I. TAX AND FEE EXEMPTION FOR FOREIGN SPECIALISTS

Foreign specialists are exempt from the following taxes and fees:

1. Import tax, special consumption tax and value added tax for import goods being personal luggage of such foreign specialists and their dependants according to the quotas set in the Government�s Decree No.17/CP of February 6, 1995 and Decree No.79/1998/ND-CP of September 29, 1999 on duty-free luggage quotas for passengers on entry or exit.

2. For foreign specialists who are allowed to stay in Vietnam for 183 days or more:

2.1. They are exempt from import tax for:

- Import goods defined at Point 2 to Point 16 on the list attached to Appendix II to the Regulation on foreign specialists (the exemption shall apply to the first-time importation only).

3. They are exempt from personal income tax for the incomes they and their dependents have earned from the implementation of ODA programs and/or projects in Vietnam while they are working in Vietnam.

II. TAX AND FEE-EXEMPTION DOSSIER AND PROCEDURES

1. For import goods being personal luggage:

The local customs agency where a foreign specialist and his/her dependants fill in the import procedures shall effect the tax preferences, without collecting the import tax, special consumption tax and value added tax for goods being personal luggage, as guided by the General Department of Customs at its Circular No.07/1998/TT-TCHQ of October 14, 1998 guiding the implementation of the Government�s Decree No.17/CP and Decree No.79/1998/ND-CP on duty-free luggage quotas for passengers on entry or exit as well as the Finance Ministry�s Circular No.89/1998/TT-BTC of June 27, 1998 guiding the implementation of the Government�s Decree No.28/1998/ND-CP of May 11, 1998 which details the implementation of the Value Added Tax Law.

2. For import goods of foreign specialists who are allowed to stay in Vietnam for 183 days or more as mentioned at Point 2, Section I of this Circular:

2.1. The foreign specialist shall have to produce to the customs agency at the place of importation the dossier for non-payment of import tax, special consumption tax or value added tax, which includes:

- The project managing agency�s written request for non-collection of import tax, special consumption tax and/or value added tax for import goods of the foreign specialist;

- The Ministry of Planning and Investment�s certification of the foreign specialist�s participation in the implementation of the ODA program and/or project, clearly stating his/her name, nationality, passport number, stay duration in Vietnam, income from the implementation of the ODA program and/or project in Vietnam and list of his/her dependants� (the copy thereof affixed with stamp of the project managing agency);

- The record or certification by the police or insurance agency at the place where the accident occurred or where the duty-free temporarily imported car or motorbike lost- their copies affixed with stamp of the project managing agency (applicable to duty-free temporarily imported cars which are stolen or irreparably damaged).

- Papers proving the lawful origin of the import goods.

The customs agency at the place where the foreign specialist fills in the customs procedures shall not collect import tax, special consumption tax and/or value added tax and clearly inscribe on the import-export goods declaration: "duty-free goods under the Regulation on foreign specialists".

2.2. The dossier for non-payment registration fee to be submitted to the tax agency of the locality where the project implementing agency is headquartered shall be the same as the dossier submitted to the customs agency mentioned at Point 2.1, Section II of this Circular and be added with the permit for temporary import and re-export of car and/or motorbike, granted by the customs agency that carries out the import procedures.

The tax agency shall not collect registration fee for cars and motorbikes of foreign specialists and clearly inscribe the reasons therefor in the registration fee declaration: "Objects entitled to registration fee exemption under the Regulation on foreign specialists".

3. For income earned from the implementation of programs and/or projects in Vietnam:

The foreign specialist shall produce to the tax agency of the locality where the project implementing agency is headquartered the dossier for personal income tax exemption, which includes:

- The project managing agency�s written request for non-collection of personal income tax on the foreign specialist�s income from the implementation of the ODA program and/or project;

- The Ministry of Planning and Investment�s certification of the foreign specialist�s participation in the implementation of the ODA program and/or project, clearly stating his/her name, nationality, passport number, working term in Vietnam and income, and the list of his/her dependants� (the copy thereof affixed with stamp of the project managing agency);

- The documents relating to the tax-free income of the foreign specialist.

The tax agency shall not collect personal income tax on foreign specialists� incomes generated from the implementation of ODA programs and/or projects in Vietnam and issue certifications thereof (according to the set form) to concerned foreign specialists.

III. RETROSPECTIVE COLLECTION OF TAXES

Upon the expiry of his/her working term in Vietnam, a foreign specialist shall have to re-export the duty-free temporarily imported car and/or motorbike; if using such car and/or motorbike for the wrong purposes or selling them in Vietnam, he/she shall have to retrospectively pay import tax, special consumption tax or value added tax according to the current tax legislation, except where the temporarily imported car and/or motorbike are sold to other immunity beneficiaries under the Regulation on foreign specialists or to diplomatic immunity beneficiaries as substitute for the latter�s import quotas.

Within 2 working days after selling goods, foreign specialists shall have to fill in the procedures of declaration for retrospective payment of import tax, special consumption tax or value added tax for the sold goods. The declaration procedures and the bases for determination of the import tax or special consumption tax amount to be retrospectively collected shall comply with the guidance in the Finance Ministry�s Circular No.172/1998/TT-BTC of December 22, 1998. The bases for calculation of the to be- retrospectively collected value added tax amount are the selling prices, including the import tax and value added tax rates prescribed by the Value Added Tax Law for the sold goods subject thereto. The customs agency that receives the dossier of declaration for retrospective tax payment shall verify the dossier and determine the to be- retrospectively collected tax amount, collect such tax amount for remittance into the State budget.

Foreign specialists who buy the above-mentioned cars and/or motorbikes shall not have to pay taxes and registration fee according to the guidance at Point 2, Section I of this Circular. The dossier submitted to the tax agency for non-payment of registration fee shall not include the vouchers on the imported goods, which shall be substituted by the sale papers certified by the project managing agency.

IV. ORGANIZATION OF IMPLEMENTATION

This Circular takes effect 15 days after its signing.

Foreign specialists who have been granted certifications of foreign specialists by the Ministry of Planning and Investment before the promulgation of this Circular shall be entitled to the tax and registration fee exemption as guided in this Circular. Foreign specialists who are entitled to non-payment of taxes and registration fee as prescribed in this Circular but have already paid them, shall be entitled to the tax and fee reimbursement. The tax and fee reimbursement shall comply with the provisions of the current tax legislation.

In the course of implementation, if any problems arise, concerned units are requested to report them to the Finance Ministry for consideration and decision.

For the Minister of Finance
Vice Minister
PHAM VAN TRONG