Can gifts given by a foreign organization or individual to a Vietnamese organization or individual be exempt from tax?

Can gifts given by a foreign organization or individual to a Vietnamese organization or individual be exempt from tax

Clause 2, Article 16 of the 2016 Law on Export and Import Duties stipulates the tax exemption as follows:

Tax exemption

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2. Personal belongings, gifts from foreign entities to Vietnamese entities and vice versa within the tax-free allowance.

If the quantity or value of personal belongings or gifts exceeds the tax-free allowance, the excess amount or value shall be taxed, unless the recipient is an entity funded by state budget and permitted by a competent authority to receive them or they are meant to serve humanitarian or charitable purposes.

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In addition, according to Clause 2, Article 8 of Decree 134/2016/ND-CP amended by Clause 3, Article 1 of Decree 18/2021/ND-CP, the tax exemption for gifts is regulated as follows:

Exemption of duties on gifts

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2. Duty-free quota

a) Gifts given by a foreign organization or individual to a Vietnamese organization or individual; gifts given by a Vietnamese organization or individual to a foreign organization or individual whose customs value does not exceed VND 2,000,000 or whose custom value exceeds VND 2,000,000 but duty on which is under VND 200,000 shall be exempt from duties up to 04 times per year.

b) For gifts given by a foreign organization or individual to a Vietnamese organization whose operating cost is covered by state budget as prescribed by state budget laws and the receipt of which is permitted by a competent authority, or gifts given for humanitarian or charitable purposes, the allowance will be the entire value of the gifts and duty exemption shall be granted up to 04 times per year.

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Based on Clause 2, Article 5 of Decision 31/2015/QD-TTg on tax-exempt allowance of gifts and donations, the regulations are as follows:

Tax-exempt allowance of gifts and donations

1. Gifts and donations that qualify for tax exemption as stipulated in this Article are those that fall outside of the list of goods subject to import and export ban and temporary suspension as well as the list of excisabe goods (exclusive of those serving the purpose of security and national defence) in accordance with laws.

2. Gifts and donations given by foreign organizations or individuals to Vietnamese individuals, and those given by Vietnamese organizations or individuals to foreign individuals that have the value of less than VND 2,000,000 (two million Vietnam dong), or more than VND 2,000,000 (two million Vietnam dong), but on which total amount of tax liability is less than VND 200,000 (two hundred thousand Vietnam dong), shall be exempted from export and import duty as well as value-added tax.

3. Gifts and donations given by foreign organizations or individuals to Vietnamese organizations, and those given by Vietnamese organizations or individuals to foreign organizations with the value of less than VND 30,000,000 (thirty million Vietnam dong) shall be entitled to export, import exemption consideration and exempted from value-added tax. As for gifts or donations exceeding the permitted amount of VND 30,000,000 (thirty million Vietnam dong), they shall be exempt from import duty, excise tax and VAT levied on all of their shipment under the following circumstances:

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Therefore, receiving gifts from abroad to Vietnam will be exempt from tax if they fall into the following cases:

[1] Gifts given by a foreign organization or individual to a Vietnamese organization or individual

With a customs value of less than VND 2,000,000 (two million Vietnam dong), or more than VND 2,000,000 (two million Vietnam dong), but on which total amount of tax liability is less than VND 200,000 (two hundred thousand Vietnam dong):

- Exempt from export and import taxes: Up to 04 times/year.

- Not subject to value-added tax.

[2] Gifts given by a foreign organization or individual to a Vietnamese organization whose operating cost is covered by state budget as prescribed by state budget laws and the receipt of which is permitted by a competent authority, or gifts given for humanitarian or charitable purposes:

- Exempt from export and import taxes: Up to 04 times/year.

- Not subject to special consumption tax and value-added tax on all of their shipment.

*Note: Gifts and donations that qualify for tax exemption as stipulated in this Article are those that fall outside of the list of goods subject to import and export ban and temporary suspension as well as the list of excisabe goods (exclusive of those serving the purpose of security and national defence) in accordance with laws.

Can gifts given by a foreign organization or individual to a Vietnamese organization or individual be exempt from tax? (Image from the Internet)

What does the tax exemption dossier in Vietnam for gifts from abroad include?

According to Clause 3 Article 8 of Decree 134/2016/ND-CP amended by point d Clause 20 Article 1 of Decree 18/2021/ND-CP, a point removed by point a Clause 2 Article 2 of Decree 18/2021/ND-CP, application for duty exemption for gifts from abroad include the following documents:

- A customs dossier defined by customs law;

- A donation agreement if the gift recipient is an organization: 01 certified true copy bearing the seal of such organization.

The recipient who is a natural person shall declare the gifts and information about the overseas giver on the customs declaration, and take responsibility for the truthfulness and adequacy of such information;

- 01 original copy of the written permission issued by the superior authority for receipt and use of the duty-free goods or a document proving that the organization’s operating cost is covered by state budget (if the recipient is an organization whose operating cost is covered by state budget);

- 01 original copy of the document issued by the President of the People’s Committee of the province if the gift is given for humanitarian or charitable purposes.

Which goods are subject to import and export taxes in Vietnam?

In Article 2 of the 2016 Law on Export and Import Duties stipulates that goods subject to import and export taxes 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.

Best regards!