Joint Circular No. 54/2003/TTLT-BTC-BTM dated June 3, 2003 of the Ministry of Finance and Ministry of Trade guiding the reduction of import tax on goods of Lao origin specified in the August 13, 2002 Vientiane Agreement between the Government of the Socialist Republic of Vietnam and the Government of the Lao People’s Democratic Republic

JOINT CIRCULAR

GUIDING THE REDUCTION OF IMPORT TAX ON GOODS OF LAO ORIGIN SPECIFIED IN THE AUGUST 13, 2002 VIENTIANE AGREEMENT BETWEEN THE GOVERNMENT OF THE SOCIALIST REPUBLIC OF VIETNAM AND THE GOVERNMENT OF THE LAO PEOPLES DEMOCRATIC REPUBLIC

Pursuant to the Vientiane Agreement signed on August 13, 2002 between the Government of the Socialist Republic of Vietnam and the Government of the Lao Peoples Democratic Republic on creation of favorable conditions for people, transport means and goods to travel across the border of the two countries, and promotion of development of trade and investment cooperation between Vietnam and Lao;

The Ministry of Finance and the Ministry of Trade hereby jointly guide the 50% tax reduction for goods of Lao origin imported into Vietnam as follows:

I. SCOPE OF APPLICATION:

A. Goods made in the Lao Peoples Democratic Republic and imported into Vietnam shall enjoy the import tax rate equal to 50% of the preferential one specified in the Preferential Import Tariff, if they satisfy the following conditions:

1. Being those on the List of goods items of Lao origin eligible for the 50% reduction of preferential import tax when being imported into Vietnam under annual treaties or agreements between the two countries governments.

The specific quantities and values of imported goods of Lao origin, which are eligible for 50% import tax reduction each year, shall be based on the List of goods of Lao origin eligible of 50% preferential import tax reduction when being imported into Vietnam under the treaty or agreement between the two

Promulgated together with this Circular is the List of goods items of Lao origin eligible for 50% (fifty per cent) import tax reduction when being imported into Vietnam in 2003.

In cases where a goods item concurrently satisfies the conditions for enjoying 50% import tax reduction and those for enjoying a CEPT preferential tax rate, the lower tax rate of these two tax rates shall apply.

2. Having a certificate of origin (C/O) issued by the Trade Ministry or the Trade Bureaus or Trade Services of Vientiane city and Saysomboun special zone of Laos.

3. Obtaining a written certification that they are covered by the tax preferential program under the agreement between the two governments, issued by the Trade Ministry or Trade Services of Vientiane city and Saysomboun special zone of Laos.

4. Being imported into Vietnam through border gates officially opened along the Vietnam-Laos border.

B. Procedures for producing and checking certificates of origin (C/O):

Enterprises that import Lao goods, which are on the List of goods items eligible for 50% import tax reduction, promulgated together with this Circular, and wish to enjoy the import tax reduction preference, shall have to produce to the customs offices the original certificates of origin of the goods together with the prescribed import document sets upon carrying out the import procedures.

In cases where enterprises have not yet obtained C/O for production upon carrying out the import procedures, the customs offices shall apply the ordinary tax rates or CEPT preferential tax rates (if the conditions therefor are fully met) and accept the delayed C/O production within 30 days counting from the date of submitting the customs declarations. After submitting C/O, enterprises shall be considered for reimbursement of overpaid tax amount (the difference between the paid tax amount calculated at the ordinary tax rate or CEPT preferential tax rate and that calculated at 50%-reduced preferential import tax rate specified in the Import Tariff).

Importing enterprises shall be held responsible before law for the legality and validity of the already submitted C/O. If any C/O fraudulence is detected, the concerned importing enterprise(s) shall be handled according to the current law provisions.

When having any doubt about the truthfulness and accuracy of certificates of origin, the customs offices may request the concerned enterprises to supply written evidences. The time limit for enterprises to supply additional documents shall be 30 days after the C/O is submitted. Pending the re-inspection result, the 50% tax rate reduction for the concerned goods lots shall temporarily not be given, and the ordinary tax rates or CEPT preferential tax rates (if the conditions therefor are fully met) shall be applied. And at the same time, the procedures for goods release shall continue to be carried out if such goods items are not banned or restricted from import and there is no doubt about false declarations of goods. In cases where the goods owners have sufficient documents to prove the Lao origin of their goods, the overpaid tax amount shall be considered and reimbursed (the difference between the already paid tax amount calculated at the ordinary tax rate or CEPT preferential tax rate and that calculated at 50%-reduced preferential import tax rate specified in the Import Tariff).

II. OTHER REGULATIONS

1. The tax calculation prices for calculation of 50% preferential import tariff reduction for goods of Lao origin imported into Vietnam are determined to be the actually paid prices inscribed in foreign trade contracts signed between the two countries companies, provided that such foreign trade contracts fully satisfy the conditions prescribed in Section I, Part III of the Finance Ministrys Circular No. 08/2002/TT-BTC of January 23, 2002 guiding the application of import tax calculation prices under foreign trade contracts. For foreign trade contracts failing to fully meet the conditions for tax calculation according to contractual prices, the prices for calculating 50% tax reduction shall be the minimum prices promulgated by the Finance Ministry.

2. The tax calculation bases, tax collection and payment regime, accounting of tax amounts, report on tax collection and payment results, import tax reduction, tax reimbursement, tax arrears collection and handling of violations shall comply with the provisions of the Law on Export Tax and Import Tax and the current guiding documents.

III. ORGANIZATION OF IMPLEMENTATION

Once every three months (by the 15th day of the following month at the latest) and annually (by February 15th of the following year at the latest), the General Department of Customs shall sum up and report the volumes and value (calculated at the import tax calculation prices) of import goods subject to this Circular to the Trade Ministry and the Finance Ministry. In cases where it detects that the Lao side issues written certifications for goods in excess of the volume already agreed upon, the Trade Ministry shall work together with the Lao Trade Ministry in devising appropriate remedial measures.

This Circular takes effect 15 days after its publication in the Official Gazette and applies to the import goods declarations registered with the customs offices as from January 9, 2003 (the effective date of the 2003 Treaty on economic, cultural, scientific and technical cooperation between the Government of the Socialist Republic of Vietnam and the Government of the Lao Peoples Democratic Republic).

Those cases of importing goods of Lao origin, entitled to the 50% import tax reduction, with their import declarations registered with the customs offices as from January 9, 2003 to the effective date of this Circular, shall be eligible for the import tax reimbursement. The import tax amount to be reimbursed shall be the difference between the tax amount already paid by enterprises and the import tax amount already reduced by 50% under this Circulars guidance. Enterprises shall contact the Customs Departments of the localities where they import goods for carrying out the procedures for tax reimbursement. A dossier of application for tax reimbursement comprises:

+ A written request for reimbursement of already paid import tax;

+ Import goods customs declaration with customs liquidation;

+ Foreign trade contract, foreign trade purchase and sale invoices;

+ Documents evidencing that import goods are of Lao origin according to the guidance in this Circular.

This Circular replaces Joint Circular No. 75/2001/TTLT-BTC-BTM-TCHQ of September 24, 2001 of the Finance Ministry, the Trade Ministry and the Customs General Department guiding the reduction of import tax on goods of Lao origin specified in the Agreement between the Government of the Socialist Republic of Vietnam and the Government of the Lao Peoples Democratic Republic (the 1999 Cua Lo Agreement) on creation of favorable conditions for people, transport means and goods to travel across the common borders of the two countries.

Any problems arising in the course of implementation should be promptly reported by the concerned units to the Finance Ministry and the Trade Ministry for study, timely guidance and supplements.

THE LIST AND QUANTITIES

OF GOODS OF LAO ORIGIN ELIGIBLE FOR THE 50% PREFERENTIAL IMPORT TAX REDUCTION WHEN BEING IMPORTED
INTO VIETNAM IN 2003

(According to Appendix No. 3 to the 2003 Treaty on Economic, Cultural, Scientific and Technical Cooperation between the Government of the Socialist Republic of Vietnam and the Government of the Lao Peoples Democratic Republic, signed on January 9, 2003)

Promulgated together with Joint Circular No. 54/2003/TTLT-BTC-BTM of June 3, 2003 of the Finance Ministry and the Trade Ministry