Circular No. 52/2001/TT-BTC dated July 2, 2001 of the Ministry of Finance guiding the implementation of the Government’s Decree No. 28/2001/ND-CP dated June 6, 2001 which promulgates Vietnam’s 2001 list of commodities and their tax rates for the implementation of the Agreement on Common Effective Preferential Tariff (CEPT) of the ASEAN countries

CIRCULAR

GUIDING THE IMPLEMENTATION OF THE GOVERNMENT’S 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 AGREEMENT ON COMMON EFFECTIVE PREFERENTIAL TARIFF (CEPT) OF THE ASEAN COUNTRIES

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

In furtherance of the Government’s Decree No. 28/2001/ND-CP of June 6, 2001 promulgating Vietnam’s 2001 List of commodities and their tax rates for the implementation of the CEPT/AFTA Agreement,

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. 28/2001/ND-CP of June 6, 2001 shall have to meet the following conditions:

1. They are on Vietnam’s 2001 List of commodities and their tax rates for the implementation of the CEPT/AFTA Agreement, issued together with Decree No. 28/2001/ND-CP of June 6, 2001 of the Government;

2. They are imported into Vietnam from the 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 Myanma;

- The Republic of the Philippines;

- The Republic of Singapore; and

- The Kingdom of Thailand.

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

4. They are transported directly to Vietnam from the exporting countries being ASEAN members.

II. APPLICABLE IMPORT TAX RATES

1. The import tax rates applicable to import goods which are 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 2001 List of commodities and their tax rates for the implementation of the CEPT/AFTA Agreement, issued together with Decree No. 28/2001/ND-CP of June 6, 2001 of the Government (hereafter called the 2001 CEPT preferential tax rates for short).

2. In cases where in 2001 the MFN tax rate of one commodity item specified in the current Preferential Import Tariff is adjusted to be lower than the 2001 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 prescribed for this commodity item in the Preferential Import Tariff is adjusted to be higher than the 2001 CEPT preferential tax rate, the applicable import tax rate shall be the 2001 CEPT preferential tax rate.

3. In cases where goods imported by enterprises for the production and/or assembly of mechanical, electrical and electronic products meet both the conditions to be eligible for the 2001 CEPT preferential tax rates and the conditions to be eligible for import tax rates according to the localization rate under current regulations, the lower import tax rate of the 2 above-said tax rates shall be applied to enterprises.

4. In cases where there appear changes in commodity items in legal documents promulgated by the 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 EXAMINATION OF CERTIFICATES OF ORIGIN

1. The rules upon which the goods are recognized to have the origin from the ASEAN countries are defined in the Regulation on goods origin applicable to the CEPT/AFTA Agreement (Appendices 1, 3 and 5) and the Regulation on 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 and Decision No. 0492/2000/QD-BTM of March 20, 2000 of the Ministry of Trade.

2. Certificates of origin must bear signatures(s) and seal(s) compatible with the official specimen signatures and seals of the following agencies of the 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 for Foreign Trade and Industry;

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

- In the Republic of the 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 office shall send its requests to the agencies competent to grant such certificates of origin in the exporting countries, requesting the verification.

- Suspend the application of the 2001 CEPT preferential tax rates and temporarily collect import tax at the tax rates of the current preferential or ordinary import tariff.

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

- Pending the re-examination results, the procedures for such goods clearance shall still be carried out according to the ordinary import regulations.

- When having enough documents to prove that the goods actually have the ASEAN origin, the customs office shall have to proceed with the procedures to reimburse the importers the difference between the tax amount temporarily collected according to the current preferential or ordinary import tariff and that calculated at the 2001 CEPT preferential tax rates.

IV. OTHER PROVISIONS

The regulations on tax calculation bases, the regime of tax collection, payment, exemption, reduction, reimbursement and retrospective collection; 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 2001 and replaces the Finance Ministry’s Circular No. 35/2000/TT-BTC of May 4, 2000 guiding the implementation of the Government’s Decree No. 09/2000/ND-CP of March 21, 2000 which promulgates Vietnam’s 2000 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 implementation effect of Decree No. 28/2001/ND-CP of June 6, 2001 of the Government, for which import tax has already been collected at the 2000 CEPT preferential tax rates (under Decree No. 09/2000/ND-CP of March 21, 2000) or at tax rates of the current preferential or ordinary import tariff, the customs office shall check the dossiers thereof and reimburse the importers the import tax difference amounts if the tax rates already applied for tax calculation are higher than the 2001 CEPT preferential tax rates.

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