Circular No. 116/2011/TT-BTC of the Ministry of Finance guiding the Prime Minister's Decision No. 36/2011/QD-TTg of June 29, 2011, issuing the import duty rates for used passenger cars of 15 seats or less

THE MINISTRY OF FINANCE

Circular No. 116/2011/TT-BTC of August 15, 2011, guiding the Prime Minister’s Decision No. 36/2011/QD-TTg of June 29, 2011, issuing the import duty rates for used passenger cars of 15 seats or less

Pursuant to June 14, 2005 Law No. 45/2005/QH11 on Import Duty and Export Duty;

Pursuant to the Government’s Decree No. 87/2010/ND-CP of August 13, 2010, detailing a number of articles of the Law on Import Duty and Export Duty;

Pursuant to the Government’s Decree No. 40/2007/ND-CP of March 16, 2007, on customs valuation of imports and exports;

Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Prime Minister’s Decision No. 36/2011/QD-TTg of June 29, 2011, issuing the import duty rates for used passenger cars of 15 seats or less;

The Ministry of Finance guides the implementation of the Prime Minister’s Decision No. 36/2011/QD-TTg of June 29, 2011, as follows:

Article 1. Scope of regulation of subjects of application

1. Scope of regulation: This Circular guides the implementation of the Prime Minister’s Decision No. 36/2011/QD-TTg of June 29, 2011, issuing the import duty rates for used passenger cars of 15 seats (including the driver’s) or less.

2. Subjects of application: Organizations, individuals, customs offices and customs officers performing jobs related to customs declaration, determination of duty rates or inspection, consultation and determination of dutiable prices of imported used passenger cars of 15 seats (including the driver’s) or less.

Article 2. Rights and obligations of customs declarants

1. To fully and accurately declare import duty rates applicable to, and expenses related to the purchase of, imported used passenger cars of 15 seats (including the driver’s) or less and determine their dutiable prices by themselves according to regulations, declaring in detail car name, brand, manufacturer, origin, type (sedan, hatchback, SUV, MPV or pickup), cylinder capacity, number of seats, doors and drive shafts, gear type (manual or automatic), type of engine fuel (petrol, oil or electricity), year of model, other model codes (Limited, Premium, XLE, LE, etc.), if any, year of manufacture and number of kilometers traveled.

2. To exercise other rights and perform other obligations under Articles 5 and 6 of the Ministry of Finance’s Circular No. 205/2010/TT-BTC of December 15, 2010, guiding the Government’s Decree No. 40/2007/ND-CP of March 16, 2007, on customs valuation of imports and exports (below referred to as Circular No. 205/2010/TT-BTC for short).

Article 3. Responsibilities and powers of customs offices

1. To check duty rates and dutiable prices determined and declared by customs declarants under this Circular.

2. To determine dutiable prices when:

2.1. Customs declarants cannot determine dutiable prices according to valuation methods;

2.2. Customs declarants fail to declare or inaccurately declare adjustments guided in Article 14 of Circular No. 205/2010/TT-BTC;

2.3. They reject declared prices under Points 1.3.2.2, Clause 1, Article 24 and Point 4.4.1, Clause 4, Article 26 of Circular No. 205/2010/TT-BTC;

2.4. They have price-related doubts as specified in Clause 2, Article 6 of this Circular and, at the same time, customs declarants agree to pay duty at the prices determined by customs offices according to form No. 1 attached to Circular No. 205/2010/TT-BTC (form No. 1);

2.5. Customs declarants fail to comply with the provisions of the Government’s Decree No. 40/2007/ND-CP of March 16, 2007, Circular No. 205/2010/TT-BTC and this Circular.

3. To discharge other responsibilities and powers under Articles 7 and 8 of Circular No. 205/2010/TT-BTC.

Article 4. Determination of import duty rates

1. The specific duty rates prescribed in Clauses 1 and 2, Article 1 of Decision 36/2011/QD-TTg apply to used passenger cars of 9 seats (including the driver’s) or less and having a cylinder capacity of under 1,500 cc and used passenger cars of between 10 and 15 seats (including the driver’s), regardless of their brand, manufacturer, origin, type, number of doors and drive shafts, gear type, type of engine fuel, year of model, other model codes, year of manufacture and number of kilometers traveled.

2. The import duty rates specified in Clause 3, Article 1 of Decision No. 36/2011/TT-BTC apply to used passenger cars of 9 seats (including the driver’s) or less under Heading No. 8703 of the Preferential Import Tariff and having a cylinder capacity of 1,500 cc or more. These import duty rates shall be imposed based on the specifications of imports referred to in Clause 1, Article 2 of this Circular.

3. The dutiable prices of used cars specified in Clauses 1 and 2 of this Article shall be determined under Article 5 of this Circular.

Article 5. Determination of dutiable prices

1. The dutiable price of imported used passenger cars of 15 seats (including the driver’s) or less is the actually paid price at the first border gate of importation.

1.1. Dutiable prices of used passenger cars of 9 seats (including the driver’s) or less and having a cylinder capacity of under 1,500 cc and used passenger cars of between 10 and 15 seats (including the driver’s) shall be determined for calculation of excise tax and value-added tax.

1.2. Dutiable prices of used passenger cars of 9 seats (including the driver’s) or less and having a cylinder capacity of 1,500 cc or more specified at Point c, Clause 3, Article 1 of Decision No. 36/2011/QD-TTg shall be determined for calculation of import duty, excise tax and value-added tax.

2. The actually paid price at the first border gate of importation (the first border gate of importation shall be identified under Circular No. 205/2010/TT-BTC) shall be determined by applying one after another the six methods of determining dutiable prices specified in Articles 7 thru 12 of Decree No. 40/2007/ND-CP, including:

2.1. Method of determining the dutiable value on the basis of the transaction value of imports;

2.2. Method of determining the dutiable value on the basis of the transaction value of identical imports;

2.3. Method of determining the dutiable value on the basis of the transaction value of similar imports;

2.4. Method of determining the dutiable value on the basis of the deductible value;

2.5. Method of determining the dutiable value on the basis of the computed value;

2.6. The inferential method of determining the dutiable value.

3. Customs offices shall determine dutiable prices in the cases specified in Clause 2, Article 3 of this Circular.

4. When determining dutiable prices, customs offices shall comply with the order, principles and methods of determining dutiable prices specified in Clause 2 of this Article and base themselves on information and data sources available at the time of price determination. The determined dutiable prices, however, must not be lower than check prices of identical or similar cars on the list of imports subject to risk management by the General Department of Customs. In case check prices of identical or similar cars on the list of imports subject to risk management by the General Department of Customs are unavailable, the determined prices must not be lower than the prices of brand-new cars of the same type and year of manufacture by 10% for each year of use.

5. The price database consists of all information relating to the inspection and determination of dutiable prices declared and supplied by customs declarants to customs offices or information relating to imported cars collected by customs offices up to the time of inspection and determination of dutiable prices. Such information shall be managed and used within the customs sector to serve the checking of the declared values and determination of dutiable prices of imported cars.

Article 6. Checking of the declared value

1. The declared value shall be checked right at the stage of customs clearance with regard to all lots of imported used passenger cars of 15 seats (including the driver’s) or less under Article 24 of Circular No. 205/2010/TT-BTC.

2. Customs offices shall compare dutiable prices declared by customs declarants with the price database available at the time of checking and identify doubtful price-related signs in any of the following cases:

2.1. The declared price of imported cars is lower than the lowest dutiable price of identical or similar cars determined by customs offices or than the lowest declared prices of identical or similar cars (except questionable goods lots) accepted by customs offices.

Identical or similar cars used for comparison are cars exported to Vietnam on the same day or within 60 days before or after the date of exportation of cars subject to declared value checking. If, within the above-mentioned time limit, no identical or similar cars are exported to Vietnam, such time limit may be extended but must not exceed 90 days before or after the date  of exportation of cars subject to declared value checking.

2.2. The declared price of imported cars is lower than the check price of identical or similar cars on the list of imports subject to risk management at the General Department of Customs.

2.3. The declared price of imported cars is lower than the price collected by customs offices from other information sources, after being converted to the same conditions of the goods lot subject to declared value checking.

2.4. The declared price of imported cars has price reduction factors which, after being subtracted, is lower than those of the declared price of identical or similar cars in the price database.

2.5. In case identical or similar cars cannot be found for comparison and checking of declared prices, the concept of identical or similar cars can be more flexibly applied and broadened, specifically:

2.5.1. Imported cars with many properties or utilities may be compared to cars of the same type with a single basic property in the price database;

2.5.2. Imported cars with high-class equipment may be compared to cars of the same type with equipment of a lower class in the price database;

2.5.3. Imported cars originating from developed countries or groups of developed countries may be compared to cars imported from underdeveloped or developing countries or groups of underdeveloped or developing countries (for example, imported cars subject to value inspection originating from Japan may be compared to cars of the same type originating from Thailand in the price database).

2.6. The declared price of imported cars is lower than the price of brand-new cars of the same type and year of manufacture in the price database by 10% for each year of use.

3. When identifying any doubtful price-related signs, customs offices shall notify customs declarants of the grounds and bases for having such doubts and price determination methods and prices determined by customs offices according to form No. 1.

If customs declarants agree with the price determination methods and the prices determined by customs offices, customs offices shall issue a valuation notice according to form No. 4 attached to Circular No. 205/2010/TT-BTC, conduct tax assessment based on the determined prices and clearly write the method of determining the dutiable prices and the determined prices in the import declarations before effecting customs clearance for imported cars.

If customs declarants disagree with the price determination methods and the prices determined by customs offices according to form No. 1 and request  consultation, customs offices shall issue a notice of the security amount according to form No. 2 attached to Circular No. 205/2010/TT-BTC and hold consultation under Article 7 below.

4. Customs offices shall accept the declared value if they have no price-related doubts specified Clause 2 of this Article.

Article 7. Consultation

1. Customs offices shall hold consultation for cases in which they have price-related doubts under Clause 2, Article 6 of this Circular but customs declarants disagree with the price determination methods and the prices determined by customs offices according to form No. 1, and request consultation.

2. Time limit for consultation and determination of dutiable prices: 30 days from the date of registration of a customs declaration.

3. The order, procedures, competence, contents and form of consultation and handling of consultation results comply with Article 26 of Circular No. 205/2010/TT-BTC.

4. Some contents to be taken into consideration in the process of consultation:

4.1. Information to be fully collected before consultation:

4.1.1. Information on identical or similar cars available on the system of information on previously determined dutiable prices;

4.1.2. Information on identical or similar cars available on the list of imports subject to risk management by the General Department of Customs;

4.1.3. Information on sale prices of identical or similar cars offered on the Internet;

4.1.4. Information on the market prices of imported cars;

4.1.5. Other information relating to imported cars.

4.2. It is necessary to review, summarize, analyze and evaluate the reliability of collected information so as to eliminate unreliable or groundless information before consultation.

4.3. During consultation, attention must be paid to factors which affect the prices of imported cars such as their current state, number of kilometers traveled, year of manufacture, origin, model, brand and sale and purchase mode so as to clarify doubts and reject declared prices according to Item 4.4.1, Point 4.4, Clause 4, Article 26 of Circular No. 205/2010/TT-BTC.

Article 8. Collection and updating of information, building of the price database and reporting

1. Collection and updating of information by customs offices:

1.1. Customs offices shall base themselves on the price database available at the time of valuation or price-related information supplied by agencies, units and businesses to collect information serving as bases and grounds for value checking, consultation and determination.

1.2. To update the results of inspection and identification of doubtful signs, and consultation and price determination to the system of price information and data right on the date of price checking, consultation or determination or the subsequent working day and transmit data to the General Department of Customs according to regulations for monitoring and inspection.

1.3. The collection, updating, exploitation and use of the price database comply with the Minister of Finance’s Decision No. 1102/QD-TTg of May 21, 2008.

2. Building of the price database:

2.1. The General Director of Customs shall formulate and adjust check prices of used passenger cars of 15 seats (including the driver’s) or less under Clause 5, Article 23 of Circular No. 205/2010/TT-BTC, according to the principle that check prices of used cars must not be lower than those of brand-new cars of the same type and year of manufacture by 10% for each year of use.

2.2. Provincial-level Customs Departments shall collect, analyze and summarize information for reporting to the General Department of Customs (according to the form attached to the Ministry of Finance’s Decision No. 1102/QD-TTg of May 21, 2008) so as to propose adjustments to check prices of used cars on the list of imports subject to risk management by the General Department of Customs.

3. Reporting: Before the 10th every month, provincial-level Customs Departments shall send to the General Department of Customs reports on management of used passenger cars of 15 seats (including the driver’s) or less, made according to a form attached to this Circular.

Article 9. Organization of implementation

1. To apply the duty rates specified in Article 1 of Decision No. 36/2011/QD-TTg to imported used passenger cars of 15 seats (including the driver’s) or less from August 15, 2011.

2. Provincial-level Customs Departments shall arrange officers and properly implement regulations on management of imported used cars so as to assure compliance with law and sufficient tax collection.

3. To check declared values, identify doubtful signs, hold consultation and determine dutiable prices in accordance with the Government’s Decree No. 40/2007/ND-CP of March 16, 2007, the Ministry of Finance’s Circular No. 205/2010/TT-BTC of December 15, 2010, Decision No. 30/2008/QD-BTC of May 21, 2008, Circular No. 163/2009/TT-BTC of August 13, 2009, Decision No. 1102/QD-BTC of May 21, 2008, and Official Letter No. 7293/BTC-TCHQ of June 3, 2011, and this Circular.

Article 10. Effect

1. This Circular takes effect on August 15, 2011.

2. If relevant documents referred to in this Circular and forms of reports attached to this Circular are amended, supplemented or replaced in the course of implementation of this Circular, the newly promulgated documents shall apply.-

For the Minister of Finance
Deputy Minister
DO HOANG ANH TUAN