The General Department of Customs has guided some local customs units to implement procedures related to tax policies for investment projects.
Binh Dinh Customs Department has raised obstacles related to import duty exemption for electric cars for investment project of Hon Ngoc – Bai Tram eco-tourism areas
The General Department guided as follow: according to Clause 11, Article 16 of Law on Import and Export Duties No. 107/2016/QH13, “Imports for creating fixed assets of an entity eligible for investment incentives as prescribed by the regulations of the law on investment, including:
a) Machinery and equipment; components, parts, spare parts for assembly or operation of machinery and equipment; raw materials for manufacture of machinery and equipment, components, parts, or spare parts of machinery and equipment; b) Special-use vehicles in a technological line used for a manufacturing project; c) construction materials that cannot be domestically produced. Exemption of import duty on imports specified in this clause also applies to new investment projects and extension projects.
Clause 4, Article 14 of Decree No. 134/2016/ND-CP and Article 3 of Circular No. 14/2017/TT-BKHCN of the Ministry of Science and Technology stipulate criteria to determine vehicles eligible for import duty exemption.
Based on regulations mentioned above, the General Department of Customs said that imported electric cars by Bai Tram Estates Co., Ltd did not met criteria as special-use vehicles in a technological line directly used for production activity to enjoy import duty exemption according to the Law on Import and Export Duties and Circular No. 134/2016/ND-CP
Ba Ria – Vung Tau Customs Department raised a case that on September 23rd, 2019, the department received a copy investment certificate in the 16th change dated on September 19th, 2019 of the management board of Ba Ria – Vung Tau industrial zones, granted to the project of manufacture and consumption of floating glass products, and registered for amendments for import duty incentives, from NSG Vietnam Glass Industries Co., Ltd.
Accordingly, Clause 2 of Article 2 of the Investment Certificate showing import duty incentives of the project states that: “Existing project: The legal basis of incentives: the company is free from import duty for imported goods according to regulations in Article 16 of the Law on Import and Export Duties No. 45/2005/QH11 dated June 14th, 2005 and Article 16 of Government Decree No. 149/2005/ND-CP dated December 8th, 2005 detailing implementation of the Law on Import and Export Duties.
Beneficiaries and conditions of incentives: Investment projects in areas with difficult socio-economic conditions
Extension investment: Technology conversion, conversion of capacity and increase designed capacity of VG13 line to 500 tonnes/ day.
Legal basis of incentives: Following provisions of the Law on Import and Export Duties No. 107/2016 / QH13 dated April 6th, 2016, Government Decree 134/2016 / ND-CP detailing articles and implementation measures of the Law on Import and Export Duties and relevant guidelines and adjustments.
Beneficiaries and conditions of incentives: “extension projects in industrial zones in areas with difficult economic conditions.”
Yet, according to Ba Ria – Vung Tau Customs Department, through reviewing the investment certificate in the 16th change dated September 9th, 2019, the contents of the investment project stated in Article 1 of the investment certificate did not show that the second project of the company was an extension investment project as guided by the General Department of Customs at Dispatch No. 4984/TCHQ-TXNK dated August 2nd, 2019.
Meanwhile, comparing the investment certificate in the 16th change with the investment certificate in the second change (dated December 20th, 2012 – when the list of tax exemption No. 08/2013 dated May 20th, 2015 was granted to the item of VG13 line), the goal of the project and the VG13 line at the investment certificate in the 16th change was changed while the total capacity of the whole project remains.
Ba Ria – Vung Tau Customs Department said the unit is facing problems in determining whether the company is eligible for enjoying tax incentives for the VG13 line or not.
According to the General Department of Customs, pursuant to Clause 6 of Article 16 of the Law on Import and Export Duties No. 45/2005/QH11, imports for creating fixed assets of an investment project are exempt from import duty. The import duty exemption for imports described in points a,b,c,d and đ of this Clause applies for extension projects, technology change and reform.
Under Clause 11, Article 16 of Law on Import and Export Duties No. 107/2016/QH13, imports for creating fixed assets of entities eligible for investment incentives under the law on investment are exempt from import duty. The import duty exemption for imports described in this clause are applied for both new investment projects and extension investment projects.
Regarding the extension investment, Clause 3 of Article 3 of Law on Investment states the extension investment project is an investment project that develops the current project by expanding its scale, increasing its capacity, reforming technology, reducing pollution to the environment or improving the environment.
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Based on existing regulations, for the case of NSG Vietnam Glass Industries Co., Ltd, the investment registration certificate and the investment certificate in the 16th change granted by the project management board of Ba Ria – Vung Tau industrial zone stated clear regulations. Accordingly, the General Department of Customs requests Ba Ria – Vung Tau Customs Department comply with the regulations in Article 30 of Government Decree No. 134/2016/ND-CP and import duty incentives stated in the company’s investment registration certificate to notify the company of the list of import duty exemptions.
By Dao Le/ Huyen Trang
