On 29th May, 2023 the General Department of Customs has just issued Official Letter 2588/TCHQ-GSQL 2023 on commenting on the draft amendment and supplement to Article 35 of Decree 08/2015/NĐ-CP for on-the-spot export and import.
1. Currently, Customs procedures of on-the-spot exported and imported goods is regulated as Article 35 Circular 08/2015/NĐ-CP dated 21st January, 2015:
Article 35. Customs procedures that must be followed by on-the-spot exports and imports
1. On-the-spot exports and imports shall include:
a) Those produced in Vietnam under contract manufacturing arrangements and sold to Vietnamese organizations or individuals by overseas ones;
b) Those traded under the sale and purchase contract between domestic enterprises and exporting and processing enterprises or enterprises located in free trade zones;
c) Those traded under the sale or purchase contract between Vietnamese enterprises and overseas organizations or individuals that have no representative in Vietnam, and delivered or received under the designation arrangement between foreign merchants with other enterprises in Vietnam.
It’s based on assessment of the current situation, advantages and disadvantages of customs procedures, tax policies applied to on-the-spot exported and imported goods:
- Points a and b, Clause 1, Article 35 will be moved on Circular No. 38/2015/TT-BTC related to outsourcing activities for foreign traders, and imported and exported activities of export processing enterprises and enterprises in non-tariff zones with the domestic market.
- Point c, Article 35 of Decree No. 08/2015/ND-CP will be deleted
2. Proposing a regulation to replace customs procedures for on – the - spot imports and exports goods as below:
|
Classify |
Current Regulation |
Plan for changing |
|
A. Company do processing under processing contract, then delivery to Vietnam company follow nominate of Processing Hirer (at oversea)
|
1. Processing company open export CD: E52 -Shipper: Processing company -Cnee: Processing Hirer (at oversea) - Remark: Delivery to company in Vietnam 2. Company in Vietnam open Import CD -Shipper: Processing Hirer (at oversea) -Cnee: Vietnam Company
|
1. Processing company open change purpose CD for the CD which imported material use for making product delivery in Vietnam. Pay duty and tax. (EPE also apply) - Open CD: A42 - Cnee: Processing company - Shipper: Processing company Pay duty and tax base on Materials HS code and value. 2. Processing Hirer company have to have Agent Contract with Vietnam company to sell this product. |
|
B. Company Import materials to make export product, then delivery to Vietnam company follow nominate of Customer at Oversea
|
1.Manufacture company open export CD: E62 -Shipper: Manufacture company -Cnee: Customer at Oversea -Remark: Delivery to company in Vietnam 2.Company in Vietnam open Import CD - Shipper: Customer at Oversea - Cnee: Vietnam Company |
1. Manufacture company open change purpose CD for the CD which imported material use for making product delivery in Vietnam. Pay duty and tax. (EPE also apply) - Open CD: A42 - Cnee: Manufacture company - Shipper: Manufacture company Pay duty and tax base on Materials HS code and value. 2. Company at Oversea have to have Agent Contract with Vietnam company to sell this product. |
|
C.Trading company in Vietnam sell to Customer at oversea but delivery to other Vietnam Company (Company at oversea has capital in other company or have Subsidiaries in Vietnam |
1.Trading company open Export CD: B11 - Shipper: FDI company - Cnee: Customer at Oversea - Remark: Delivery to company in Vietnam
2.Company in Vietnam open Import CD - Shipper: Customer at Oversea - Cnee: Vietnam Company |
1. Don’t open CD
2. Company at Oversea must have to make Agent Contract with a Vietnam Company to buy and sell this product.
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3. The estimated effects of changing these regulations as below:
1) Could effect on - the - spot export and import after being manufactured by Vietnam companies due to orders from customers in abroad (seller) (when changing purpose of opening CD and paing duty and tax, the cash flow could be effected also,…)
2) Impact on the supply chain and/or business model of companies applying the domestic export/import model.
3) Potential changes to Other Relevant Regulations as Commercial Law, Foreign Trade Management Law, Import Tax and Export Tax Law,…
4) Cost expected to increase to apply new regulations as VAT, CIT, Import and Export Tax, Other Taxes,…
The above is information of planning for changing regulation of on – the - spot export and import. The General Customs is still amending and supplementing regulation of on – the - spot expor and import during next time. There may be changes and updates that could happen. So KEN will keep checking and updating if there is any news next time.