Goods imported to create fixed assets of subjects eligible for investment incentives are exempt from import tax

Pursuant to Article 14 nDecree No. 134/2016/ND-CP dated September 1, 2016 of the Government detailing a number of articles and measures to implement the Law on Export Tax and Import Tax, effective from September 1, 2016, amended and supplemented by Decree No. 18/2021/ND-CP dated March 11, 2021

Goods imported to create fixed assets of subjects eligible for investment incentives are exempt from import tax, including:

- Machinery and equipment; components, details, separate parts, spare parts for synchronous assembly or use with machinery and equipment; Raw materials and supplies used to manufacture machinery and equipment or to manufacture components, details, separate parts, and spare parts of machinery and equipment;

- Specialized means of transport in the technological chain used directly for the project's production activities;

- Construction materials cannot be produced domestically.

In there:

Import tax exemption for the above-mentioned goods applies to both new investment projects and expansion investment projects.

Subjects eligible for investment incentives include: Investment projects in sectors eligible for investment incentives or sectors with special investment incentives as prescribed in Appendix IDecree 118/2015/ND-CP; Investment projects in areas with difficult socio-economic conditions or areas with extremely difficult socio-economic conditions as prescribed in Appendix IIDecree 118/2015/ND-CP(See details at:List of industries, occupations, and areas with investment incentives).

To be exempt from import tax on this type of goods, enterprises must proceedRegister for the list of tax-free goods expected to be importedbefore registering the first duty-free import declaration.

Import tax exemption documents:

1. IsCustoms documents for imported goods.

2. In addition to the above documents, depending on each case, the enterprise must submit one of the following documents:

- Contract to entrust the import of goodsIn case of entrusted import of goods: photocopy stamped as true copy of the agency.

- Contract for supplying goods according to the winning bid document or contractor appointment document in case of bidding, clearly stating the supply of goods does not include import tax in the case of the winning enterprise importing goods: a photocopy stamped as a true copy of the agency.

- Contract for supplying goods to organizations and individuals conducting oil and gas activities clearly stating the price of goods supply does not include import tax in case the enterprise imports goods for oil and gas activities: photocopy stamped as a true copy of the agency.

- Financial leasing contract in case of financial leasing for import of goods provided to subjects entitled to tax exemption incentives, which clearly states that the price of goods supply does not include import tax: a photocopy with a stamp of a true copy of the agency.

- Goods transfer documents in case of transfer of goods subject to tax exemption to another subject to tax exemption, the document clearly states the transfer price of goods does not include import tax: photocopy stamped as a true copy of the agency's original.

- Written confirmation from the Ministry of Science and Technology for specialized means of transport in the technology line used directly for the project's production activities: original copy.

Documents, order and procedures for certifying specialized means of transport are carried out according to the instructions of Article 5 and Article 6.Decision 30/2018/QD-TTg.

- Tax exemption list(according to form No. 13/DKDMMT/TXNK in Appendix III issued herewithCircular 39/2018/TT-BTC) has been received by the customs authority in the case of a paper notification of the Tax Exemption List expected to be imported with a reconciliation monitoring slip that has been received by the customs authority: photocopy, present the original for comparison.

In case of notification of the Tax Exemption List through the Electronic Data Processing System, the taxpayer does not have to submit the Tax Exemption List, the customs authority uses the Tax Exemption List on the Electronic Data Processing System to carry out tax exemption according to regulations.

- Lease and sublease contracts for machinery, equipment, and specialized means of transport serving oil and gas activities; Work service contract for organizations and individuals conducting oil and gas activities: photocopy.

Sample reference:Property lease contract.

- Contracts to manufacture machinery and equipment or to manufacture components, details, separate parts, spare parts of machinery and equipment necessary for oil and gas activities to supply organizations and individuals conducting oil and gas activities. The contract must clearly state the supply of goods excluding import tax: photocopy.

- Contract for manufacturing machinery and equipment or manufacturing components, details, separate parts, spare parts of machinery and equipment to create fixed assets of subjects eligible for investment incentives or to create fixed assets of shipbuilding establishments: photocopy.

Time limit for processing documents:

- Time limit for completing customs dossier inspection: no more than 02 working hours from the time the customs authority receives complete customs dossiers.

- Time limit for completing the physical inspection of goods: no more than 08 working hours from the time the customs declarant fully presents the goods to the customs authority. In case the goods are subject to specialized inspection on quality, health, culture, animal and plant quarantine, and food safety according to relevant laws, the time limit for completing the physical inspection of the goods is calculated from the time of receiving the specialized inspection results according to regulations.

For shipments with large quantities, many types or complex inspections, the head of the customs office where customs procedures are carried out shall decide to extend the time for physical inspection of goods, the maximum extension period shall not exceed 02 days.

Within a maximum period of no more than 15 (fifteen) days from the date of receipt of complete documents, the customs authority shall exempt tax or notify the taxpayer of the reason for not being eligible for tax exemption.

Lawyer Dương Minh Hòa

Ho Chi Minh City Bar Association