Our Vietnam Legal Update #189 would lead you on 03 legal issues:
I. Amendment, supplement on some articles of Decree No. 122/2016/ND-CP and Decree No. 57/2020/ND-CP
On 15 November 2021, the Government issued Decree No. 101/2021/ND-CP to amend, supplement some articles of Decree No. 122/2016/ND-CP and Decree No. 57/2020/ND-CP with the following contents:
- Adjustment of export tax rates and preferential import tax rates for several commodity groups, specifically:
- Appendix I – Export Tariff according to the List of taxable goods; and
- Appendix II – Preferential import tariff schedule according to the List of taxable goods specified in Article 2.1 of Decree No. 57/2020/ND-CP.
- In case the exported goods are not listed in the Export Tariff, the declarant must declare the code of the exported goods corresponding to the eight-digit code of such goods according to the Preferential Import Tariff. In addition, customs declarants are not required to declare tax rates on export declaration form.
- Additional conditions on emission standards:
- The production and assembling of cars must meet emission standards at level 4 and level 5 for the period from 2018 to the end of 2021; level 5 or higher for the period from 2022 onwards and vehicles with level 4 emission standards manufactured and assembled that have been granted a certificate of quality, technical safety, and environmental protection before 1 January 2022 and still in effect.
- In the tax incentive consideration period, in case the car model manufactured or assembled by the enterprise has both types that meet level 4 and level 5 emission standard, the enterprise is allowed to include the output of those vehicles that meet level 4 and level 5 emissions standards to determine the output condition of that vehicle model.
- Enterprises can choose a 6-month or 12-month tax incentive consideration period:
- The 6-month tax incentive review period is from 1st January to 30th June or from 1st July to 31st December every year.
- The 12-month tax incentive review period is from 1st January to 31st December every year.
- In case an enterprise meets the following conditions: (1) selecting a 06-month tax incentive consideration period; (2) having been processed overpaid tax on the number of components manufactured and assembled for automobiles shipped in the first 6 months of the year; (3) The last 6 months of the year do not meet the production requirements as prescribed by the Tax Incentive Program; (4) the total output of the whole year that meets the production conditions of the 12-month tax incentive consideration period as prescribed by the Tax Incentive Program will still be considered for tax incentives for the last 6 months of the year. At the same time, the enterprise is entitled to handle the overpaid tax on the number of components used to manufacture and assemble automobiles shipped in the period.
- Adding 02 items enjoying preferential import tax rate of 0%, including:
- Seeds and oilseeds for breeding have Item Code No. 9805.00.00; and
- Engine ECU, for use in motor vehicles with Item Code No. 9849.46.00.
II. Guidance on administrative sanctions in case of import of banned goods
On 10 November 2021, the General Department of Customs issued Official Letter No. 5334/TCHQ-PC to guide on the administrative sanctions in case of import of banned goods. The main content is as follows:
- Acts of importing banned goods will be subject to a fine with the amount depending on the value of the goods. In addition, such goods will be confiscated in accordance with the law.
- In case the banned imported goods cause harm to human health, livestock, plants, and the environment, the act of importing such goods will be fined, and be applied with remedial measures as being forced to take the goods out of Vietnamese territory or forced to re-export goods within the time limit for enforcement of the sanctioning decision.
III. Guidance on the registration of VAT declaration of export processing enterprises
On 17 November 2021, Hai Duong Tax Department issued Official Letter No. 10989/CTHDU-TTHT to guide the registration of VAT declaration by the monthly deduction method for leasing factories of export processing enterprises. Some of the main contents are as follows:
This guide applies to export processing enterprises whose business lines are the production and processing of garment products and the subleasing of already built spare offices and factories (“Enterprise”).
- In case the Enterprise wants to lease spare offices and factories to other domestic enterprises, the Enterprise must open a separate accounting book to record revenue and expenses related to leasing activities. Warehouse and offices for the lease must be in a separate area.
- The act of leasing of offices and factories of the Enterprise must be registered with the competent tax authority to declare and pay VAT monthly/quarterly.
Maybe you are interested in reading other Legal Update of BLawyers Vietnam: November 2021 (Part 3) | November 2021 (Part 2) | November 2021 (Part 1) | October 2021 (Part 5) | October 2021 (Part 4) | October 2021 (Part 3) | October 2021 (Part 2) | October 2021 (Part 1) September 2021 (Part 4) | September 2021 (Part 3) | September 2021 (Part 2)