Circular No. 47/2002/TT-BTC dated May 28, 2002 of the Ministry of Finance guiding the implementation of the Government’s Decree No. 21/2002/ND-CP dated February 28, 2002 promulgating Vietnam’s 2002 list of commodities and their tax rates for the implementation of ASEAN countries’ agreement on Common Effective Preferential Tariffs (CEPT) and Decree No. 53/2002/ND-CP dated May 13, 2002 on amendments and supplements thereto

CIRCULAR

GUIDING THE IMPLEMENTATION OF THE GOVERNMENT’S DECREE No. 21/2002/ND-CP OF FEBRUARY 28, 2002 PROMULGATING VIETNAM’S 2002 LIST OF COMMODITIES AND THEIR TAX RATES FOR THE IMPLEMENTATION OF ASEAN COUNTRIES’AGREEMENT ON COMMON EFFECTIVE PREFERENTIAL TARIFFS (CEPT) AND DECREE No. 53/2002/ND-CP OF MAY 13, 2002 ON AMENDMENTS AND SUPPLEMENTS THERETO

In furtherance of the Protocol on the Socialist Republic of Vietnam’s participation in the Agreement on Common Effective Preferential Tariffs (CEPT) for materializing ASEAN Free Trade Area (AFTA) (hereinafter referred to as the CEPT/AFTA Agreement), concluded on December 15, 1995 in Bangkok;

In furtherance of the Government’s Decree No. 21/2002/ND-CP of February 28, 2002 promulgating Vietnam’s 2002 List of commodities and their tax rates for the implementation of the CEPT/AFTA Agreement and Decree No. 53/2002/ND-CP of May 13, 2002 amending and supplementing Decree No. 21/2002/ND-CP;

The Ministry of Finance hereby guides the implementation thereof as follows:

I. SCOPE OF APPLICATION

Import goods eligible for the CEPT preferential tax rates as defined in Article 1 of the Government’s Decree No. 21/2002/ND-CP of February 28, 2002 must meet the following conditions:

1. Being included in Vietnam’s 2002 List of commodities and their tax rates for the implementation of the CEPT/AFTA Agreement, issued together with the Government’s Decree No. 21/2002/ND-CP of February 28, 2002, and Decree No. 53/2002/ND-CP of May 13, 2002.

2. Being imported into Vietnam from ASEAN member countries, including the following countries:

- Brunei Darussalam;

- The Kingdom of Cambodia;

- The Republic of Indonesia;

- The People’s Democratic Republic of Laos;

- Malaysia;

- The Federation of Myanmar;

- The Republic of Philippines;

- The Republic of Singapore; and

- The Kingdom of Thailand.

3.Satisfying the ASEAN-origin requirement, certified by certificates of ASEAN goods origin’Form D (as prescribed in Part III of this Circular); and

4. Being transported directly to Vietnam from exporting countries being ASEAN members.

II. APPLICABLE IMPORT TAX RATES

1.The import tax rates applicable to import goods eligible for the CEPT preferential tax rates as prescribed in Part I of this Circular shall be the CEPT tax rates specified in Vietnam’s 2002 List of commodities and their tax rates for the implementation of the CEPT/AFTA Agreement, issued together with the Government’s Decree No. 21/2002/ND-CP of February 28, 2002 (hereinafter called the 2002 CEPT preferential tax rates for short).

Particularly for four specific commodity groups, including cheese (Heading No. 0406), coffee (Heading No. 0901) and vehicles engines (Headings No. 8407 and 8408), the import tax rates applicable to import goods eligible for the CEPT preferential tax rates shall be the CEPT tax rates specified in the amended and supplemented List issued together with the Government’s Decree No. 53/2002/ND-CP of May 13, 2002 amending and supplementing Decree No. 21/2002/ND-CP.

2.In cases where, the MFN tax rate of one commodity item specified in the current 2002 Preferential Import Tariff is adjusted to be lower than the 2002 CEPT preferential tax rate, the import tax rate applicable to such commodity item shall be such lower MFN tax rate.

If the MFN tax rate specified in the Preferential Import Tariff of such commodity item is adjusted to be higher than the 2002 CEPT preferential tax rate, the applicable import tax rate shall be the 2002 CEPT preferential tax rate.

3. In cases where goods imported by enterprises for production and/or assembly of mechanical, electrical, and electronic products meet both the conditions for the application of the 2002 CEPT preferential tax rates and the conditions for the application of import tax rates according to the localization rate under current regulations, the enterprises shall enjoy the lower import tax rate of the two said-above tax rates.

4. In cases where there are changes in the commodity items in the legal documents promulgated by ASEAN countries for the implementation of the CEPT/AFTA Agreement that affect the right to enjoy Vietnam’s preferential tax rates as prescribed in Part I, the Ministry of Finance shall provide appropriate guidance for each specific case.

III. CERTIFICATES OF ORIGIN AND INSPECTION OF CERTIFICATES OF ORIGIN

1. The rules according to which goods are recognized to originate from ASEAN countries are defined in the Regulation on goods origin applicable to the CEPT/AFTA Agreement (Appendices 1, 3 and 5) of the Regulation on the granting of Vietnam’s certificates of ASEAN goods origin, issued together with Decision No. 416/TM-DB of May 13, 1996, Decision No. 0878/1998/QD-BTM of July 30, 1998, Decision No. 1000/1998/QD-BTM of September 3, 1998, Decision No. 0034/2000/QD-BTM of January 10, 2000, Decision No. 0492/2000/QD-BTM of March 20, 2000 and Decision No. 1448/2001/QD-BTM of December 25, 2001 of the Ministry of Trade.

2. The certificates of origin must bear signatures and seals compatible with the official specimen signatures and seals of the following agencies of ASEAN member countries, which are competent to grant certificates of ASEAN goods origin - Form D:

- In Brunei Darussalam: The Ministry of Industry and Natural Resources;

- In the Kingdom of Cambodia: The Ministry of Trade;

- In the Republic of Indonesia: The Ministry of Trade and Industry;

- In the People’s Democratic Republic of Laos: The Ministry of Trade;

- In Malaysia: The Ministry of Foreign Trade and Industry;

- In the Federation of Myanmar: The Ministry of Trade;

- In the Republic of Philippines: The Ministry of Finance;

- In the Republic of Singapore: The Department for Trade Development;

- In the Kingdom of Thailand: The Ministry of Trade; and

- In Vietnam: The Ministry of Trade and the Industrial Parks and Export-Processing Zones Management Boards authorized by the Ministry of Trade.

3.In case of suspicion of the truthfulness and accuracy of the certificates of ASEAN goods origin’Form D, the customs offices shall be entitled to:

- Request the re-examination of the certificates of ASEAN goods origin’Form D. The customs offices shall send their requests to the exporting countries agencies competent to grant the certificates of origin, requesting the verification.

- Suspend the application of the 2002 CEPT preferential tax rates and temporarily collect tax at the rates specified in the current preferential or ordinary import tariff.

- Request the importers to provide additional documents (if any) to prove that their goods actually originate from ASEAN countries, within 01 (one) year at most.

- Pending the re-examination results, continue filling in the procedures for the release of according to the ordinary import regulations.

- When having enough documents to prove that the goods actually have the ASEAN origin, the customs offices shall have to carry out procedures to reimburse the importers the difference between the tax amounts temporarily collected according to the current preferential or ordinary import tariff and the tax amounts calculated at the 2002 CEPT preferential tax rates.

IV. OTHER PROVISIONS

The regulations on tax calculation bases, the regime of tax collection, payment, exemption, reduction and reimbursement, the handling of violations and other regulations shall comply with the provisions of the Law on Export Tax and Import Tax and current guiding documents.

V. IMPLEMENTATION ORGANIZATION

This Circular takes effect as from January 1, 2002 and replaces Circular No. 52/2001/TT-BTC of July 2, 2002 of the Ministry of Finance guiding the implementation of Decree No. 28/2001/ND-CP of June 6, 2001 which promulgates Vietnam’s 2001 List of commodities and their tax rates for the implementation of the CEPT/AFTA Agreement.

For cases eligible for the CEPT preferential tax rates under the Government’s Decree No. 21/2002/ND-CP of February 28, 2002 and Decree No. 53/2002/ND-CP of May 13, 2002, for which the import tax has already been collected at the 2001 CEPT preferential tax rates (under Decree No. 28/2001/ND-CP of June 6, 2001) or at the current preferential or ordinary import tax rates, the customs offices shall check the dossiers, reimburse the importers the import tax difference amounts, for cases where the tax rate already applied for tax calculation and the 2002 CEPT preferential tax rate are different.

Any difficulties or problems arising during the course of implementation should be timely reported to the Ministry of Finance for appropriate additional guidance.