High efficiency from price ruling at Investment Management Customs Branch

	Ho Chi Minh City Customs Department collected nearly VND600 billion from price ruling and post-clearance audit
	HCM City Customs’ revenue increases over VND600 billion from price rulings
	HCM City Customs Department collects over VND374 billion from price ruling

Officials of the Investment Management Customs Branch exchange and guide procedures for enterprises. Photo: T.H

Adjusting the taxable price of many items

The Investment Management Customs Branch performs state management of customs and carries out customs procedures for import and export goods of foreign direct investment (FDI) enterprises, enterprises implementing investment incentive projects in the country, and projects using ODA capital... so import-export goods are diversified with many new products. Price ruling for import-export shipments with doubts about declared value is always interesting and reviewed by the Branch. Recently, when carrying out procedures for imported electrical appliances, the unit rejected the declared taxable value of some shipments. For example, household electric stove product, capacity 3500w, Bosch brand. The enterprise declares the taxable price of USD 219,1882/piece. Through price ruling, the Investment Management Customs Branch rejected the declared value of the enterprise, and determined the taxable value to increase to USD 301,9091/piece; the adjusted tax amount increased after the price ruling of over VND 1 billion.

Similarly, Toshiba washing machine product, type 9.5kg, capacity 1950w, 1 drawer, horizontal cage, no drying function, no hot water line, stainless steel washing tub, automatic control. The declared price of the enterprise is USD 205,1487/piece, after the price ruling, the customs office determines the dutiable value of USD 241.99/piece. The adjusted tax amount increased after the price ruling of over VND 460 million.

In the first 6 months of 2023, the Investment Management Customs Branch ruled over 3,900 customs declarations and rejected the declared value of enterprises after ruling nearly 1,100 declarations, with a total tax adjusted after ruling of nearly VND 43.4 billion. In which, there are many cases of large tax increases after price rulings, such as toothpaste, a tax increase of over VND 1.5 billion; toothbrush, a tax increase of over VND 1.5 billion...

Deputy Director of the Investment Management Customs Branch Nguyen Thi Thanh Hang said that to achieve the above results, the unit carried out the identification, inspection, and customs valuation in accordance with regulations; promptly implemented the direction of leaders at all levels to review the dutiable value of import and export goods; along with that, it is the initiative and high responsibility of cadres and civil servants to perform their duties, in order to effectively carry out price ruling, correctly and fully collect taxes for the state budget.

Recommending many solutions

According to the Deputy Director of the Branch Nguyen Thi Thanh Hang, customs valuation is a specific technical and professional field that plays a key role in customs management in general and tax management for import and export goods in particular. With the characteristics of import and export goods at the Investment Management Customs Branch, they are mainly in the Value Risk List, have exclusive brands, high value, and belong to multinational corporations, so the price ruling at the Branch faces many difficulties when arguing with businesses on the legal basis, the appropriateness of the declared price from the collected information sources, the trading practices according to international practices...

With the above characteristics, during the price ruling process, the unit has difficulty in requesting enterprises to provide the VAT invoices for sale on the domestic market of Vietnam when enterprises import under the A12 form for raw materials for production... Difficulties arise when enterprises cannot calculate the cost for each item but generally for the whole imported shipment, so estimating the distribution of deductible expenses for each item is not an accuracy guarantee; sources of information on the value of import and export goods through information exchange with customs of other countries or international organizations are limited.

In addition, the implementing officer also encountered some problems, in the process of determining whether the special relationship between the buyer and the seller affects the transaction value: imported goods with a unique brand name, at the time of ruling, the enterprise presents an invoice for sale, but because the selling price is according to the regulations of the corporation, when using the deduction method, the cost of goods sold cannot be calculated, in some cases the cost of goods sold is lower than the price declared by the enterprise. In addition, when performing a data lookup on the system, there is no data of identical or similar imported goods sold to another importer who does not have a special relationship with the exporter (seller) to compare.

For foreign-invested enterprises (enterprises of corporations), the purchase of goods is based on the group's operating regulations or on the agreement in the service contract signed between two parties in the same group. Using the services of the purchasing department of the parent corporation to represent the company and negotiate with raw material suppliers for production is a common practice for companies belonging to large corporations.

In order to make the price ruling work even more effective, the Investment Management Customs Branch recommends and regularly trains on valuable work, especially after each staff rotation to ensure that officials receiving the new position can meet the job; develop a model of "Ruling Branch - Import-Export Appraisal Tax Department" or "Accompanying price ruling with Branch" for a number of items with high tax rates, high turnover or high-value risks to exchange experiences, promptly direct and handle arising problems for each set of ruling documents.