What are the documents for duty exemption for fixed asset-generating goods of a financial leasing company in Vietnam?
What are fixed assets of financial leasing in Vietnam?
Pursuant to Article 2 of Circular No. 45/2013/TT-BTC explaining that fixed assets are understood as assets that participate in many business cycles such as buildings, structures, machinery, equipment, means of transportation, etc. (regarded as tangible fixed assets) and issuance right, patent, copyright, etc. (regarded as intangible fixed assets)
A financial leasing company as prescribed in Clause 5, Article 3 of Decree No. 39/2014/ND-CP means a specialized financial company mainly engaged in financial leasing under Decree No. 39/2014/ND-CP.
Clause 8, Article 3 of Decree No. 39/2014/ND-CP explains that assets for financial leasing (below referred to as leased assets) means machinery, equipment and other assets prescribed by the State Bank of Vietnam.
Pursuant to the provisions of Clause 3, Article 2 of Circular No. 45/2013/TT-BTC, explaining the relationship between fixed assets and the financial leasing company as follows:
Fixed assets of financial leasing are the assets which enterprises lease from financial leasing companies.
At the end of the lease term, the lessee has the right to purchase the leased property or continues the lease under the terms agreed in the lease contract. The total rent of an asset type specified in the financial leasing contract must be at least equal to the value of that asset at the time of contract signing.
All leased assets if not meeting the above-mentioned regulations are considered as the operating leased fixed assets
Can a financial leasing company that imports fixed asset-generating goods be exempt from import duties in Vietnam?
Pursuant to the provisions of Clause 5, Article 31 of Decree No. 134/2016/ND-CP (amended and supplemented by Clause 14, Article 1 of Decree No. 18/2021/ND-CP) as follows:
Documents and procedures for duty exemption while following customs procedures
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5. Procedures for exemption of import duties in special cases
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c) Finance lease companies that import goods for lease by the entities specified in Article 14, Article 16, Article 17, Article 19, Article 25 of this Decree will be granted exemption of import duties provided the lease prices are not inclusive of import duties. In case the imports are not used for the duty-free purposes, the finance lease company shall register a new customs declaration and pay tax upon registration of the new customs declaration. Otherwise, the customs authority shall impose tax as per regulations.
Thus, only when the financial leasing company imports fixed asset-generating goods for the subjects specified in Decree No. 134/2016/ND-CP provided the lease prices are not inclusive of import duties, the financial leasing company is exempt from import duties in Vietnam.
What are the documents for duty exemption for fixed asset-generating goods of a financial leasing company in Vietnam?
What are the documents for duty exemption for fixed asset-generating goods of a financial leasing company in Vietnam?
According to the provisions of Article 31 of Decree No. 134/2016/ND-CP, amended and supplemented by Point d Clause 20, Clause 14, Article 1 of Decree No. 18/2021/ND-CP, the documents for duty exemption are as follows:
Documents and procedures for duty exemption while following customs procedures
1. The application for duty exemption is the customs dossier defined by the Law on Customs and its instructional documents.
2. In addition to the documents mentioned in Clause 1 of this Article, the taxpayer might be requested to submit one of the following documents on a case-by-case basis:
a) 01 photocopy of the import or export mandate contract in case of import or export mandate;
b) 01 photocopy of the certification of successful bidder or direct contracting decision which specifies that the prices are exclusive of import duties if goods are imported by the successful bidder;
c) 01 photocopy of the contract for supply of goods for a petroleum operator which specifies that the prices are exclusive of import duties if goods are imported for petroleum activities;
d) 01 photocopy of the finance lease contract in case imported goods are supplied for an entity eligible for tax incentives (the contract must specify that the prices are exclusive of import duties);
dd) 01 photocopy of the duty-free goods transfer agreement in case where duty-free goods are transferred to another entity which is eligible for duty exemption (the agreement must specify that the prices are exclusive of import duties);
e) A written confirmation of the Ministry of Science and Technology for vehicles specified in Clause 11, Clause 15, Clause 16 of Article 16 of the Law on Export and Import Duties: 01 original copy;
g) 01 photocopy of the physical duty-free list received by the customs authority (the original shall be presented for comparison)
If the duty-free list is submitted electronically and the taxpayer is not required to submit the physical duty-free list, the customs authority shall decide the grant of duty exemption according to the duty-free list on the electronic data processing system.
h) The Prime Minister’s Decision on duty exemption in the cases specified in Points a, b, dd Clause 1 Article 28 of this Decree: 01 photocopy with the original copy presented for comparison.
Thus, the customs document prescribed in Clause 1, Article 24 of the 2014 Customs Law is as follows:
- A customs declaration or documentary evidence in substitution;
- Relevant documentary evidence.
As the cases maybe, a customs declarant shall submit sale contract, commercial invoice, bill of lading, certificate of origin of goods, import or export permit, notice of specialized inspection results or exemption from specialized inspection, and documentary evidence related to goods as prescribed by corresponding regulations of law.
Documents in customs documents may be paper or electronic documents. Electronic documents must ensure the integrity and format prescribed in regulations of law on e-transactions.
- The finance lease contract in case imported goods are supplied for an entity eligible for tax incentives.
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