Facilitating customs clearance for petroleum

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Customs officers inspect imports and exports of petroleum

On October 14, the General Department of Customs released information about the management of petroleum imports and exports.

Many policies on tax incentives for imported petroleum issued

The Ministry of Finance reported the Government on issuing Decree 51/2022 dated August 8, 2022 to revise down the import preferential tax rate for petrol products in Heading 27.10 the Preferential Import Tax Schedule from 20% to 10%. The Decree takes effect from August 8, 2022.

Regarding the VAT, under Article 3 of the Law on VAT in 2008, commodities and services for business, production and living activities in Vietnam (including commodities and services bought from foreign individuals and organizations) have three VAT rates, which are 0% for exported commodities and services; 5% for some necessities such as clean water and agricultural products and 10% for all taxable commodities and services.

Petroleum has a VAT of 10%, which is applied to many other commodities and services

For excise tax, according to Law on excise tax, the excise tax only levies on petrol products but oil products of all kinds.

Pursuant to the Excise Tax Schedule described in Article 7 of Law on Excise Tax 2008 revised in 2014, the excise tax rate for petrol is 10%, E5 biofuel is 8% and E10 biofuel is 7%

Regarding the green tax, the National Assembly Standing Committee issued Resolutions on reducing the green tax for jet fuel, petrol oil and grease from 2022.

Specifically: Reducing 50% of green tax for jet fuel from January 1, 2022 to the end of December 31, 2022 (from 3,000 VND/liter to 1,500 VND/liter) according to Resolution 13/2021/ UBTVQH15 on December 31, 2021.

Reducing 50% of green tax rate for gasoline, oil and grease and reducing 70% of green tax rate for kerosene from April 1, 2022 to the end of December 31, 2022 according to Resolution 18/2022/UBTVQH15d dated March 23, 2022.

Reducing the green tax rate for gasoline, oil and grease products to the floor level in the tax bracket specified in the Law on Green Tax 57/2010/QH12 until the end of December 31, 2022 according to Resolution 20/2022/UBTVQH15d 06 July 7, 2022, effective from July 11, 2022, specifically:

Petrol: Reduced from 2,000 VND/liter to the floor level of 1,000 VND/liter.

Flight fuel: Reduced from 1,500 VND/liter to the floor level of 1,000 VND/liter.

Diesel: Reduced from 1,000 VND/liter to the floor level of 500 VND/liter.

Fuel oil, lubricating oil: Reduced from 1,000 VND/liter to the floor level of 300 VND/liter.

Grease: Reduced from 1,000 VND/kg to the floor level of 300 VND/kg.

Kerosene: Maintained at 300 VND/liter because this is the floor level in the tax bracket.

Notably, on September 30, 2022, the Ministry of Finance submitted Report 224/TTr-BTC to the Government on the Draft Resolution of the National Assembly on reducing the excise tax on petrol and VAT on petrol and oil as follows:

“Reducing maximum excise tax rates on petrol (including E5, E10) and reducing 50% of VAT rate on petrol of all types, jet fuel, diesel oil, kerosene, fuel oil, lubricating oil, grease; assigning the National Assembly Standing Committee to decide on the specific reduction of excise tax on petrol and VAT on petrol and oil as well as the time to apply the excise tax reduction in case the world price of petrol and oil continues complicated developments, increasing or remaining at a high level, affecting the inflation index, macro-economy, people's living standards and economic growth."

Facilitate customs clearance

According to the General Department of Customs, import procedures and customs clearance for petroleum products have always been supported by the Customs.

To further facilitate and shorten the clearance time and quickly bring goods to the market, the General Department of Customs issued Document 3642/TCHQ-GSQL dated August 31, 2022, requesting local Customs Departments quickly carry out customs clearance for imported petrol and oil products; arrange customs officers to quickly handle customs procedures, inspect and remove problems related to petroleum imports even during holidays, outside of office hours to ensure customs clearance 24/7, and actively understand the actual situation and solve arising problems, avoiding harassment for enterprises.

Regarding the implementation of Decree 67/2020/ND-CP amending and supplementing a number of articles of Decree 68/2016/ND-CP dated July 1, 2016, stipulating conditions for trading in duty-free goods, customs checkpoints, gathering place, customs inspection and supervision place, effective from August 10, 2020, the General Department of Customs said, under Clause 11 Article 1 of Decree 67 amending and supplementing Article 22 of Decree 68/2016/ND-CP dated July 1, 2016 conditions for inspection and supervision of petrol and oil depots, petrol and oil traders must have two years from the effective date of the decree. That is, the implementation time will be from August 10, 2022.

This regulation helps the management agency to accurately and promptly grasp the volume of imported petrol and oil, and collect a sufficient amount of tax payable, improving the efficiency of corporate governance.

To implement the above Decree, the General Department of Customs has issued documents to urge businesses and Customs to ensure the correct implementation of the content and time limit prescribed by law.

Enterprises also have two years to prepare before Decree 67 takes effect on regulations on tank standards. The General Department of Customs has not received any complaints from businesses in the implementation of Decree 67/2020/ND-CP.

Currently, 46 out of 52 major petroleum depots (accounting for nearly 88.5%) meet the provisions of Decree 67/2020/ND-CP on installing and automatically connecting tank level measuring devices with the Customs office; and six deports (accounting for 11.5%) have not met the provisions.

On the other hand, according to the Vietnam Petroleum Association, the domestic petroleum output meets 70% of consumer demand in Vietnam and the rest (30%) is from imported sources.

Why are many oil tanks suspended customs procedures for petroleum imports and exports? VCN – The reason for oil tanks being suspended is that many enterprises have not completed the ...