Firms face mixed fates on customs exemptions

Foreign invested companies applying from import tax exemptions weren’t all so luckyPhoto: Le Toan

The Ministry of Finance (MoF) has agreed not to apply administrative sanctions on Posco Vietnam’s failure to declare handling costs at customs.

According to the MoF Circular 40 dated May 21, 2008, companies must pay additional tax for not declaring handling charges at port.

However, in the case of Posco Vietnam, the MoF waived the charge because the company carried out good handling at its single-purpose port.

The MoF chose to give the company the benefit of the doubt in a situation where clear regulations do not exist.

However, regarding its incorrect declaration of deductible items from taxable value in declaration 63, the ministry ruled that the company had violated regulations on state management in customs and would receive no such reprieve.

Keangnam Vina, the Korean-backed developer of Vietnam’s tallest skyscraper, also received good news from the tax department.

In a document sent by Deputy Minister of Finance Do Hoang Anh Tuan, the MoF ruled that Keangnam Vina’s imported goods could not be produced domestically and that this has been confirmed by the Ministry of Planning and Investment under Document 2709 dated November 6, 2011. Under these circumstances, the products will be exempt from import tax as per Keangnam Vina’s request.

Korean-owned Doosan Heavy Industries Vietnam (Doosan Vina) on the other hand, was not treated so favourably when applying for tax breaks on their imported mechanical goods.

According to Circular 193 dated November 15, 2012 promulgating the preferential import and export tariff according to the list of taxable products for import tax incentives, the importer must register a list of imported goods to the customs department before the first customs declaration.

As Doosan Vina had not yet registered its products, it was therefore not eligible to enjoy import tax incentives, said the MoF.