What are the criteria of components that are exempt from import tariffs and used for production of software products in Vietnam?
- What are the criteria of components that are exempt from import tariffs and used for production of software products in Vietnam?
- What is the application for exemption from tax applicable to components directly used for production of software products in Vietnam?
- What are the tax exemption procedures for components directly used for production of software products in Vietnam?
What are the criteria of components that are exempt from import tariffs and used for production of software products in Vietnam?
Pursuant to Clause 1, Article 2 of Circular 25/2022/TT-BTTTT on determining imported materials, supplies and components that are subject to exemption from import tariffs and directly used for production of information technology products, digital products and software products as follows:
Regulations on determining imported materials, supplies and components that are subject to exemption from import tariffs and directly used for production of information technology products, digital products and software products
1. Materials, supplies and components that are subject to exemption from import tariffs used for production of information technology products, digital products and software products must meet the following criteria:
a) Being materials, supplies and components directly used for production of products under the List of software products and hardware products, electronic products prescribed in Circular No. 09/2013/TT-BTTTT dated April 08, 2013 of the Minister of Information and Communications of Vietnam promulgating the list of software and hardware products and electronic products and Circular No. 20/2021/TT-BTTTT dated December 03, 2021 of the Minister of Information and Communications amending Circular No. 09/2013/TT-BTTTT dated April 08, 2013 of the Minister of Information and Communications; or products under the list of digital products as prescribed by the Ministry of Information and Communications. Based on the development status and management policies in each period, the Ministry of Information and Communications shall update and adjust lists accordingly;
b) Not being under the list of machines, equipment, materials, supplies and components that are used in the domestic industries of telecommunications - information technology, digital contents and software and have been manufactured as prescribed in Appendix 8 enclosed Circular No. 05/2021/TT-BKHDT dated August 17, 2021 of the Minister of Investment and Planning issuing lists of machines, equipment, spare parts, specialized transport vehicles, materials, supplies and semi-finished products which have been produced at home.
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Thus, materials, supplies and components that are subject to exemption from import tariffs used for production of information technology products, digital products and software products must meet the following criteria:
- Being materials, supplies and components directly used for production of products under the List of software products and hardware products, electronic products prescribed in Circular No. 09/2013/TT-BTTTT and Circular No. 20/2021/TT-BTTTT;
- Or products under the list of digital products as prescribed by the Ministry of Information and Communications. Based on the development status and management policies in each period, the Ministry of Information and Communications shall update and adjust lists accordingly;
- Not being under the list of machines, equipment, materials, supplies and components that are used in the domestic industries of telecommunications - information technology, digital contents and software and have been manufactured as prescribed in Appendix 8 enclosed Circular No. 05/2021/TT-BKHDT.
What are the criteria of components that are exempt from import tariffs and used for production of software products in Vietnam?
What is the application for exemption from tax applicable to components directly used for production of software products in Vietnam?
Pursuant to Clause 2, Article 2 of Circular 25/2022/TT-BTTTT stipulating as follows:
Regulations on determining imported materials, supplies and components that are subject to exemption from import tariffs and directly used for production of information technology products, digital products and software products
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2. Applications and procedures for exemption from tax shall comply with the regulations in Articles 30 and 31 of Decree No. 134/2016/ND-CP dated September 01, 2016 of the Government providing detailed regulations and measures for implementation of the Law on Export and Import Duties (amended by Decree No. 18/2021/ND-CP dated March 11, 2021 of the Government of Vietnam on amendments to Decree No. 134/2016/ND-CP dated September 01, 2016 of the Government of Vietnam providing detailed regulations and measures for implementation of the Law on Export and Import Duties).
Thus, applications and procedures for exemption from tax applicable to components directly used for production of software products in Vietnam shall comply with the regulations in Articles 30 and 31 of Decree No. 134/2016/ND-CP (amended and supplemented by Article 1 of Decree No. 18/2021/ND-CP) and Articles 31 of Decree No. 134/2016/ND-CP (amended and supplemented by Article 1 of Decree No. 18/2021/ND-CP).
In which:
- Applications for tax exemption are customs dossiers as prescribed in the Customs Law 2014
- In addition, depending on each specific case, the tax exemption dossier submitter must submit additional papers and documents as prescribed in Clause 2, Article 31 of Decree No. 134/2016/ND-CP (amended and supplemented by Clause 14, Article 1 of Decree No. 18/2021/ND-CP, Clause 20, Article 1 of Decree No. 18/2021/ND-CP).
What are the tax exemption procedures for components directly used for production of software products in Vietnam?
For tax exemption procedures specified in Clause 3, Article 31 of Decree No. 134/2016/ND-CP (amended by Clause 14, Article 1 of Decree No. 18/2021/ND-CP) as follows:
(1) The taxpayer shall determine and declare the amount of duty-free goods and tax exempted (except duties on goods imported or exported for processing by the hirer) while following customs procedures and take responsibility for such declaration.
(2) The customs authority where customs procedures are followed shall examine the declaration and applicable regulations to decide the grant of duty exemption.
If imported goods are not eligible for duty exemption as declared, the taxpayer shall have to pay duties and fines (if any).
(3) Electronic data processing system shall deduct the quantity of imports or exports written on the duty-free list.
- In case of submission of a physical duty-free list, the customs authority shall update and deduct the quantity of goods exported/imported accordingly.
- In case of import of a duty-free combination or assembly line, the taxpayer shall follow customs procedures at the customs authority responsible for the area where the equipment is installed. When registering the customs declaration, the taxpayer shall provide details about the goods on the declaration.
- If details about the goods cannot be provided, the taxpayer shall prepare a list of imports according to Form No. 04 in Appendix VIIa hereof via the electronic data processing system or according to Form No. 15 in Appendix VII hereof and enclose it with the customs declaration.
- Within 15 days from the day on which the last shipment of the combination or assembly line is imported, the taxpayer shall register the duty-free list with the customs authority according to Form No. 05 in Appendix VIIa hereof via the electronic data processing system or according to Form No. 16 of Appendix VII hereof.
Circular 25/2022/TT-BTTTT takes effect from February 15, 2023.
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