Exemption of duties on gifts

1. Gifts exempt from duties specified in Clause 2 Article 16 of the Law on Export and import duties are those that are not enumerated on the List of goods banned from import, banned from export, suspended from export, suspended from import and not enumerated on the List of goods subject to special excise tax (excluding those serving national defense and security purposes) as prescribed by law.

2. Duty-free allowance:

a) Gifts given by a foreign organization or individual to a Vietnamese organization or individual; gifts given by a Vietnamese organization or individual to a foreign organization or individual whose customs value does not exceed VND 2,000,000 or whose custom value exceeds VND 2,000,000 but duty on which is under VND 200,000 shall be exempt from duties up to 04 times per year.

b) Gifts given by a foreign organization or individual to a Vietnamese organization whose operating cost is covered by state budget as prescribed by state budget laws; gifts given for humanitarian or charitable purposes whose customs value does not exceed VND 30,000,000 shall be exempt from duties up to 04 times per year.

Where duty-free allowance is exceeded by an organization whose operating cost is covered by state budget, duty exemption shall be decided by the Ministry of Finance on a case-by-case basis.

c) Gifts given by a foreign organization or individual to a Vietnamese individual that are drugs or medical equipment for people having fatal diseases specified in Appendix IV hereof whose customs value does not exceed VND 10,000,000 shall be exempt from duties up to 4 times per year.

3. Application for duty exemption:

a) A customs dossier defined by customs law;

b) A donation agreement if the gift recipient is an organization: 01 certified true copy bearing the seal of such organization.

The recipient who is a natural person shall declare the gifts and information about the overseas giver on the customs declaration, and take responsibility for the truthfulness and adequacy of such information;

c) 01 original copy of the decision on exemption of duties issued by the Minister of Finance if the gifts exceed the duty-free allowance;

d) 01 original copy of the written permission issued by the superior authority for receipt and use of the duty-free goods or a document proving that the organization’s operating cost is covered by state budget (if the recipient is an organization whose operating cost is covered by state budget);

dd) 01 original copy of the document issued by the President of the People’s Committee of the province if the gift is given for humanitarian or charitable purposes.

4. Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 9. Exemption of duties on goods traded among border residents

1. Goods traded among border residents that are on the List of goods that are meant to serve their business or consumption published by the Ministry of Industry and Trade shall be exempt from duties within the allowances specified in Appendix V hereof according to Clause 3 Article 16 of the Law on Export and import duties.

Goods purchased or transport within the duty-free allowance but are not meant to serve border residents’ business or consumption shall be dutiable.

2. Exports and imports of traders who are nationals of bordering countries and permitted to do business at border markets are dutiable.

3. Application for duty exemption:

a) A customs dossier defined by customs law;

b) Original copy of the laissez-passer or ID card.

4. Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 10. Exemption of duties on goods imported for further processing and processed exports
1. Goods imported for further processing and processed exports under processing contracts exempt from export and import duties specified in Clause 6 Article 16 of the Law on Export and import duties comprise:

a) Raw materials, semi-finished products, supplies (including those for manufacture of packages of exports), imported components that are incorporated into the exports or used during the processing of exports not incorporated into the exports, including those imported by the processor to execute the processing contract;

b) Goods imported as samples that are not traded or used;

c) Machinery and equipment imported for processing under a processing contract;

d) Imported finished products that are attached on processed products or packed with processed products as a whole for export according to the processing contract or appendices thereof and are considered raw materials or supplies imported for processing;

dd) Components and parts imported for repair of processed exports under warranty according to the processing contract or appendices thereof and are considered raw materials or supplies imported for processing;

e) Goods imported for further processing but are permitted to be destroyed in Vietnam and have been destroyed in reality.

Goods imported for further processing and used as gifts shall be exempt from duties in accordance with Article 8 of this Decree.

When the processing contract expires, it is not required to re-export goods imported for processing. Imported goods that are not re-exported shall be dutiable;

g) Processed exports.

Where processed exports are made of dutiable domestic raw materials or supplies, export duties shall be charged on the value of raw materials or supplies incorporated into the products at the duty rates applied to such raw materials or supplies when the products are exported.

2. Basis for determination of eligibility for duty exemption:

a) Availability of a processing contract specified in Decree No. 187/2013/ND-CP.

The taxpayer shall write the number and date of the processing contract and the hirer on the customs declaration;

b) The taxpayer or processor hired by the taxpayer has a facility in Vietnam where goods are processed or exports are manufactured and the customs authority is notified of such facility and the processing contract in accordance with customs laws.

c) Imported raw materials, supplies and components are used for processing or manufacture of the exported products.

The value or quantity of imported raw materials, supplies and components exempt from duty is the actual value or quantity of raw materials, supplies and components used for manufacture of the processed products that are exported in reality and is determined when making a statement of raw materials, supplies and components imported for processing exports in accordance with customs laws.

The taxpayer shall truthfully declare the value or quantity of raw materials, supplies and components that are used for manufacture of the processed products that are imported in reality and granted duty exemption while following customs procedures.

3. Import duties shall be charged upon machinery, equipment, raw materials, supplies, components and processed products on which processing charges are paid by the foreign party.

4. Refuses, scrap, redundant raw materials and supplies imported for processing under a processing contract shall be exempt from import duties when they are sold domestically provided they do not exceed 3% of the quantity of each type. VAT, special excise tax and environmental protection tax (if any) shall be paid to the customs authority.

5. Procedures for granting duty exemption are specified in Article 31 of this Decree.

Article 11. Exemption of duties on goods exported for processing and processed imports

1. Goods exported for processing and processed imports under processing contracts exempt from export and import duties specified in Clause 6 Article 16 of the Law on Export and import duties comprise:

a) Raw materials, supplies and components for export.

Export duties shall be charged on the value or quantity of raw materials, supplies and components corresponding to the quantity of processed products that are not re-imported at the duty rates applied to such raw materials, supplies and components.

Where goods exported for processing are natural resources, minerals or products in which the value of natural resources or minerals plus (+) energy cost makes up at least 51% of the product price and the goods are subject to export duties, duty exemption shall not be granted.

Products in which the value of natural resources or minerals plus (+) energy cost makes up less than 51% of the product price shall be determined in accordance with Decree No. 100/2016/ND-CP dated July 01, 2016 on guidelines for the Law on amendments to the Law on Value-added tax, the Law on special excise duty, the Law on Tax administration and instructional documents thereof;

b) Goods exported as samples that are not traded or used;

c) Machinery and equipment exported for processing under a processing contract;

d) When products that are processed overseas are imported into Vietnam, import duties on the value of raw materials, supplies and components incorporated into the processed products shall be exempt; the remaining value of the products shall be dutiable at the import duty rates applied to processed imports.

2. Basis for determination of eligibility for duty exemption:

a) The taxpayer has a processing contract specified in Decree No. 187/2013/ND-CP.

b) Exported raw materials, supplies and components are used for processing or manufacture of the imported products.

The value or quantity of raw materials, supplies and components exempt from duty is the actual value or quantity of raw materials, supplies and components used for manufacture of the processed products that are imported in reality and is determined when making a statement of raw materials, supplies and components imported for processing exports in accordance with customs laws.

The taxpayer shall truthfully declare the value or quantity of raw materials, supplies and components that are used for manufacture of the processed products that are imported in reality and is granted duty exemption while following customs procedures.

3. Procedures for granting duty exemption are specified in Article 31 of this Decree.

The taxpayer shall write on the customs declaration the number and date of the processing contract, number and date of the notification to the customs authority of exported products in which the value of natural resources or minerals plus (+) energy cost makes up less than 51% of the product price.