Client Alert Law on Export and Import Duties 2016 On 06 April 2016, the National Assembly passed Law on Export and Import duties 2016, which shall take effect on 1 September 2016. As one of the four key issues of customs modernization, Law on Export and Import Duties 2016 is expected to establish a more competitive business environment in Vietnam under the context of accelerating roadmap for duty elimination following Vietnam’s commitments in international trade treaties. To such extent, the new law supplements new regulations on customs duty, duty exemptions and time limits for duty payment. Certain key developments under Law on Export and Import duties 2016 are as follows: 1 Duty exemption applicable to a larger number of imports and exports The new Law grants duty exemption to 23 types of goods, which is significantly higher than those under the current regulations. In particular, pursuant to Law on Export and Import duties 2016, notable additional goods under such exemption include: • Raw material, supplies and accessories imported for export production under contract manufacturing, which are currently entitled to 275-day duty deferral; • Goods for temporary import/export for following purposes: – Machines and equipment for repairing marine vessels and airplanes: Under current regulations, only spare parts and accessories of temporary import/export are entitled to duty exemption. The new Law expands duty exemption to also cover the machines and equipment of temporary import/ exports; – Temporary imports/exports for repair and warranty; – Goods for trading business of temporary import/export (bank guarantee or deposit required); • Fertilizer, pesticide which have not been domestically produced, subject to necessity appraisal of line ministries; • Goods for non-commercial purpose including: samples, photos, films, alternative models for samples, advertising publication in small quantities; Tax Vietnam Baker & McKenzie (Vietnam) Ltd. 12th Floor, Saigon Tower 29 Le Duan Blvd District 1 Ho Chi Minh City Socialist Republic of Vietnam Tel: +84 8 3829 5585 Fax: +84 8 3829 5618 Baker & McKenzie (Vietnam) Ltd. Hanoi Branch Office Unit 1001, 10th Floor Indochina Plaza Hanoi 241 Xuan Thuy Street Cau Giay District, Hanoi Socialist Republic of Vietnam Tel: +84 4 3825 1428 Fax: +84 4 3825 1432 April 2016 2 Vietnam | April 2016 Should you wish to obtain further information or want to discuss any issues raised in this alert with us, please contact: Fred Burke +84 8 3520 2628 firstname.lastname@example.org Nguyen Thanh Vinh +84 8 3520 2660 email@example.com www.bakermckenzie.com This client alert provided by Baker & McKenzie (Vietnam) Ltd. is intended to provide our clients, and other interested parties, with an overview of the recent legal changes in the relevant area for information purposes only. The information contained in this client alert does not constitute legal advice or legal opinion, and should not be regarded as a substitute for detailed advice in individual cases. The information, as referred to in this client alert, is based on the laws, regulations, notifications, practice and policy at the time of its production. The laws, regulations, notifications, practice and policy may change from time-totime and, therefore, the use of this client alert must be taken with due care. You are strongly advised that no use should be made of the information in this client alert without prior consultation with Baker & McKenzie (Vietnam) Ltd.. No portion hereof may be reproduced or transmitted, by any means, without the prior written permission from Baker & McKenzie (Vietnam) Ltd.. All rights reserved. Baker & McKenzie (Vietnam) Ltd. is a member of Baker & McKenzie International, a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a “partner” means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an “office” means an office of any such law firm. ©2016 Baker & McKenzie (Vietnam) Ltd. All rights reserved. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. • Goods are not domestically produced, which are imported directly for educational purposes. Law on Export and Import duties 2016 also eliminates exemption for imports as fixed assets of investment projects of official development assistance (ODA) capital sources; 2 Duty refund in the event of wrong declaration Under the current regulations, wrong declaration may be entitled to duty refund if such wrong declaration is conducted within 365 days from the date of detection. This regulation accommodates the possibility of refunding the overpaid duty if such wrong declaration is detected within 365 days since the customs declaration. Nonetheless, the new Law has abolished this regulation. As such, taxpayers will no longer have chance to claim the overpaid duty if such mistakes are made by themselves. 3 Time limits for duty payment Privileged enterprises (under Authorized Economic Operators Scheme) are entitled to a grace period of up to 40 days in comparison with other taxpayers. As such, instead of paying duties before goods release, privileged enterprises may make payment no later than the 10th day of the month following the month of goods release or clearance. 4 Anti-dumping duty, countervailing duty, safeguard duty The new law supplements a Chapter to clarify application of the abovementioned duties. The Ministry of Industry and Trade is the decision maker, and Ministry of Finance decides relating protocols, including declaration, collection, payment, refund of such duties. Countervailing duty and anti-dumping duty shall be applied for up to five years from effective date. For safeguard duty, the duration will not exceed four years inclusive of the temporary period . Where necessary, these periods may be extended.