Are goods directly imported serving national defense and security purposes exempt from tax in Vietnam?

Regarding this matter, LawNet would like to answer as follows:

1. What are goods subject to export and import duties in Vietnam?

According to Clauses 1, 2, 3 and 4, Article 2 of the Law on Export and import duties 2016, the goods subject to export and import duties include:

- Goods exported and imported through Vietnam’s border and border checkpoints.

- Goods exported from the domestic market into free trade zones; goods imported from free trade zones into the domestic market.

- Goods indirectly exported-imported; goods exported and imported by enterprises exercising their right to export, import, or distribute.

- The following goods do not incur export and import duties:

+ Goods in transit;

+ Goods that are humanitarian aid or grant aid;

+ 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;

+ Amounts of petroleum used as severance tax paid to the State upon its exportation.

Thus, goods subject to export and import duties include: goods exported and imported through Vietnam’s border; Goods exported from the domestic market into free trade zones and vice versa; goods indirectly exported-imported; goods exported and imported by enterprises exercising their right to export, import, or distribute.

Goods not subject to export and import duties include: goods in transit; goods that are humanitarian aid or grant aid; Goods exported from a free trade zone to abroad; amounts of petroleum used as severance tax paid to the State upon its exportation.

2. Are goods directly imported serving national defense and security purposes exempt from tax in Vietnam?

According to the provisions of Clause 1 and Clause 2, Article 20 of Decree 134/2016/ND-CP, imports exclusively serving national defense and security purposes and vehicles among which cannot be domestically manufactured are exempt from import duties.

Basis for determination of eligibility for duty exemption:

- The goods is part of the annual plan for importing goods exclusively serving national defense and security purposes approved by the Prime Minister or by the Minister of Public Security or by the Minister of National Defense on the Prime Minister’s authority.

- The specialized vehicles cannot be domestically manufactured as defined by Ministry of Planning and Investment.

Thus, for goods exclusively serving national defense and security purposes, in which specialized means of transport must be types that cannot be produced domestically and are included in the approved annual plan for importing goods, the import tax will be exempt according to regulations.

3. Tax exemption documents and procedures for imported goods that directly serve security and national defense in Vietnam

According to Clause 3 and Clause 4, Article 20 of Decree 134/2016/ND-CP amended by Decree 18/2021/ND-CP, applications and procedures for exemption of duties on imports serving national defense and security purposes are as follows:

An application for duty exemption consists of:

- Form 03a in Appendix VII enclosed herewith (if duty exemption is granted before customs procedures are completed) or Form 03b in Appendix VII enclosed with Decree 18/2021/ND-CP (if duty exemption is applied for after customs procedures is completed) prepared by the Ministry of National Defense or the Ministry of Public Security or a unit authorized by the Ministry of National Defense or the Ministry of Public Security.

Form 03a  Download

- 01 photocopy of the sale contract;

- 01 photocopy of the import mandate contract or goods supply contract according to the certification of successful bidder or direct contracting decision which specifies that the prices are exclusive of import duties (in case of import mandate or bidding).

Procedures for granting duty exemption:

- If duty exemption is applied for before customs procedures are completed, the Ministry of National Defense or the Ministry of Public Security or a unit authorized by the Ministry of National Defense or the Ministry of Public Security shall submit the application for duty exemption to the General Department of Customs at least 05 working days before registration of the customs declaration.

- Within 03 working days from the day on which the application is received, the General Department of Customs shall issue a notice whether duty exemption is granted or request supplementation of the application.

- The Sub-department of Customs where customs procedures are followed shall grant customs clearance according to the notice sent by the General Department of Customs.

Best regards!

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