On March 11, 2021, the Government issued Decree No. 18/2021/NĐ-CP amending and supplementing a number of articles of the Government’s Decree No. 134/2016/ND-CP dated September 1, 2016, detailing a number of articles and the enforcement of the Law on Import and Export Tax.

This Decree has many new regulations, amended and supplemented regulations related to export and import tax policies applicable to taxpayers. In particular, additional regulations on tax exemption of Goods imported for processing and Processed Goods for export, specifically supplements for Processed Goods for export or exported to non-tariff zones, on-spot exports for organizations and individuals in Vietnam as prescribed by the ordering party will be exempt from export tax, import tax in accordance with the Law on Import And Export Tax.

Accordingly, the condition for Processed Goods for export to be exempt from the above-mentioned export tax is that it must be Goods processed from all imported goods. In case Processed Goods for export are produced from domestic raw materials and supplies with export tax, when exporting, tax must be paid on the value of domestic raw materials and supplies constituentd in exported products at the tax rate of raw materials and supplies.

In addition, the Decree has additional provisions on the basis for determining tax-exempt goods such as:

• The basis for determining the quantity of imported goods used for the process of goods already exported abroad or exported to non-tariff zones exempt from import tax is the actual quantity of imported goods used for the process of exported goods;

• Goods imported for processing, scrap formed during export process paid to foreigners ordered for processing are exempt from export tax or import tax;

• The basis for determination of imports used for the process of on-spot export goods exempt from import tax is the actual goods used for the process already exported on the spot if the on-spot exporter notified the customs office of the customs declaration of the corresponding on-spot imported goods that has completed the import procedures in 15 days from the date of customs;

• Taxpayers or organizations/individuals that receive re-processed taxation shall have the right to own or use the processing establishments, machinery and equipment at the processing establishments in the Vietnamese territory and must notify the processing and re-processing establishments; process contracts, re-process contracts, appendixes of process contracts, appendixes of re-processed contracts to customs authorities in accordance with the customs law;

• On-spot imported goods registering customs declarations under the type of importation exempt from import tax if the on-spot importer has a process contract, the taxpayer or the organizations/individuals receiving the re-process for taxpayers has the right to own or use the processing establishments, machinery and equipment at the processing establishments in the Vietnamese territory and must notify the customs agency.

This Decree takes effect on April 25, 2021.