DECREE No. 94/1998/ND-CP OF NOVEMBER 17, 1998 DETAILING THE IMPLEMENTATION OF LAW No. 4/1998/QH10 OF MAY 20, 1998 AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF THE LAW ON EXPORT TAX AND IMPORT TAX

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;

Pursuant to the Law on Foreign Investment in Vietnam of November 8, 1996; Law on Domestic Investment Promotion (amended) No. 03/1998/QH10 of May 20, 1998;

Pursuant to the Law on Export Tax and Import Tax of December 26, 1991; the Law Amending and Supplementing a Number of Articles of the Law on Export Tax and Import Tax of July 5, 1993; Law No. 04/1998/QH10 of May 20, 1998 Amending and Supplementing a Number of Articles of the Law on Export Tax and Import Tax;

At the Minister of Finance�s proposal,

DECREES:

Article 1.- The import tax rates are stipulated as follows:

1. The tax rates applicable to import goods include the ordinary tax rates, the preferential tax rates and the special preferential tax rates:

a) The preferential tax rates shall apply to goods imported from countries or groups of countries that have agreements on the most favored nation treatment in their trade relations with Vietnam.

The preferential tax rates are specified in the Import Tariff issued by the Minister of Finance. The Ministry of Finance shall assume the prime responsibility and coordinate with the Ministry of Trade and the concerned ministries in readjusting, on the basis of export and import policies and the market price fluctuation in each period, the tax rates in the Import Tariff to make them compatible to the tax rate bracket set by the National Assembly Standing Committee.

b) The ordinary tax rates shall apply to goods imported from countries that have no agreements on the most favored nation treatment in their trade relations with Vietnam.

The uniformly applied ordinary tax rates shall be 50% (fifty per cent) higher than the preferential tax rates stipulated in Point a, Clause 1 of this Article. For special cases where the tax rates should be prescribed lower or higher than 50% (but not higher than 70% of preferential tax rates), the Ministry of Finance shall, after consulting the Ministry of Trade, stipulate the tax rate applicable to each specific case, ensuring its conformity with the trade policies and relations in each period.

c) The special preferential tax rates shall apply to goods imported from countries or groups of countries that have agreements with Vietnam on special import tax preferences under the free trade areas institutions, tariff coalitions or aimed to create favorable conditions for border trade exchange.

The special preferential tax rates shall apply to import goods which fully meet the following conditions:

- Being goods items specified in the agreements and fully meeting the conditions stated in the agreements;

- Being goods with origin from countries bordering Vietnam or countries being members of groups with tax agreements which Vietnam has acceded to.

The Ministry of Trade shall provide detailed guidance on the criteria of goods origin stipulated in Points a, b and c, Clause 1 of this Article.

2. There shall be separate regulations on surtax rates stipulated in Points a, b and c, Clause 2, Article 9 of the Law on Export Tax and Import Tax and supplemented in Clause 1, Article 1 of Law No. 04/1998/QH10 of May 20, 1998.

Article 2.- Export goods and import goods eligible for tax exemption consideration as stipulated in Clause 2, Article 1 of Law No. 04/1998/QH10 Amending and Supplementing a Number of Articles of the Law on Export Tax and Import Tax are specified as follows:

1. Goods imported in exclusive service of national security and defense, scientific research, education and training activities shall be exempt from import tax according to the import goods list formulated by the Ministry of Finance after consulting the concerned ministries and branches.

2. Import goods of foreign-invested enterprises and foreign parties to business cooperation contracts under the Law on Foreign Investment in Vietnam shall be exempt from import tax in accordance with provisions of Decree No.12/CP of February 18, 1996 of the Government detailing the implementation of the Law on Foreign Investment in Vietnam, Decree No. 10/1998/ND-CP of January 23, 1998 of the Government on a number of measures to encourage and guarantee foreign direct investment in Vietnam and Decree No. 62/1998/ND-CP of August 15, 1998 of the Government promulgating the Regulation on investment in forms of build-operate-transfer contracts, build-transfer-operate contracts and build-transfer contracts applicable to foreign investment in Vietnam.

3. Import goods of domestic-invested enterprises operating under the Law on Domestic Investment Promotion shall be exempt from import tax in accordance with Article 25 of the Law on Domestic Investment Promotion (amended) of May 20, 1998.

4. Goods sent as gifts and/or donations from foreign organizations and/or individuals to Vietnamese organizations and/or individuals and vice versa, and sample goods shall be exempt from tax according to the levels prescribed by the Ministry of Finance.

The Ministry of Finance shall prescribe the procedures for considering the tax exemption for each case as defined in this Article.

Article 3.- Tax declaration and payment

1. Organizations and/or individuals, upon each exportation of their goods as permitted, shall have to make and submit their export goods declarations and pay export tax to the customs authorities where the export procedures are carried out, and take responsibility for the accuracy of their declarations.

2. Organizations and/or individuals, upon each importation of goods as permitted, shall have to make and submit import goods declarations and pay import tax to the customs authorities of the localities with border-gates through which the goods are imported, and take responsibility for the accuracy of their declarations.

The border-gates with great flow of import goods shall be permitted to open some more places for import procedures clearance and import tax collection. The General Department of Customs shall consult the Ministry of Finance before proposing the Government to permit the opening of such places.

The customs authorities shall have to inspect export and import goods, carry out the customs procedures and collect taxes in accordance with provisions of this Decree.

Article 4.- Goods inspection, tax calculation and tax payment time limit:

1. The time for export or import tax calculation shall be the date when an organization or individual registers its/his/her export or import goods declaration with the customs authority. The taxes shall be calculated according to the tax rates and tax calculation prices on the date the export or import goods declaration is registered.

2. Within eight (8) working hours from the receipt of an export or import goods declaration, the customs authority shall have to officially notify the tax payer of the payable tax amount.

- For some goods items imported in large quantity each time (such as iron, steel, steel cast, cement, clinker, petroleum, fertilizers) and those subject to the quality standard inspection according to the Government�s regulations before being permitted to be circulated on the Vietnamese market, the time limit for issuing tax notices may be extended but shall not exceed 3 working days and shall be specified by the General Department of Customs.

- For goods items which require the technical standard inspection before identifying their code numbers in the tax tariff and their current state (new or old), in order to ensure the accuracy of the tax calculation, the time limit for issuing tax notices may be more than 3 working days but shall not exceed 15 working days.

The inspection agency(ies) and the State quality control agency(ies) shall have to complete the inspection and quality control of export or import goods items within the prescribed time limit so that the customs authorities can issue tax notices to the tax payers.

The Ministry of Science, Technology and Environment shall coordinate with the Ministry of Trade and the Ministry of Finance in specifically defining the agencies competent to inspect and control the quality of export and import goods as well as the agencies competent to make final decisions in cases of complaints.

3. The time limit for export tax or import tax payment is prescribed as follows:

a) For export goods, it is fifteen (15) days from the date the tax payers receive the official notices from the customs authorities on the payable tax amounts.

b) For goods being materials and raw materials imported for export goods production, it is nine (9) months from the date the tax payers receive official notices from the customs authorities on the payable tax amounts.

For exceptional cases where the production cycles and materials and raw materials reserves of enterprises in such sectors as ship-building and mechanical engineering are prolonged, the tax payment time limit may be extended to suit such production cycles and materials and raw materials reserves and shall be decided by the Ministry of Finance for each case.

In cases where the goods produced from imported materials and raw materials are actually exported within the above-prescribed tax payment time limit, the import tax on the volume of imported materials and raw materials used for the production of the corresponding exported goods volume shall not be paid. If the goods are exported outside the prescribed tax payment time limit, the tax payers shall have to pay tax(es) as prescribed.

Enterprises producing export goods shall have to register with the customs authorities their goods which are materials and raw materials and used for the production of export goods. In cases where enterprises have registered and been eligible for tax payment time limit prescribed in this Clause but sold their goods in Vietnam, they shall be handled according to Article 5 of this Decree.

The Ministry of Finance shall specify the conditions for tax payment time limit application and the handling of violations of this Clause.

c) For goods temporarily exported for re-import or temporarily imported for re-export, the time limit shall be fifteen (15) days from the date of expiry of the temporary export for re-import or temporary import for re-export time limit.

In cases where the goods are actually re-imported (for goods temporarily exported for re-import) or actually re-exported (for those temporarily imported for re-export) within the prescribed tax payment time limit, the export tax or import tax shall not be paid for the corresponding goods volume temporarily imported or re-exported.

The Ministry of Trade shall prescribe the temporary export for re-import and temporary import for re-export time limits.

For forms of temporary import for re-export and temporary export for re-import other than business forms stipulated by the Ministry of Trade, the tax payment time limits shall comply with Points a, d and e of this Clause.

d) For goods being machinery, equipment, raw materials, fuel, materials and means of transport, which are imported in service of the enterprises� production, the time limit shall be thirty (30) days from the date the tax payers receive the official notices from the customs authorities on the payable tax amounts.

e) For imported consumer goods, tax payers shall be to fully pay taxes before receiving their goods. In cases where the payable tax amounts are guaranteed by credit institutions or other organizations licensed to conduct some banking activities under the Law on Credit Institutions, the tax payment time limit shall be thirty (30) days from the date the tax payers receive the official notices from the tax-collecting agencies on the payable tax amounts. The Ministry of Trade shall assume the prime responsibility and coordinate with the concerned ministries in determining the list of import consumer goods as stipulated in this Point.

Past the above-said tax payment time limit, if the tax payers still fail to pay taxes, the guaranteeing organizations shall have to pay such tax amounts on the tax payers� behalf.

The guaranty for tax payers� payable tax amounts, the rights and obligations of the credit institutions providing the guaranty and the obligations of the guaranteed tax payers shall comply with Articles 58, 59 and 60 of the Law on Credit Institutions of December 12, 1997.

Article 5.- Tax payers that violate the Law on Export Tax and Import Tax shall, depending on each act of violation and its seriousness, be handled according to provisions in Clause 5, Article 1 of Law No. 04/1998/QH10 of May 20, 1998 Amending and Supplementing a Number of Articles of the Law on Export Tax and Import Tax and other legal documents on handling of administrative violations in the fields of taxation and customs.