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| Customs officers of Thanh Hoa Customs Department perform professional tasks. |
Inadequacies from policy
The National Assembly delegation of Binh Duong province sent proposals from the province’s voters on the issue of on-site import and export specified in Point c, Clause 1, Article 35 of Decree No. 08/2015/ND-CP dated January 21, 2015 of the Government: “Goods purchased and sold between Vietnamese enterprises and foreign organizations and individuals that are not present in Vietnam and are designated by foreign traders to deliver and receive goods with other enterprises in Vietnam”.
According to voters, goods purchased and sold between Vietnamese enterprises and foreign organizations and individuals that are not present in Vietnam and are designated by foreign traders to deliver and receive goods with other enterprises in Vietnam fall under the category of carrying out on-site export and import procedures according to regulations. In cases where foreign traders do not meet the conditions of foreign traders not being present in Vietnam specified in Clause 5, Article 3 of the Law on Foreign Trade Management, they are not subject to on-site import and export.
Besides that, since 2015, regulations on on-site export and import have been more specifically stipulated in Government Decree such as Decree No. 08/2015/ND-CP, Decree No. 134 /2016/ND-CP… Meanwhile, Clause 1, Article 1 of Decree No. 18/2021/ND-CP dated March 11, 2021 on amending and supplementing some articles of Decree No. 134/2016/ND-CP dated September 1, 2016 guidelines for the law on export and import duties, which regulates the form of on-site import and export subject to tax. Therefore, the connotation of export and import activities is not consistent between the legal system on trade and foreign trade and the legal system on export and import taxes.
Voters reflected that the above regulations currently have inconsistencies and difficulties in implementation, especially for businesses that process, export and import on the spot, which cannot be refunded taxes as prescribed in Clause 4, Article 1 of Decree No. 18/2021/ND-CP, leading to a backlog of import taxes and difficulties for businesses in maintaining production and business activities.
Therefore, to ensure state management of customs is unified and facilitate businesses to improve production and business efficiency, voters recommend: urgently reviewing and based on the nature of the transactions of goods adjusting and amend regulations in Article 35 of Decree No. 08/2015/ND-CP to be consistent with the legal system on trade and foreign trade management and import and export activities of export processing enterprises
Will be amended to suit the nature of transaction activities
Responding to voters’ petitions, the Ministry of Finance said that following the direction of Deputy Prime Minister Le Minh Khai, the Ministry of Finance has reviewed and evaluated relevant legal documents of on-site export and import activities stipulated in Clause 1, Article 35 of Decree No. 08/2015/ND-CP during the period from 1998 to present. Then the Ministry of Finance would report to the Prime Minister and Deputy Prime Minister.
The Ministry of Finance said that the voters’ recommendations stem from the provisions at Point c, Clause 1, Article 35 of Decree No. 08/2015/ND-CP, accordingly, at this point it is stipulated: “Goods traded between Vietnamese enterprises with foreign organizations and individuals that are not present in Vietnam and are designated by foreign traders to deliver and receive goods with other enterprises in Vietnam.
To implement this regulation, foreign traders must meet the condition of not being present in Vietnam as prescribed in Decree 90/2007/ND-CP dated May 31, 2007 of the Government and Clause 5 of Article 3 Law on Foreign Trade Management.
In cases where foreign traders already have a presence in Vietnam such as having representative offices, and branches, investing in establishing economic organizations; investing capital, buying shares, buying capital contributions; implementing investment projects; investing in the form of Business Cooperation Contract (BCC); new forms of investment and economic organizations following the Government’s regulations. Those items do not meet the condition of not having a presence in Vietnam, so they are not subject to on-site import and export specified in Point c, Clause 1, Article 35 Decree No. 08/2015/ND-CP.
“Based on the provisions of the Commercial Law, the Law on Foreign Trade Management, exported and imported goods must be brought out/brought into Vietnamese territory or brought out/brought into a separate customs area. For goods trading activities with foreign traders that do not deliver goods in Vietnam as designated by the foreign trader, the goods do not move out of Vietnam’s borders or into or out of customs-controlled areas. It is not essentially an import-export activity,” the Ministry of Finance stated.
At the same time, the Ministry of Finance added that, through reviewing relevant legal documents, there is an inconsistency between the legal system on trade and on-site import and export activities with a legal system on export and import duties.
Therefore, it is necessary to evaluate the overall on-site import and export activities to propose amendments and supplements to suit the nature of this transaction activity.