Official Dispatch No. 7599/TCHQ-TXNK dated November 20, 2017 of the General Department of Customs on implementing the Law on Import and Export Duties, Decree No. 134/2016/ND-CP

No.

Categories of inquiries

Inquiries made by local Departments of Customs

Responses of the General Department of Customs

I

Anti-dumping duty, countervailing duty, safeguard duty, environment tariff

1

- If a material which is imported to produce a good to be exported is eligible for import duty exemption as prescribed in Article 16 of the Law on export and import duty No. 107/2016/QH13, whether additional customs duties such as anti-dumping duty, countervailing duty, or safeguard duty are exempted as well.

- Article 8 of Circular No. 152/2011/TT-BTC dated November 11, 2011 stipulates 5 cases eligible for environment protection duty refund without any case specifying that material imported for producing goods to be exported will be eligible for duty refund. From September 1, 2016, the environment protection tax on materials imported to produce goods to be exported shall be paid in full immediately without any provision of eligibility for duty refund after export. If materials imported for processing or producing goods to be imported that are further consumed in Vietnam and harmful to Vietnam’s environment (such as lubricants, etc.) are not eligible for tax exemption, it must be specified that such materials are not eligible for duty refund as well.

(Customs Department of Dong Nai)

- Pursuant to Official Dispatch No. 17707/BTC-TCHQ dated December 14, 2016 of the Ministry of Finance on guidelines for application of anti-dumping duty, countervailing duty, safeguard duty, and other guiding documents, such an anti-dumping duty, countervailing duty or safeguard duty shall be applied similarly to the import duty in terms of the point of time at which assessable tax is determined, deadline for paying tax, tax exemption, duty refund, etc.).

- Environment protection tax: Pursuant to the Law on environment protection tax, Circular No. 152/2011/TT-BTC dated November 11, 2011, Circular No. 159/2012/TT-BTC dated September 28, 2012 of the Ministry of Finance, materials imported to produce goods to be exported are neither eligible for environment protection tax cancellation nor environment protection duty refund.

II

Tariff

2

Pursuant to Decree No. 129/2016/ND-CP dated September 1, 2016, goods imported to Vietnam from the Socialist Republic of Vietnam (goods from free trade zone imported to domestic market) may claim preferential tariff treatment if they are under preferential import tariff, fulfill conditions for direct transport, comply with regulations on origin of goods, and obtain Certificate of Origin form D.

In practice, however, there is an issue regarding indirectly-imported goods (goods that are delivered to another entity in Vietnam appointed by the overseas importer)/exports delivered to domestic (at the request of the importer) as follows: Enterprise A in Vietnam enters into a sale contract with foreign enterprise B, specifying that enterprise C in Vietnam (neither an export processing enterprise nor an enterprise in a export processing zone) shall deliver goods to enterprise A. The indirectly-imported goods of enterprise C obtain C/O form D (RVC is more than 40%), meet origin criteria and be included in the preferential import tariff ATIGA.

Accordingly, pursuant to Decree No. 129/2016/ND-CP dated September 1, 2016, indirectly-imported goods of enterprise A are not eligible for claiming preferential tariff treatment. However, Point 1 of Official Dispatch No. 1744/TCHQ-GSQL dated April 22, 2011 of the General Department of Customs on guidelines for C/O form D issued to exports delivered to domestic processors specifies that: ...“require relevant entities to consider granting preferential tariff treatment to indirectly-imported goods obtaining C/O issued by designated authorities by the Ministry of Industry and Trade member of free trade agreement".

Proposal: Propose the General Department of Customs to provide guidance in accordance with the Law on export and import duty No. 107/2016/QH13 and Decrees promulgating preferential tariff schedule.

(Customs Department of Quang Ninh)

The General Department of Customs gathered inquiries and forward them to the Ministry and competent authorities for consideration. Currently, while guidelines remain absent, laws and regulations in force will prevail.

III

Deadline for paying duty, guarantee, security deposit of duty payable

3

Pursuant to the Law on Value-Added Tax and the Law on Special Excise Duty, no provision specifies that an enterprise eligible for customs and tax incentives (hereinafter referred to as preferential enterprise) is a taxpayer. The Law on Tax Administration does not impose a deadline for tax payment on such an enterprise as well. Accordingly, whether deadline for paying tax of the preferential enterprise as prescribed in the Law on Export and Import Duty No. 107/2016/QH13 is the same with that of VAT or special excise duty.

 (Customs Department of Ho Chi Minh City)

Clause 1 Article 4 of Decree No. 134/2016/ND-CP dated September 1, 2016 specifies as follows:“deadline for paying tax prescribed in Article 9 of the Law on Export and Import Duty applies to taxable exported and imported goods in accordance with regulations of law on taxation”.Accordingly, a preferential enterprise is entitled to apply deadline for paying tax as prescribed in Article 9 ofthe Law on Export and Import Duty No. 107/2016/QH13applicable to duties relevant to exported goods and imported goods.

4

Pursuant to the Law on Export and Import Duty No. 107/2016/QH13, an enterprise is not required to pay duties immediately. Pursuant to Official Dispatch No 8450/TCHQ-CNTT dated September 1, 2016 and Official Dispatch No. 8621/TCHQ-TXNK dated September 8, 2016 of the General Department of Customs, Sub-departments of Customs must create a document of grace period adjustment.

Accordingly, in case of a green channel declaration, the customs authority considers how to create a document of grace period adjustment. Department of Customs of Ho Chi Minh City proposes that the abovementioned step should be taken automatically in the system.

 (Customs Department of Ho Chi Minh City)

The determination of deadline for paying tax applicable to preferential enterprises has been automatically designed in the accounting centralized system.

The function of adjustment of grace period in the declarations of preferential enterprise has been upgraded in the system and specified in the Official Dispatch No. 10461/TCHQ-CNTT dated November 4, 2016. Therefore, the adjustment of grace period is no longer required.

5

Request the General Department of Customs to adjust the VNACCS/KTTT with a view to make the process from registration to the liquidation of every declaration (including customs fees) automatic as follows:

1. Monthly tax arrears of preferential enterprises shall be processed automatically in the centralized accounting program;

2. The monthly tax arrears of preferential enterprises in the centralized accounting program shall be processed to make the estimates of state budget revenues;

3. The preferential enterprise shall not if the centralized accounting system has not completed the liquidation process of the tax amount paid on the 10^thof each month.

 (Customs Department of Ho Chi Minh City)

1+2. The automation and processing of monthly tax arrears of preferential enterprises: The centralized accounting system, at all times, automatically makes a list of tax arrears owned by all enterprises (this function is available even when a document is created in the system) and the function aimed at managing and monitoring tax arrears owned by all enterprises has been also available.

3. The preferential enterprise shall not be coerced if the centralized accounting system has not completed the liquidation process of the paid tax amount that was paid on the 10th of each month: The General Department of Customs has promulgated Official Dispatch No. 10461/TCHQ-CNTT dated November 4, 2016. Accordingly, when the system may adjust grace period automatically for preferential enterprises as prescribed in the Law on Export and Import Duty No. 107/2016/QH13 from November 4, 2016, the said problem has been addressed.

6

1. Monitoring and inputting security deposits of temporarily-imported goods (prescribed in Point dd Clause 9 Article 16 of the Law on Export and Import Duty No. 107/2016/QH13):

- Currently, the deposit form is updated manually, request IT Department to synchronize the declarations from VNACCS and security deposit payment slip from banks or treasury agencies to centralized tax accounting system.

Function M. Input deposit document to manage security deposits in the centralized tax accounting system without assurance of monitoring deposit. Request to use the following function: 2. Input/D. accounting records relevant to declaration/insert form – Type of accounting record: Deposit form; Q2. Withdrawal form.

2. Monitoring and managing guarantees of temporarily-imported goods:

- There have not been guidelines for monitoring and statement of guarantees of temporarily-imported goods that have been re-exported within the prescribed time limit (including extensions) so far. Customs Department of Hai Phong requests as follows: At the request of enterprise, the customs authority shall send a notice of completion of temporarily-imported goods in order for the enterprise and the bank to make the statement of guarantee.

- The centralized tax accounting system has not recorded the subtraction of declared imports from the import quota and re-establishes guarantee and warning if an enterprise has not paid tax or liquidates the declaration. Request IT Department to upgrade the system as mentioned above in accordance with the Law on Export and Import Duty No. 107/2016/QH13.

(Customs Department of Hai Phong, Customs Department of Quang Ninh)

1. The General Department of Customs has promulgated Official Dispatch No. 292/TCHQ-TXNK dated January 16, 2017 on handling of duties on temporarily-imported goods in the VNACCS/VCIS and the centralized accounting system. However, such Official Dispatch has been suspended by Official Dispatch No. 575/TCHQ-TXNK dated January 25, 2017 due to certain difficulties in the management and accounting methods.

2. Pursuant to Point dd Clause 9 Article 16 of the Law on Export and Import Duty No. 107/2016/QH13, guaranteed or deposited re-imports are eligible for duty exemption, therefore, the centralized accounting system displays no information about the amount of duty requiring guarantee or deposit. Accordingly, the centralized accounting system does not monitor and manage either deposit or guarantee of temporarily-imported goods; therefore, it must be monitored manually as specified in Official Dispatch No. 4497/TCHQ-TXNK dated July 4, 2017 of the General Department of Customs sent to Customs Department of Hanoi and other provinces and cities. Consequently, while awaiting the system upgrade, entities shall continue monitoring manually.

7

Pursuant to the Law on Export and Import Duty No. 107/2016/QH13, a preferential enterprise is entitled to delay its duty payment until the 10^thof subsequent month (total duty payable of all import declarations within the current month and following days of the subsequent month). Currently, after duty payment, the preferential enterprise is considered late duty payment nationwide.

 (Customs Department of Ho Chi Minh City)

The monitoring of duty arrears due to preferential enterprises has been automatically designed in the centralized accounting system.

IV

Gifts exempt from duties

8

Imports being drugs for people having fatal diseases (specific drugs) specified in the Appendix IV of Decree No. 134/2016/ND-CP.

Generally, specific drugs imported in the form of gifts do not enclose with directions in Vietnamese that deters customs officials from distinguishing drugs for people having fatal diseases specified in the Appendix IV Decree No. 134/2016/ND-CP. Request the General Department of Customs to propose the Ministry of Health to promulgate a list of specific drug trade names equivalent to the Appendix IV or provide guidelines for specific drugs without directions in Vietnamese.

 (Customs Department of Ho Chi Minh City)

Clause 4 Article 3 of Circular No. 38/2015/TT-BTC specifies that if a document in the dossier prescribed in Clauses 1, 2 and 3 is not in Vietnamese or English, the customs declarant or taxpayer must translate it into Vietnamese and take responsibility for its translation.

Accordingly, if a specific drug is imported in the form of a gift without directions in Vietnamese or English, the taxpayer must translate it into Vietnamese and take responsibility for its translation.

V

Duty exemption on processing

9

Whether exports delivered to domestic processors, processing enterprises, transfer of materials between processing agreements, or temporary imports are subject to duties as prescribed in Clause 3 Article 2 of the Law on Export and Import Duty No. 107/2016/QH13.

(Customs Department of Dong Nai)

- Pursuant to Clause 3 Article 2 of the Law on Export and Import Duty No. 107/2016/QH13, exports delivered to domestic processors are subject to duties.

The said inquiry is ambiguous, while the circumstances eligible for duty exemption or non-taxable status are specified in the Law on Export and Import Duty No. 107/2016/QH13, please refer to this Law for implementation; any further inquiry shall be reported to the General Department of Customs for consideration.

- With regard to materials being transferred from a processing agreement to another processing agreement: The General Department of Customs provides guidelines in Point 7 Section III of Appendix issued together with Official Dispatch No. 11567/TCHQ-TXNK, accordingly, if the temporary imports for being processed are not re-exported, upon the time limit for processing agreement, but are transferred to another processing agreement, subject to procedures for exports delivered to domestic processors are exempt from duties in accordance with laws and regulations on customs, the Law on Export and Import Duty No. 107/2016/QH13, and Decree No. 134/2016/ND-CP.

10

Point b Clause 2 Article 10 of Decree No. 134/2016/ND-CP, Point a Clause 2 Article 12 of Decree No. 134/2016/ND-CP specify conditions for processing and exemption of duties on materials imported to manufacture exports as follows: the taxpayer or processor or export manufacturer has a processing or export manufacturing facility within Vietnam’s territory.

Accordingly, whether the taxpayer, processor or export manufacturer is required to justify the lawful ownership or right to use of the facility.

(Customs Department of Long An)

The General Department of Customs provides guidelines for this matter in Point 11 of Official Dispatch No. 11567/TCHQ-TXNK dated December 8, 2016 and Official Dispatch No. 6435/TCHQ-TXNK dated October 2, 2017 on guidelines to Customs Department of Dong Nai. Accordingly, if the taxpayer fails to comply with Articles 10, 12, and 36 of Decree No. 134/2016/ND-CP, Decree No. 08/2015/ND-CP, Circular No. 38/2015/TT-BTC, the taxpayer is not eligible for duty exemption or refund as prescribed.

11

Clause 4 Article 10 of Decree No. 134/2016/ND-CP dated September 1, 2016 specifies as follows:“Refuses, scrap, redundant raw materials and supplies imported for processing under a processing contract shall be exempt from import duties when they are sold domestically provided they do not exceed 3% of the quantity of each type. VAT, special excise tax and environmental protection tax (if any) shall be paid to the customs authority”.

1. Whether the refuses or scrap within the aforesaid processing quota are liable to VAT, special excise tax and environmental protection tax (if any) to be paid to the customs authority.

2. If an enterprise imports fabric but its scrap is clothing, then how the tax return is made.

(Customs Department of Binh Dinh, Customs Department of Quang Ngai)

1. Filing returns and remitting payments of special excise tax, VAT, and environmental protection tax:

This matter has been guided in Clause 4 Article 10 of Decree No. 134/2016/ND-CP, Point 6 of Official Dispatch No. 11567/BTC-TCHQ dated December 8, 2016. Accordingly, refuses, scrap, redundant raw materials and supplies imported for processing under a processing contract shall be exempt from import duties when they are sold domestically provided they do not exceed 3% of the quantity of each type. VAT, special excise tax and environmental protection tax (if any) shall be paid to the customs authority.

2. The opinion of Customs Department of Binh Dinh has been recognized for making further amendments to Circular No. 38/2015/TT-BTC.

12

With regard to goods exported for processing subject to export duty with the duty paid.

Whether the refund of export duty paid on materials or supplies exported for processing that are completely re-imported in the form of a finished product could be claimed.

(Customs Department of Da Nang)

Pursuant to Article 11 of Decree No. 134/2016/ND-CP, goods exported for processing subject to export duties are not exempt from export duties

Pursuant to Article 33 through Article 37 of Decree No. 134/2016/ND-CP on circumstances in which refund of duties is eligible, no circumstance specifies that the it is possible to claim a refund of duty paid on goods exported for processing that are completely re-imported in the form of a finished product.

13

The Law on Export and Import Duty No. 107/2016/QH13 and the Decree No. 134/2016/ND-CP do not set forth that redundant refuses and scrap exported to return to the processor are subject to export duties as prescribed in the export tariff schedule issued together with Decree No. 122/2016/ND-CP. Whether the redundant refuses and scrap exported to return to the processor, upon the completion of the processing agreement, are subject to export duties.

(Customs Department of Binh Duong, Customs Department of Hue)

Pursuant to Article 10 of the Decree No. 134/2016/ND-CP, Article 21 of Circular No.

14

1. Whether a taxpayer may submit an original of bank guarantee or a payment slip of a security deposit paid to the competent authority’s deposit account at the State Treasury if the letter of bank guarantee has not been updated in the customs electronic data processing system.

2. Regarding statement: Pursuant to Article 60 of Circular No. 38/2015/TT-BTC, whether the taxpayer may either submit multiple final accounts or single final accounts.

(Customs Department of Thua Thien Hue)

1. In case of an electronic bank guarantee, system will record the subtraction automatically; in case of a physical bank guarantee, the taxpayer shall submit an original of letter of customs guarantee to the customs authority for verification and maintenance.

2. Clause 1 Article 60 of Circular No. 38/2015/TT-BTC specifies that “Annually, the declarant shall submit the statement of the use of materials/supplies, machinery, equipment, and exported goods to the customs authority no later than the 90th day after the end of the fiscal year”.

15

Point g, Clause 1 Article 10 of the Decree No. 134/2016/ND-CP specifies that “Where a processed export is manufactured from domestic materials cost subject to export duty, such materials and supplies constituting the exported product, upon the exportation, shall be taxed at the applicable rate”. Here are inquiries:

1. If the processed export is subject to export duty but the materials and supplies constituting it are taxed at 0% or if the processed export is not subject to export duty but the materials and supplies are subject to export duty, whether such a processed export is taxed.

2. The guidelines for preparation of tax declaration of domestic materials and supplies constituting exported products in the VNACCS are asked.

(Customs Department of Binh Dinh)

1. Where a processed export is manufactured from domestic materials and supplies subject to export duty, such materials and supplies constituting the exported product, upon the exportation, shall be taxed at the applicable rate as prescribed in Clause 1 Article 10 of the Decree No. 134/2016/ND-CP.

2. With regard to tariff value of domestic materials constituting the exported product, the commodity line is separately declared in the declaration of processed exports (procedure code E52 – export of processed goods).

Apart from the guidelines in Point 2 Appendix II issued together with Circular No. 38/2015/TT-BTC, the declarant must note that:

The item description of goods: insert “domestic materials self-provided by the processor under the processing agreement in relation to the commodity line No. ...”; invoice value and currency code of the invoice unit price: leave it blank; the item invoice unit price: leave it blank; the item dutiable value: insert manually.

The sum of duties in declaration of processed exports (procedure code E52) shall be paid to state budget. According to the design of VNACCS, duties on goods in types E shall be paid to a provisional account. Accordingly, the General Department of Customs shall modify that the document recording the duty payable released by VNACCS to be paid to a state budget account instead of to be paid to the provisional account.

Customs Department of provinces and cities shall notify taxpayers that duties on declarations of E52 (processed exports) shall be paid to the state budget account.

16

Pursuant to the Decree No. 134/2016/ND-CP: Goods exported for outward processing (subject to export duty) are liable to export duty.

Decree No. 134/2016/ND-CP specifies no circumstance in which it is possible to claim a refund of duty on goods exported for outward processing that are re-imported.

Request the General Department of Customs to permit a deposit made to the provisional account at the State Treasury or a bank guarantee.

 (Customs Department of Ho Chi Minh City)

- Pursuant to Article 33 through Article 37 of Decree No. 134/2016/ND-CP, no circumstance specifies that it is possible to claim a refund of duty paid on goods exported for processing that are completely re-imported in the form of a finished product.

- Pursuant to Point dd Clause 9 Article 16 of the Law on Export and Import Duty No. 107/2016/QH13, Clause 3 Article 4 of Decree No. 134/2016/ND-CP, the security deposit of duty applies solely to temporary import business.

17

Currently, no provision specifies the requirement for time and form of notification of processing agreements and processors to the customs authority in accordance with law on customs. Therefore, a processor, currently, shall notify the customs authority of a processing agreement as a condition for consideration of duty exemption on goods imported or exported for inward or outward processing.

Request the General Department of Customs to determine that either a outward processing agreement or an inward processing agreement shall be notified to the customs authority and the equivalent notification time.

 (Customs Department of Quang Nam and Customs Department of Ho Chi Minh City)

The request is acknowledged, therefore, the General Department of Customs shall make amendments of notification time and contents of processing agreements to Circular No. 38/2015/TT-BTC.

VI

Exemption of duties on intermediate goods that are imported and used in production for export

18

Point a Clause 2 Article 12 of Decree No. 134/2016/ND-CP specifies that “a) The manufacturer of exports has a factory where exports are manufactured in Vietnam; owns or has the right to use machinery and equipment at the factory which is suitable for the raw materials, supplies and components imported for manufacture of exports and has notified the customs authority of the factory”.

1. Whether the requirement for notification of the factory applies to all manufacturers of domestic exports from the effective date of Decree No. 134/2016/ND-CP or applies to manufacturer producing domestic exports for the first time.

2. Whether the requirement for notification of the factory applies to an entity that imports materials for trading purpose but thereafter put them into manufacture and receive import duty refund as prescribed in Point a, Clause 3, Article 36.

(Customs Department of Bac Ninh)

3. Whether the customs authority shall undertake an inspection visit to the factory of any manufacturer importing materials for manufacture of exports prior to grant of duty exemption for the initial shipment.

Whether a manufacturer that has previously granted 275-day grace period and has the factory inspected but is now eligible for duty exemption shall has its factory re-inspected.

 (Customs Department of Long An, Customs Department of Ho Chi Minh, Customs Department of Nghe An)

1. Pursuant to Article 36 of Decree No. 08/2015/ND-CP dated January 21, 2015, before obtaining customs clearance for the first shipment of raw materials, machinery or equipment used for processing, production of goods for exportation, the declarant must notify the customs authority of the factory.

Article 56 of Circular No. 38/2015/TT-BTC specifies notifications of factories, locations where materials/supplies, machinery, equipment, and products to be exported are stored to Sub-department of Customs (except for export processing companies). If materials/supplies, exported goods have to be stored outside the said factories, the storage location must be notified to the Sub-department of Customs.

2. Pursuant to Article 56 of Circular No. 38/2015/TT-BTC, if an entity imports materials for trading purpose but thereafter puts them into manufacture and receives import duty refund as prescribed in Point a Clause 3 Article 36 of Decree No. 134/2016/ND-CP the manufacturer of goods to be exported must notify the customs authority of its factory before submitting the claim for refund and the statement.

3. Point b Clause 1 Article 57 of Circular No. 38/2015/TT-BTC specifies that the inspection visit to the factory shall apply to an entity that is initially granted 275-day grace period on duty payment for intermediate goods that are imported and used in production for export.

Clause 2 Article 21 of the Law on Export and Import Duty No. 107/2016/QH13 specifies that “This Law shall apply to raw materials, supplies, components imported and used in production for exports but the products have not been exported; goods temporarily imported that have not been re-exported under declarations registered with customs authorities before the effective date of this Law and tax on which have not been paid”.

Accordingly, the inspection visit to the factory in which intermediate goods imported are used in production for export shall solely apply to an entity that is initially granted duty exemption on raw materials, supplies, equipment imported for processing or production for export (except for an entity granted 275-day grace period on duty payment).

19

Article 36 of Decree No. 134/2016/ND-CP specifies that “Paid import duties on goods that are initially imported for business operation but eventually used for manufacture of goods that have been exported into a foreign country or a free trade zone shall be refunded”.

 Accordingly, if the finished good to be exported (completely manufactured from imported materials and supplies) is subject to duty, whether the declarant must make a declaration and pay export duty at the rate indicated in the export duty schedule issued together with Decree No. 122/2016/ND-CP dated September 1, 2016.

(Customs Department of Da Nang)

Pursuant to the Law on Export and Import Duty No. 107/2016/QH13 and the Decree No. 134/2016/ND-CP, goods that are initially imported for business operation but eventually used for manufacture for export shall be subject to export duty (if any) at the rate indicated in the export duty schedule issued together with Decree No. 122/2016/ND-CP dated September 1, 2016.

20

Materials and supplies imported for manufacture of exports eligible for duty exemption prescribed in Clause 7, Article 16 of the Law on Export and Import Duty No. 107/2016/QH13 and Article 12 of Decree No. 134/2016/ND-CP, no provision indicates time limit over which such materials and supplies may stay in Vietnam and the treatment of duty if they are in stock as specified in annual statement.

(Customs Department of An Giang, Quang Ngai)

Article 12 of the Decree No. 134/2016/ND-CP specifies that raw materials, supplies, components, semi-finished products and finished products imported for manufacture of exports are exempt from import duties. The taxpayer shall make a statement of number of raw materials, supplies, components that are actually used for manufacture of exports as prescribed in Article 60 of Circular No. 38/2015/TT-BTC.

21

If exports are made from imported materials and domestically-made materials (domestically-made materials are subject to export duty). Accordingly, which provision applies to export duty on domestically-made materials.

(Customs Department of Long An)

- Point g Clause 1 Article 10 of the Decree No. 134/2016/ND-CP shall apply to foreign exports.

- Article 2 of the Law on Export and Import Duty No. 107/2016/QH13 shall apply to domestic exports.

22

Article 60 of Circular No. 38/2015/TT-BTC specifies that statements of domestic exports are required from September 1, 2016. Customs Department of Long An is processing procedures of 2 enterprises whose fiscal year 2015 ends on June 30, 2016. Accordingly, whether both of them are required to make a statement of fiscal year 2015 no later than September 30, 2016 or are solely required to make a statement from fiscal year 2016.

(Customs Department of Long An)

Point 1 of Official Dispatch No. 2646/TCHQ-GSQL dated April 1, 2016 of the General Department of Customs specifies that with regard to goods for imported production of exports, if the refund of duty or duty cancellation has been completed as prescribed, the manufacturer is not required to make a statement.

Official Dispatch No. 8537/TCHQ-GSQL dated September 5, 2016 of the General Department of Customs specifies that from September 1, 2016, materials and supplies for production of exports are not eligible for duty exemption, therefore, the manufacturer shall make a statement as prescribed. If the manufacturer’s fiscal year ends on June 30, 2016 and in fiscal year 2015, the manufacturer has completed the refund of duty or duty cancellation, it is not required to make a statement.

23

Official Dispatch No. 8537/TCHQ-GSQL dated September 5, 2016 of the General Department of Customs specifies that regarding materials imported for production of exports, a relevant statement of the fiscal year shall be submitted to customs authority as prescribed in Article 60 of Circular No. 38/2015/TT-BTC

Request the General Department of Customs to specify the time when the equivalent opening balance is determined and how to treat data arising before September 1, 2016 when preparing an annual statement.

(Customs Department of Dong Nai)

The opening balance of domestic exports in the statement shall be determined as prescribed in Point 2.2 of Official Dispatch No. 1501/TCHQ-GSQL dated February 29, 2016 of the General Department of Customs.

24

Point 2 Section II Official Dispatch No. 12166/BTC-TCHQ dated August 31, 2016 on guidelines for document requirements and procedures for exemption of duty on foreign exports: “Document requirements and procedures for exemption of duty on foreign exports shall be subject to provisions set forth in the Government’s Decree No. 08/2015/ND-CP dated January 21, 2015 (Section 6 Chapter III) and the Circular No. 38/2015/TT-BTC of the Ministry of Finance dated March 25, 2015.”

However, Point a Clause 3 Article 31 of Decree No. 134/2016/ND-CP: The taxpayer shall determine and declare the amount of duty-free goods and duty exempted (except duties on goods imported or exported for processing by the hirer) while following customs procedures and take responsibility for such declaration.

Request the General Department of Customs to provide guidelines for declarations of domestic exports that have been made as prescribed in Official Dispatch No. 12166/BTC-TCHQ and the amount of duty exempted not being declared.

(Customs Department of Hai Phong)

Article 31 of the Decree No. 134/2016/ND-CP shall apply.

25

Clause 1, Clause 2 Article 36, Point d Clause 5 Article 36 of Decree No. 134/2016/ND-CP solely specify claim for refund in case of imported materials and supplies initially intended for business operation but eventually used for manufacture of exports under an outward processing agreement; no provision indicates claim for refund in case of imported materials and supplies by type of business and being incorporated into the exports.

Request the General Department of Customs to provide guidelines for claim for refund in case of imported materials and supplies by type of business and being incorporated into the exports.

(Customs Department of Ha Nam Ninh)

Article 36 of the Decree No. 134/2016/ND-CP specifically sets forth claim for refund in case of goods for business operation. Accordingly, the requirement for a written outward processing agreement entered into with the foreign company solely applies to claim for refund in case of imported materials and supplies initially intended for business operation but eventually used for manufacture of exports under an outward processing agreement.

VII

Duty exemption on temporary imports or temporary exports for a limited time

26

Pursuant to Point d Clause 9 Article 16 of the Law on Export and Import Duty No. 107/2016/QH13, there is no import duty imposed on goods imported on a temporary basis if the importer posts a bond or provides a security deposit equal to the amount of import duty. Up to now, the Law on Export and Import Duty No. 107/2016/QH13 and Decree No. 134/2016/ND-CP dated have not set forth procedures for temporary duty payment upon temporary importation and duty refund upon re-exportation in the event that the importer applying for temporary duty payment fails to post a bond or provides a security deposit .

(Customs Department of Long An)

If the importer applies for temporary duty payment, procedure for providing a security deposit against the import duty payable prescribed in Article 4 of the Decree No. 134/2016/ND-CP and the procedure for deposit refund equivalent to duty refund prescribed in the Law on Tax administration and its guiding documents shall apply.

27

In order to prevent an importer from misusing the temporary importation policy leading the loss of duty by definitely keeping temporarily imported goods, classified as sensitive, high duty and large turnover goods, for consumption in Vietnam without re-export, the importer must provide a commercial bank guarantee or a deposit payment slip equivalent to customs value against 13 categories of goods Official Dispatch No. 9680/TCHQ-TXNK dated October 7, 2016 of the General Department of Customs at the temporary importation time.

 (Customs Department of Ho Chi Minh City)

Article 16 of the Law on Export and Import Duty No. 107/2016/QH13 and Article 4 of the Decree No. 134/2016/ND-CP specifies that there is no import duty imposed on goods imported on a temporary basis if the importer posts a bond or provides a security deposit equal to the amount of import duty, not equivalent to customs value. If the importer fails to re-export the goods upon the expiry of temporary import time limit, the customs authority shall transfer the security deposit from the customs authority’s deposit account to the state budget or require the relevant credit institution to pay duty or late payment interest on behalf of the taxpayer.

28

As for temporary imports intended for repair (exporting origin) and temporary exports intended for repair (importing origin) free of duty as prescribed, the declaration of those goods is done manually using procedure code A31-B13 without support of the system resulting in less scientific guarantee.

Guidelines for procedure code A31 of Official Dispatch No. 2765/TCHQ-GSQL specifies that “in case of imports intended for reprocessing or re-export to a third party, the customs authority shall monitor or apply the temporary policy (declaration under procedure code G12-G22 may be applicable).

Proposal:

Provide guidelines for declaration of imports intended for repair (exporting origin) using type G12-G22, G61-G51 under support of the system in terms of monitoring of time limit and liquidation.

(Customs Department of Hai Phong)

Pursuant to Official Dispatch No. 2765/TCHQ-GSQL dated April 1, 2015 of the General Department of Customs:

 Procedure code A31 will apply to exports returned for repair, reprocessing, domestic consumption, destruction or re-export to a third party in case of domestic exports, processed exports, exports of export processing companies. In case of imports intended for reprocessing or re-export to a third party, the customs authority shall monitor or apply the temporary policy. Accordingly, exports returned for repair or reprocessing may apply the temporary policy and procedure code G12 and G22, G61 and G51 may be applicable.

VIII

Exemption of duty on imported products incorporated in immovable property of investment incentives entities

29

- Article 104 of Circular No. 38/2015/TT-BTC specifies that “The Customs Department of the province where the project is executed (if identifiable) or the Customs Department of the province in which the headquarter is located (if the Customs Department of the province where the project is executed is not identifiable) or the Customs Department of the nearest province (if there is no customs authority in the province).The Director of Customs Department shall appoint a capable unit to grant registration the list of duty-free imports or exports.

- Clause 4 Article 30 of Decree No. 134/2016/ND-CP specifies that:

“a) The project owner shall send the application for registration of the duty-free list in accordance with Clause 2 of this Article before the first declaration of duty-free imports is registered;

b) The application shall be submitted to the Customs Department of the province where the project or the applicant’s headquarters is located, the supervisory Customs Department of the project if the project is located in more than one province or the Customs Department of the province where the compound or technological line is located if the goods are imported as a compound or technological line.”

Request the General Department of Customs to provide guidelines that “the Director of Customs Department shall appoint a capable unit to grant registration the list of duty-free imports or exports”

(Customs Department of Dong Thap)

Clause 4 Article 30 of the Decree No. 134/2016/ND-CP specifies that “the application shall be submitted to the Customs Department of the province where the project or the applicant’s headquarters is located, the supervisory Customs Department of the project if the project is located in more than one province or the Customs Department of the province where the compound or technological line is located if the goods are imported as a compound or technological line.”

The authorization of units to grant registration of the list of duty-free imports or exports is subject to the local Customs Department that notifies such a list.

30

Clause 2 Article 16 of Decree No. 87/2010/ND-CP dated August 13, 2010 specifies that:“In case an enterprise makes re-registration or registers for change of its investment certificate concurrently with for expansion of the scale of a project or investment in a new project, or extension of the project performance time, import duty or export duty incentives applicable to the expanded project scale, investment in a new project or the extended time of project implementation will comply with the provisions of law on import duty and export duty effective at the time of re-registration or registration for change of the investment certificate”.

However, the Decree No. 134/2016/ND-CP has not set forth the following circumstance:

Accordingly, when an investment project has enjoyed duty incentives previously and, currently, no longer enjoys the duty incentives but may have its scope expanded and have time performance extended as prescribed, whether such a part with expanded scope or extended time is eligible for duty exemption.

(Customs Department of Da Nang)

Pursuant to Article 13 of the Law on Investment No. 67/2014/QH13, Article 3 of Decree No. 118/2015/ND-CP dated November 12, 2015; the Law on promulgation of legislative documents; Clause 1 Article 21 of the Law on Export and Import Duty No. 107/2016/QH13, when an investment project has enjoyed duty incentives previously as prescribed in Decree No. 87/2010/ND-CP and, as of September 1, 2016, no longer enjoys the duty incentives but have its scope expanded and have time performance extended after the effective date of the Law on Export and Import Duty No. 107/2016/QH13, such a part with expanded scope or extended time is not eligible for import duty exemption.

31

Request The General Department of Customs to provide guidelines for specific responsibilities and steps to receive and process notifications of List of duty-free goods, modify and withdraw List of duty-free goods to maintain the accurate process.

(Customs Department of Can Tho)

The General Department of Customs acknowledges and will make amended procedures issued together with Decision No. 1966/QD-TCHQ dated July 10, 2015 of Director General of the General Department of Customs.

32

The Decree No. 134/2016/ND-CP has not provided specific guidelines for project owner’s notifications of duty-free good use in the fiscal year (forms to be used). Accordingly, whether the relevant form of 38/2015/TT-BTC still be used. If the form of Circular No. 38/2015/TT-BTC still be used, the General Department of Customs is requested to provide guidelines for inserting value and type of currency in the column Included in immovable property (the value indicated in accounting books or declaration).

(Customs Department of Can Tho)

Point dd Clause 7 Article 30 of the Decree No. 134/2016/ND-CP specifies that the project owner, no later than the 90th day from the end of the fiscal year, sends a notification of the duty-free good use in the fiscal year to the customs authority receiving the List of duty-free goods.

Pursuant to Article 106 of Circular No. 38/2015/TT-BTC, the form No. 17/BCKT-NKMT/TXNK Appendix VI issued together with this Circular shall be used, accordingly, the enterprise will only mark in the columns 11 and 12 of form No. 17/BCKT-NKMT/TXNK.

33

Clause 1 Article 17 of the Law on Export and Import Duty, the Law on Export and Import Duty No. 107/2016/QH13 specifies the change of procedures for registration of List of duty-free goods to notification of List of duty-free goods, relevant procedures prescribed in Circular No. 38/2015/TT-BTC and Procedure No. 1966/QD-TCHQ have not been modified equivalently. Request the General Department of Customs to provide single guidelines as soon as practicable.

(Customs Department of Quang Ninh)

The General Department of Customs acknowledges to amend Circular No. 38/2015/TT-BTC and Procedure No. 1966/QD-TCHQ dated July 10, 2015 of the Director of the General Department of Customs.

34

Point d, dd Clause 3 Article 30 of Decree No. 134/2016/ND-CP specifies that notification documentation shall contain an economic-technical thesis or technical documents or project description; and a Certificate of high-tech enterprise or science and technology enterprise or science and technology organization, etc. but no specific provision indicates that which duty-free circumstance in which above documentation is required. Request the General Department of Customs to provide guidelines that an economic-technical thesis or technical documents or project description only be required where necessary and the project has such documentation.

(Customs Department of Quang Ninh)

- Certificate of high-tech enterprise or science and technology enterprise or science and technology organization required in the notification documentation prescribed in Point d Clause 3 Article 30 of the Decree No. 134/2016/ND-CP applies to exemption of duty on imported materials and parts that cannot be produced domestically for above enterprises as prescribed in Clause 13 Article 16 of the Law on Export and Import Duty No. 107/2016/QH13.

- Economic-technical thesis or technical documents or project description in the notification documentation shall comply with Clause 3 Article 30 of the Decree No. 134/2016/ND-CP.

35

Circular No. 83/2016/TT-BTC dated June 17, 2016 of the Ministry of Finance on guidelines for the Investment Law and the Government’s Decree No. 118/2015/ND-CP dated November 12, 2015 on guidelines for certain articles of the Investment Law in terms of duty exemption as follows:

“3. Projects qualifying for import tax incentives that invest in fields, such as hotel, office or apartment buildings for lease, residential houses, commercial centers, engineering services, supermarkets, golf courses, tourist sites, sports facilities, entertainment places, healthcare service facilities, training and cultural centers, finance, banking, insurance, auditing and consultancy services, shall be granted duty exemptions for initial importation of goods which are equipment in the list stipulated in Appendix II of the Decree No. 87/2010/ND-CP for the purpose of creating fixed assets for projects. Those projects that have imported goods qualifying for an initial duty exemption as stated in this Clause shall not be eligible for import duty exemptions referred to in other clauses of this Article.”

Circular No. 83/2016/TT-BTC dated June 17, 2016 of the Ministry of Finance referred to the Law on Export and Import Duty No. 45/2005/QH11 dated June 14, 2005 and Decree No. 87/2010/ND-CP dated August 13, 2010 as legal bases. In fact, the Law on Export and Import Duty No. 107/2016/QH13 dated June 4, 2016 and Decree No. 134/2016/ND-CP dated September 1, 2016 no longer specifies exemption of duties on above subject matters.

However, Circular No. 83/2016/TT-BTC dated June 17, 2016 on guidelines for the Law on Investment No. 67/2014/QH13 and Decree No. 118/2015/ND-CP dated December 11, 2015 on guidelines for the Law on Investment is still in force.

Request the General Department of Customs to amend Circular No. 83/2016/TT-BTC dated June 17, 2016 for maintaining consistency.

(Customs Department of Dong Nai)

- Pursuant to Article 156 of the Law on promulgation of legislative documents No. 80/2015/QH13 on application of legislative documents;

- Pursuant to the Law on Export and Import Duty, the Law on Export and Import Duty No. 107/2016/QH13, the Decree No. 134/2016/ND-CP that set forth duty-free circumstances, not including exemption of duties on initially-imported goods.

Accordingly, the Decree No. 134/2016/ND-CP shall prevail.

IX

Exemption of import duties on goods manufactured, processed, recycled or assembled in a free trade zone

36

Clause 2 Article 22 of Decree No. 134/2016/ND-CP specifies that:

“Where goods manufactured, processed, recycled or assembled in a free trade zone using imported raw materials or components, they shall be dutiable when imported into the domestic market according to the duty rates and their dutiable values”. Whether the above provision can be interpreted as the dutiable value of imported goods includes value of materials provided domestically for processing or remaining value of the goods after deduction from value of materials domestically derived as prescribed in Point d Clause 1 Article 11 of the Decree No. 134/2016/ND-CP.

(Customs Department of Dong Nai)

If the goods are manufactured, processed, recycled or assembled in a free trade zone using overseas-imported materials and parts when imported into the domestic market prescribed in Clause 2 Article 22 of the Decree No. 134/2016/ND-CP.

In case of re-import of outward processing goods into Vietnam, Point d Clause 1 Article 11 of the Decree No. 134/2016/ND-CP shall apply.

X

Exemption of import duties on goods not for commercial purpose

37

Distinguish types of declarations of sample good importation (For example: Procedure code E31 applies to sample goods intended for production of exports, procedure code E21 applies to sample goods intended for processing, procedure code E11 applies to sample goods intended for production of exporting and processing enterprises, procedure code H11 applies to sample goods intended for other purposes, such as display, exhibition, trial production of domestic enterprises or procedure code A12 applies to sample goods imported not for sale but trial production).

(Customs Department of Dong Nai)

Pursuant to Official Dispatch No. 2765/TCHQ-GSQL dated April 1, 2015, procedure code H11 or H21 applies to goods that are samples not for sale or gifts, presents received from an overseas entity, etc.;

Pursuant to Point 1.69, 2.58 Section 2 Appendix II of Circular No. 38/2015/TT-BTC, the item internal management number #&7 applies to sample goods not for sale.

XI

Exemption of duties on goods imported for national defense and security purpose

38

When the customs procedures are processed, whether the importer shall declare the import duty exemption code in the VNACCS. If the exemption code has been declared, how the customs authority can monitor to expedite the import to follow exemption procedures after the goods have been cleared.

(Customs Department of Hai Phong)

Currently, no particular exemption code is given to goods imported for national defenses and security purpose in the VNACCS.

XII

Exemption of duties on exports and imports in accordance with treaties

Pursuant to Clause 21 Article 103 and Clause 1 Article 104 of Circular No. 38/2015/TT-BTC, the registration of a list of duty-free goods is required in case of goods imported in accordance with a treaty.

Pursuant to Clause 4 Article 5 of the Decree No. 134/2016/ND-CP on duty exemption in accordance with treaties entered into between Vietnam’s Government and foreign non-governmental organizations.

Request the General Department of Customs to provide specific guidelines for duty-free goods in accordance with treaties entered into between Vietnam’s Government and foreign non-governmental organizations.

 (Customs Department of Ho Chi Minh City)

Clause 1 Article 29 of Decree No. 134/2016/ND-CP specifies that: “Exports and imports exempt from export and import duties under international treaty to which Vietnam is a signatory”.

The basis for determination of eligibility for exemption of export or import duties is the quantity, categories and values of the goods specified in the international treaty.

Where an international treaty does not specify the duty-free categories or quantities, the Ministry of Finance shall reach an agreement with the Ministry of Foreign Affairs on the duty-free categories or quantities and submit a report to the Prime Minister for approval.”

Exemption procedures and documentation shall comply with Clause 4, Clause 5 Article 29 of the Decree No. 134/2016/ND-CP.

XIII

Duty reduction

Clause 5 Article 107 of Circular No. 38/2015/TT-BTC specifies that in case the materials, machinery and equipment imported for inward processing or manufacturing of goods for export under the contract are totally damaged and unusable because of a natural disaster, conflagration, accident, import tax shall be exempt and VAT shall be cancelled when goods are imported, which refers to duty exemption consideration.

However, the Law on Export and Import Duty No. 107/2016/QH13 has no provision for duty exemption consideration and no other provision that materials, machinery and equipment imported for inward processing or manufacturing of goods for export under the contract are totally damaged and unusable because of a natural disaster, conflagration, accident, import tax shall be exempt and VAT shall be cancelled when goods are imported.

Request the General Department of Customs to provide specific guidelines for materials, machinery and equipment imported for inward processing or manufacturing of goods for export under the contract are totally damaged and unusable because of a natural disaster.

(Customs Department of Hai Phong)

Pursuant to Article 18 of the Law on Export and Import Duty, Clause 1 Article 32 of the Decree No. 134/2016/ND-CP, if materials, machinery and equipment imported for inward processing or manufacturing of goods for export which are subject to customs authority’s oversight as prescribed in the Law on Customs and its guiding documents are damaged because of a natural disaster or conflagration, they are eligible for duty reduction as prescribed in Clause 1 Article 18 of the Law on Export and Import Duty No. 107/2016/QH13 and Article 12 of the Decree No. 134/2016/ND-CP.

XIV

Notification of list of duty-free goods

41

1. Customs Department of Can Tho has not received the Decree No. 134/2016/ND-CP until October 21, 2016. Accordingly, from September 1, 2016 (effective date of Decree No. 134/2016/ND-CP) to October 20, 2016, Customs Department of Can Tho processes applications for registration of list of duty-free goods as prescribed in Circular No. 38/2015/TT-BTC (using forms in Circular No. 38/2015/TT-BTC). Whether the relevant applicants are required to re-submit applications using new forms.

2. With regard to lists of duty-free goods registered by Customs Department of Can Tho before September 1, 2016 or applications for registration processed in accordance with Circular No. 38/2015/TT-BTC (not requiring submission of procurement of goods in conformity with the contract award). Here are some inquiries:

- After September 1, 2016, if a contractor imports goods and the procurement of good contract in conformity with the contract award does not specify that the price whether or not includes import duty as prescribed in Point b, Clause 2, Article 31 of Decree No. 134/2016/ND-CP. Accordingly, whether the project keeps eligible for exemption of import duty.

- If an enterprise fails to amend the procurement of good contract as required by the customs authority in accordance with Point b, Clause 2, Article 31 of Decree No. 134/2016/ND-CP, what further step can be taken?

- If a procurement of good contract made in accordance with the contract award specifies that the price is inclusive of import duty, whether the project is exempt from duty according to the list.

(Customs Department of Can Tho)

1. Decree No. 134/2016/ND-CP comes into force as of September 1, 2016, therefore, Customs Department of Can Tho is required to comply with this Decree.

2. Point b Clause 22 Article 103 Circular No. 38/2015/TT-BTC specifies that the entrusted importer or contractor for goods import (the price for goods supply under the entrustment contract or the successful bid is exclusive of import duty) that supplies imported goods for entities eligible for exemption of import duty prescribed in Clauses 7 through 18 of this Article is also eligible for exemption of import duty on the goods imported.

- Pursuant to Point b, Clause 2, Article 31 of the Decree No. 134/2016/ND-CP, if goods are imported by the contractor, the application for duty exemption includes: 01 certified true copy of the procurement of good contract in conformity with the contract award or direct contracting decision which specifies that the prices are exclusive of import duties.

Customs Department of Can Tho is required to comply with Circular No. 38/2015/TT-BTC, Decree No. the Decree No. 134/2016/ND-CP.

- Pursuant to Point b, Clause 2, Article 31 of the Decree No. 134/2016/ND-CP, if a contractor imports goods and the procurement of good contract in conformity with the contract award does not specify that the price whether or not includes import duty, it does not satisfy the conditions for duty exemption procedures and documentation.

42

In the course of amendment to the investment certificate, if an enterprise obtains additional investment stages from the competent authority, whether the customs authority receives notification of a list of duty-free goods for such additional investment stages. (Customs Department of Can Tho)

The inquiry of Customs Department of Can Tho is unclear, however, Clause 11 Article 16 of the Law on Export and Import Duty No. 107/2016/QH13 specifies that: “exemption of import duty applicable to imported products prescribed in this Clause also applies to new project and expanded project”.

43

1. Point b Clause 4 Article 30 of the Decree No. 134/2016/ND-CP specifies that “the application shall be submitted to the Customs Department of the province where the project or the applicant’s headquarters is located, the supervisory Customs Department of the project if the project is located in more than one province or the Customs Department of the province where the compound or technological line is located if the goods are imported as a compound or technological line.”

As for this provision, Customs Department of Quang Nam can interpret as follows:

Option 1: When an enterprise applies for registration of list of duty-free goods, it shall submit an application to the following authorities in the order below:

(1) Customs Department of province where the project is executed.

(2) Customs Department of province where the applicant’s headquarters is located or the supervisory Customs Department of the project if the project is located in more than one province.

(3) Customs Department of province where the compound or technological line is located if the duty-free goods to be imported as a compound or technological line.

Option 2: When an enterprise applies for registration of list of duty-free goods, it shall submit the application at the following authorities at its own discretion: The Customs Department of the province where the project or the applicant’s headquarters is located, the supervisory Customs Department of the project if the project is located in more than one province or the Customs Department of the province where the compound or technological line is located if the goods are imported as a compound or technological line.

Request the General Department of Customs to provide single guidelines.

 (Customs Department of Quang Nam and Customs Department of Can Tho)

Point b Clause 4 Article 30 of Decree No. 134/2016/ND-CP specifies that:The application shall be submitted to the Customs Department of the province where the project or the applicant’s headquarters is located, the supervisory Customs Department of the project if the project is located in more than one province or the Customs Department of the province where the compound or technological line is located.

Accordingly, the list of duty-free goods shall be received by: The Customs Department of the province where the project or the applicant’s headquarters is located, the supervisory Customs Department of the project if the project is located in more than one province or the Customs Department of the province where the compound or technological line is located if the goods are imported as a compound or technological line (Option 2).

44

Pursuant to Point a, Clause 6, Article 30 of the Decree No. 134/2016/ND-CP, whether the acknowledgement of application can be construed as the acceptance of the registration of list. After an applicant provides additional necessary documents or representation or clarification to the notification documentation, when is the subsequent documentary inspection?

(Customs Department of Can Tho)

Point a Clause 6 Article 30 of Decree No. 134/2016/ND-CP specifies that:Within 03 working days from the day on which the application is received, the customs authority shall notify the project owner of the receipt of the duty-free list, request the project owner to complete the application if it is incomplete as prescribed in Clause 2 of this Article or to clarify information in the application, or reject the application;

Accordingly, if the notification of list of duty-free goods is done in accordance with Article 30 of the Decree No. 134/2016/ND-CP, within 3 working days from the date on which the application is received, the customs authority shall notify the project owner of the receipt of the duty-free list, request the project owner to complete the application within 3 working days if it is incomplete or to clarify information in the application; if the application is rejected, the customs authority shall notify the applicant within 3 working days from the date on which the application is received.

45

Point k Clause 3 Article 30 of the Decree No. 134/2016/ND-CP dated September 1, 2016 specifies that: An application for notification of the duty-free list shall include “1 certified true copy of the sale contract or goods supply contract according to the bidding result, export or import entrustment contract or finance lease contract if the importer and the person that notifies the duty-free list are not the same”.

At the time the project owner notifies the list of duty-free goods, the customs authority does not have substantial ground for determining whether the project owner has concluded a procurement of goods contract, a sales contract, or has determined the supplier of goods or has concluded a finance lease contract. Therefore, Customs Department of Can Tho faces difficulty in requesting enterprises to provide above documents at the time of notification.

(Customs Department of Can Tho)

Pursuant to Point k Clause 3 Article 30 of the Decree No. 134/2016/ND-CP, an application for notification of the duty-free list shall include “a sale contract or goods supply contract according to the bidding result, export or import entrustment contract or finance lease contract”.

if the importer and the person that notifies the duty-free list are not the same, an application for notification of the duty-free list shall not include a sale contract or goods supply contract according to the bidding result, export or import entrustment contract or finance lease contract.

XV

Duty exemption documents and procedures

46

Point c Clause 3 Article 31 of Decree No. 134/2016/ND-CP dated September 1, 2016 specifies that:

In case of duty-free import of an entire assembly or production line which has to be divided into more than one shipment, within 15 days from the import of the last shipment of each assembly or line, the importer shall submit a consolidated import declaration to the customs authority in accordance with tax administration laws. When will the duty exemption procedure be processed? Importation upon every declaration or statement?

(Customs Department of Long An)

Point a and Point b Clause 3 Article 31 of Decree No. 134/2016/ND-CP specifies that:

a) The taxpayer shall determine and declare the amount of duty-free goods and tax exempted (except duties on goods imported or exported for processing by the hirer) while following customs procedures and take responsibility for such declaration.

b) The customs authority where customs procedures are followed shall examine the declaration and applicable regulations to decide the grant of duty exemption. If imported goods are not eligible for duty exemption as declared, the taxpayer shall have to pay duties and fines (if any).

Accordingly, the duty exemption procedure shall be processed at the time of registration of declaration.

XVI

Treatment of overpaid duties

47

Clause 2 Article 31 of Decree No. 134/2016/ND-CP specifies that:

“2. Where concessional rate of duty on an article specified in a concessional tariff schedule is lower than the special concessional rate specified in a special concessional tariff schedule, the former shall apply.

Where duty is paid according to a special concessional rate which is higher than a concessional rate on the same article, overpaid duty shall be dealt with in accordance with tax administration laws.”

The Decree No. 134/2016/ND-CP specifies mechanism for dealing with overpaid duty. However, pursuant to circumstances eligible for duty refund prescribed in Article 19 of the Law on Export and Import Duty No. 107/2016/QH13 and the Decree No. 134/2016/ND-CP, no specific regulation on refund of overpaid duty exists. Request the General Department of Customs to provide guidelines for dealing with overpaid duties

(Customs Department of Dong Nai, Customs Department of Hanoi)

If a payment is determined overpaid, the overpaid amount shall be dealt in accordance with the Law on Tax administration and its guiding documents.

48

The Law on Export and Import Duty and the Decree No. 134/2016/ND-CP do not specify duty refund in case of overpaid duty as prescribed in Article 49 of Circular No. 38/2015/TT-BTC or certain circumstances of duty refund as prescribed in Article 114 of Circular No. 38/2015/TT-BTC. Whether the regulation of Circular No. 38/2015/TT-BTC prevails.

Request the General Department of Customs to provide guidelines for circumstances of duty refund as prescribed in Article 18 of the Law on Export and Import Duty No. 107/2016/QH13, refund of overpaid duty shall be done in accordance with Article 49 of Circular No. 38/2015/TT-BTC.

(Customs Department of Quang Ninh)

- The overpaid duties shall be dealt in accordance with the Law on Tax administration and its guiding documents.

- The duty refund prescribed in Article 19 of the Law on Export and Import Duty No. 107/2016/QH13 shall be done in accordance with Articles 33, 34, 35, 36 of the Decree No. 134/2016/ND-CP, Article 129, Article 132 of Circular No. 38/2015/TT-BTC.

XVII

Duty refund

49

- Article 33 of the Decree No. 134/2016/ND-CP on refund of duties on re-imported exports specifies that:

1. Paid duties on the following exports that have to re-imported shall be refunded and import duties thereon shall be exempt: ...

2. An application for duty refund consists of:

a) Form 09 in Appendix VII enclosed herewith: 1 original;

- Article 34 of the Decree No. 134/2016/ND-CP on refund of duties on re-exported imports specifies that:

1. Paid import duties on the following imports that have to be re-exported shall be refunded and export duties thereon shall be exempt: …..

Request the General Department of Customs to provide guidelines:

1. In such situations, whether the enterprise sends a request for refund of duties on exports.

2. Whether the procedure for import/export duty exemption shall be processed while the customs procedure or submission of claim for export duty refund is in progress.

(Customs Department of Hai Phong)

1. Article 33 of the Decree No. 134/2016/ND-CP specifies refund of duties on re-exported imports. The General Department of Customs acknowledges the request of Customs Department of Hai Phong on amendments to Point a Clause 2 Article 33 of the Decree No. 134/2016/ND-CP.

2. The General Department of Customs will make amendments to Circular No. 38/2015/TT-BTC.

50

Point a Clause 1 Article 34 of the Decree No. 134/2016/ND-CP specifies that “a) a) Imports that have to be re-exported to a foreign country or exported into a free trade zone for consumption therein. The re-export of goods must be done by the initial importer or a person authorized by the initial importer”. This provision impedes the circulation of imports and exports, because imports have insufficient customers to export all products that are imported, and vice versa, not any exporter may have sufficient imports to export.

(Customs Department of Binh Dinh)

Point a Clause 1 Article 34 of the Decree No. 134/2016/ND-CP shall apply.

51

Point b Clause 8 Article 114 of Circular No. 38/2015/TT-BTC specifies that: “With regard to imported alcohol, beer, tobacco, timber that are then re-exported, the customs authority shall inspect the entire shipment upon exportation to check the equivalence of exported goods and imported goods”.

However, Articles 33, 34, 35 of Decree No. 134/2016/ND-CP specifies that “The customs authority shall verify information provided by the taxpayer and specify the result to serve the refund of duties".

Customs Department of Hai Phong complies with the regulation on inspection of taxpayer’s declaration and clarification of inspection result as prescribed in Decree 08/2015/ND-CP and Circular No. 38/2015/TT-BTC as follows: Inspection or inspection of details of customs documentation or physical verification of goods may be exempted depending on the classification of declarations in the system.

Request the General Department of Customs to provide guidelines:

1. Whether physical verification of goods and clarification of verification are compulsory for the duty refund purpose as prescribed in Articles 33, 34, 35 of Decree No. 134/2016/ND-CP.

2. Whether imported alcohol, beer, tobacco, timber that are re-exported thereafter continue complying with Point b Clause 8 Article 114 of Circular No. 38/2015/TT-BTC.

(Customs Department of Hai Phong)

1. Physical verification of goods and clarification of verification for the duty refund purpose as prescribed in Articles 33, 34, 35 of Decree No. 134/2016/ND-CP, Decree No. 08/2015/ND-CP and Circular No. 38/2015/TT-BTC.

2. Imported alcohol, beer, tobacco, timber that are re-exported thereafter continue complying with Point b Clause 8 Article 114 of Circular No. 38/2015/TT-BTC.

52

Point 2 Clause 3 Article 1 of Law No. 106/2016/QH13 dated April 6, 2016“A business establishment whose exported goods/services incur an input VAT of at least VND 300 million which has not been deducted in the month or quarter shall receive VAT refund for that month or quarter, unless such goods are imported for exportation or exports are not exported within a customs controlled area as prescribed by the Law on Customs.”Accordingly, imports for production shall not be eligible for VAT refund. Whether goods imported for business which are thereafter exported to a third country eligible for duty refund prescribed in Clause 8 Article 114 of Circular No. 38/2015/TT-BTC in the declaration before July 1, 2016 may have VAT paid in the importation stage refunded.

(Customs Department of Quang Ninh)

Pursuant to Clause 1 Article 156 of the Law on promulgation of legislative documents No. 80/2015/QH13: “Legislative documents are applicable from their effective date. Legislative documents shall be applied to the acts committed at the time such documents are effective, except for those that have retrospective effect”.

If the enterprise has paid VAT on imports which are thereafter re-exported to the goods owner prior to July 1, 2016, the customs authority shall refund the paid amount of VAT which is determined as mistaken or excess payment as prescribed in Point a Clause 1 Article 49 of Circular No. 38/2015/TT-BTC.

If the enterprise has paid VAT on imports which are thereafter re-exported to the goods owner after July 1, 2016, Clause 3 Article 1 of Circular No. 130/2016/TT-BTC dated August 12, 2016 of the Ministry of Finance.

53

Article 34 of the Decree No. 134/2016/ND-CP specifies refund of duties on re-exported imports

1. Accordingly, in case of shipment imported for business and then successfully finding a client for export, other than re-export, whether import duty may be refunded.

2. If the enterprise B purchases imports of enterprise A and export them to a foreign country in substantially the same form without being processed in Vietnam, whether import duty may be refunded and export duty may be cancelled upon the exportation.

(Customs Department of Nghe An)

Pursuant to Point a Clause 1 Article 34 of Decree No. 134/2016/ND-CP:

1. in case of shipment imported for business and then successfully finding a client for export, the import duty may be refunded as prescribed in Article 34 of the Decree No. 134/2016/ND-CP if conditions prescribed in Clause 2 Article 19 of the Law on Export and Import Duty No. 107/2016/QH13 are satisfied.

2. Point a Clause 1 Article 34 of the Decree No. 134/2016/ND-CP specifies that imports with paid import duty but have to be re-exported to a foreign country or to a free trade zone for use therein may be eligible for import duty refund.

The re-export shall be conducted by the initial importer or person authorized or entrusted by the importer.

Therefore, if the re-export is not conducted by the initial importer or person authorized or entrusted by the importer, the import duty may not be refunded.

54

Circular No. 38/2015/TT-BTC specifies that imports with paid import duty but have to be returned to the foreign client, re-exported to a third country or to a free trade zone may be eligible for import duty refund.

However, Point a Clause 1 Article 34 of Decree No. 134/2016/ND-CP specifies that:

 “a. Imports that have to be re-exported to a foreign country or exported into a free trade zone for use therein”.

Whether the circumstance that the imports re-exported to a third country may be eligible for import duty refund.

(Customs Department of Dong Nai)

Pursuant to Point c Clause 1 Article 19 of the Law on Export and Import Duty No. 107/2016/QH13, Clause 1 Article 34 of the Decree No. 134/2016/ND-CP, imports with paid import duty but have to be re-exported to a foreign country (including re-exported to a third country) may be eligible for import duty refund.

Clause 3 Article 36 of the Decree No. 134/2016/ND-CP specifies conditions for eligibility for refund of duty on goods imported for business but exported thereafter:

“The manufacturer of exports has a factory where exports are manufactured in Vietnam; owns or has the right to use machinery and equipment at the factory which is suitable for the raw materials, supplies and components imported for manufacture of exports; etc.”

Accordingly, if an enterprise fails to fulfill conditions for manufactures to import goods under manufacturing of export with declaration registered under procedure code A12 similarly to Official Dispatch No. 1386/GSQL-GQ2 dated October 17, 2016, whether the goods with paid import duty on materials thereof to be exported are eligible for import duty refund.

Request the General Department of Customs to provide guidelines:

- Responsibilities of customs authority in verification visit to manufacturing facilities in case of refund of duty on imports for business but to be exported thereafter (specifying whether verification visit or documentary inspection).

- Previously, the Ministry of Finance promulgated Official Dispatch No. 5495/TBC-TCHQ dated April 26, 2014 on guidelines for verification visit to manufacturing facilities in accordance with Circular No. 128/2013/TT-BTC dated September 10, 2013. Currently, Circular No. 128/2013/TT-BTC expires, so, request the General Department of Customs to provide guidelines for criteria for determining whether a manufacturing facility is legitimate.

(Customs Department of Dong Nai)

- Verification visit to manufacturing facilities in case of refund of duty on goods imported for business but exported thereafter shall be conducted in accordance with Article 36 of the Decree No. 134/2016/ND-CP, Article 39 of Decree No. 08/2015/ND-CP and Article 57 of Circular No. 38/2015/TT-BTC.

- Regarding criteria for determining whether a manufacturing facility is legitimate The General Department of Customs shall promulgate Official Dispatch No. 7513/TCHQ-TXNK dated November 15, 2017 acknowledging inquiry of Customs Department of Dong Nai and give it to the draft Circular on amendments to Circular No. 38/2015/TT-BTC.

56

Clause 12 Article 114 of Circular No. 38/2015/TT-BTC specifies circumstances of duty refund:

“ If export or import duty on certain goods has been paid and then duty exemption or duty refund is granted by a competent authority, such paid duty shall be refunded”.

However, the Law on Export and Import Duty No. 107/2016/QH13 and Decree No. 134/2016/ND-CP do not specify the mentioned circumstance as eligible for duty refund. Request the General Department of Customs to provide single guidelines for such a circumstance.

(Customs Department of Dong Nai)

If an enterprise has paid duty and then receives a decision on duty exemption or duty refund, the competent authority shall treat it as overpaid duty as prescribed in the Law on Tax administration and its guiding documents.

57

Pursuant to Appendix VII, form 10 enclosed with Decree No. 134/2016/ND-CP specifying a “report of import duties on materials to be refunded” with 19 columns. Such a table with many columns may not be printed within a paper A4 size with popular and current paper and printers.

Request the General Department of Customs to allow that the report may be displayed in two tables as prescribed in Circular No. 128/2013/TT-BTC.

(Customs Department of Dong Nai)

Form 10 of Appendix VII enclosed with the Decree No. 134/2016/ND-CP specifies items to be filled when preparing a report of import duties on materials to be refunded. Request Customs Department of Dong Nai to guide that enterprises may prepare the report in an appropriate format provided sufficient information required is provided.

XVIII

Operation and processing in electronic data processing system

58

Section II of Official Dispatch No. 12166/BTC-TCHQ dated August 31, 2016 on guidelines for exemption of duties on imports for manufacturing of export, applications and procedures for duty exemption shall be similar to those of imports for processing, accordingly, in the VNACCS-VCIS, whether the tariff schedule B30, tariff schedule B01 and remission code XN120 with the remission amount (equivalent to duty amount of items) shall apply.

(Customs Department of Hanoi)

Applications and procedures for exemption of duties on imports for manufacturing of export shall be done in accordance with Clause 7 Article 16 of the Law on Export and Import Duty No. 107/2016/QH13, Article 12, Article 31 of the Decree No. 134/2016/ND-CP.

The taxpayer shall determine and declare the amount of duty-free goods and tax exempted while following customs procedures and take responsibility for such declaration.

- Duty exemption code: XN210 (in case of imports for manufacturing of export

- Tariff schedule code: equivalent to imports.

59

Currently, there is no guidance on accounting method and processing in the electronic data processing system regarding:

1. Refund of security deposit for import duty in case of temporarily-imported goods (applying to two cases: refund of duties from provisional account and duties previously paid to state budget).

2. Transfer the security deposit from the customs authority’s deposit account to state budget in case of expiry of temporary import duration and the goods not being re-exported. Request the General Department of Customs to provide guidelines for operation and processing in the centralized system.

(Customs Department of Quang Ninh)

- Do accounting similarly to escrow deposit (accounting for accounts payable)

When a revenue is earned: Dr 112/Cr 338 (security deposit in details)

When the revenue from provisional account is refunded: Dr 338/Cr 112; when the revenue from state budget is refunded: Dr 338/Cr 333 (recording a journal entry of temporary revenue to state budget)

- Insert 2.B.1: remittance bill

- Refund 2.B.1. Reason for transfer: Refund of security deposit

60

Request the General Department of Customs to provide guidelines for codes of duty exemption, deduction or cancellation associated with goods manufactured for export.

(Customs Department of Ha Nam Ninh)

The codes of duty exemption, deduction or cancellation have been posted in the General Department of Customs’ website.

61

Request the General Department of Customs to provide guidelines for procedure code associated with declaration of changing the purpose of using materials imported for manufacture of exports:

+ Whether procedure code E31 or A42 shall apply.

+ Vehicle identification numbers have not been specified.

(Customs Department of Ha Nam Ninh, Quang Nam)

Official Dispatch No. 2765/TCHQ-GSQL dated April 1, 2015 of the General Department of Customs specifies that, regarding procedure code A42: “Domestic sale of other goods shall be applicable in case goods are no longer tax-free, the eligibility of goods for tax exemption, conditional tax exemption, or preferential tax rates is changed, or goods are no longer eligible for tax deferral.Use A21 if temporarily imported goods are sold domestically.

Accordingly, procedure code A42 shall apply to declaration of changing the purpose of using materials imported for manufacture of exports in accordance with Official Dispatch No. 2765/TCHQ-GSQL dated April 1, 2015.

XIX

Other requests

62

Article 21 of Circular No. 38/2015/TT-BTC specifies that in case of repurposed goods eligible for duty exemption or tax incentives, no new declaration or further policies are required and the procedures for duty declaration and payment and actions against violations (if any) should be made more simplified. A requirement for new declaration affects to total imports/exports, unnecessary policies and more complicated and lengthy administrative procedures.

In particular: In the event that an enterprise imports new machinery, equipment for a project which is eligible for duty exemption and then disposes of them as used items or scrap, etc., if a new declaration is made as required leading subject to regulations on import of used goods or scrap or quality control, etc., it is obviously inadequate and unreasonable.

Proposal: In case of repurposed goods, no new declaration is required, except for cases considered as exports delivered to domestic processors.

(Customs Department of Quang Ngai)

Customs Department of Quang Ngai is required to comply with Clause 5 Article 25 of Decree No. 08/2015/ND-CP, Article 21 of Circular No. 38/2015/TT-BTC.

63

Article 40 of Decree No. 134/2016/ND-CP specifies that relevant ministries, within their responsibilities, shall issue required lists as required by the Law associated with duty exemption. From September 1, 2016 until now, certain ministries and agencies have not issued the said lists. Request the General Department of Customs to expedite ministries and agencies to issue them as soon as possible.

(Customs Department of Hai Phong, Customs Department of Ho Chi Minh)

As for this issue, Office of the Government has issued Official Dispatch No. 7956/VPCP-KTTH dated July 31, 2017 on initiation of Decree No. 134/2016/ND-CP, the General Department of Customs has issued Official Dispatch No. 5436/TCHQ-TXNK dated August 17, 2017 sent to ministries and Customs Departments of provinces and cities. Accordingly, whilst ministries have not issued required lists and criteria, ministries are required to give a document certifying that a list of imports eligible for duty exemption in accordance with the Decree No. 134/2016/ND-CP and forward it to the customs authority as prescribed; in case of absence of such a certifying document, the customs authority shall collect duty as prescribed.

64

Point 3 of Official Dispatch No. 13959/BTC-TCHQ dated October 4, 2016 of the Ministry of Finance specifies that “C/O submission time in case of imports is subject to price regulation in accordance with the Law on Price Management and its guiding documents”.

Request the General Department of Customs to provide single guidelines. While no related guidance exists, Customs Department shall apply single regulation on all kinds of goods (including petrol and oil) as prescribed in Point 2 of Official Dispatch No. 13959/BTC-TCHQ (submission of C/O within 30 days from the date on which the customs declaration is registered, except for C/O form VK).

 (Customs Department of Ho Chi Minh City)

As to this issue, the Ministry of Finance has issued Official Dispatch No. 3109/BTC-TCHQ dated March 9, 2017 on relevant guidelines.

65

Point d Clause 9 Article 16 of the Law on Export and Import Duty specifies that temporarily-imported goods are eligible or duty exemption. In the VNACCS, as the import duty exemption/reduction/cancellation code “XN019: temporarily-imported goods within time limit” at criteria 1.92 of electronic customs declaration, the centralized accounting system does not produce a document certifying the duty receivable.

In case of temporarily-imported goods, the taxpayer must furnish a letter of bank guarantee or payment slip of security deposit to the customs authority’s deposit account at State Treasury.

1. Which account to which the security deposit is paid?

2. Request the General Department of Customs to provide guidelines for general and separate guarantee monitoring, security deposit for every declaration in the centralized accounting system and treatment of duty, customs guarantees, and security deposit after re-exporting the goods.

(Customs Department of Hanoi)

1. Payment of security deposit to deposit account:

Paid to customs authority’s deposit account (provisional revenue)

2. The monitoring of guarantee and security deposit associated with temporarily-imported goods shall be done manually while awaiting the system upgrade.

66

Clause 3 Article 3 of the Law No. 106/2016/QH13 specifies that all tax arrears before July 1, 2016 shall incur late payment interest at 0.03% per day. However, Clause 3 Article 3 of Circular No. 130/2016/TT-BTC specifies that such tax arrears shall incur the interest according to validity period of the document, respectively: 0.1%, 0.07%, 0.05%, and 0.03%. Alternatively, Article 133 of Circular No. 38/2015/TT-BTC has not been amended or superseded so far.

Request the General Department of Customs to specify that the late payment interest on import/export duties shall comply with the Law No. 106/2016/QH13 (all tax arrears shall incur interest of 0.03% per day).

(Customs Department of Quang Ninh)

As to this issue, the General Department of Customs has promulgated Official Dispatch No. 8237/TCHQ-TXNT dated August 24, 2016 on relevant guidelines. Accordingly, pursuant to the Law No. 106/2016/QH13 (effective from July 1, 2016), the late payment interest incurred is 0.03%, the centralized system has updated and applied it from July 1, 2016. Currently, the centralized system meets the requirements for determination of late payment interest in accordance with the Law No. 106/2016/QH13.

67

1. In the export duty schedule according to the list of taxable products, section 211 specifies that “ In case of supplies, materials, semi-finished products not specified with value of resources and minerals plus energy costs accounting for at least 51% of cost” shall incur export duty of 5%.

- Misstatements may occur due to lack of warning when inspecting code and amount of duty caused by non-specific names of supplies, materials and semi-finished products.

- If a finished product of a stage is considered material of another stage, does it incur export duty?

For example: Ceramic tiles or cement are both ingredients manufactured from clay or clinker and supplies in construction (prescribed in Circular No. 14/2015/BKHDT), does it incur export duty? Proposal:

Request the General Department of Customs to specify the list of supplies, materials and semi-finished products to facilitate the declaration by enterprises and inspection by customs officials.

(Customs Department of Hai Phong, Customs Department of Binh Dinh)

2. Article 4 of Decree No. 122/2016/ND-CP dated September 1, 2016 specifies that:

“Article 4. Export tariff schedule.

1. The schedule of export tariffs on taxable products in the Annex I hereof shall specify the code, description of goods and specific export tariff rate.”

- Section 211 Appendix 1 of Decree No. 122/2016/ND-CP dated September 1, 2016 specifies that:

"In case of supplies, materials, semi-finished products not specified with value of resources and minerals plus energy costs accounting for at least 51% of cost”, export duty of 5% shall apply.

- Pursuant to Point 3 of Official Dispatch No. 9744/TCHQ-TXNK dated October 12, 2016 of the General Department of Customs on guidelines for declaration of good codes and tariff rates, the enterprise shall self-determine the items incur export duty of 5% associated with goods with value of resources and minerals plus energy costs accounting for at least 51% of cost.

However, most enterprises engaging in import/export are purely commercial enterprises, trading through multiple intermediaries, resulting in difficulties in determination of items incurring export duty of 5%. Difficulty: When a commercial enterprise (without manufacturing goods) exports articles in the section 211 Appendix 1 of Decree No. 122/2016/ND-CP, the percentage of resource, minerals plus energy cost in the product cost cannot be identified.

(Customs Department of Ha Tinh)

3. Section 211 Appendix I of Decree No. 122/2016/ND-CP dated September 1, 2016 on export tariff schedule:

"In case of supplies, materials, semi-finished products not specified with value of resources and minerals plus energy costs accounting for at least 51% of prime cost”, export duty of 5% shall apply.

This provision is unclear, customs officials cannot identify any article composed of resources or minerals to request declaration of product cost as the basis for determining export duty.

Request the General Department of Customs to issue a list of articles subject to inspection of value of resources and minerals plus energy cost.

(Customs Department of Dong Nai)

1+2+3. As to the issue, the General Department of Customs issues Official Dispatch No. 9744/TCHQ-TXNK dated October 12, 2016 on guidelines for No. 9744/TCHQ-TXNK dated October 12, 2016 of the General Department of Customs on guidelines for declaration of good codes and tariff rates to implement the export tariff schedule as prescribed in Decree No. 122/2016/ND-CP and Official Dispatch No. 10610/TCHQ-TXNK dated November 9, 2016 on export duty imposed on clinker.

Currently, the Tax Policy Department affiliated to the Ministry of Finance request the Ministry to ask for further guidance.

68

1. From January 1, 2017, pursuant to Decree No. 120/2016/ND-CP dated August 23, 2016, customs fees are compulsory amounts payable to the State budget. Currently, unpaid customs fees are not forced to pay, enterprises must pay customs fees monthly, quarterly, or even annually, the liquidation applies to each declaration causing waste of time. Request from January 1, 2017: an enterprise is compulsory to indicate customs fees in the declaration and pay at the same time with import duty or VAT upon clearance of goods.

2. Currently, the closing accounting books and accounting reports have difficulties in collation of data between customs authority and State Treasury: Request the General Department of Customs to solve the difficulties in the centralized accounting system for the whole 3 levels: sub-departments, departments and general department.

 (Customs Department of Ho Chi Minh City)

1. Pursuant to Circular No. 274/2016/TT-BTC, the customs fees shall be paid to state budget, customs fees are subject to management and use of customs authority and paid to deposit account and separately from the taxes/duties paid to state budget.

2. The accounting, closing of accounting books, and accounting reports shall be done in accordance with Circular No. 174/2016/TT-BTC.

69

Certain documents on duty exemption not in accordance with the Law on Export and Import Duty have not been annulled and their validity remain unclear (Decision No. 72/2013/QD-TTg dated November 26, 2013, Circular No. 90/2011/TT-BTC dated June 20, 2011; Circular No. 201/2012/TT-BTC dated November 16, 2012, Circular No. 101/2010/TT-BTC dated July 14, 2010, Circular No. 116/2012/TT-BTC dated August 20, 2013.

(Customs Department of Quang Ninh)

Pursuant to Clause 2 Article 156 of the Law on Promulgation of Legislative Documents No. 80/2015/QH13 “If certain legislative documents contain different regulations on the same issue, the superior document shall apply”. Therefore, in case of certain legislative documents on duty exemption not in accordance with the Law on Export and Import Duty No. 107/2016/QH13 and the Decree No. 134/2016/ND-CP, the two documents shall prevail.

70

Modern-oriented customs management and application of risk management rules associated with customs operations in general and practices applicable to processed goods, goods manufactured for export, temporarily-imported goods (eligible for duty exemption), and post-customs clearance inspections in particular have not fulfilled the management requirements.

Request the General Department of Customs to make necessary modifications to the procedures to change the method from declaration-based management to enterprise-based management.

 (Customs Department of Ho Chi Minh City)

Currently, the General Department of Customs is evaluating enterprises to classify them according to extent of observance and level of risks, and then propose suitable management and inspection methods. The General Department of Customs shall keep amending relevant regulations after the Circular on amendments to Circular No. 38/2015/TT-BTC is promulgated.