Vietnam: Shall a domestic enterprise be exempt from import duty in case the domestic enterprise leases or borrows goods from an EPE under the lease or lending contract to serve its manufacturing?
- What are the regulations on taxed goods for export and import duties in Vietnam?
- Shall goods temporarily imported and re-exported or temporarily exported and re-imported be exempted from export and import tax in Vietnam?
- Shall the enterprise exporting and importing goods in Vietnam be exempted from import or export duties in case the goods fall into one of the above cases?
- Shall a domestic enterprise be exempt from import duty in case the domestic enterprise leases or borrows goods from an EPE under the lease or lending contract to serve its manufacturing?
What are the regulations on taxed goods for export and import duties in Vietnam?
Pursuant to Article 2 of the 2016 Law on Import and Export Duties, the taxed goods for import and export tax are as follows:
Article 2. Taxed goods
1. Goods exported and imported through Vietnam’s border and border checkpoints.
2. Goods exported from the domestic market into free trade zones; goods imported from free trade zones into the domestic market.
3. Goods indirectly exported-imported; goods exported and imported by enterprises exercising their right to export, import, or distribute.
4. The following goods do not incur export and import duties:
a) Goods in transit;
b) Goods that are humanitarian aid or grant aid;
c) Goods exported from a free trade zone to abroad; goods imported from abroad to a free trade zone and used within such free trade zone; goods transported from one free trade zone to another;
d) Amounts of petroleum used as severance tax paid to the State upon its exportation.
5. The Government shall regulate this Article.
Thus, goods in Clauses 1, 2 and 3 of the above Article must pay import and export tax on exported and imported goods.
Shall goods temporarily imported and re-exported or temporarily exported and re-imported be exempted from export and import tax in Vietnam?
Pursuant to Clause 9, Article 16 of the 2016 Law on Import and Export Duties, goods temporarily imported and re-exported or temporarily exported and re-imported be exempted from export and import tax in a certain period under the following cases:
- Goods temporarily imported or exported to participate in fairs, exhibitions, product introduction, sports or art events, or other events; machinery and equipment temporarily imported for re-export for testing, research and development; machinery and equipment, tools temporarily imported or exported to be used for certain period of time or serve overseas processing, except for machinery, equipment, tools, vehicles permitted to be temporarily imported too serve investment projects, construction, installation, or manufacture;
- Machinery, equipment, components, spare parts temporarily imported for replacement or repair of foreign ships or airplanes, or temporarily exported for replacement or repair of Vietnamese ships or airplanes overseas; goods temporarily imported to supply for foreign ships or airplanes in Vietnam's ports;
- Goods temporarily imported or exported for warranty, repair, or replacement;
- Vehicles temporarily imported or exported to carry exports or imports;
- Goods that are temporarily imported and re-exported by the deadline or extended deadline and a credit institution provides a guarantee or a deposit equivalent to import duties on the temporarily imported goods has been paid.
Shall the enterprise exporting and importing goods in Vietnam be exempted from import or export duties in case the goods fall into one of the above cases?
In addition, according to point dd, clause 1, Article 19 of the Law on Import Tax and Export Duties 2016, any taxpayer who has paid tax on machinery, equipment, tools, vehicles of organizations and individuals that are permitted to be temporarily imported for re-export , except for those rented to execute investment projects, construction and installation, manufacture, when they are re-exported to abroad or exported to a free trade zone.
Shall a domestic enterprise be exempt from import duty in case the domestic enterprise leases or borrows goods from an EPE under the lease or lending contract to serve its manufacturing?
Pursuant to Clause 9 Article 17 of Circular 39/2015/TT-BTC (amended and supplemented by Clause 9 Article 1 of Circular 60/2019/TT-BTC) as follows:
Article 17. Customs value of exported/imported goods in special cases
...
9. Regarding imported rented goods, the customs value is the declared value determined based on the price actually paid or payable for rent of such goods and other expenses that the renter must pay at the first importing checkpoint, suitable with documents related to the rented goods.
Regarding imported borrowed goods, the customs value is the total amount of expenses that the borrower must pay at the first importing checkpoint, suitable with documents related to the borrowed goods.
If customs authorities possess the evidence proving that the customs declarant did not declare the suitable value, the customs value shall be determined by a method for customs valuation prescribed in this Circular, suiting the actual state of the imported goods.
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Pursuant to the above regulations and Official Dispatch 1400/TCHQ-TXNK dated April 21, 2022 of the General Department of Customs on import duty for goods leased or lent from EPEs (export processing enterprises), if a domestic enterprise leases or borrows goods from an export processing enterprise under the lease or lending contract to serve its manufacturing, it shall not be eligible for exemptions from import duty as prescribed in Point a Clause 9 Article 16 of the Law on Export and Import Duties No. 107/2016/QH12, and it is required to declare and pay import duty when temporarily importing such goods, and shall also not be eligible for refund of the paid import duty when re-exporting such goods as prescribed in Point dd Clause 1 Article 19 of the Law on Export and Import Duties No. 107/2016/QH13 because these are leased or lent goods. The taxable value of leased or lent goods shall be determined according to Clause 9 Article 1 of the Circular No. 60/2019/TT-BTC of the Ministry of Finance.
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