Vietlaw Weekly Newsletter No. 375
Table of enquiries – answers relating amendments to customs procedures and policies
Dispatch No. 4787/TCHQ-TXNK dated August 15th, 2018 of the General Department of Customs on dealing with issues and difficulties arising from implementation of the Decree No. 59/2018/ND-CP and the Circular No. 39/2018/TT-BTC
The document is to attach the Table of enquiries – answers of the General Department of Vietnam Customs regarding some amended regulations on customs declaration procedures and customs policies in Decree No. 59/2018/ND-CP and Circular No. 39/2018/TT-BTC .
Accordingly, in cases where exports and imports are suspected of any fraud on the customs valuation and posing high customs valuation risks and the customs declarants are judged or classified as enterprises that do not comply with the regulations, it is required to give explanations and proofs for the customs value declared within the duration of completion of customs procedures.
With regard to a shipment of which declared customs value is rejected, if the customs declarant makes supplementary declaration according to the value of customs authority within 05 days, the customs clearance shall be settled immediately. However, if the customs declarant does not make supplementary declaration or make supplementary declaration which does not conform to the requirements set out in the notification of customs valuation, the customs authority shall determine value regardless of whether the enterprise agrees or disagrees.
Currently, there have not been amended regulations on exemption from import duty on raw materials which are imported for manufacturing of domestic exports through outsourcing the processing service.
Import duty on raw materials used for manufacture of goods exported on the spot is not exempt. The exemption from import duty on raw materials is only given to goods exported abroad or exported to non-tariff zones.
CV4787_15082018TCHQ[ENGLISH].pdf (English translation)
Amendments to regulations on investment incentives for investment projects before July 1st, 2015
Circular No. 81/2018/TT-BTC dated August 28th, 2018 of the Ministry of Finance on amending, supplementing to Circular No. 83/2016/TT-BTC dated June 17th, 2016 of the Ministry of Finance guiding the implementation of investment incentive programs under the provisions of the Law on Investment No. 67/2014/QH13 and the Government’s Decree No. 118/2015/ND-CP dated November 12th, 2015
According to Clause 5 Article 7 of Circular No. 83/2016/TT-BTC , investment projects that have investment permits, investment certificates before July 1st, 2015 and domestic investment projects with the maximum total investment of less than VND 15 billion commenced before July 1st, 2015 shall comply with tax incentive policies (enterprise income tax, import duty, non-agricultural land use tax) in accordance with legislative documents entering into force before July 1st, 2015.
According to the supplemented regulations in this Circular, investment projects which apply tax incentive policies according to regulations entering into force before July 1st, 2015 shall be guaranteed investment incentives in accordance with Article 3 of Decree No. 118/2015/ND-CP.
This Circular takes effect from October 12th, 2018.
Circular No. 81/2018/TT-BTC dated August 28th, 2018 of the Ministry of Finance on amending, supplementing to Circular No. 83/2016/TT-BTC dated June 17th, 2016 of the Ministry of Finance guiding the implementation of investment incentive programs under the provisions of the Law on Investment No. 67/2014/QH13 and the Government’s Decree No. 118/2015/ND-CP dated November 12th, 2015.
TT81_28082018BTC[VLO].pdf (English translation)
New regulations on use of electronic invoices
Decree No. 119/2018/ND-CP dated September 12th, 2018 of the Goverment on prescribing electronic invoices for sale of goods and provision of services
This Decree regulates the obligatory use of electronic invoices in all activities of goods sale, service provision in order to thoroughly replace paper invoices.
According, all enterprises, business organizations and other organizations, when selling goods, providing services are obliged to issue e-invoices with tax authorities’ identification codes.
In addition, business households or individuals keeping accounting records, regularly hiring at least 10 employees and earning the preceding year’s revenue which equals at least 03 (three) billion dong in the commerce and service sector shall be also obliged to use e-invoices with tax authorities’ identification codes.
Particularly, enterprises doing business in the following sectors: electricity, petroleum, post and telecommunications, transportation, clean water, finance and credit, insurance, healthcare, electronic commerce, supermarket business or trading shall be entitled to use e-invoices without tax authorities’ identification codes.
Another special point of this Decree is that e-invoices must be issued whenever goods are sold and/or services are provided regardless of value of each sale or provision. Under the earlier regulations, it is exempt from issuance of invoices upon selling goods, providing services valued at under VND 200,000.
The use of e-invoice with or without the tax agency's identification code is obliged to be registered on the Web Portal of the General Department of Taxation according to Form No. 01 issued together with this Decree. Notably, from the date of use of e-invoices as registered, paper invoices which remain unused (if any) must be destroyed rather than being used further.
This Decree takes effect from November 1st, 2018.
However, the transformation from the use of paper invoices to e-invoices shall be carried out according to the road map to November 1st, 2020 and Decree No. 51/2010/ND-CP , Decree No. 04/2014/ND-CP shall remain in effect until October 31st, 2020 and shall be expired from November 1st, 2020.
ND119_12092018CP[ENGLISH].pdf (English translation)
Regarding VAT upon transferring debts between a Company and its branches
Official letter No. 3300/TCT-DNL dated August 27th, 2018 of the General Department of Taxation regarding guidelines on tax obligations towards the activity of assets transfer of banks
According to Clause 7 Article 5 of Circular No. 219/2013/TT-BTC , assets transferred upon transformation of enterprises are exempt from both issuance of invoices and declaration of value added tax (VAT).
However, in case a branch wholly transfers assets, debts to the its parent company under a contract on sell and purchase of assets, debts or an agreement on transfer of assets, debts, this is not the form of transformation of enterprise and therefore it shall not be exempt from VAT declaration.
With regard to cumulated losses (if any) of the Branch transferred to the parent company according to the sale contract or transfer agreement as mentioned above, it also does not belong to the cases eligible to carry out loss carryforward for 5 consecutive years according to Article 7 of Circular No. 96/2015/TT-BTC .
CV3300_27082018TCT[VLO].pdf (English translation)
Regulations on organic agriculture production
Decree No. 109/2018/ND-CP dated August 29th, 2018 of the Government on organic agriculture
This Decree provides for production, certification, labeling, logo, traceability, sale and state inspection of products from organic agriculture in the fields of cultivation, husbandry, forestry and aquaculture.
“Organic agriculture” means a production system which sustains the health of soils, ecosystems and people. It relies on ecological processes, biodiversity and cycles adapted to natural conditions, rather than the use of inputs with adverse effects.
“Products from organic agriculture” means products, herbal ingredients, cosmetics and other products or plant varieties and animal breeds; animal feeds and aquaculture feeds that are produced, certified and labeled in accordance with regulations of this Decree.
One of the basic principles of organic agriculture production is that synthetic inputs at all stages of the organic production chain should be avoided and genetic modification, irradiation and other technologies that harm organic production should not be employed.
Organic products should be certified by a third party in accordance with TCVN or international, regional or foreign standards applied during organic production.
This Decree takes effect from October 15th, 2018.
ND109_29082018CP[ENGLISH].pdf (English translation)
Analysis - Classification
Translation of Explanatory Notes 2017 edition of the WCO
Official letter No. 5563/TCHQ-TXNK dated September 25th, 2018 of the General Department of Vietnam Customs regarding Explanatory Notes and the Compendium of Classification Opinions 2017 edition
This Official letter is accompanied by the Explanatory Notes and the Compendium of Classification Opinions 2017 edition of the World Customs Organization (WCO) as the official document for reference serving the classification of imports/exports according to the List of Vietnam's imports and exports
In the course of application, if there are differences between description of goods in Vietnamese and description of goods in English, the description of goods in English shall be directly applied.
CV5563_25092018TCHQ[VLO].pdf (English translation)
Construction investment unit cost 2016
Decision No. 706/QD-BXD dated June 30th, 2017 of the Ministry of Construction on promulgation of investment unit cost and construction unit cost of structural assemblies in 2016
Construction investment unit cost (investment unit cost) 2016 issued together with this Decision is the basis for investors to consult and to use to estimate and manage construction investment cost
“Investment unit cost” is needed cost to invest in constructing a new structure per unit of area, capacity according to the structure design.
The investment unit cost promulgated in this Decision is calculated with construction price index of Quarter IV of 2016. For the construction works using USD, the cost in USD shall be changed to VND as per the average exchange rate in Quarter IV/2016 as 1 USD = 22.533 VND.
The aforesaid investment unit cost excludes special costs according to particular requirements of each project/construction work, such as: Compensation, loan interest during, Initial working capital (construction investment period, etc.
This Decision takes effect from the date of its signing.
QD706_30062017BXD[EN].pdf (English translation)
The Government requests amendments to many construction-related Laws
Resolution No. 110/NQ-CP dated August 25th, 2018 of the Government on some primary tasks and solutions for resolving difficulties in implementing construction-related policies
Aiming to resolve difficulties in implementing construction-related policies, the Government requested Ministers, agencies to focus on amending, supplementing to and newly promulgating these Laws and Decrees:
1. Law on amendments to the Laws on Construction, Housing, Real Estate Trading and Urban Planning to ensure consistency in the legal system, reform and simplify administrative procedures and investment conditions.
2. The Law on Public Investment with a view to simplifying administrative procedures, promoting autonomy in preparing, appraising and assigning the annual and medium-term public investment plans.
3. The Law on amendments, supplements to a number of articles of the Law on Investment and the Law on Enterprises with a view to amending the regulations on scope of application; rules for applying the Law on Investment; entities eligible for investment incentives; business lines eligible for investment incentives; business lines subject to conditions; power of and procedures for making investment; criteria for determining the investment projects whose decisions on investment guidelines are issued by the Prime Minister; law against wrongful seizure of final trust; issuance of investment registration certificates and state management of business operation, etc. to ensure consistency in the legal system and improve investment environment.
4. The Law on Bidding (amended) and Decree No. 63/2014/ND-CP with a view to amending procedures and methods for selecting contractors and investors, regulations on bidding for consulting services; expanding the scope of direct contracting with regard to construction planning consulting.
5. The Law on amendments, supplements to some articles of the Law on Land with a view to uniformly providing for the time delay in execution of the projects for which land is appropriated between the Law on Land and the Law on Investment; developing methods for performance security; simplifying business conditions.
6. The Law on amendments, supplements to the Law on Environmental Protection with a view to simultaneously carrying out the procedures for appraising the environmental impact assessment report (or determining the environmental protection plan) and the procedures for appraising the project and construction design. During the approval for investment guidelines, it is only required to carry out preliminary environmental impact assessment.
NQ110_25082018CP[ENGLISH].pdf (English translation)
E-Customs - VNACCS
Regulations on formatting of data messages exchanged between customs authorities and processing, export manufacturing or export processing enterprises
Decision No. 2270/QD-TCHQ dated August 9th, 2018 of the General Department of Custom on issuing regulations on formating of data messages exchanged between customs authorities and processing, export manufacturing or export processing enterprises
Under this Decision, data used for information exchange between customs authorities and processing, export manufacturing or export processing enterprises must apply XML language
XML (eXtensible Markup Language) is a set of rules for dividing a material into different parts, marking and combining these parts to identify data easier
Data exchanged between customs authorities and processing, export manufacturing or export processing enterprises shall be considered complete and valid if it is not in breach of the rules regarding the syntax and the structure of data message which are specified in the Appendix enclosed with this Decsion.
This Decision takes effect from the date of its signing and replaces Decision No. 2228/QD-TCHQ dated July 5th, 2017.
QD2270_09082018TCHQ[ENGLISH].pdf (English translation)
Pilot program for supervision of electronic customs procedures at seaports and international airports
Decision No. 2722/QD-BTC dated December 29th, 2017 of the Ministry of Finance on pilot program from management and supervision of electronic customs procedures for exports, imports, transited goods and transshiped goods at seaports and international airports
The pilot program for e-customs management and supervision promulgated in this Decision only applies to goods imported/exported at seaports and civil international airports under the management of Customs Departments of Ho Chi Minh City and Ba Ria Vung Tau province.
Pilot program duration is from January 2nd, 2018 to effective date of a Circular amending to Circular No. 38/2015/TT-BTC .
This Decision takes effect from January 2nd, 2018.
QD2722_29122017BTC[ENGLISH].pdf (English translation)
Export processing enterprises
EPEs’ machinery transferred to their branches shall not be exempt from import/export duty
Official letter No. 2550/GSQL-GQ2 dated August 15th, 2018 of the General Department of Vietnam Customs regarding customs procedures of export processing enterprises (EPEs)
According to point c Clause 4 Article 2 of the Law on import and export duties No. 107/2016/QH13, goods transferred from an EPE to another one shall be exempt from import duty/export duty.
Thus, under this provision, it is only exempt from import duty/export duty on goods transferred between EPEs.
Accordingly, in case an EPE moves machinery, equipment to its branch which does not operate in the form of an EPE, import duty/export duty shall not be exempt.
CV2550_15082018TCHQ[VLO].pdf (English translation)
List of 20 units appointed to conduct inspection of imported foods (under the management of the Ministry of Agriculture and Rural Development)
Decision No. 3489/QD-BNN-QLCL dated August 31st, 2018 of Ministry of Agriculture and Rural Development on assignment of state inspection tasks in terms of food safety of imported foods with regard to products under the management of the Ministry of Agriculture and Rural Development
This Decision is to announce the List of 20 units that are assigned to conduct food safety inspection with regard to imported goods subject to the management of the Ministry of Agriculture and Rural Development. The details are provided in the Appendix enclosed with this Decision.
Notably, with regard to an imported shipment that has various types of food; blending food of which many ingredients belong to the management of at least 2 Ministries or belong to the management of 2 managing agencies in the field of Agricultural and Rural Development, the importer is optional to select 01 inspecting agency (in charge of receiving dossier) in order to carry out administrative procedures.
This Decision takes effect from the date of its signing and replaces Decision No. 3254/QD-BNN-QLCL dated December 27th, 2012.
QD3489_31082018BNN[VLO].pdf (English translation)
Regarding exportation right of FDI enterprises
Official letter No. 2829/GSQL-GQ2 dated September 12th, 2018 of the General Department of Vietnam Customs regarding guidelines on customs procedures for export under rights of foreign direct investment enterprises (FDI enterprises)
According to Clause 1 Article 7 of Decree No. 09/2018/ND-CP, an FDI enterprise already obtaining exportation right is entitled to export goods purchased in Vietnam; goods processed in Vietnam and goods legitimately imported into Vietnam.
Customs procedures shall be carried out according to Article 48 of Decree No. 08/2015/ND-CP (which has been amended, supplemented at Clause 21 Article 1 of Decree No. 59/2018/ND-CP).
Particularly, the custom dossier is not required a written acceptance to receive back the goods of the foreign goods owner (except for the case of exporting the goods to return the seller of such consignment).
Customs procedure code of the form of re-export of intact goods is B13 - export of already - imported goods.
CV2829_12092018TCHQ[VLO].pdf (English translation)
Import and export policies
Regarding import of scraps without national technical regulations on environment
Official letter No. 5283/TCHQ-GSQL dated September 11th, 2018 of the General Department of Vietnam Customs regarding import of scraps without national technical regulations on environment
According to Article 76 of the Law on environment protection 55/2014/QH1, scraps imported from abroad to Vietnam must meet the environmental technical regulations and must belong to the List of scraps permissible to be imported.
Accordingly, with regard to scraps included in the List of scraps permissible to be imported (announced at Decision No. 73/2014/QD-TTg) without technical regulations promulgated by the Ministry of Natural Resources and Environment, they are not eligible to be imported.
CV5283_11092018TCHQ[VLO].pdf (English translation)
List of functional foods for children subject to price declaration
Circular No. 22/2018/TT-BYT dated September 12th, 2018 of the Ministry of Health regulating List of functional foods for children under 06 years old subject to price declaration
According to Article 2 of this Circular, these functional foods for children under 06 years old subject to price declaration:
1. Health protecting foods
2. Medical nutritious foods
3. Food supplements, including nutritious products for children reach 36 months of age
This Circular takes effect from November 1st, 2018.
This Circular does not apply to milk products for children under 06 years old which belong to the cases of price stabilization regulated at Circular No. 30/2013/TT-BYT.
TT22_12092018BYT[VLO].pdf (English translation)
Regarding costs of leasing office before establishment of an enterprise
Official letter No. 5973/CT-TTHT dated June 20th, 2018 of the Department of Taxation of Ho Chi Minh city regarding costs before establishment
According to Clause 12.b Article 14 of Circular No. 219/2013/TT-BTC , before a company is established, if its founders authorize an individual in writing to pay on their behalf costs of leasing working office, the enterprise shall be still allowable to deduct and make costs accounting for invoices for leasing the office bearing name of the authorized individual.
Costs of leasing the office arisen before the establishment of the enterprise are not recorded as fixed assets but are amortized into business cost of the enterprise in a maximum time not exceeding 3 years (Clause 3 Article 3 of Circular No. 45/2013/TT-BTC).
CV5973_20062018CTHCM[VLO].pdf (English translation)
Sea and Aquatic food
Plan for prevention of illegal fishing up to 2025
Decision No. 78/QD-TTg dated January 16th, 2018 of the Prime Minister on national plan of action to prevent, deter and eliminate illegal, unreported and unregulated fishing up to 2025
This Decision is to promulgate the National plan of action to prevent, deter and eliminate illegal, unreported and unregulated fishing until 2025.
This Decision takes effect from the date of its signing.
QD78_16012018TTg[EN].pdf (English translation)
Requirements for fishery consignments imported into Vietnam for further processing and export to the EU
Dispatch No. 57/QLCL-CL1 dated January 10th, 2018 of the Ministry of Agriculture and Rural Development requirements for fishery consignments imported into Vietnam for further processing and export to EU
To comply with regulations of EU, fishery consignments imported into Vietnam for further processing and export to the EU must have the certificate which fully shows these contents:
- Come from an establishment(s) implementing a program based on the HACCP principles in accordance with Regulation (EC) No. 852/2004;
- Have been caught and handled on board vessels, landed, handled and where appropriate prepared, processed, frozen and thawed hygienically in compliance with the requirements laid down in Section VIII, Chapters I to IV of Annex III to Regulation (EC) No. 853/2004.
- Satisfy the health standards laid down in Section VIII, Chapter V of Annex III to Regulation (EC) No. 853/2004 and the criteria laid down in Regulation (EC) No. 2073/2005 on microbiological criteria for foodstuffs;
- Have been packaged, stored and transported in compliance with Section VIII, Chapters VI to VIII of Annex III to Regulation (EC) No 853/2004;
- Have been marked in accordance with Section I of Annex II to Regulation (EC) No. 853/2004;
- The guarantees covering live animals and products thereof, if from aquaculture origin, provided by the residue plans submitted in accordance with Directive 96/23/EC, and in particular Article 29 thereof, are fulfilled; and
- Have satisfactorily undergone the official controls laid down in Annex III to Regulation (EC) No. 854/2004.
For consignment of frozen fishery products imported directly into Vietnam from freezer vessel: the consignment must be accompanied with documents signed by the captain stating full contents in point 2 of this Official letter.
Amendments to criteria for verification of results of seafood safety inspection
Circular No. 02/2017/TT-BNNPTNT dated February 13th, 2017 of the Ministry of Agriculture and Rural Development on amending certain articles of Circular no. 48/2013/TT-BNNPTNT of 13 February 2017 on pre-export inspection and certification for seafood safety
This Circular takes effect from April 11th, 2017.
TT02_13022017BNN[EN].pdf (English translation)
State Capital Investment
Amendments to regulation on investment and transfer of state capital at enterprises
Circular No. 59/2018/TT-BTC dated July 16th, 2018 of the Ministry of Finance on amending and supplementing certain articles of the Circular No. 219/2015/TT-BTC dated December 31, 2015 by the Minister of Finance on state capital investment in enterprises, use and management of capital and assets in enterprises
This Circular is to add more guidelines on investment, management, use and transfer of state capital at enterprises, in particular:
- Cases must record an increase in state capital and adjust the charter capital amount stated in the enterprise registration certificate;
- Cases must record a decrease in state capital invested in enterprises and procedures for it;
- Procedures for change of approach to transfer of state capital invested in a joint stock company, a multiple-member limited liability company;
- Distribution of profits of a state-owned enterprise.
This Circular takes effect from September 1st, 2018.
TT59_16072018BTC[ENGLISH].pdf (English translation)
Regarding network code conversion plan
Decision No. 798/QD-BTTTT dated May 25th, 2018 of the Ministry of Information and Communications on promulgating network code conversion plan
This Decision is to promulgate plan for conversion of 11-digit phone numbers to 10-digit phone numbers, applicable to all mobile network carrier (MobiFone, VinaPhone, Viettel, Vietnammobile và Gmobile
Accordingly, road map for conversion of 11-digit phone numbers to 10-digit phone numbers shall begin from September 15th, 2018 to June 30th, 2019, in which, the parallel dialing shall begin from September 15th, 2018 to November 14th, 2018
This Decision takes effect from the date of its signing.
QD798_25052018BTTTT[ENGLISH].pdf (English translation)
Guidelines on aviation security training
Circular No. 43/2017/TT-BGTVT dated November 16th, 2017 of the Ministry of Transport on aviation security training
This Circular takes effect from January 15th, 2018 and replaces Circular No. 29/2014/TT-BGTVT dated July 29th, 2014.