Decree No. 57/2020/ND-CP amending the Decree No. 122/2016/ND-CP and Decree No. 125/2017/ND-CP

DECREE

Amending and supplementing a number of articles of the Government’s Decree No. 122/2016/ND-CP of September 1, 2016, on the Export Tariff, the Preferential Import Tariff and the list of commodity items and their specific duty rates, compound duty rates and out-of-quota import duty rates, and Decree No. 125/2017/ND-CP of November 16, 2017, amending and supplementing a number of articles of Decree No. 122/2016/ND-CP^[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the April 6, 2016 Law on Import Duty and Export Duty;

Pursuant to the November 29, 2006 Law on Tax Administration, and the November 20, 2012 Law Amending and Supplementing a Number of Articles of the Law on Tax Administration;

Pursuant to the June 23, 2014 Law on Customs;

Pursuant to the National Assembly’s Resolution No. 71/2006/QH11 of November 29, 2006, ratifying the Protocol on Accession of the Socialist Republic of Vietnam to the Agreement Establishing the World Trade Organization;

At the proposal of the Minister of Finance;

The Government promulgates the Decree amending and supplementing a number of articles of the Government’s Decree No. 122/2016/ND-CP of September 1, 2016, on the Export Tariff, the Preferential Import Tariff and the list of commodity items and their specific duty rates, compound duty rates and out-of-quota import duty rates, and Decree No. 125/2017/ND-CP of November 16, 2017, amending and supplementing a number of articles of Decree No. 122/2016/ND-CP.

Article 1.To amend and supplement a number of articles of Decree No. 122/2016/ND-CP

1. To amend and supplement Clause 1, Article 5 as follows:

“Article 5. Preferential Import Tariff according to the list of dutiable commodity items

The Preferential Import Tariff according to the list of dutiable commodity items in Appendix II includes:

1. Section I: Provisions on preferential import duty rates applicable to 97 chapters according to Vietnam’s list of exports and imports, including titles of Parts, Chapters, Part Annotations and Chapter Annotations; the Import Tariff with commodity descriptions (names of groups of commodity items and names of commodity items), commodity headings (8-digit) according to Vietnam’s list of exports and imports and preferential import duty rates for dutiable commodity items.

In case Vietnam’s list of exports and imports is modified, customs declarants shall additionally declare commodity descriptions and headings according to the modified list of exports and imports and apply duty rates applicable to modified commodity headings.”

2. To add the following Article 7b:

“Article 7b. Preferential import duty rates applicable to materials, supplies and parts for manufacture or processing (assembly) of support industrial products prioritized for development for automobile manufacture and assembly industries in the 2020-2024 period (below referred to as the Program on duty incentives for automobile support industries)

1. Provisions on the preferential import duty rate of 0% applicable to materials, supplies and parts that cannot be domestically manufactured for manufacture or processing (assembly) of support products prioritized for development for automobile manufacture and assembly industries (below referred to as automobile support industrial products).

a/ At the time of declaration registration, customs declarants shall make declarations and calculate import duty for imported materials, supplies and parts at ordinary import duty rates or preferential import duty rates or specially preferential import duty rates under regulations, and are not yet entitled to the duty rate of 0%.

b/ The preferential import duty rate of 0% for materials, supplies and parts under the Program on duty incentives for automobile support industries shall be applied under Clauses 2 thru 8 of this Article.

2. Eligible subjects

a/ Enterprises that manufacture or process (assemble) automobile parts and spare parts;

b/ Automobile manufacturing or assembling enterprises that manufacture or process (assemble) on their own automobile parts and spare parts.

3. Conditions for application

a/ An enterprise that manufactures or processes (assembles) automobile parts and spare parts must satisfy the following conditions:

a.1/ Signing contracts on purchase and sale of automobile support industrial products with automobile manufacturing or assembling enterprises which possess certificates of eligibility for automobile manufacture or assembly granted by the Ministry of Industry and Trade;

a.2/ Possessing its investment certificate or investment registration certificate or enterprise registration certificate or business registration certificate clearly stating objectives of its projects or business lines, including the manufacture of spare parts and accessories for automobiles and other motor vehicles.

a.3/ Having ownership over, or the right to use, a manufacturing or processing (assembling) establishment in Vietnam’s territory and machinery and equipment at such establishment.

b/ An automobile manufacturing or assembling enterprise that manufactures or processes (assembles) on its own automobile parts and spare parts must possess a certificate of eligibility for automobile manufacture or assembly granted by the Ministry of Industry and Trade.

c/ Imported materials, supplies and parts must satisfy the following conditions:

c.1/ Imported materials, supplies and parts (including those imported on or after the effective date of this Decree and left in stock and transferred from previous periods eligible for duty incentives for manufacture or processing (assembly) of automobile support industrial products in subsequent periods eligible for duty incentives; and excluding those intended for use but having defects) for manufacture or processing (assembly) of automobile support industrial products are on the list of support industrial products prioritized for development for automobile manufacture or assembly industries specified in Section IV of the Appendix to the Government’s Decree No. 111/2015/ND-CP of November 3, 2015, on development of support industries, and amending and supplementing documents (if any). Products that are simply assembled by simple devices such as screws, bolts, nuts and rivets and have not undergone any manufacturing or processing stage to become finished products are not eligible for the Program on duty incentives for automobile support industries.

c.2/ Imported materials, supplies and parts are those that cannot be domestically manufactured and directly imported or imported under entrustment or authorization by the enterprises specified in Clause 2 of this Article. Materials, supplies and parts that cannot be domestically manufactured shall be identified under regulations of the Ministry of Planning and Investment regarding the list of materials, supplies and semi-finished products that can be domestically manufactured.

The enterprises specified in Clause 2 of this Article, satisfying the conditions specified at Points a, b and c of this Clause and complying with Clauses 4 thru 8 of this Article are eligible for the preferential import duty rate of 0% for materials, supplies and parts imported for manufacture or processing (assembly) of automobile support industrial products in the period of duty incentive consideration.

4. Period of duty incentive consideration

A period of duty incentive consideration must not exceed 6 months counting from January 1 to June 30 or from July 1 to December 31 every year.

5. Dossiers and procedures for registration for participation in the Program on duty incentives for automobile support industries

a/ A dossier of registration for participation in the Program on duty incentives for automobile support industries must comprise:

a.1/ An official letter for registration for participation in the Program on duty incentives for automobile support industries, made according to Form No. 08 provided in Appendix II to this Decree: 1 original;

a.2/ An investment certificate or investment registration certificate or enterprise registration certificate or business registration certificate (for the case specified at Point a, Clause 2 of this Article: 1 certified copy;

a.3/ A notice of the manufacturing or processing (assembling) establishment; machinery and equipment at the establishment sent to the customs office, made according to Form No. 09 provided in Appendix II to this Decree (for the case specified at Point a, Clause 2 of this Article): 1 original; a land use rights certificate granted by a competent state agency to the enterprise or a land use rights certificate granted by a competent agency to the land owner and a contract on rent or borrowing of land, ground and workshops in case the enterprise rents or borrows them for use as manufacturing facilities: 1 certified copy.

a.4/ A certificate of eligibility for automobile manufacture or assembly granted by the Ministry of Industry and Trade (for the case specified at Point b, Clause 2 of this Article): 1 certified copy.

b/ Procedures for registration for participation in the Program on duty incentives for automobile support industries

An enterprise shall submit a dossier of registration for participation in the Program on duty incentives for automobile support industries directly or via the e-data system of the customs office or by post to the customs office of the locality where the enterprise or its manufacturing or processing (assembling) establishment is located for registration for participation in the Program right after the effective date of this Decree or at any time in the year. The date of participation in the Program is the date of issuance of the official letter for registration of the Program.

6. Procedures for filling in customs declarations

Upon registering a customs declaration, a customs declarant shall fill in the item “Type code” as “A43 - Import of commodities under the Program on duty incentives”; item “Internal management number of the enterprise” coded “#&7b”; and item “Commodity code” (HS code) according to Vietnam’s List of exports and imports for materials, supplies and parts under the Program on duty incentives for automobile support industries.

7. Inspection of manufacturing or processing (assembling) establishments of enterprises participating in the Program on duty incentives for automobile support industries

Upon receiving a dossier of registration for participation in the Program on duty incentives for automobile support industries, a customs office shall inspect manufacturing or processing (assembling) establishments; and inspect machinery and equipment at such establishments notified by the enterprise. The customs office shall issue a decision on inspection of manufacturing establishments according to Form No. 09a provided in Appendix II to this Decree and send such decision via its e-data system or by registered mail or facsimile to the customs declarant within 3 working days from the date of signing. Inspection shall be carried out after 5 working days from the date of issuance of the inspection decision. The inspection period must not exceed 5 working days. Inspection contents include:

a/ Physical inspection of manufacturing or processing establishments against information notified by the enterprise to the customs office, investment certificate or investment registration certificate or enterprise registration certificate or business registration certificate and land use rights certificate granted by a competent state agency to the enterprises or land use rights certificate granted by a competent state agency to the land owner, and a contract on rent or borrowing of land, ground and workshops in case the enterprise rents or borrows them for use as manufacturing or processing establishments.

b/ Physical inspection of machinery and equipment at manufacturing or processing establishments against information in customs dossiers of imported goods, invoices, documents, and contracts on rent or borrowing of machinery and equipment (for the case of rent or borrowing of machinery and equipment); inspection of manufacturing or processing (assembling) process and scale, human resources, and actual state of machinery and equipment in order to determine the compatibility of actual manufacturing capacity of the enterprise with products registered for participation in the Program on duty incentives for automobile support industries.

Upon completion of inspection, the customs office shall make a minutes of inspection results according to Form No. 09b provided in Appendix II to this Decree.

Within 5 working days after signing the inspection minutes, the customs office shall send to the enterprise a notice of satisfaction of or failure to satisfy conditions of manufacturing or processing (assembling) establishments or machinery and equipment specified at Point a.3, Clause 3 of this Article, made according to Form No. 09c provided in Appendix II to this Decree.

In the course of participation in the Program on duty incentives for automobile support industries, if there is a change in the addresses of manufacturing or processing establishments or the ownership over or the right to use machinery and equipment of such establishments of the enterprise, the enterprise shall send a notice of such change to the customs office within 5 working days after such change occurs. Upon receiving the notice of change or detecting a sign indicating that the enterprise changes information about its manufacturing or processing establishments, or machinery and equipment at such establishments but fails to notify such change to the customs office or based on the risk management process, the customs office shall carry out inspection of manufacturing or processing (assembling) establishments, and inspect machinery and equipment at such establishments.

8. Dossiers and procedures for application of the preferential duty rate of 0%

a/ A dossier must comprise:

a.1/ For an enterprise that manufactures or processes (assembles) automobile parts and spare parts

a.1.1/ A written request for application of the preferential duty rate of 0% under the Program on duty incentives for automobile support industries, made according to Form No. 10a provided in Appendix II to this Decree: 1 original;

a.1.2/ An investment certificate or investment registration certificate or business registration certificate or enterprise registration certificate (unless the enterprise has submitted such certificate upon registering for participation in the Program on duty incentives for automobile support industries): 1 certified copy;

a.1.3/ Contracts on purchase and sale of automobile support industrial products with enterprises possessing a certificate of eligibility for automobile manufacture or assembly granted by the Ministry of Industry and Trade: 1 original;

a.1.4/ Process of manufacturing or processing (assembling) automobile support industrial products (together with explanations): 1 original;

a.1.5/ A list of import duty declarations and paid amounts for materials, supplies and parts for manufacturing or processing (assembling) automobile support industrial products registered for participation in the Program on duty incentives for automobile support industries, made according to Form No. 10 provided in Appendix II to this Decree: 1 original;

a.1.6/ A report on use of materials, supplies and parts imported for manufacturing or processing (assembling) automobile support industrial products registered for participation in the Program on duty incentives for automobile support industries, made according to Form No. 11 provided in Appendix II to this Decree: 1 original;

a.1.7/ A list of value-added invoices for quantities of automobile support industrial products sold under purchase and sale contracts, made according to Form No. 12 provided in Appendix II to this Decree: 1 original;

a.1.8/ Accounting documents showing quantities of  materials, supplies and parts imported for manufacturing or processing (assembling) automobile support industrial products: 1 photocopy;

a.2/ For an automobile manufacturing or assembling enterprise that manufactures or processes (assembles) automobile parts and spare parts on its own

a.2.1/ A written request for application of the preferential duty rate of 0% under the Program on duty incentives for automobile support industries, made according to Form No. 10a provided in Appendix II to this Decree: 1 original;

a.2.2/ Process of manufacturing or processing (assembling) automobile support industrial products (together with explanations): 1 original;

a.2.3/ A list of import duty declarations and paid amounts for materials, supplies and parts for manufacturing or processing (assembling) automobile support industrial products, made according to Form No. 10 provided in Appendix II to this Decree: 1 original;

a.2.4/ A report on use of materials, supplies and parts imported for manufacturing or processing (assembling) automobile support industrial products, made according to Form No. 11 provided in Appendix II to this Decree: 1 original;

a.2.5/ A list of value-added invoices for quantities of automobile support industrial products sold to automobile manufacturing or assembling enterprises possessing a certificate of eligibility for automobile manufacture or assembly (if any) granted by the Ministry of Industry and Trade, made according to Form No. 12 provided in Appendix II to this Decree: 1 original;

a.2.6/ A report on use of automobile support industrial products manufactured or processed (assembled), made according to Form No. 13 provided in Appendix II to this Decree: 1 original;

a.2.7/ A certificate of eligibility for automobile manufacture or assembly (if any) granted by the Ministry of Industry and Trade (unless the enterprise has submitted such certificate upon registration for participation in the Program): 1 certified copy;

a.2.8/ Accounting documents showing quantities of  materials, supplies and parts imported for manufacturing or processing (assembling) automobile support industrial products: 1 photocopy;

b/ Procedures for application of the duty rate of 0%

b.1/ Within 60 days from June 30 or December 31 every year, an enterprise shall send a dossier specified at Point a of this Clause to the customs office responsible for receiving dossiers for registration for participation in the Program on duty incentives for automobile support industries. For a dossier submitted after expiration of the 60-day time limit, the customs office shall still receive the dossier, conduct inspection and sanction administrative violations under the Government’s regulations.

b.2/ The customs office shall base itself on the dossier of request for application of the duty rate of 0%, results of inspection of manufacturing or processing (assembling) establishments, machinery and equipment of the enterprise to inspect the eligible subject and conditions for application of the Program on duty incentives for automobile support industries and:

b.2.1/ In case the dossier is incomplete, request in writing the enterprise to supplement the dossier. In case of having doubts about accuracy of the dossier, carry out inspection at its office or the duty payer’s office in accordance with the law on tax administration.

b.2.2/ In case the conditions for application of the Program on duty incentives for automobile support industries are fully satisfied, issue a refund decision and make an order of refund of the overpaid duty amount to the enterprise in accordance with the law on tax administration and guiding documents. Based on the customs office’s order of refund of the state budget revenue, the State Treasury office shall refund the overpaid import duty amount to the enterprise. Sources for refund of overpaid duty amounts come from the central budget’s revenues from import duty and export duty.

b.2.3/ In case the enterprise fails to fully satisfy the conditions for application of the Program on duty incentives for automobile support industries, reply in writing to the enterprise.”

Article 2.To amend and supplement a number of articles of Decree No. 125/2017/ND-CP

1. To amend and supplement Clause 1, Article 1 as follows:

“Article 3. To promulgate the Export Tariff, the Preferential Import Tariff according to the List of dutiable commodity items, the List of commodity items and their specific duty rates, compound duty rates and out-of-quota import duty rates

1. Appendix I - The Export Tariff according to the list of dutiable commodity items.

2. Appendix II - The Preferential Import Tariff according to the list of dutiable commodity items.

3. Appendix III - The List of commodity items and their specific duty rates and compound duty rates, for used passenger cars with up to 15 seats (including the driver’s).

4. Appendix IV - The List of commodity items and their out-of-quota import duty rates, for commodity items subject to tariff quotas.”

2. To amend and supplement Clause 2, Article 1 as follows:

“Article 4. The Export Tariff according to the list of dutiable commodity items

1. The Export Tariff according to the list of dutiable commodity items specified in Appendix I to this Decree includes commodity codes, descriptions and export duty rates for different commodity groups and items liable to export duty. For exports not included in the Export Tariff, customs declarants shall declare their codes corresponding to 8-digit headings of such commodity items in the Preferential Import Tariff specified in Section I of Appendix II to this Decree and are not required to declare duty rates on export declarations.

For commodity items of the commodity group with the ordinal number of 211 in the Export Tariff, when carrying out customs procedures, customs declarants shall declare codes of exports corresponding to 8-digit headings of such commodity items according to the Preferential Import Tariff specified in Section I of Appendix II to this Decree and write the export duty rate of 5%. Export items of the group with the original number of 211 are commodity items that satisfy both of the following conditions:

a/ Condition 1: Supplies, materials and semi-finished products (below collectively referred to as commodities) are not of groups with ordinal numbers from 1 thru 210 in the Export Tariff.

b/ Condition 2: They are processed directly from main materials being natural resources and minerals of a total value plus energy cost accounting for at least 51% of production costs. The determination of the total value of natural resources and minerals plus energy cost to see whether it accounts for at least 51% of production costs must comply with the Government’s Decree No. 100/2016/ND-CP of July 1, 2016, detailing and guiding a number of articles of the Law Amending and Supplementing a Number of Articles of the Law on Value-Added Tax, the Law on Exercise Tax and the Law on Tax Administration, and the Government’s Decree No. 146/2017/ND-CP of December 15, 2017, amending and supplementing a number of articles of Decree No. 100/2016/ND-CP.

Exports in the cases of exclusion specified in Clause 1, Article 1 of Decree No. 146/2017/ND-CP of December 15, 2017, are not of the group with the ordinal number of 211 in the Export Tariff promulgated together with this Decree.”

3. To amend and supplement Clause 6, Article 1 as follows:

“Article 7a. Preferential import duty rates for automobile parts imported under the Program on duty incentives for automobile manufacture and assembly (below referred to as the Program on duty incentives)

1. Provisions on the preferential import duty rate of 0% for imported automobile parts under heading 98.49 in Section II, Chapter 98 of Appendix II to this Decree

a/ At the time of registration of customs declarations, customs declarants shall declare and calculate import duty on imports at ordinary import duty rates or preferential import duty rates or specially preferential import duty rates under regulations, and are not yet entitled to the preferential import duty rate of 0% for heading 98.49.

b/ The application of the preferential import duty rate of 0% for automobile parts under heading 98.49 must comply with Clauses 2 thru 7 of this Article.

2. Eligible subjects

Enterprises possessing a certificate of eligibility for automobile manufacture or assembly granted by the Ministry of Industry and Trade.

3. Conditions for application

3.1. Automobile parts must satisfy the following conditions:

a/ Imported automobile parts are under heading 98.49 and cannot be domestically manufactured and are used for automobile manufacture or assembly in the period of incentive consideration (including parts left in stock from previous periods of incentive consideration to be used for manufacturing or assembling ex-workshop automobiles in subsequent periods of incentive consideration). The identification of parts that cannot be domestically manufactured must comply with the Ministry of Planning and Investment’s regulations on the list of materials, supplies and semi-finished products that can be domestically manufactured.

b/ Parts (details, assemblies and parts) are finished products but unassembled or are unfinished products but have basic characteristics of finished products with the knock-down level at least equal to that of automobile parts under the Ministry of Science and Technology’s regulations on methods of determination of localization rates of automobiles and the provisions of Point b.5.2, Clause 3.2, Section I, Chapter 98, Section II of Appendix II to this Decree.

c/ Imported automobile parts are directly imported by automobile manufacturing or assembling enterprises or under their entrustment or authorization.

3.2. For enterprises manufacturing or assembling electric automobiles, automobiles powered by fuel cells, hybrid automobiles, automobiles totally powered by biofuels or automobiles fuelled by natural gases, enterprises are not required to register automobile models when participating in the Program.

a/ Enterprises are not required to satisfy the condition on minimum output in the first period of participation in the Program and the subsequent period of incentive consideration. If they satisfy the conditions specified in Clause 2, 3.1, 4, 5, 6 and 7 of this Article, the duty rate of 0% may be applied to all imported parts used for manufacturing or assembling automobiles of the group registered for participation in the Program on duty incentives which are ex-workshopped in the period of incentive consideration.

b/ In subsequent periods of incentive consideration, enterprises must satisfy the condition on minimum output specified at Point b.12.2, Clause 3.2, Section I, Chapter 98 of Appendix II to this Decree and the conditions specified in Clauses 2, 3.1, 4, 5, 6 and 7 of this Article for application of the duty rate of 0% for all imported parts used for manufacturing or assembling automobiles of the group for which the enterprises satisfy the condition on output and which are ex-workshopped in the period of incentive consideration.

3.3. For enterprises manufacturing or assembling automobiles fueled by gasoline or oil

a/ Condition on emission standards:

Enterprises must manufacture or assemble automobiles that conform to level-4 or level-5 emission standards for the period from 2018 through 2021; or level-5 or higher-level emission standards for the period from 2022 onward.

b/ Condition on automobile models:

An enterprise manufacturing or assembling automobiles fueled by gasoline or oil may register one or more than one automobile model when participating in the Program on duty incentives. In the course of implementation of the Program on duty incentives, the enterprise may change or add the registered automobile models. The output of changed or added automobile models may be added up to the minimum general output for incentive consideration but must still satisfy the condition on minimum specific output for each period of incentive consideration. Models of automobile groups are prescribed as follows:

b.1/ Models of passenger cars with up to 9 seats and of a cylinder capacity not exceeding 2,500 cc under heading 87.03 must fully satisfy the following 4 criteria: meeting the same engine criterion; meeting the same body (or body frame) criterion; having a cylinder capacity not exceeding 2,500 cc; and having a fuel consumption rate of under 7.5 liters/100 km. The criterion of fuel consumption rate of under 7.5 liters/100 km shall be determined based on the fuel consumption rate of combined cycle as stated in a certificate of fuel consumption rate granted by the Vietnam Register;

b.2/ Models of mini buses (passenger cars with between 10 seats and 19 seats under heading 87.02) and buses/passenger cars (passenger cars with at least 20 seats under heading 87.02) must satisfy the same engine criterion and frame criterion;

b.3/ Models of trucks (motor vehicles for cargo transportation under heading 87.04 and special-use motor vehicles under heading 87.05) must satisfy the same engine criterion and cabin criterion.

The engine criterion of a vehicle model shall be determined based on cylinder capacity or type or engine capacity as stated in a certificate of technical safety quality and environmental protection for manufactured or assembled automobiles granted by the Vietnam Register. The automobile body (or body frame), frame or cabin criterion shall be determined based on basic technical characteristics of automobiles stated in their technical design explanations bearing an appraisal certification seal of the Vietnam Register.

c/ Condition on minimum general output (manufacturing or assembling output of each automobile group) and minimum specific output (manufacturing or assembling output of automobile models registered for participation in the Program on duty incentives).

An enterprise must satisfy the condition on minimum general output or minimum specific output in one of the following cases:

c.1/ In case the enterprise satisfies the condition on minimum general output for each automobile group and minimum specific output for at least one automobile model specified for each 6-month period of duty incentive consideration at Point b.12.1, Clause 3.2, Section I, Chapter 98 of Appendix II to this Decree and satisfies the conditions specified in Clauses 2 and 3.1; at Points a and b, Clause 3.3; and in Clauses 4, 5, 6 and 7, of this Article, it may enjoy the duty rate of 0% for all imported parts used for manufacturing or assembling the groups of automobiles for which it satisfies the output condition under regulations and which are ex-workshopped during the period of incentive consideration.

In case the enterprise manufactures or assembles both automobiles fueled by gasoline or oil and electric automobiles, automobiles powered by fuel cells, hybrid automobiles or automobiles totally powered by biofuels or automobiles fueled by natural gases, when determining the minimum general output of the group of automobiles fueled by gasoline or oil, the enterprise may add up the output of electric automobiles, automobiles powered by fuel cells, hybrid automobiles or automobiles totally powered by biofuel or automobiles fueled by natural gases manufactured or assembled during the period of incentive consideration to the minimum general output of automobiles fueled by gasoline or oil of the same group upon incentive consideration.

In case the first period of incentive consideration of an enterprise manufacturing or assembling automobiles fueled by gasoline or oil is under 6 months but the enterprise reaches an output of actually manufactured or assembled automobiles of a group at least equal to the average monthly output as a minimum general output multiplied by the number of months of participation in the Program on duty incentives during the period of incentive consideration, and reaches an output of actually manufactured or assembled automobiles of registered models at least equal to the average monthly output as a minimum specific output multiplied by the number of months of participation in the Program on duty incentives during the period of incentive consideration and, at the same time, satisfies the condition on minimum general output and minimum specific output for the subsequent 6-month period of incentive consideration, the automobile parts used for manufacturing or assembling automobiles during the first period of incentive consideration will be eligible for the duty rate of 0% provided the enterprise satisfies the conditions specified in Clauses 2 and 3.1; at Points a and b, Clause 3.3; and in Clauses 4, 5, 6 and 7, of this Article. In case the period of participation in the Program on duty incentives in the first month is 15 days or more, such period shall be rounded up to one full month. In case the period of participation in the Program on duty incentives in the first month is under 15 days, such month shall not be counted.

c.2/ In case the enterprise’s actually manufactured or assembled output of 1 (one) model of passenger cars with up to 9 seats registered during the period of incentive consideration is equal to at least 1.3 times the minimum specific output of models of automobiles with up to 9 seats as specified at Point b.12.1, Clause 3.2, Section I, Chapter 98 of Appendix II to this Decree and satisfies the conditions specified in Clauses 2 and 3.1; at Points a and b, Clause 3.3; and in Clauses 4, 5, 6 and 7, of this Article, the enterprise may enjoy the duty rate of 0% for imported parts used for manufacturing or assembling automobiles of such registered model which are ex-workshopped during the period of incentive consideration.

c.3/ In case the enterprise’s total actually manufactured or assembled output of 2 (two) models of passenger cars with up to 9 seats registered during the period of incentive consideration is equal to at least 1.5 times the minimum specific output of models of automobiles with up to 9 seats as specified at Point b.12.1, Clause 3.2, Section I, Chapter 98 of Appendix II to this Decree and satisfies the conditions specified in Clauses 2 and 3.1; at Points a and b, Clause 3.3; and in Clauses 4, 5, 6 and 7, of this Article, the enterprise may enjoy the duty rate of 0% for imported parts used for manufacturing or assembling automobiles of such registered models which are ex-workshopped during the period of incentive consideration.

c.4/ In case the enterprise has registered 2 (two) or more automobile groups for participation in the Program and the total actually manufactured or assembled output of all automobile groups registered for participation in the Program during the period of incentive consideration is at least equal to the total minimum general output of corresponding automobile groups as specified at Point b.12.1, Clause 3.2, Section I, Chapter 98 of Appendix II to this Decree and satisfies the conditions specified in Clause 2 and 3.1; at Points a and b, Clause 3.3; and in Clauses 4, 5, 6 and 7, of this Article, the enterprise may enjoy the duty rate of 0% for imported parts used for manufacturing or assembling automobiles of groups registered for participation in the Program which are ex-workshopped during the period of incentive consideration.

4. Periods of incentive consideration

A 6-month period of incentive consideration is counted from January 1 to June 30 or from July 1 to December 31 every year.

5. Dossiers and procedures for registration for participation in the Program on duty incentives

a/ A dossier must comprise:

a.1/ An official letter for registration of automobile parts for participation in the Program on duty incentives, made according to Form No. 05 provided in Appendix II to this Decree: 1 original;

a.2/ A certificate of eligibility for automobile manufacture or assembly: 1 certified copy.

b/ Procedures for registration for participation in the Program on duty incentives: An enterprise shall submit a dossier for registration for participation in the Program directly or via the e-data system or by post to the customs office of the locality where the enterprise’s head office or its manufacturing or assembling plant is located for registration for participation in the Program right after this Decree is signed or at any time in the year during the period of implementation of the Program. The date of participation in the Program on duty incentives is the date of issuance of the official letter for registration for participation in the Program.

6. Procedures for filling in customs declarations:

A customs declarant shall fill in the item “Type code” as A43 - “Import of commodities under the Program on duty incentives” for imported automobile parts under heading 98.49 for manufacturing or assembling automobiles of groups registered for participation in the Program on duty incentives; and the item “Internal management code of the enterprise”: To declare the code “#&7a.”

7. Dossiers and procedures for application of the preferential duty rate of 0% to commodities under heading 98.49

a/ A dossier must comprise:

a.1/ A written request for application of the preferential duty rate of 0% for commodities under heading 98.49, made according to Form No. 06a provided in Appendix II to this Decree: 1 original;

a.2/ A report on the actual use of imported automobile parts for manufacturing or assembling automobiles ex-workshopped during the period of incentive consideration, made according to Form No. 06 provided in Appendix II to this Decree: 1 original;

a.3/ A list of customs declarations and paid import duty amounts, made according to Form No. 07 provided in Appendix II to this Decree: 1 original;

a.4/ Accounting documents showing quantities of imported parts used for manufacturing or assembling automobile groups during the period of incentive consideration: 1 photocopy;

a.5/ A sheet of ex-workshop quality inspection of the enterprise, made according to a form issued by the Vietnam Register: copies bearing the enterprise’s seal (the number of copies is equal to the number of automobiles manufactured or assembled during the period of incentive consideration);

a.6/ A certificate of technical safety quality and environmental protection for manufactured or assembled automobiles: A certified copy or copy enclosed with the original for checking (the number of copies is equal to the number of types of manufactured or assembled automobiles);

a.7/ Written explanations about technical designs of automobiles bearing an appraisal certification seal of the Vietnam Register: A certified copy or photocopy enclosed with the original for checking (the number of copies is equal to the number of types of manufactured or assembled automobiles).

b/ Procedures for application of the duty rate applicable to heading 98.49:

b.1/ Within 60 days from June 30 or December 31, an enterprise shall send a dossier specified at Point a of this Clause to the customs office responsible for receiving dossiers for registration for participation in the Program on duty incentives. In case a dossier is submitted after the expiration of the 60-day time limit, the customs office shall still receive the dossier, conduct inspection and sanction administrative violations under regulations of the Government.

In case the first period of incentive consideration of the enterprise is under 6 months, the enterprise shall submit a dossier specified at Point a of this Clause together with a dossier of request for application of the duty rate of 0% for the subsequent period of incentive consideration.

b.2/ The customs office shall base itself on the enterprise’s dossier of request to check the latter’s eligibility and conditions for application of the Program on duty incentives under Clauses 2 and 3 of this Article, including:

b.2.1/ Output of automobiles, based on the number of sheets of ex-workshop quality inspection issued by the enterprise during the period of incentive consideration.

b.2.2/ Registered automobile models, based on the certificate of technical safety and environmental protection for manufactured or assembled automobiles granted by the Vietnam Register.

b.2.3/ The number of imported automobile parts used (excluding those intended for use but found damaged or having defects), which must be consistent with the number of actually manufactured or assembled automobiles with sheets of ex-workshop quality inspection issued during the period of incentive consideration and based on a report on actual use of automobile parts eligible for import duty incentives, a list of customs declarations, and paid import duty amounts as stated in customs declarations of imports.

b.3/ Based on results of checking of the enterprise’s dossier, the customs office shall:

b.3.1/ In case the dossier is incomplete, request in writing the enterprise to supplement the dossier. In case of a doubt about accuracy of the dossier, the customs office shall carry out inspection at its office or the office of the duty payer in accordance with the law on tax administration.

b.3.2/ In case the dossier fully satisfies the conditions for application of the Program on duty incentives and the enterprise has paid a duty amount for imported automobile parts larger than the payable duty amount calculated at the duty rate applicable to commodities under heading 98.49, issue a decision on duty refund and make an order on refund of the overpaid duty amount to the enterprises in accordance with the Law on Tax Administration and guiding documents. Based on the customs office’s order on refund of state budget revenue, the State Treasury office shall refund the overpaid import duty amount to the enterprise. Sources for refund of overpaid duty amounts come from the central budget’s revenues from import duty and export duty.

b.3.3/ In case the enterprise fails to fully satisfy the conditions for application of the Program on duty incentives, notify such in writing to the enterprise.”

Article 3.Responsibility to organize implementation

1. The Ministry of Finance shall inspect, supervise, give price advices and combat trade frauds under regulations regarding commodity items subject to high import duty rates and commodity items with high risks in duty value.

2. The Ministry of Planning and Investment shall promulgate the list of commodities that can be domestically manufactured; revise and update revisions to such list as suitable to reality.

3. The Ministry of Science and Technology shall assume the prime responsibility for, and coordinate with the Ministry of Industry and Trade, Ministry of Transport, Ministry of Planning and Investment, and related agencies in, revising regulations on knock-down level as suitable to reality.

4. The Ministry of Industry and Trade shall grant certificates of eligibility for automobile manufacture or assembly under the Government’s regulations on conditions for automobile manufacture, assembly and import and provision of automobile warranty and maintenance services in accordance with law.

5. Competent state agencies shall grant investment certificates, investment registration certificates, enterprise registration certificates or business registration certificates to enterprises in accordance with law.

6. Related ministries and sectors, and localities shall, within the ambit of their functions and tasks, carry out inspection and control to ensure that policies are implemented in accordance with regulations and combat trade frauds.

7. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, and related organizations and individuals shall implement this Decree.

Article 4.Transitional provisions for enterprises participating in the Program on duty incentives specified in Article 7a of Decree No. 125/2017/ND-CP

1. Enterprises that register for participation in the Program on duty incentives under Article 7a of Decree No. 125/2017/ND-CP before the effective date of this Decree are not required to make such registration again and may enjoy incentives under this Decree from January 1, 2020, through December 31, 2022. In case of changing or adding automobile groups or models or number of automobile models registered upon participating in the Program on duty incentives, enterprises shall make registration again with customs offices.

2. Parts left in stock that have been used for manufacturing or assembling automobiles with sheets of ex-workshop quality inspection issued during the period of incentive consideration from January 1, 2020, onward are eligible for the duty rate of 0% if satisfying the conditions specified in Clause 3, Article 2 of this Decree. Parts left in stock used for manufacturing or assembling automobiles with sheets of ex-workshop quality inspection issued before January 1, 2020, are ineligible for the duty rate of 0%.

3. Enterprises that carry out procedures for filling in customs declarations for imported automobile parts under guidance of customs offices and make registration before the effective date of this Decree are not required to carry out procedures for filling in customs declarations under Clause 3, Article 2 of this Decree.

Article 5.Effect

1. This Decree takes effect on July 10, 2020, except the provisions of Clause 3, Article 2 of this Decree that apply from January 1, 2020.

2. To annul the provision “3. Section III: Provisions on preferential import duty for a number of commodity items in implementation of the WTO commitments from January 1, 2019, onward” of Clause 3, Article 1 of Decree No. 125/2017/ND-CP of November 16, 2017, and the Appendices to Decree No. 125/2017/ND-CP.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC