Answer

 Question: We are investing in the project on construction of a hotel and apartments for rent in Hanoi. Our Investment Certificate regulates that our company will be exempted from the import tax in accordance with Article 16 of the Law on Import Tax and Export Tax and Article 16 of Decree No. 149/2005/ND-CP of December 8, 2005 detailing the implementation of the Law on Import Tax and Export Tax. However, when importing some goods for forming our fixed assets, the customs office refuses to let us enjoy the tax exemption. How should we do for enjoying tax exemption? What kind of goods can we be entitled to import tax exemption?

Answer:

Under Article 16 of the Law on Import Tax and Export Tax and Article 16 of Decree 149/2005/ND-CP (“Decree 149”), your Company can only enjoy import tax exemption with regard to goods imported for forming fixed assets if your project falls under the list of projects entitled to investment encouragement.

Based on the current list of projects entitled to investment encouragement, your project shall be considered as an investment encouragement project only in case your Company regularly employs at least 500 laborers.

Pursuant to Official Letter No.1010/TCHQ-KTTT dated 25 February 2009 of the General Department of Customs on procedures for investment incentives applicable to companies regularly employs 500 to 5,000 laborers, for enjoying import tax exemption, your company has to lodge the Feasibility Study of your project attached by a confirmation on total number of laborers by the Department of Labors, Invalids and Social Affairs of the province/city where your project is located to the customs office.

In case the competent authority recognizes your project as an investment encouragement project, according to Point 6, Article 16 of Decree 149, your Company shall be exempted from the import tax with regard to following goods:

-               Equipment and machinery;

-               Special-use means of transport included in technological lines, worker-transporting vehicles with 24 seats or more;

-               Components, details, knocked down parts, spare parts, fittings, molds and accessories accompanying machinery, equipment and special-use means of transport;

-               Raw materials and supplies used for manufacture of equipment and machinery included in technological lines or for manufacture of components, details, knocked down parts, spare parts, fittings, molds and accessories accompanying equipment and machinery;

-               Construction materials which cannot be locally produced.

Additionally, pursuant to Point 10 Article 16 of Decree 149, investment encouragement projects on hotels, apartments for rent will be entitled to tax exemption with regard to the following goods which are imported for the first time to create fixed assets:

-         Hotel room furniture and interior decoration (beds, cupboards, tables, chairs, telephones);

-         Sanitary ware (bathtubs, lavatory pans, lavabos, supplies for installing sanitary ware, mirrors);

-         Living-room sets (tables, chairs);

-         Equipment and facilities for kitchens, dining-rooms, restaurants and bars (assorted cookers and cooking devices);

-         Paintings, statues, carpets and other decorative articles;

-         Refrigerators, television, microwave ovens, smoke consumers, vacuum cleaners and machines for deodorizing cups, plates and bowls;

Audio and video equipment.