The meeting introduced the new on‑spot import/export provisions proposed in the draft amendment to the Customs Law—specifically removing the requirement that “the foreign trader must have a presence in Vietnam.” It also gathered feedback from Vietnam’s major business associations to resolve practical difficulties and legal shortcomings in the current on‑spot import/export regime.
Participants: KOCHAM(UNI CUSTOMS CONSULTING), EUROCHAM, JCCI, VBF, Vietnam Textile & Apparel Association, Vietnam Logistics Association, SAMSUNG, AMANN, VAWE, CANON
The key points are:
1, Introduction of the contents proposed to amend the Customs Law
a, Amendment to the Customs Law: supplementing provisions on on‑spot import/export
“ Article 47a. Regulations on customs inspection and supervision of on‑spot exported and imported goods
1. On‑spot exported and imported goods are goods delivered and received in Vietnam as designated by a foreign trader under a sales, processing, lease or loan contract between Vietnamese enterprises and that foreign trader.
2. On‑spot exported and imported goods must undergo customs procedures and are subject to customs inspection and supervision. On‑spot exported goods shall be subject to a 0% value‑added tax rate, as with exported goods.
3. The Government shall issue detailed regulations for this Article.”
Analysis by the Customs Authority::
- The element “as designated by a foreign trader” is the defining condition for on‑spot import/export activities.
- The scope of application of on‑spot import/export procedures includes the transactions of sale, processing, lease and loan.
- It affirms that on‑spot export activities are deemed exports and qualify for the 0% VAT rate.
- It excludes sales between domestic enterprises and export‑processing enterprises or within non‑tariff zones (Article 35.1.b) from the concept of “on‑spot import/export,” although such transactions will still be carried out via the standard customs declaration procedure for exports.
b, Amendment of Decree 08/2015/NĐ‑CP
Proposal to repeal Article 35 (which currently governs on‑spot import/export) and instead detail all on‑spot procedures under Circular 38/2015/TT‑BTC and Circular 39/2018/TT‑BTC.
c, Amendment of Circular 38/2015/TT‑BTC and Circular 39/2018/TT‑BTC
Revision of Article 86 (Customs Procedures for On‑Spot Exported and Imported Goods):
- Exporter’s Responsibilities (new provisions):
- a.4) May deliver goods only after the importer has registered the on‑spot import declaration.
- a.5) Within 15 days from customs clearance of the on‑spot export declaration, must notify the customs authority of the completed on‑spot import declaration.
- a.6) If no notification, release, or placement of goods into bonded storage occurs within 15 days, the exporter must settle all applicable duties and taxes.
- Importer’s Responsibilities (new provision):
- Responsible for notifying the implementation of the on‑spot import procedure so that the exporter can fulfill its obligations under items a.4) and a.5).
2, Opinions Discussed at the Meeting
a, Proposal to Supplement Definitions of Legal Terms
Proposal by KOCHAM (UNI CUSTOMS CONSULTING):
Clarify the following terms and concepts:
- The term “foreign trader”
- The concept of “no commercial presence in Vietnam”
- The concept of “export processing enterprise”
- The concepts of “partner” and “partner of an Authorized Economic Operator”
Customs’ viewpoint:
The term “foreign trader” is already defined in Article 16 of the Commercial Law:
“Article 16. Foreign Traders Conducting Commercial Activities in Vietnam
1.A foreign trader is a trader established or registered under the laws of a foreign country or recognized by foreign law.”
The Customs authority has acknowledged and will consider adding explanations for the remaining terms in the draft amendment.
b, On‑Spot Import/Export Procedures for Preferred Enterprises and Their Partners (Clause 6, Article 86)
Proposal by KOCHAM (UNI CUSTOMS CONSULTING):
The current draft of Clause 6, Article 86 only recognizes the transactions: “purchase, sale, delivery and receipt of goods” between a preferred enterprise and its preferred partner.
Therefore, it is necessary to amend the detail “delivery of goods” to “processing, borrowing, repair, etc.” to be consistent with the content in the draft law.
It is necessary to add cases where priority enterprises and partners are allowed to apply on-site import and export procedures for transactions: buying and selling, processing, leasing, borrowing, repairing, and warranty of goods.
Customs’ viewpoint: This recommendation is acknowledged and will be added to the draft.
c, Regarding retroactive application of VAT refunds for cleared on-site import-export declarations
KOCHAM (UNI CUSTOMS CONSULTING) & Enterprise recommendation: Many associations and businesses propose allowing retroactive application for VAT refunds.
Customs’ viewpoint: The Customs Department (DC) considers this a reasonable solution and will present this opinion to the Government and Tax Department to acknowledge the resolution of tax refunds in this direction.
However, DC also noted that the prosecution rule is quite rare. Therefore, it is proposed that business associations and the Customs Department send official letters of opinion directly to the Government, the Ministry of Finance, and the Department of Taxation to record the regulations on retroactive application to on-the-spot import and export.
d, Is export to bonded warehouses considered as export? Is it eligible for 0% VAT rate and VAT refund?
Proposal of enterprises: Official Letter No. 1872/BTC-TCT from the Ministry of Finance and Official Letter No. 8958/CTDON-KKKTT from the Dong Nai Provincial Tax Department are considered unreasonable.
The representative of AMANN company believes that if businesses can prove that export activities through bonded warehouses are transactions between the business and foreign customers, with foreign customers designating delivery to bonded warehouses, they should still qualify for the 0% VAT rate.
Customs’ viewpoint: Customs will discuss with the Tax Department and Ministry of Finance to support businesses on this issue.
e, Proposal to promote the electronic customs system
The Customs Department acknowledges and commits to promoting the development of the electronic customs system.
f, Proposal to clarify import rights
Business Associations’ Proposal:
Clarify whether goods imported under “import rights” can be exported abroad.
Decree 09/2018/ND-CP
Article 3 Interpretation of Terms:
3.Import right is the right to import goods from foreign countries into Vietnam for sale to traders who have the right to distribute such goods in Vietnam
Customs’ viewpoint:
Customs confirms that export is possible.
Based on Article 7 of Decree 09/2018/ND-CP:
Article 7. Implementation of goods trading activities and activities directly related to goods trading
1. Economic organizations with foreign investment that have export rights are permitted to export: Goods purchased in Vietnam; goods processed in Vietnam by that economic organization and goods legally imported into Vietnam to foreign countries and separate customs areas, under the following conditions:
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