required to declare and pay VAT but may deduct input VAT."
Thus, the non-application of value-added tax on crop products imported from abroad into Vietnam will comply with the above provisions.
Are unprocessed tobacco leaves and tobacco wastes grown in Cambodia imported to Vietnam tax-free?
What is the exemption from import tax on tobacco leaves grown in Cambodia when imported into Vietnam?
Pursuant to Official Dispatch 14214/BTC-CST in 2021 of the Ministry of Finance of Vietnam guiding on import tax exemption for investment goods grown in Cambodia imported to Vietnam. According to this Official Dispatch, the Ministry of Finance of Vietnam has made the following comments to Minh Tam Joint Stock Company:
“Regarding the proposal of the Company to request import tax exemption for “unprocessed tobacco and tobacco leaf waste” that the Company invests in growing in Cambodia when importing to Vietnam, The Ministry of Finance has issued Official Letter No. 8035/BTC-CST dated July 21, 2021 to reply to Minh Tam Cambodia IMEX Co., Ltd and Minh Tam Vietnam Joint Stock Company.
In Official Dispatch No. 8035/BTC-CST, the Ministry of Finance requested the Company to comply with the provisions of Decree No. 18/2021/ND-CP, and at the same time, the Company could exploit the mechanism of the Agreement to terminate the contract. promote bilateral trade between Vietnam and Cambodia for the period 2019-2020[1] to import unprocessed tobacco leaves from Cambodia according to the quota amount specified in the Agreement with a preferential tax rate within the quota of 0%.
However, in Official Dispatch No. 168/CV-MT dated October 25, 2021 stating that the Company is not eligible for a tobacco import quota, so it cannot exploit the mechanism of the Agreement and requests to continue to enjoy the benefits. import tax exemption for raw tobacco products grown in Cambodia by the Company when imported to Vietnam until the end of 2037 as in the period before the promulgation of Decree No. 18/2021/ND-CP. In this regard, the Ministry of Finance has the following comments:
- Tobacco is an item that is not encouraged to be imported and is harmful to public health, so according to the provisions of the Investment Law (Clause 3, Article 13), this item is not guaranteed investment incentives. Accordingly, from the effective date of Decree No. 18/2021/ND-CP, tobacco products (including unprocessed tobacco leaves and tobacco scraps) are supported by the Vietnamese side. Investment support, planting in the provinces of Cambodia imported to the country are not exempt from import tax.
- To implement the Agreement to promote bilateral trade between Vietnam and Cambodia, on September 13, 2021, the Government issued Decree No. 83/2021/ND-CP on the special preferential import tariff of Vietnam. Vietnam to implement the Agreement to promote bilateral trade between the Government of the Socialist Republic of Vietnam and the Government of the Kingdom of Cambodia for the period of 2021 - 2022.
The Ministry of Industry and Trade is the agency in charge of negotiating the development of an Agreement to promote bilateral trade between Vietnam and Cambodia and managing the allocation of quotas. The Ministry of Industry and Trade is also developing a draft Circular stipulating the import of rice and dried tobacco leaves originating from the Kingdom of Cambodia under tariff quotas in 2021 and 2022. Therefore, related to the implementation implementing the contents of this Agreement, the Company is requested to contact the Ministry of Industry and Trade for consideration and settlement.”
Accordingly, the determination of import tax exemption for tobacco leaves grown in Cambodia and imported to Vietnam will be made according to the above guidance of the Ministry of Finance of Vietnam.
Are tobacco leaves grown in Cambodia exempt from value added tax in Vietnam?
Pursuant to Official Dispatch 5719/BTC-CST in 2022 of the Ministry of Finance of Vietnam guiding on tax exemption for investment agricultural products grown in Cambodia imported to Vietnam. According to this Official Dispatch, the Ministry of Finance of Vietnam has sent the following comments to Minh Tam Joint Stock Company:
"1. Regarding import tax on "unprocessed tobacco leaves and tobacco scraps" grown in Cambodia by the investment company when imported to Vietnam
Regarding the Company's proposal, the Ministry of Finance has 2 official dispatches (Dispatch No. 8035/BTC-CST dated July 21, 2021, Dispatch No. 14214/BTC-CST dated December 14, 2021) to respond. Company. Accordingly, it is recommended that the Company comply with the current regulations of the law on export tax and import tax.
2. Regarding value-added tax (VAT) for "unprocessed tobacco and tobacco leaf waste" that the company invests in growing in Cambodia when importing to Vietnam
- Clause 1, Article 5 of the current Law on Value-Added Tax (VAT) stipulates who are not subject to VAT as follows:
"first. Cultivation, livestock and aquaculture products, which have not been processed into other products or are only preliminarily processed, are sold and sold by organizations or individuals themselves.
Enterprises and cooperatives that purchase crop, livestock and aquaculture products that have not been processed into other products or are only preliminarily processed and sold to other enterprises or cooperatives are not required to list them. declare, calculate and pay value-added tax but receive input value-added tax deduction.”
- Clause 1, Article 3 of Decree No. 209/2013/ND-CP dated December 18, 2013 of the Government detailing and guiding the implementation of a number of articles of the Law on Value-Added Tax (amended and supplemented according to the Law on Value-Added Tax). The provisions of Clause 1, Article 1 of Decree No. 100/2016/ND-CP dated July 1, 2016 of the Government detailing and guiding the implementation of a number of articles of the Law amending and supplementing a number of articles of the Law Value-added tax, Law on Special Consumption Tax and Law on Tax Administration) stipulates who are not subject to VAT:
"1. For products specified in Clause 1, Article 5 of the Law on Value-Added Tax, which has been amended and supplemented in Clause 1, Article 1 of the Law amending and supplementing a number of articles of the Law on Value-Added Tax, the Law on Consumption Tax, Special consumption and the Law on Tax Administration for preliminary processing is generally a new product that has been cleaned, dried, dried, peeled, seeded, cut, salted, refrigerated, and otherwise conventionally preserved. .
It is recommended that the Company base on the provisions of the current VAT law to implement. If you have any problems, please contact the customs office where import procedures are done for guidance.”
Accordingly, the determination of value-added tax on medicinal products that are grown abroad and imported to Vietnam will follow the above guidance of the Ministry of Finance of Vietnam.
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