Decree 26/2023/ND-CP Export Tariff, Preferential Import Tariff and list of commodity items

DECREE

On the Export Tariff Schedule, Preferential Import Tariff Schedule, and List of commodities and their absolute, mixed and out-of-quota import duty rates^[1]

Pursuant to the June 19, 2015 Law on Organization of the Government; and the November 22, 2019 Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration;

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

Pursuant to the June 13, 2019 Law on Tax Administration;

Pursuant to the June 23, 2014 Customs Law;

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

At the proposal of the Minister of Finance;

The Government promulgates the Decree on the Export Tariff Schedule, Preferential Import Tariff Schedule, and List of commodities and their absolute, mixed, and out-of-quota import duty rates.

Article 1. Scope of regulation

This Decree promulgates the Export Tariff Schedule, Preferential Import Tariff Schedule, and List of commodities and their absolute, mixed, and out-of-quota import duty rates.

Article 2. Subjects of application

1. Taxpayers specified in the Law on Import Duty and Export Duty.

2. Customs offices and customs officers.

3. Organizations and individuals that have rights and obligations related to imported goods and exported goods.

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

To promulgate together with this Decree:

1. Appendix I - Export Tariff Schedule according to the List of dutiable commodity items.

2. Appendix II - Preferential Import Tariff Schedule according to the List of dutiable commodity items.

3. Appendix III - List of used passenger automobiles of 15 seats or less and their absolute and mixed duty rates.

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

Article 4. Export Tariff Schedule according to the List of dutiable commodity items

1. The Export Tariff Schedule according to the List of dutiable commodity items specified in Appendix I to this Decree is composed of commodity codes, commodity descriptions, and export duty rates prescribed for each dutiable commodity group and item. For exported goods not listed in the Export Tariff Schedule, customs declarants shall declare the commodity codes of the exported goods corresponding to their 8-digit commodity codes in the Preferential Import Tariff Schedule specified in Section I, Appendix II to this Decree and are not required to declare the applicable duty rates on the export declaration forms.

2. Exported commodity items under headings with the ordinal number of 211 in the Export Tariff Schedule must simultaneously satisfy the following two conditions:

a/ Condition 1: Supplies, materials and semi-finished products (collectively referred to as goods) are not under headings with the ordinal numbers of 01 thru 210 in the Export Tariff Schedule.

b/ Condition 2: Being processed directly from the main materials that are natural resources and minerals with the total value of natural resources and minerals plus the energy cost accounting for 51% or more of the production cost. The determination of whether the total value of natural resources and minerals plus the energy cost accounts for 51% or more of the production cost must comply with the Government’s Decree No. 100/2016/ND-CP of July 1, 2016, detailing, and guiding the implementation of, a number of articles of the Law Amending and Supplementing a Number of Articles of the Law on Value-Added Tax, the Law on Excise Tax and the Law on Tax Administration (below referred to as Decree No. 100/2016/ND-CP), and the Government’s Decree No. 146/2017/ND-CP of December 15, 2017, amending and supplementing a number of articles of Decree No. 100/2016/ND-CP, and documents amending and supplementing these decrees (if any).

Exported goods falling into cases of exclusion specified in Clause 1, Article 1 of Decree No. 146/2017/ND-CP are not under the headings with the ordinal number of 211 in the Export Tariff Schedule promulgated together with this Decree.

3. Codes of, and export duty rates applicable to, commodity items under headings with the ordinal number of 211:

For commodity items with 8-digit codes and commodity descriptions under headings 25.23, 27.06, 27.07, 27.08, 68.01, 68.02, and 68.03 in the ordinal number of 211 of the Export Tariff Schedule, customs declarants shall declare the export duty rates corresponding to these commodity codes as specified in the ordinal number of 211. In case of failure to declare the export duty rates as specified in headings with the ordinal number of 211, a taxpayer shall, when automobilerying out customs procedures, submit a List of the ratio of the value of natural resources and minerals plus the energy cost in the production cost of the exported goods, made according to Form No. 14 provided in Appendix II to this Decree, to prove that the value of natural resources and minerals plus the energy cost accounts for less than 51% of the production cost of the goods. In case the taxpayer is a commercial enterprise that purchases goods from a manufacturing enterprise or another commercial enterprise for export but fails to declare the export duty rate as specified in the heading with the ordinal number of  211, the taxpayer shall rely on the information provided by the manufacturing enterprise to make declaration according to Form No. 14 provided in Appendix II above to prove that the value of natural resources and minerals plus the energy cost accounts for less than 51% of the production cost. The taxpayer shall be held responsible before law for the accuracy of its/his/her declaration.

For exported goods under headings with the ordinal number of 211 that have not yet been detailed under 8-digit sub-headings and satisfy the conditions specified in Clause 2 of this Article, customs declarants shall declare the exported goods under the 8-digit sub-headings specified in Section I of the Preferential Import Tariff Schedule provided in Appendix II to this Decree and declare the export duty rate of 5%.

Article 5. Preferential Import Tariff Schedule according to the List of dutiable commodity items

The Preferential Import Tariff Schedule according to the List of dutiable commodity items (Preferential Import Tariff Schedule) provided in Appendix II to this Decree is composed of:

1. Section I: Regulations on preferential import duty rates for 97 chapters according to Vietnam’s Nomenclature of Exports and Imports, covering titles of parts and chapters; annotations; sub-heading annotations; and the Import Tariff Schedule with commodity descriptions, commodity codes (8-digit sub-headings) according to Vietnam’s Nomenclature of Exports and Imports, and preferential import duty rates prescribed for dutiable commodity items.

In case Vietnam’s Nomenclature of Exports and Imports is modified or supplemented, customs declarants shall declare goods descriptions and commodity codes according to the modified and supplemented Nomenclature and apply the duty rates of the modified or supplemented commodity codes.

2. Section II: Regulations on the List of, and preferential import duty rates for, a number of commodity items in Chapter 98, covering annotations; classification method, conditions and procedures for application of the preferential import duty rates specified in Chapter 98, reporting on inspection and final settlement of the use of goods entitled to the preferential import duty rates specified in Chapter 98; and List of goods and their preferential import duty rates.

a/ For commodity items on the List of goods and their preferential import duty rates specified in Clause 3, Section II of Appendix II to this Decree, the preferential import duty rates specified in Clause 3, Section II of Appendix II shall apply.

The classification of, and application of preferential import duty rates specified in Chapter 98 to, complete knocked down (CKD) automobile sets, incomplete automobile sets and motor chassis fitted with cabins (cabin chassis) must comply with Clause 1.1, Section II of Appendix II.

For the commodity items of alloy steel containing boron and/or chromium and/or titanium under heading 98.11; dermal fillers, skin automobilee creams, sautomobile gels under heading 98.25; 1680/D/2 and 1890 D/2 nylon cord fabric under heading 98.26; copper wire with a maximum cross-sectional dimension exceeding 6mm but not exceeding 8mm under heading 98.30; polypropylene plastic grains in primary form under heading 98.37; non-alloy steel, bars and rods, in irregularly wound coils, hot-rolled under heading 98.39; set-top-boxes under heading 98.46; and lattice-shaped compartments made from nano-composite polymeric alloy (Neoweb) under heading 98.47, the preferential import duty rates specified in Chapter 98 shall apply if they meet the standards and technical specifications specified in Clause 1, Section II of Appendix II.

b/ The classification methods, conditions and procedures for application of the preferential import duty rates specified in Chapter 98, and reporting on inspection and final settlement of use of goods entitled to the preferential import duty rates specified in Chapter 98 must comply with Clause 2, Section II of Appendix II.

c/ The List of goods and their preferential import duty rates specified in Chapter 98 for a number of goods include: commodity codes; commodity descriptions; the corresponding codes of these commodities in the Preferential Import Tariff Schedule according to the List of dutiable commodity items in Section I of Appendix II; and the preferential import duty rates specified in Chapter 98.

d/ For goods that satisfy the conditions for being classified into Chapter 98 and are qualified for application of the special preferential import duty rates under current regulations, taxpayers may opt to apply the special preferential import duty rates specified in relevant Special Preferential Import Tariff Schedules or the preferential import duty rates specified in Chapter 98 of the Preferential Import Tariff Schedule.

For goods classified into Chapter 98, customs declarants shall, when automobilerying out customs procedures, fill in the column “Corresponding commodity code in Section I, Appendix II” as stated in Chapter 98, and concurrently write the commodity code under Chapter 98 next to the column.

Article 6. Preferential import duty rates for mechanical processing machines

Mechanical processing machines under headings 84.54 thru 84.63 are entitled to preferential import duty rates as follows:

1. Mechanical processing machines that cannot be domestically manufactured are entitled to the preferential import duty rate of 0%. The mechanical processing machines mentioned in this Clause are those not on the Ministry of Planning and Investment-issued List of machinery and equipment that can be domestically manufactured.

2. Mechanical processing machines that do not fall into the case mentioned in Clause 1 of this Article are entitled to the preferential import duty rates for headings 84.54 thru 84.63 specified in Section I of the Preferential Import Tariff Schedule according to the List of dutiable commodity items provided in Appendix II to this Decree.

Article 7. Import duty on used automobiles

1. Used passenger automobiles of 9 seats or less with a cylinder capacity not exceeding 1,000cc under heading 87.03 shall be subject to the absolute duty rates specified in Appendix III to this Decree.

2. Used passenger automobiles of 9 seats or less with a cylinder capacity exceeding 1,000cc under heading 87.03 and used passenger automobiles of between 10 seats and 15 seats under heading 87.02 are subject to mixed duty rates specified in Appendix III to this Decree.

3. Used passenger automobiles of 16 seats or more under heading 87.02 and used motor vehicles for automobilego transportation with a gross vehicle weight not exceeding 5 tons under heading 87.04 (except refrigerated lorries, refuse/garbage collection vehicles having a refuse compressing device, tank trucks, armored automobilego vehicles for transporting valuables; and bulk cement lorries and hooklift lorries) are entitled to the preferential import duty rate of 150%.

4. Other used automobiles under headings 87.02, 87.03 and 7.04 are subject to a duty rate equaling 1.5 times the preferential import duty rate applicable to brand-new automobiles of the same type under the same heading specified in Section I of Appendix II to this Decree.

Article 8. Preferential import duty rates for automobile parts imported under the Program on duty incentives for automobile manufacture and assembly (below referred to as the Duty Incentive Program)

1. The preferential import duty rate of 0% for imported automobile parts under heading 98.49 in Clause 3, Section II of Appendix II to this Decree is specified
as follows:

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

b/ The application of the preferential import duty rate of 0% to automobile parts under heading 98.49 must comply with Clauses 2 thru 8 of this Article.

2. Subjects of application

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

3. Conditions for application

a/ Imported automobile parts must satisfy the following conditions:

a.1/ Imported automobile parts are under heading 98.49 and cannot be domestically manufactured and are used for automobile manufacture/assembly in the period of duty incentive consideration (including also parts left in stock from previous periods of duty incentive consideration to be used for manufacturing/assembling automobiles released from factory in subsequent periods of duty incentive consideration). The identification of parts that cannot be domestically manufactured must comply with the Ministry of Planning and Investment’s regulations on the List of materials, supplies and semi-finished products that can be domestically manufactured.

a.2/ Imported automobile parts are directly imported by automobile manufacturing/assembling enterprises or under their entrustment or authorization.

a.3/ In case imported automobile parts’ sets (including those imported from multiple sources and in multiple shipments) comprise body frame and chassis, the following conditions must be met:

The body frame must at least include the following assemblies: roof assembly, floor assembly, left-side assembly, right-side assembly, front assembly, rear assembly and connecting panels (if any) that are discrete and have not been electrostatically painted;

Chassis: Imported chassis of a length of less than 3.7m, whether or not assembled together, must be those not yet electrostatically painted; chassis of a length of 3.7m or higher, whether or not assembled together, may be electrostatically painted before being imported.

a.4/ Imported automobile parts must not comprise the commodity items under heading 87.07 (automobile body, including also cabin).

b/ Enterprises manufacturing/assembling electric automobiles, automobiles powered by fuel cells, hybrid automobiles, automobiles totally powered by biofuels or automobiles fueled by natural gas shall not be required to register automobile models when participating in the Duty Incentive Program.

b.1/ Enterprises are not required to satisfy the condition on minimum output in the first period of participation in the Duty Incentive Program and the subsequent period of duty incentive consideration; if satisfying the conditions specified in Clause 2; at Point a, Clause 3; and in Clauses 4, 6, 7 and 8, of this Article, the enterprises are entitled to the duty rate of 0% for all imported parts used for manufacturing/assembling automobiles of the group(s) they have registered for participation in the Duty Incentive Program, which are released from factory in the period of duty incentive consideration.

b.2/ In subsequent periods of duty incentive consideration, enterprises must satisfy the condition on minimum output specified at Point b, Clause 5 of this Article; and if satisfying the conditions specified in Clause 2; at Point a, Clause 3; and in Clauses 4, 6, 7 and 8, of this Article, the enterprises are entitled to the duty rate of 0% for all imported parts used for manufacturing/assembling automobiles of the group(s) satisfying the condition on minimum output, which are released from factory in the period of duty incentive consideration.

c/ For enterprises manufacturing/assembling petrol- or diesel-fueled automobiles:

c.1/ Condition on emission standards:

From 2022 onward, enterprises that manufacture/assemble automobiles meeting at least level-5 emission standards; level-4 emission standard automobiles they manufacture/assemble have certificates of quality, technical safety and environmental protection, which were granted before January 1, 2022, and remain valid under the Government’s Decree No. 116/2017/ND-CP of October 17, 2017, and documents amending and supplementing or replacing that Decree (if any).

c.2/ Condition on vehicle models:

An enterprise manufacturing/assembling petrol- or diesel-fueled automobiles may register one or more than one automobile model when participating in the Duty Incentive Program. In the course of implementation of the Duty Incentive Program, the enterprise may alter, or add new models to, the automobile models they have registered. The output of the altered or added automobile models shall be added up to the minimum general output for duty incentive consideration but the enterprise must still satisfy the condition on minimum specific output for each period of incentive consideration. Models of automobile groups are specified as follows:

Models of passenger automobiles of 9 seats or less and of a cylinder capacity not exceeding 2,500cc under heading 87.03 are those fully meet the following criteria: meeting the same engine criterion and having a cylinder capacity not exceeding 2,500cc; meeting the same body (or body frame) criterion; and having a fuel consumption rate of under 7.5 liters per 100 kilometers. The criterion of fuel consumption rate of under 7.5 liters per 100 kilometers shall be determined based on the fuel consumption rate of combined cycle as stated in a certificate of fuel consumption rate granted by the Vietnam Register;

Models of minibuses (passenger automobiles of between 10 seats and 19 seats under heading 87.02) and buses/coaches (passenger automobiles with 20 seats or more under heading 87.02) must meet the same engine criterion and frame criterion;

Models of trucks (motor vehicles for automobilego transportation under heading 87.04 and special-use motor vehicles under heading 87.05) must meet the same engine criterion and cabin criterion.

The engine criterion of a vehicle model shall be determined based on cylinder capacity or type or engine capacity as stated in a certificate of quality, technical safety and environmental protection for manufactured/assembled automobiles granted by the Vietnam Register. The body frame (or chassis frame), automobile frame or cabin criterion shall be determined based on basic technical characteristics of automobiles and body and frame structure stated in their technical design commentaries and technical drawings appraised by the Vietnam Register.

c.3/ Condition on minimum general output (manufacturing/assembling output applicable to each automobile group) and minimum specific output (manufacturing/assembling output of automobile models registered for participation in the Duty Incentive Program)

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

c.3.1/ In case the enterprise satisfies the condition on minimum general output for each automobile group and the condition on minimum specific output for at least one automobile model specified for each period of duty incentive consideration at Point a, Clause 5 of this Article and satisfies the conditions specified in Clause 2; at Points a, c.1 and c.2, Clause 3; and Clauses 4, 6, 7 and 8, of this Article, it will be entitled to the duty rate of 0% for all imported parts used for manufacturing/assembling the groups of automobiles for which it satisfies the output condition under regulations and which are released from factory in the period of incentive consideration.

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

c.3.2/ In case the enterprise’s actually manufactured/assembled output of 1 model of passenger automobiles with 9 seats or less registered during the period of duty incentive consideration is equal to 1.3 times or more the minimum specific output of models of automobiles with 9 seats or less as specified at Point a, Clause 5 of this Article and the enterprise satisfies the conditions specified in Clause 2; at Points a, c.1 and c.2, Clause 3; and in Clauses 4, 6, 7 and 8, of this Article, the enterprise will be entitled to the duty rate of 0% for imported parts used for manufacturing/assembling automobiles of such registered model which are released from factory in the period of duty incentive consideration.

c.3.3/ In case the enterprise’s total actually manufactured/assembled output of 2 models of passenger automobiles with 9 seats or less registered during the period of duty incentive consideration is equal to 1.5 times or more the minimum specific output of models of automobiles with 9 seats or less as specified at Point a, Clause 5 of this Article and the enterprise satisfies the conditions specified in Clause 2; at Points a, c.1 and c.2, Clause 3; and in Clauses 4, 6, 7 and 8, of this Article, the enterprise will be entitled to the duty rate of 0% for imported parts used for manufacturing/assembling automobiles of such registered models which are released from factory in the period of duty incentive consideration.

c.3.4/ In case the enterprise has registered 2 or more automobile groups for participation in the Duty Incentive Program and the total actually manufactured/assembled output of all automobile groups registered for participation in the Duty Incentive Program in the period of duty incentive consideration is at least equal to the total minimum general output of the corresponding automobile groups as specified at Point a, Clause 5 of this Article and the enterprise satisfies the conditions specified in Clause 2; at Points a, c.1 and c.2, Clause 3; and in Clauses 4, 6, 7 and 8, of this Article, the enterprise will be entitled to the duty rate of 0% for imported parts used for manufacturing/assembling automobiles of the groups registered for participation in the Duty Incentive Program which are released from factory in the period of duty incentive consideration.

c.3.5/ In case the number of months of the first period of duty incentive consideration of a automobile-manufacturing or -assembling enterprise as specified in Points c.3.1, c.3.2, c.3.3 or c.3.4 of this Clause is smaller than the number of months of the period of duty incentive consideration, if the enterprise’s actually manufactured/assembled output of the automobile group(s) it has registered for participation in the Duty Incentive Program is at least equal to the average monthly output of the minimum general output multiplied by the number of months of participating in the Duty Incentive Program in the period of duty incentive consideration and the enterprise satisfies the conditions on the minimum general output and minimum specific output in the subsequent period of duty incentive consideration, the enterprise will be entitled to the duty rate of 0% for imported parts used for manufacturing/assembling such automobile group(s) in the first period of duty incentive consideration if it satisfies the conditions specified in Clause 2; at Points a, c.1, and c.2, Clause 3; and Clauses 4, 6, 7 and 8, of this Article. In case the duration of participating in the Duty Incentive Program in the first month is 15 days or more, it shall be rounded to 1 month. In case the duration of participating in the Duty Incentive Program in the first month is shorter than 15 days, that month will not be counted.

4. Period of duty incentive consideration period

Enterprises may opt for a 6-month or 12-month period of duty incentive consideration which is specified as follows:

a/ The 6-month period of duty incentive consideration shall be counted from January 1 to June 30 or from July 1 to December 31 every year.

In case an enterprise opts for a 6-month period of duty incentive consideration, if its overpaid duty amount for the quantity of parts used for manufacturing and assembling automobiles that are released from factory in the first 6 months of the year has been processed and the output in the last 6 months of the year does not satisfy the Duty Incentive Program’s output condition but the total output of the whole year satisfies the Duty Incentive Program’s condition on the output of the 12-month period of duty incentive consideration according to the Tax Incentive Program, the enterprise will still be considered for duty incentives for the last 6 months of the year and, at the same time, have its overpaid duty amount for the parts used for manufacturing and assembling automobiles that are released from factory in the period processed if meeting the requirements specified in Clauses 2, 3, 6, 7 and 8 of this Article.

b/ The 12-month period of duty incentive consideration shall be counted from January 1 to December 31 every year.

5. Output of manufactured and assembled automobiles under the Duty Incentive Program

a/ Petrol- and diesel-fueled automobiles

Unit of calculation: automobile

In case a vehicle model manufactured/assembled by an enterprise in a period of duty incentive consideration includes both the vehicle type of level-4 emission standards according to the provisions on emission standards of Point c.1, Clause 3, Article 8 of this Decree and the vehicle type of level-5 emission standards, the enterprise can count the output of both vehicle types of level-4 and level-5 emission standards to determine whether that vehicle model meets the output condition.

For the 2023 period of duty incentive consideration, enterprises that have participated in the Duty Incentive Program may add the quantity of vehicles manufactured and assembled and released from factory in the period from January 1, 2023, to the effective date of this Decree in order to be considered for incentives if they satisfy the conditions of the Duty Incentive Program specified in the Government’s Decree No. 57/2020/ND-CP of May 25, 2020, and Decree No. 101/2021/ND-CP of November 15, 2021; particularly, it is not required to apply the condition on the minimum level of discreteness of automobile parts.

b/ Electric automobiles, automobiles powered by fuel cells, hybrid automobiles, automobiles totally powered by biofuels or automobiles fueled by natural gases

Unit of calculation: automobile

6. Dossiers and procedures for registration for participation in the Duty Incentive Program

a/ A dossier must comprise:

a.1/ Official letter for registration of automobile parts for participation in the Duty Incentive Program, made according to Form No. 05 provided in Appendix II to this Decree: 1 original;

a.2/ Certificate of eligibility for automobile manufacture/assembly: 1 certified copy.

b/ Procedures for registration for participation in the Duty Incentive Program: An enterprise shall hand-deliver or submit via the e-data system or by post a dossier for registration for participation in the Duty Incentive Program to the customs office of the locality where the enterprise’s head office or its manufacturing or assembling plant is located in order to register its automobile parts for participation in the Duty Incentive Program right after this Decree takes effect or at any time in the year during the period of implementation of the Duty Incentive Program. The date of participation in the Duty Incentive Program is the date of issuance of the official letter for registration for participation in the Program.

7. Procedures for filling in customs declaration forms:

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

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

a/ A dossier must comprise:

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

a.2/ Report on the use of imported automobile parts for manufacturing/assembling automobiles released from factory during the period of duty incentive consideration, made according to Form No. 06 provided in Appendix II to this Decree: 1 original;

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

a.4/ Accounting documents showing the quantity of imported parts used for manufacturing/assembling automobiles of assorted groups in the period of duty incentive consideration: 1 copy;

a.5/ Ex-factory quality inspection slip, made by the enterprise according to the form issued by the Vietnam Register: copy bearing the enterprise’s seal (the number of copies must correspond to the number of automobiles manufactured/assembled in the period of duty incentive consideration);

a.6/ Certificate of quality, technical safety and environmental protection for manufactured/assembled automobiles: certified copy or copy enclosed with the original for collation (the number of copies must correspond to the number of types of manufactured/assembled automobiles);

a.7/ Written commentaries about technical designs and technical drawings of automobiles appraised by the Vietnam Register: certified copy or copy enclosed with the original for collation (the number of copies must correspond to the number of types of manufactured/assembled automobiles).

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

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

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

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

The automobile output shall be based on the number of ex-factory quality inspection slips issued by the enterprise in the period of duty incentive consideration.

The registered automobile models shall be based on the certificates of technical safety and environmental protection for manufactured/assembled automobiles issued by the Vietnam Register.

The number of imported automobile parts used (excluding those intended for use but found damaged or having defects) must be consistent with the number of actually manufactured/assembled automobiles which have ex-factory quality inspection slips issued in the period of duty incentive consideration and shall be based on the report on use of automobile parts eligible for import duty incentives and the list of customs declaration forms and the import duty amount paid for each customs declaration form.

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

In case the dossier is incomplete, the customs office shall request in writing the enterprise to supplement the dossier. If having any doubts about accuracy of the dossier, the customs office shall automobilery out inspection at its office or the taxpayer’s office in accordance with the law on tax administration.

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

In case the enterprise does not fully satisfy the conditions for application of the Duty Incentive Program, it will not be entitled to duty refund and the customs office shall notify such in writing to the enterprise.

Article 9. Preferential import duty rates applicable to materials, supplies and parts for manufacture/processing (assembly) of supporting industry products prioritized for development of the automobile manufacture and assembly industry until December 31, 2024 (below referred to as the Program on duty incentives for the automobile supporting industry)

1. Provisions on the preferential import duty rate of 0% applicable to materials, supplies and parts that cannot be domestically manufactured and are used for manufacture/processing (assembly) of products of the automobile supporting industry prioritized for development (below referred to as products of the automobile supporting industry) until December 31, 2024:

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

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

2. Eligible subjects

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

b/ Automobile manufacturing/assembling enterprises that manufacture/process (assemble) automobile parts and spare parts by themselves.

3. Conditions for application

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

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

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

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

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

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

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

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

The enterprises specified in Clause 2 of this Article, if satisfying the conditions specified at Points a, b and c of this Clause and the requirements in Clauses 4 thru 8 of this Article, will be entitled to the preferential import duty rate of 0% for materials, supplies and parts imported for manufacture/processing (assembly) of products of the automobile supporting industry in the period of duty incentive consideration.

4. Period of duty incentive consideration

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

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

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

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

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

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

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

b/ Procedures for registration for participation in the Program on duty incentives for the automobile supporting industry

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

6. Procedures for filling in customs declaration forms

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

7. Inspection of manufacturing/processing (assembling) establishments of enterprises participating in the Program on duty incentives for the automobile supporting industry

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

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

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

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

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

In the course of participation in the Program on duty incentives for the automobile supporting industry, if there is a change in the address(es) of its manufacturing/processing establishment(s) or the ownership of, or the right to use, machinery and equipment of such establishment(s), the enterprise shall send a notice thereof to the customs office within 5 working days after such change occurs. Upon receiving the notice of change or detecting a sign indicating changes in information about the enterprise’s manufacturing/processing establishment(s) or machinery and equipment therein but the enterprise fails to notify such change to the customs office or based on the risk management process, the customs office shall automobilery out inspection of the manufacturing/processing (assembling) establishment(s) and machinery and equipment therein.

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

a/ A dossier must comprise:

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

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

Investment certificate or investment registration certificate or business registration certificate or enterprise registration certificate (unless the enterprise has submitted such certificate upon registering for participation in the Program on duty incentives for the automobile support industry): 1 certified copy;

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

Descriptions of the process of manufacturing/processing (assembling) products of the automobile supporting industry (together with commentaries): 1 original;

List of import duty declaration forms and import duty paid amounts for materials, supplies and parts for manufacturing/processing (assembling) products of the automobile supporting industry registered for participation in the Program on duty incentives for the automobile supporting industry, made according to Form No. 10 provided in Appendix II to this Decree: 1 original;

Report on use of materials, supplies and parts imported for manufacturing/processing (assembling) products of the automobile supporting industry registered for participation in the Program on duty incentives for the automobile supporting industry, made according to Form No. 11 provided in Appendix II to this Decree: 1 original;

List of value-added invoices for quantities of products of the automobile supporting industry sold under purchase and sale contracts, made according to Form No. 12 provided in Appendix II to this Decree: 1 original;

Accounting documents showing quantities of  materials, supplies and parts imported for manufacturing/processing (assembling) products of the automobile supporting industry: 1 copy;

a.2/ For a automobile manufacturing/ assembling enterprise that manufactures/processes (assembles) automobile parts and spare parts by itself:               

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

Descriptions of the process of manufacturing/processing (assembling) products of the automobile supporting industry (together with commentaries): 1 original;

List of import duty declaration forms and paid import duty amounts for materials, supplies and parts for manufacturing/processing (assembling) products of the automobile supporting industry, made according to Form No. 10 provided in Appendix II to this Decree: 1 original;

Report on use of materials, supplies and parts imported for manufacturing/processing (assembling) products of the automobile supporting industry, made according to Form No. 11 provided in Appendix II to this Decree: 1 original;

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

Report on use of products of the automobile supporting industry manufactured/processed (assembled), made according to Form No. 13 provided in Appendix II to this Decree: 1 original;

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

Accounting documents showing quantities of  materials, supplies and parts imported for manufacturing/processing (assembling) products of the automobile supporting industry: 1 copy;

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

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

b.2/ The customs office shall base itself on the dossier of request for application of the duty rate of 0%, results of inspection of the enterprise’s manufacturing/processing (assembling) establishment(s) and machinery and equipment therein to inspect the enterprise’s eligibility and conditions for application of the Program on duty incentives for the automobile supporting industry and:

In case the dossier is incomplete, the custom office shall request in writing the enterprise to supplement the dossier. In case of having doubts about accuracy of the dossier, the customs office shall automobilery out inspection at its office or the taxpayer’s office in accordance with the law on tax administration.

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

In case the enterprise fails to fully satisfy the conditions for application of the Program on duty incentives for the automobile supporting industries, the customs office shall issue a notice thereof to the enterprise.

Article 10. List of commodity items subject to tariff-rate quotas and their import duty rates

1. The list of commodity items subject to tariff-rate quotas includes a number of commodity items under the headings specified in Appendix IV to this Decree and commodity items subject to tariff-rate quotas stated in treaties to which the Socialist Republic of Vietnam is a contracting party (below referred to as treaties).

2. The annual import quotas must comply with the Ministry of Industry and Trade’s regulations.

3. Import duty rates applicable to the quantities of imported goods within tariff-rate quotas:

In case the imported quantity of a commodity item is within its annual import quota set by the Ministry of Industry and Trade, the preferential import duty rate specified in Section I of Appendix II to this Decree or the special preferential import duty rate specified in the Special Preferential Import Tariff (if meeting the conditions for application of the specially preferential import duty rate) issued together with the Government’s Decrees promulgating the Special Preferential Import Tariffs for implementation of treaties.

In case the Government’s Decrees promulgating the Special Preferential Import Tariffs for implementation of treaties provide for conditions for application of the within-quota special preferential import duty rate, such Decrees shall apply.

4. Import duty rates applicable to the quantity of imported goods in excess of tariff-rate quotas:

a/ In case the imported quantity of a commodity item specified in Clause 1 of this Article exceeds its annual import quota set by the Ministry of Industry and Trade, the excessive quantity will be subject to the out-of-quota import duty rate specified in Appendix IV of this Decree;

b/ In case treaties provide for import quotas and/or out-of-quota import duty rates for the commodity items specified in Clause 1 of this Article, the Government’s Decrees promulgating the Special Preferential Import Tariffs for implementation of such treaties shall apply. In case the out-of-quota duty rates under a treaty are higher than the out-of-quota import duty rates specified in Appendix IV to this Decree, the latter shall prevail.

Article 11. Responsibility for organization of implementation 

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

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

3. The Ministry of Industry and Trade shall:

a/ Grant certificates of eligibility for automobile manufacture or assembly under  the Government’s regulations on conditions for automobile manufacture, assembly and import and provision of automobile warranty and maintenance services.

b/ Promulgate regulations on inclusion of provisions on tariff-rate quotas in treaties to which Vietnam is a contracting party into domestic laws.

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

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

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

Article 12. Effect

1. This Decree takes effect on July 15, 2023.

2. This Decree replaces the Government’s Decree No. 122/2016/ND-CP of September 1, 2016, Decree No. 125/2017/ND-CP of November 16, 2017, Decree No. 57/2020/ND-CP of May 25, 2020, Decree No. 101/2021/ND-CP of November 15, 2021, and Decree No. 51/2022/ND-CP of August 8, 2022.

3. From October 1, 2022, to the effective date of this Decree, the conditions on the knock-down level of automobile parts under Point b, Clause 3.1, Article 7a specified in Clause 3, Article 2 and at Point b.5, Clause 3,  Section II, Chapter 98 of the Government’s Decree No. 57/2020/ND-CP of May 25, 2020, shall not be applied.

Enterprises that have participated in the Duty Incentive Program but not yet been refunded import duty amounts paid in the period from October 1, 2022, to the effective date of this Decree may be refunded the duty amounts for the quantities of imported automobile parts provided that they satisfy the conditions specified in the Duty Incentive Program, except the conditions on the knock-down level of automobile parts.

Enterprises importing CKD sets and incomplete automobile sets for automobile manufacture and assembly, including also authorized importers and entrusted importers signing entrustment contracts, importing and trading enterprises that have signed purchase and sale contracts with automobile manufacturing and assembling enterprises in the period from October 1, 2022, to the effective date of this Decree, that opt to calculate import duty by separate automobile parts and spare parts or by commodities under heading 98.21 must satisfy the conditions specified in the Government’s Decree No. 57/2020/ND-CP of May 25, 2020, except the conditions on the knock-down level of automobile parts.

4. The preferential import duty rates applicable to imported automobile parts under heading 98.40 specified in Article 8 of this Decree shall be applied until December 31, 2027. Enterprises register their participation in the Duty Incentive Program before the effective date of this Decree are required to make re-registration with customs offices under this Decree.

In case of altering the automobile groups or models or adding new automobile groups or models to those registered upon participating in the Duty Incentive Program, enterprises shall make re-registration with customs offices.

5. The preferential import duty rates applicable to materials, supplies and parts for manufacture/processing (assembly) of products of the automobile supporting industry specified in Article 9 of this Decree shall be applied until December 31, 2024. Enterprises that register for participation in the Program on duty incentives for the automobile supporting industries before the effective date of this Decree are not required to make re-registration and may enjoy incentives under this Decree.-

On behalf of the Government
For the Prime Minister
Deputy Prime Minister
LE MINH KHAI

* The Appendices to this Decree are not translated.