What are preferential import duty rates imposed on imported auto parts of automobiles according to the tax incentive program in Vietnam?
- How to determine the tax incentive consideration period in the tax incentive program for automobile manufacturing and assembly in Vietnam?
- What are preferential import duty rates imposed on imported auto parts of automobiles according to the tax incentive program in Vietnam?
- Since when does the preferential import duty rates imposed on imported auto parts of automobiles according to the tax incentive program in Vietnam take effect?
How to determine the tax incentive consideration period in the tax incentive program for automobile manufacturing and assembly in Vietnam?
Pursuant to Decree No. 26/2023/ND-CP on schedule of export tariffs, schedule of preferential import tariffs, tariff nomenclature, and fixed duties, mixed duties, out-of-quota import duties.
The tax incentive consideration period in the tax incentive program for automobile manufacturing and assembly in Vietnam is determined according to Clause 4, Article 8 of Decree No. 26/2023/ND-CP as follows:
Preferential import duty rates imposed on imported auto parts of automobiles according to the tax incentive program for automobile manufacturing and assembly (hereinafter referred to as “the Program”)
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4. Consideration period
An enterprise may choose between a 6-month, or 12 month consideration period as follows:
a) A 6-month period is from January 01 to June 30 or from July 01 to December 31 every year.
In case the enterprise chooses to apply a 6-month tax incentive period, the overpaid tax on the quantity components used for manufacture or assembly of finished motor vehicles in the first 06 months has been settled but that of the last 06 months of the year is below the minimum quantity prescribed by the Tax Incentive Program, but the total quantity of the year is still satisfactory under the Program, tax incentives for the last 06 months are still considered and overpaid tax on the quantity of components used for manufacture or assembly of motor vehicles in the period will be settled if the requirements specified in Clause 2, Clause 3, Clause 6, Clause 7, Clause 8 of this Article are satisfied.
b) A 12-month period is from January 01 to June 30 to December 31 every year.
Thus, according to the above regulations, enterprises can choose to consider tax incentives for 6 or 12 months. Specifically:
- For the 06-month tax incentive consideration period:
From January 1 to June 30 or from July 1 to December 31 every year.
- For the 12-month tax incentive consideration period:
From January 1 to December 31 every year.
What are preferential import duty rates imposed on imported auto parts of automobiles according to the tax incentive program in Vietnam?
What are preferential import duty rates imposed on imported auto parts of automobiles according to the tax incentive program in Vietnam?
Pursuant to the provisions of Clause 1, Article 8 of Decree No. 26/2023/ND-CP as follows:
Preferential import duty rates imposed on imported auto parts of automobiles according to the tax incentive program for automobile manufacturing and assembly (hereinafter referred to as “the Program”)
1. Preferential import duty rates of 0% imposed on imported auto parts of automobiles of heading 98.49 in Clause 3 Section II Chapter 98 Appendix II of this Decree shall be specified as follows:
a) At the time of customs declaration, the declarant shall declare and calculate taxes according to the ordinary import duty rate, preferential import duty rate or special preferential import duty rate in accordance with applicable regulations of law. The preferential import duty rates shall not be imposed on the commodities of heading 98.49.
b) The import 0% duty shall be imposed on auto parts of heading 98.49 in accordance with regulations in Clauses 2, 3, 4, 5, 6, 7, 8 of this Article.
Thus, the preferential import duty rates imposed on imported auto parts of automobiles according to the tax incentive program in Vietnam is determined to be 0% imposed on imported auto parts of automobiles of heading 98.49 in Clause 3 Section II Chapter 98 Appendix II of Decree No. 26/2023/ND-CP when certain conditions are met.
Since when does the preferential import duty rates imposed on imported auto parts of automobiles according to the tax incentive program in Vietnam take effect?
Pursuant to the provisions of Clause 1, Article 12 of Decree No. 26/2023/ND-CP on entry in force as follows:
Entry in force
1. This Decree comes into force as of July 15, 2023.
2. This Decree replaces the following Government’s Decrees: Decree No. 122/2016/ND-CP dated September 1, 2016, Decree No. 125/2017/ND-CP dated November 16, 2017, Decree No. 57/2020/ND-CP dated May 25, 2020, Decree No. 101/2021/ND-CP dated November 15, 2021, Decree No. 51/2022/ND-CP dated August 8, 2022.
3. From October 1, 2022 to the effective date of this Decree, the requirement pertaining to the minimum degree of completeness of auto parts according to Point b Clause 3.1 Article 7a specified in Clause 3 Article 2 and point b.5 clause 3 Section II Chapter 98 Decree No. 57/2020/ND-CP dated May 25, 2020 of the Government.
In case an enterprise has participated in the Tax Incentive Program but has not yet been refunded the import duty paid from October 1, 2022 to the effective date of this Decree, it will be entitled to a tax refund equivalent to the number of auto parts that have been imported if the requirements specified in the tax incentive program are satisfied, the requirement pertaining to minimum degree of auto parts is not applicable.
If an enterprise imports CKD and IKD kits of auto parts for manufacturing and assembly, even if it is an authorized importer, entrusted importer under an entrustment contract, or an importer under a sales contract with an auto manufacturing and assembly enterprise, from October 1, 2022 to the effective date of this Decree, and it chooses to impose duties on each auto part or component or under heading 98.21, it must meet the requirements laid down in Decree No. 57/2020/ND-CP dated May 25, 2020, the requirement pertaining to minimum degree of auto parts is not applicable.
4. Preferential import duty rates for imported auto parts of heading 98.49 specified in Article 8 of this Decree shall be applied until December 31, 2027. Enterprises that have registered to participate in the Tax Incentive Program before the effective date of this Decree must re-register with the customs authorities as prescribed in this Decree.
If, after enrolling in the Tax Incentive Program, the enterprise adds or changes vehicle groups, makes, or the number of vehicle makes registered in the Tax Incentive Program, they must re-register with the customs authority.
5. Preferential import duty rates for raw materials, supplies and components for the manufacturing, processing (assembly) of supporting industry products prioritized for development for the automobile manufacturing and assembly industry prescribed in Article 9 of this Decree shall be applied until December 31, 2024. Enterprises that have enrolled in the Tax Incentive Program for the automobile supporting industry specified before the effective date of this Decree must re-register for the Automotive Support Industry Tax Incentive Program and enjoy incentives under this Decree.
Thus, Decree No. 26/2023/ND-CP is applied from July 15, 2023.
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