Regulations on VAT Duty-free allowance for donated goods to government

Regulations on VAT Duty-free allowance for donated goods to government

Pursuant to the provisions of Clause 19, Article 5, Chapter 1 of the VAT Law No. 13/2008 / QH12 of June 3, 2008, “Goods imported as humanitarian aid or non-refundable aid; gifts for state agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations or peoples armed forces units; donations or gifts for Vietnam-based individuals within the Government-prescribed quotas shall be Non-taxable objects”.

Duty-free allowance are provided for in Article 5, Decision No. 31/2015 / QD-TTg of August 4, 2015 (The regulations on export tax and import tax exemption in this Decision are annulled in Clause 2, Article 38 of Decree No. 134 / 2016 / ND-CP of September 1, 2016).

1.Condition

According to clause 1 of Article 5, Decision No. 31/2015 / QD-TTg of August 4, 2015:

“1.Gift and donations that qualify for tax exemption as stipulated in this Article are those that fall outside of the list of goods subject to import and export ban and temporary suspension as well as the list of excisabe goods (exclusive of those serving the purpose of security and national defence) in accordance with laws.”

2.Duty-free allowance for VAT

According to clause 2,3,4,5,6 of Article 5, Decision No. 31/2015 / QD-TTg of August 4, 2015:

“2. Gifts and donations given by foreign organizations or individuals to Vietnamese individuals, and those given by Vietnamese organizations or individuals to foreign individuals that have the value of less than VND 2,000,000 (two million Vietnam dong), or more than VND 2,000,000 (two million Vietnam dong), but on which total amount of tax liability is less than VND 200,000 (two hundred thousand Vietnam dong), shall be exempted from export and import duty as well as value-added tax.

3. Gifts and donations given by foreign organizations or individuals to Vietnamese organizations, and those given by Vietnamese organizations or individuals to foreign organizations with the value of less than VND 30,000,000 (thirty million Vietnam dong) shall be entitled to export, import exemption consideration and exempted from value-added tax. As for gifts or donations exceeding the permitted amount of VND 30,000,000 (thirty million Vietnam dong), they shall be exempt from import duty, excise tax and VAT levied on all of their shipment under the following circumstances:

a) Consignee is permitted to receive such gifts and donations being public administrative agencies, socio-political organizations, political – social – professional organizations for use by competent authorities;

b) Goods are gifts or donations serving the charity and humanitarian purposes.

4. If gifts and donations stipulated in Clause 2, 3 of this Article fall within the list of excisable goods for the security and national defence purposes, they shall qualify for export, import duty and shall be exempt from excise value-added tax.

5. If gifts and donations are emergency medications, medical equipment given to persons with serious illnesses or those who suffer from disasters or accidents, and have the value of less than VND 10,000,000 (ten million Vietnam dong), they are exempt from all types of tax.
6. Tax exemption in accordance with Clause 3, 4 and 5 of this Article shall not apply if organizations or individuals frequently receive one or certain good(s).”

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