Circular No. 64/2003/TT-BTC dated July 1, 2003 of the Ministry of Finance guiding the implementation of the Government’s Decree No. 78/2003/ND-CP dated July 1, 2003 which promulgates Vietnam’s list of commodities and their tax rates for the implemen-tation of ASEAN countries’ Agreement on Common Effective Preferential Tariff (CEPT) for the 2003-2006 period

CIRCULAR

GUIDING THE IMPLEMENTATION OF THE GOVERNMENTS DECREE No. 78/2003/ND-CP OF JULY 1, 2003 WHICH PROMULGATES VIETNAMS LIST OF COMMODITIES AND THEIR TAX RATES FOR THE IMPLEMEN-TATION OF ASEAN COUNTRIES AGREEMENT ON COMMON EFFECTIVE PREFERENTIAL TARIFF (CEPT) FOR THE 2003-2006 PERIOD

In furtherance of the Protocol on the Socialist Republic of Vietnams joining in the Agreement on Common Effective Preferential Tariff (CEPT) program for materializing the ASEAN Free Trade Area (AFTA) (hereinafter called the CEPT/AFTA Agreement), concluded on December 15, 1995 in Bangkok;

In furtherance of the Governments Decree No. 78/2003/ND-CP of July 1, 2003 promulgating Vietnams list of commodities and their tax rates for the implementation of the CEPT/AFTA Agreement for the 2003-2006

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

I. SCOPE OF APPLICATION:

Import goods eligible for the CEPT preferential import tax rates as defined in Article 1 of the Governments Decree No. 78/2003/ND-CP of July 1, 2003 must satisfy the following conditions:

1. Being on Vietnams list of commodities and their tax rates for the implementation of the CEPT/AFTA Agreement for the 2003-2006 period, promulgated together with the Governments Decree No. 78/2003/ND-CP of July 1, 2003, and at the same time being on the list of commodities and their tax rates for the implementation of the CEPT/AFTA Agreement for each corresponding year of the ASEAN member countries, from which import goods originate.

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

- Brunei Darussalam;

- The Kingdom of Cambodia;

- The Republic of Indonesia;

- The Peoples 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).

4. Being transported directly to Vietnam from exporting countries being ASEAN members as prescribed in the Trade Ministrys Decision No. 416/TM-DB of May 13, 1996.

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 for each year, counting from 2003, and automatically apply as from January 1 of the subsequent years, correspon-ding to the CEPT tax rates for each of those years, specified in Vietnams list of commodities and their tax rates for the implementation of the CEPT/AFTA Agreement, promulgated together with the Governments Decree No. 78/2003/ND-CP of July 1, 2003 (hereinafter called the CEPT preferential tax rates for short).

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

If the MFN tax rate of such commodity item specified in the Preferential Import Tariff is adjusted to be higher than the CEPT preferential tax rate, the applicable import tax rate shall be the 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 CEPT preferential tax rates and the conditions for the application of import tax rates according to the localization rate under the current regulations, the enterprises shall enjoy the lower import tax rate of the two above-said tax rates.

The importing enterprises, when applying the import tax rates according to the localization rate, shall not be entitled to apply the CEPT tax rates or vice versa.

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 Vietnams special preferential import 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 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 Vietnams certificates of ASEAN goods origin, issued together with the Trade Ministrys 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, Decision No. 1448/2001/QD-BTM of December 25, 2001, Decision No. 0478/2002/QD-BTM of April 26, 2002, Decision No. 1062/2002/QD-BTM of September 4, 2002, Decision No. 1382/2002/QD-BTM of November 6, 2002 and Decision No. 0468/2003/QD-BTM of April 23, 2003.

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 Peoples 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 Customs;

- 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 certification.

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

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

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

- When having enough documents to evidence the goods 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 CEPT preferential tax rates.

IV. OTHER PROVISIONS

In cases where commercial invoices are issued by the third party other than exporters, goods imported into Vietnam shall still enjoy the CEPT preferential tax rates if they fully satisfy the conditions prescribed in this Circular.

The regulations on tax calculation bases, the regimes 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. ORGANIZATION OF IMPLEMENTATION

This Circular takes implementation effect 15 days after its publication in the Official Gazette, replaces the Finance Ministrys Circular No. 47/2002/TT-BTC of May 28, 2002 guiding the implementation of the Governments Decree No. 21/2002/ND-CP of February 28, 2002 and the Governments Decree No. 53/2002/ND-CP of May 13, 2003 promulgating Vietnams 2002 list of commodities and their tax rates for the implementation of the CEPT/AFTA Agreement, and applies to the import goods declarations already submitted to the customs offices as from July 1, 2003.

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