THE MINISTRY OF TRADE
SOCIALIST REPUBLIC OF VIET NAM
Hanoi, July 18, 1998
GUIDING THE DUTY-FREE IMPORT FOR INVESTMENT PROJECTS DEFINED IN DECREE No. 07/1998/ND-CP OF JANUARY 15, 1998 OF THE GOVERNMENT DETAILING THE IMPLEMENTATION OF THE LAW ON DOMESTIC INVESTMENT PROMOTION (AMENDED)
Pursuant to Decree No. 95-CP of December 4, 1993 of the Government defining functions, tasks, powers and organizational structure of the Ministry of Trade;
In furtherance of Article 37 of Decree No. 7/1998/ND-CP of January 15, 1998 of the Government detailing the implementation of the Law on Domestic Investment Promotion (amended);
The Ministry of Trade hereby guides duty-free import for investment projects specified in the above-said Decree as follows:
A. OBJECTS OF APPLICATION
This Circular shall apply to objects defined in Article 3 of Decree No. 7/1998/ND-CP of January 15, 1998 of the Government detailing the implementation of the Law on Domestic Investment Promotion (amended), including:
1. Enterprises of various economic sectors:
– State enterprises.
– Enterprises of political, socio-political organizations and professional societies.
– Limited liability companies and joint stock companies.
– Private enterprises.
– Individuals and business groups operating under Decree No.66-HDBT of March 2, 1992 of the Council of Ministers (now the Government).
2. Enterprises directly invested by Vietnamese residing abroad.
3. Enterprises directly invested by foreigners permanently residing in Vietnam.
4. Enterprises jointly set up by Vietnamese citizens and Vietnamese residing abroad and/or foreigners permanently residing in Vietnam.
5. Vietnamese organizations and citizens, Vietnamese residing abroad and foreigners permanently residing in Vietnam that buy shares or contribute capital to domestic enterprises, including State enterprises allowed to diversify forms of ownership or investment funds with financial autonomy.
Objects defined in Points 1, 2, 3, 4 and 5 above, shall be hereafter referred to as enterprises.
B. STIPULATIONS ON DUTY-FREE GOODS IMPORTED TO CREATE FIXED ASSETS FOR LICENSED INVESTMENT PROJECTS
I. STIPULATIONS ON DUTY-FREE IMPORT GOODS:
1. Machinery, equipment and transport means defined in the technical-economic feasibility study reports, which are imported to form fixed assets of the enterprises, including:
1.1. Machinery and equipment, including electricity, water supply and drainage and information systems.
1.2. Specialized transport means included in technological lines and specialized means of conveyance to be used for carrying workers (cars of 24 seats or more), and water transport means.
The specialized transport means included in technological lines shall include:
– Specialized transport means used for production activities stipulated in the investment licenses.
– Transport means used for carrying raw materials and products in technological lines.
1.3. Components, details, spare parts, implements, models and accessories accompanied with the above-mentioned equipment, machinery, specialized transport means and means of conveyance.
1.4. The above-mentioned equipment, machinery and specialized transport means, which are imported for substitution, in-depth investment, technological renovation or expansion of production scale.
1.5. Raw materials and materials imported for the implementation of BOT, BTO and BT projects.
1.6. Plant seeds and animal breeds, agricultural pharmaceuticals of special category, imported for the implementation of agricultural, forestrial or fishery projects.
1.7. Laboratory equipment, equipment in service of the production of school equipment, medical equipment and equipment for environmental protection.
1.8. Other goods and supplies used for projects where investment is specially encouraged as stipulated by the Prime Minister.
2. Raw materials and supplies imported to form enterprises’ fixed assets shall be exempt from tax under the following conditions:
2.1. Being raw materials imported for the manufacture of machinery and equipment in Vietnam to form enterprises’ fixed assets.
2.2. Being raw materials and materials imported for construction to form enterprise’ fixed assets, if such raw materials and supplies have not yet been produced in the country or have been domestically produced but failed to meet the technical requirements of the projects.
Lists of such construction raw materials and materials shall be announced annually by the specialized ministries.
3. Raw materials imported for projects’ trial operation before pre-acceptance test and for trial production according to the explanation reports, which are considered, approved by the Ministry of Trade case by case, based on the certification by the agency competent to decide investment regarding their categories and quantities.
4. Raw materials, spare parts, accessories and materials, which are imported for the production of export goods, shall be subject to import tax when they are imported into Vietnam and when finished products are exported, the import tax shall be refunded with the amount corresponding the percentage of the export finished products. The import tax reimbursement shall be made in accordance with the stipulations of the Ministry of Finance in Circular No.43/1998/TT/BTC of April 4, 1998.
II. TIME-LIMIT FOR CONSIDERATION AND ISSUE OF DOCUMENTS:
1. Within 15 days after receiving complete and valid dossiers, the Ministry of Trade shall issue documents permitting the import and certifying lists of duty-free import goods of enterprises (the date of receiving the dossiers shall be the date stamped on the Trade Ministry’s documents).
2. If the dossiers are incomplete or invalid: Within 5 working days after receiving dossiers, the Ministry of Trade shall inform verbally or in writing the enterprises thereof so that the latter supplement and/or readjust the dossiers. The date of receiving the complete and valid dossiers shall be the date stamped on the final document of the Ministry of Trade.
III. DOSSIER ON EVALUATION TO PERMIT THE IMPORT AND CERTIFY DUTY-FREE IMPORT GOODS
1. The project owner’s (enterprise’s) written proposal on the import and exemption of import tax.
2. Investment license or investment decision issued by the competent level in accordance with the provisions of Article 7 of the Regulation on the Management of Investment and Construction (issued together with Decree No.42-CP of July 16, 1996 of the Government) and a number of Articles amending and/or supplementing the Regulation on the Management of Investment and Construction issued together with Decree No.42-CP of July 16, 1996 of the Government (issued together with Decree No.92-CP of August 23, 1997 of the Government).
3. The technical-economic feasibility study report.
4. Decision of the level competent to decide investment ratifying bid selection and bidding results (attached with a written report on the analysis of the selection of bidders).
In cases where goods are imported by mode of competitive offer, a decision ratifying the offer selection (attached with a written report on the analysis of such selection) is required.
5. The original contract and attached appendices.
6. Decision of the level competent to decide investment, ratifying the contract’s contents.
7. The preferential investment certificate issued by the competent level in accordance with the provisions of Circular No. 2/1998/TT/BKHDT of March 16, 1998 of the Ministry of Planning and Investment.
Regarding lists of duty-free goods imported to form fixed assets, the enterprises shall, basing themselves on the provisions of Clause 1, Article 37 of Decree No. 7/1998/ND-CP of January 15, 1998 and documents defined in this Section III, clearly state the goods’ names, quantities and value, for each of the following items:
– Machinery, equipment.
– Construction materials.
– Raw materials and materials for manufacture of machinery and equipment in Vietnam.
– Raw materials and materials used for trial production.
C. TIME-LIMIT FOR APPLICATION
1. For projects with preferential investment certificates granted before February 1st, 1998 (the date when the Government’s Decree No. 7/1998/ND-CP of January 15, 1998 takes effect), the import tax exemption in the remaining grace period from February 1st, 1998 is prescribed concretely as follows:
– They shall be exempt from import tax on goods imported into Vietnam after February 1st, 1998.
– They shall be subject to import tax on goods imported into Vietnam before February 1st, 1998.
2. For projects with preferential investment certifi-cates granted after February 1st, 1998, they shall be:
– Exempt from import tax on goods imported into Vietnam from the date of issuance of the preferential investment certificates.
– Subject to import tax on goods imported into Vietnam before the date of issuance of the preferential investment certificates.
The date when the goods are imported into Vietnam shall be the date written in customs declaration forms.
D. IMPLEMENTATION PROVISIONS
1. The Ministry of Trade requests the ministries, the ministerial-level agencies, the agencies attached to the Government, the People’s Committees of the provinces and cities directly under the Central Government, the central bodies of the mass organizations to notify the contents of this Circular to the enterprises under their respective management for implementation, and at the same time, report to the Ministry of Trade on any problems arising in the course of implementation for the prompt and appropriate adjustment.
2. Enterprises having investment projects shall have to comply with this Circular. Any problems arising in the course of implementation shall be promptly reported to the Ministry of Trade for appropriate amendments and supplements.
3. Officials and employees of the Ministry of Trade shall have to strictly abide by the provisions of this Circular. Any violations shall, depending on their seriousness, be handled administratively or examined for penal liability in accordance with the provisions of law.
4. This Circular takes effect 15 days after its signing.
FOR THE MINISTER OF TRADE
Mai Van Dau