Are materials imported, manufactured and assembled medical devices in Vietnam exempt from tax?

The Department of Customs of Ho Chi Minh City, Vietnam has just instructed to exempt from, reduce import duties and value-added tax on raw materials and supplies imported for the production and assembly of medical equipment for the Medical Equipment Factory and Biological Materials Joint Stock Company.

Medical equipment imported through Saigon port in Vietnam area 4. Photo: T.H

Regarding import duties in Vietnam, Clause 14, Article 16 of the Law on Export Duties and Import Taxes No. 107/2016/ ND-CP stipulates that "Imported raw materials, supplies and components that have not been produced in the country of the investment project for the production and assembly of medical devices shall be given priority in research and manufacture and shall be exempt from import duties for a period of 5 years from the commencement of production."

Pursuant to Article 23 of the Government's Decree 134/2016/ND-CP dated September 1, 2016, the list of medical device products shall be prioritized for research and manufacture as specified in Appendix VI to this Decree.

Compared with the specific case of the company that manufactures "artificial vitreous" and "surgical sutures", not the medical device products in Vietnam are prioritized for research and fabrication according to the provisions of Appendix VI issued together with Decree No. 134/2016/ND-CP dated September 1, 2016 of the Government.

Therefore, raw materials and supplies imported for the production of artificial vitreous products and surgical sutures in Vietnam are not considered for exemption from import duty under Clause 14, Article 16 of the Law on Import and Export Duty No. 107/2016/ND-CP and Article 23 of Decree No. 134/2016/ND-CP dated September 1, 2016 of the Government.

The Customs Department of Ho Chi Minh City, Vietnam requests the company to study the exemptions from import duties specified in Article 16 of the Law on Export Tax and Import Tax No. 107/2016/ND-CP; Decree No. 134/2016/ND-CP dated September 1, 2016 of the Government is amended and supplemented in Decree No. 18/2021/ND-CP dated March 11, 2021 to select the terms and provisions on tax exemption suitable to the specific case of the company.

Regarding value-added tax, due to the lack of sufficient information on the import of raw materials and supplies for domestic production or export, the type of import declaration expected to be registered, it is not possible to respond specifically to the value-added tax policy.

The Department of Customs of Ho Chi Minh City, Vietnam requests the company to contact directly the customs department where the goods import declaration is expected to be registered for specific instructions.

Le Thu

Source: Báo Hải quan Online

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