From September 01, 2016, in addition to regulations on tax payment, taxpayers shall guarantee tax on imports and exports. This is the content specified in Decree No. 134/2016/ND-CP of Vietnam’s Government providing for guidelines for the Law on Export and import duties.
Article table of contents
According to Decree No. 134/2016/ND-CP of Vietnam’s Government, export and import duty payment guarantee is either a separate or joint guarantee. In which:
Separate guarantee means guarantee of full payment of duty on an export/import declaration offered by a credit institution which operates under the Law on credit institutions of Vietnam.
Procedures for provision of separate guarantee on the amount of tax payable on 01 customs declaration are guided in Circular No. 38/2015/TT-BTC of the Ministry of Finance of Vietnam as follows:
- The taxpayer shall submit the letter of guarantee written by the guarantor to the customs authority;
- The customs authority shall inspect the fulfillment of conditions for guarantee, the contents of the letter of guarantee, and:
+ Determine a deadline for paying tax according to the guarantee period, which is not later than the deadline prescribed by law;
+ If the guaranteed tax is smaller than the amount of tax payable, the Director of the Sub-department of Customs shall grant customs clearance to the quantity of goods corresponding to the guaranteed tax, and take legal responsibility for this action. If the taxpayer wishes to obtain customs clearance for the whole shipment, the taxpayer must pay the unguaranteed tax before receiving goods.
If the imports are bulk cargo or liquefied gases, and the guarantee amount is smaller than the amount of tax payable, the Director of Sub-department of Customs shall grant customs clearance to a quantity of goods which does not exceed the corresponding amount of tax guaranteed;
+ If any of the guarantee conditions is not satisfied, the customs authority shall notify the taxpayer of the refusal of tax guarantee. The guarantor shall be requested to certify if the truthfulness of the letter of guarantee is suspicious.
- Monitoring and settlement of guarantee:
+ If the taxpayer fails to pay up the guaranteed tax by expiration of the guarantee period, the guarantor shall fully pay tax and late payment interest on behalf of the taxpayer;
+ The customs authority shall monitor, urge the taxpayer and the guarantor to fully pay tax and late payment interest to the state budget as prescribed.
+ Any customs authority that finds that the guarantor fails to adhere to the commitment shall make a notification in writing or on the electronic data system (if any) for other customs units nationwide to reject letters of guarantee written by such guarantor;
+ If the taxpayer and the guarantor pay tax and late payment interest (if any) at the same time, the overpaid amount shall be refunded to the guarantor.
Joint guarantee means guarantee provided by a lawful credit institution for fulfillment of tax liability of more than one customs declaration at one or some Sub-departments of Customs. Joint guarantee shall be gradually deducted and restored in proportion with the amount of tax payable.
Procedures for provision of joint guarantee are specified in Circular No. 38/2015/TT-BTC of the Ministry of Finance of Vietnam as follows:
- Before initiating procedures for export or import, the taxpayer shall send a written request for permission for joint guarantee of imports to the Sub-department of Customs where the customs declaration is registered;
- The customs authority where the customs declaration is registered shall check the fulfillment of guarantee conditions:
+ If all conditions are satisfied, the customs authority shall accept the joint guarantee for multiple declarations of imported/exports which are registered during the guarantee period written on the letter of guarantee, and determine the deadline for paying tax on each shipment according to the guarantee period.
+ If any of the guarantee conditions is not satisfied, the customs authority shall notify the taxpayer of the refusal of tax guarantee.
+ The customs authority shall send an enquiry about the truthfulness of the letter of guarantee to the guarantor if it is suspicious;
- If the remaining guarantee amount is lower than the amount of tax payable, provision of separate guarantee shall apply;
- Guarantee shall be monitored and settled as separate guarantee to ensure that the guaranteed amount each time is never higher than the total guarantee value; the guarantee quota shall be restored according to the amount of tax paid. The remaining quota of the letter of guarantee equals (=) the initial quota minus (-) guaranteed tax plus (+) paid tax on the declarations under joint guarantee;
- If the guarantor makes a written request for revocation of joint guarantee, the customs authority shall immediately terminate the application of joint guarantee on the e-customs system, and notify the guarantor of such termination as soon as the guarantor’s request is received, provided taxes, late payment interest, fines (if any) of the declarations under joint guarantee have been fully paid.
If the taxpayer fails to pay tax and late payment interest (if any) by expiration of the guarantee period, the guarantor shall pay tax and late payment interest fully on behalf of the taxpayer to the state budget on the basis of information on the customs electronic data processing system or notification of the customs authority.
Issues related to the content of the letter of guarantee, the submission of the letter of guarantee and the inspection, monitoring and handling of the letter of guarantee shall be carried out in accordance with the law on tax administration.
