Answering questions from European businesses about tax and customs policies

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Tan Vu Port, Hai Phong. Photo: T.Binh

Potential to become ASEAN's transport hub

Speaking at a dialogue session between the European business community and state management agencies at the launching ceremony of the 2022/2023 White Paper organized by the European Business Association in Vietnam (EuroCham) on February 16, a representative of EuroCham’s Transport and Logistics subcommittee commented that the total import and export turnover of Vietnam in 2022 surpassed the target of 700 billion USD for the first time, Vietnam has the potential to become a transport hub of ASEAN if it ensures a combination of high-quality logistics infrastructure and efficient customs procedures.

Regarding customs procedures, European businesses recommend that Customs authorities need to implement an inter-connection policy with customs procedures of ports to easily move goods from one port to another (both the current period as well as a second period between customs areas) in the case of a carrier's port or vessel operation requirement.

Responding to this issue, Ms. Bui Thi Minh Hai, Deputy Head of Customs control and supervision Division, Customs control and supervision Department, General Department of Customs, said that the issue of interoperability of customs procedures of ports has been stipulated in the guiding circulars of the Ministry of Finance, from which there is a legal basis and specific guidance on the declaration of transport with independent information or the case of transferring ports.

According to Ms. Minh Hai, this policy of linking with customs procedures is being evaluated as simple and convenient for businesses, meeting the requirements of goods management of the Customs. But with the spirit of market demand, to further facilitate business and trade activities, the General Department of Customs is developing a draft circular, implementing a pilot on customs supervision of goods in transit, import-export, transshipment, shipping back and forth with container ports in Cai Mep - Thi Vai area.

The representative of the General Department of Customs stated that, compared with the current regulations, the draft will reduce the information that businesses have to declare, allowing the use of seals of carriers instead of customs authorities in the current freight process to reduce time and costs for businesses. At the same time, the Customs authority has also strengthened measures to supervise import and export goods through modern electronic technical means. Ms. Bui Thi Minh Hai said that the draft that was issued and piloted will have results, to serve as a premise for the Customs to continue to expand the scope of nationwide application.

In addition to customs sector, and logistics-related recommendations, a representative of the Transportation and Logistics Subcommittee stated that he wanted the Government to focus more on two important areas: infrastructure to access main ports and develop high-quality logistics and distribution centers. At the same time, European businesses in Vietnam also proposed to strengthen the role of supervision and facilitation of the Government to ensure efficient resource allocation, reserve enough land for logistics and warehousing as well as the environmental safety and sustainability of these facilities, while creating transparency and fair competition.

The contribution and sharing of international experience is necessary

Regarding tax issues, Mr. Tom McClelland, Chairman of Subcommittee on Taxation and Transfer pricing, highly appreciated the efforts of the Vietnamese Government in supporting all businesses in 2022 with effective tax policies including extension, reduction of 2% value added tax, as well as positive changes and transparency of tax regulations such as circulars on tax administration, including e-commerce tax.

However, European businesses set out some recommendations on preferential policies to overcome the impact of the global minimum tax rate of 15%; Input VAT deduction is related to the VAT portion of contractor tax paid directly by foreign contractors through the online tax payment portal.

In this regard, Mr. Nguyen Thanh Hung, Deputy Director of the Tax Policy Department (Ministry of Finance) said that the business community needs to have comments on the policy development process, the Ministry of Finance and relevant authorities will study, absorb and report to the competent authorities for revision.

According to Mr. Hung, tax policies such as incentives for green growth, environmental tax, import and export tax, etc have been relatively adequate, the problem is how to make the policy come to life.

Regarding the proposal on VAT deduction, the Deputy Director of the Tax Policy Department said that this content has been relatively fully regulated, businesses that want to deduct must have invoices, vouchers, contracts, etc. If enterprises still have problems, they can work directly with the local tax authorities and the General Department of Taxation to handle them.

“Many recommendations are relevant so that Vietnam can amend its legal policy according to international experience. The Ministry of Finance has directed the tax and customs authorities to regularly speak with businesses to handle problems," Mr. Nguyen Thanh Hung emphasized to the European business community.

Regarding the global minimum tax policy, Ms. Manh Thi Tuyet Mai, Deputy Director of the Policy Department, General Department of Taxation (Ministry of Finance) said that the General Department of Taxation is being assigned by the Ministry of Finance as the presiding unit, in coordination with relevant agencies to develop plans and schemes on this tax in order to attract foreign investment.

According to Ms. Mai, the tax policy needs to be revised in a general way, otherwise it will violate international commitments, so it is necessary to share and contribute ideas from the foreign business community, in order to help the Vietnamese Government have a suitable solution from international experience.

Along with that, the Tax and Pricing Transfer Subcommittee also raised some concerns about customs value, consultation on customs value, and adjustment of price conversion in the customs declaration. With this issue, the representative of the General Department of Customs also had a specific answer at the conference, because these issues were all regulated in legal documents.