CIRCULAR

GUIDING THE REGISTRATION FOR CERTIFICATION OF THE CONDITIONS FOR APPLYING IMPORT TAX ACCORDING TO THE LOCALIZATION RATE ON MECHANICAL, ELECTRICAL OR ELECTRONIC PRODUCTS

Based on the Prime Minister’s opinions in Official Dispatches No.4830/KTTH of September 24, 1997, No.1440/CP-KTTH of November 7, 1998 and No.2687/VPCP-KTTH of July 15, 1998 on the tax policy applied according to the localization rate, the Ministry of Industry hereby guides in detail the matters related to the conditions for applying import tax according to the localization rate on mechanical, electrical or electronic products and parts, as follows:

1. All Vietnamese enter rises and foreign-invested enterprises engaged in the manufacture and/or assembly of mechanical, electrical or electronic products and parts which are subject to an import tax rate of 30% or more, shall be entitled to register for the application of import tax according to the localization rate.

2. The dossier of registration for certification of the manufacturing technology capability and level and the localization rate shall comprise:

2.1. An official written request for certification

2.2. The investment license or the license for establishment of the concerned enterprise (notarized copy).

2.3. The decision ratifying the investment project (notarized copy).

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2.5. The explanation of the manufacturing technology capability and level, including:

- The manufacturing technology arrangement plan;

- The list of main equipment in service of production, including technological, analytical, experimental and checking equipment;

- The contingent of technicians and technical workers;

- The certificate of product and goods quality registration (copy);

- The decision ratifying the environmental impact assessment report (copy);

- The certificate of industrial property rights (copy).

The enterprises that have been inspected according to the regulations jointly promulgated by the Ministry of Industry, the Ministry of Science, Technology and Environment and the Ministry of Communications and Transport (in Official Dispatch No.479/BKHCNMT-TDC of February 25, 1999) shall only have to submit the Ministry of Science, Technology and Environment’s notice certifying the technical conditions for manufacture and assembly (copy, if any).

2.6 The production and localization plan including:

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- The production plan and localization rate registered for the current plan year;

- The projected production and localization plans for the subsequent years.

2.7. The explanation of thc calculation of localization rate to be registered.

3. Regarding the localization rate calculation:

- In principle, in the localization rate calculation formula, Z is the import price(s) (CIF price) of the products or parts in complete units, I is the value reflected on invoices and vouchers of the imported semi-finished products, details, groups of details components (corresponding to the standard of knocked down form). Z and I (with the calculating unit being US$) are from the same source.

The Ministry of Industry shall concretely consider each specific case where: Z and I are from different sources; or Z is from the same source but there exist many import prices; or the import prices are not available for complete-unit or brand-new product and parts, etc.

- The localization rate shall be calculated separately for each kind of products, not collectively for the whole company.

- Enterprises shall have to take responsibility before law for the accuracy and reliability calculation figures and registered localization rate and shall be subject to the inspection and supervision by State bodies and auditing agencies.

4. Regarding the organization implementation:

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- The registration for certification of the localization rate shall be made annually at the beginning of the year or the end of the preceding year, depending on the enterprise’s production plan, and shall be supplemented and readjusted once in the second half of the year.

- A registration dossier shall be made in 3 sets and sent to the Ministry of Industry.

The Ministry of Industry shall authorize the Department for Technology and Product Quality Management to concretely examine and consider dossiers and issue written certification notices within 15 days after receiving the complete dossiers.

Any difficulties or problems arising in the course of implementation of this Circular shall be reported by the concealed enterprises to the Ministry of Industry for timely study and appropriate solutions.

FOR THE MINISTER OF INDUSTRY
VICE MINISTER




Nguyen Xuan Chuan