HCM City Customs answers questions about tax incentives under EVFTA for enterprises

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HCM City Customs officers inspect goods imported through Cat Lai port. Photo: T.H

HS codes for exported goods

Most of the questions from enterprises are related to HS codes for exported goods to European countries. The Trencilo Company said the company is a manufacturer of sewing thread for shoes and exports this product to European countries with HS code 5607.90.90. However, the company wondered ifthis HS code is on the list of goods subject to tax exemption under origin rules.

In this regard, HCM City Customs Department said that on September 18, 2020, the Government issued Decree No. 111/2020/ND-CP dated September 18, 2020 on the Preferential Export Tariff and Special Preferential Import Tariff of Vietnam for the implementation of the Free Trade Agreement between the Socialist Republic of Vietnam and European Union in the 2020 - 2022 period, effective from August 1, 2020. The company should follow the decree and directly contact the Customs branch where export procedures are made for specific instructions on arising problems.

Regarding HS codes for machinery imported from Europe, Boncafe Company said the company imports machinery and components from Europe. However, the HS code of the supplier is different from the HS code declared by the company for customs clearance. So does the HS code differ between the statements made on the imported documents (B/L, commercial invoice, packing list, C/O) and those made on the imported customs declaration.

The representative of the Import-Export Duties Division under HCM City Customs Department said that, based on Point h, Clause 6, Article 15 of Circular 38/2018 / TT-BTC revised at Circular 62/2019 / TT-BTC, “HS code differences between the statements made in the proof of origin and those made in the customs declaration of imported goods.”

If there are HS code differences between the statements made in the proof of origin and those made on the customs declaration of imported goods, but the description of goods made in that proof of origin conforms to that made in the customs declaration and in fact corresponds to the goods to be imported, and the customs authority has the grounds for determination that the goods whose HS code is provided in the customs declaration and/or additional customs declaration meet all applicable origin criteria, that proof of origin may be accepted.

If there are HS code differences between the statements made in the proof of origin and those made in the customs declaration of imported goods and the description of goods made in that proof of origin does not conform to that made in the customs declaration or corresponds to the goods to be imported, and the customs authority has the grounds for determination that the goods to be imported are not the ones described in the proof of origin, the customs authority shall reject that proof of origin and make a notification on the electronic customs data processing system in accordance with Clause 2, Article 22 of this Circular.

If there are HS code differences between the statements made in the proof of origin and those made in the customs declaration of imported goods but the description of goods made in that proof of origin conforms to that made in the customs declaration and in fact corresponds to the goods to be imported, and the customs authority has no grounds for determination that the goods whose HS code is provided in the customs declaration meet one of the origin criteria set in the Government’s Decree No. 31/2018/ND-CP dated March 8, 2018 on guidelines for the Law on Foreign Trade Management regarding origin of goods and relevant guiding documents.

If there are HS code differences between the statements in the proof of origin and those made in the customs declaration of imported goods, the company is requested to study the above provision for implementation.

Tax incentives in the agreement

Some enterprises raised questions on whether the import of finished medical equipment (TBYT) products from an EVFTA member country are entitled to import tax and VAT incentives under the agreement.

HCM City Customs Department said that on September 18, 2020, the Government issued Decree No. 111/2020 / ND-CP on Preferential Export Tariffs and Special Preferential Import Tariffs of Vietnam for implementation of the EVFTA.

Regarding the specialized management of medical devices, pursuant to Point b, Clause 1, Article 1 of the Government's Decree No. 03/2020 / ND-CP dated January 1, 2020 amending and supplementing Article 68 of the Decree No. 36/2016 / ND-CP dated May 15, 2016 of the Government on the management of medical devices, which was amended and supplemented in Decree No. 169/2018 / ND-CP dated December 31, 2018 of the Government amending and supplementing a number of articles of the Government's Decree No. 36/2016 / ND-CP dated May 15, 2016 on the management of medical devices, class A medical devices that already have acertificate of declaration of applied standards issued by a Department of Health, shall be imported under the needs, without any quantity restrictions,without a classification table and a written certification of medical devices issued by the Ministry of Health when performing customs clearance.

This only relates to customs clearance procedures for goods and does not provide for the application of value-added tax rates on imported specialized medical devices.

The value-added tax policy complies with Circular No. 26/2015 / TT-BTC dated February 27, 2015, Circular No. 83/2014 / TT-BTC dated June 26, 2014 of the Ministry of Finance and Official Letter No. 743 / BTC-TCHQ dated January 1,2017 of the Ministry of Finance.

Answering questions from enterprises about the Customs does not require analysis and classification, whether enterprises could ask the Customs to take samples to verify the HS codein case they have been uncertain about the HS code, HCM City Customs Department said that based on Clause 3, Article 3 of Circular No. 14/2015 / TT-BTC dated January 30, 2015, enterprises can use goods inspection services of inspection organizations as prescribed to determine the composition, physical and chemical properties and utility features of imported and exported goods.

For the advanced ruling of HS codes, an enterprise may carry out the procedures for advanced ruling of HS codes. Procedures and conditions for advanced ruling of codes are specified in Articles 23 and 24 of Decree 08/2015 / ND-CP dated January 21, 2015 and Clause 11, Article 1 of Decree No. 59/2018 / ND-CP dated April 20, 2018, on amendments and supplements to a number of articles of Decree No. 08/2015 / ND-CP dated January 21, 2015.

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Application for advanced ruling of codes is specified in Clause 3, Article 1 of Circular 39/2018 / TT-BTC dated April 20, 2018, of the Ministry of Finance amending and supplementing a number of articles of the Circular. No. 38/2015 / TT-BTC dated March 25, 2015 of the Minister of Finance. Procedures for advanced ruling of HS codes of imported goods shall be sent to the General Department of Customs.