Official Dispatch 1570/TCHQ-TXNK 2024 VAT of goods having use purposes changed after being exempted from import duties

To: Customs Department of Binh Duong province.

The General Department of Customs received Official dispatch No. 3148/HQBD-TXNK dated December 13, 2023, from the Customs Department of Binh Duong province, regarding goods having use purposes changed after being exempted from import duties, and has the following comments:

Pursuant to provisions of Point d Clause 1 Article 7 of the Law on Value-Added Tax (VAT) No. 13/2008/QH12, amended and supplemented under Clause 2 Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on VAT No. 31/2013/QH13, and Clause 1 Article 4 of the Government’s Decree No. 209/2013/ND-CP dated December 18, 2013, guiding the implementation of the Law on VAT, for imported goods, the taxable price is the “border-gate import price” plus “import duty (if any)”, “excise tax (if any)” and “environmental protection tax (if any)”. The border-gate import price is determined under regulations on prices for calculating import tax.

Pursuant to provisions of Clause 2 Article 7 of the Ministry of Finance's Circular No. 219/2013/TT-BTC dated December 31, 2013, guiding the implementation of the Law on VAT and the Government’s Decree No. 209/2013/ND-CP of December 18, 2013, detailing and guiding a number of articles of the Law on VAT, the taxable price for imported goods is determined as follows:

“2. For imported goods, the taxable price is the import price at border gate plus (+) import duty (if any), plus (+) excise tax (if any) and plus (+) environmental protection tax (if any). The border-gate import price is determined under regulations on prices for calculating import tax.

For goods eligible for import duty exemption or reduction, the taxable price is the import price plus (+) the import duty determined at the payable duty rate after subtracting the exempted or reduced amount.”

Therefore, the value-added taxable price is the “import price at border gate” plus “import duty (if any)”, plus “excise tax (if any)” and plus “environmental protection tax (if any)”. If an enterprise has already made VAT payment based on the “import price at border gate” but have not paid VAT based on the “import duty” because it is entitled to import duty exemption when importing, but after changing the use purpose of the imported goods which results in an amount of “import duty”, it is required to pay VAT on the “import duty” in accordance with the Law on VAT and its guiding documents.

The General Department of Customs hereby informs Customs Department of Binh Duong province for implementation./.