The General Department of Vietnam Customs issued letter no. 1381/TCHQ-TXNK regarding Import tax exemption for oil and gas activities for foreign parties.
The General Department of Vietnam Customs received the official letter UPS-Rosneft / 2018/12/0015 dated 20/12/2018 of Rosneft Vietnam B.V on tax policy for imported goods for activities of Oil and gas of Block 06.1. In this regard, the General Department of Customs has the following opinions:
Pursuant to Clause 15, Article 16 of the Law on Import Tax and Export Tax No. 107/2016 / QH13, providing for tax exemption for goods imported to serve petroleum activities, including:
“15. Imports serving petroleum activities, including:
a) Machinery, equipment, components, means of transport necessary for petroleum activities, including those temporarily imported for re-export;
b) 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 necessary for petroleum activities;
c) Supplies necessary for petroleum activities that cannot be domestically produced.”
Pursuant to Clause 1, Article 16 of the Government’s Decree No. 134/2016 / ND-CP of September 1, 2016, stipulating: “1. Imports serving petroleum activities are exempt from import duties as prescribed in Clause 15 Article 16 of the Law on Export and import duties.”.
Pursuant to Clause 1, Article 1 of the Ordinance on the conclusion and implementation of international treaties No. 07/1998 / PL-UBTVQH10 of August 20, 1998 stipulating: “ “International agreements to which the Socialist Republic of Vietnam is a signatory”, hereafter referred to as international agreements, are written arrangements concluded between the Socialist Republic of Vietnam and one or many nations, international organizations or other subjects of international law, irrespective of their names such as treaties, conventions, acts, agreements, protocols or diplomatic notes for exchange, and the signatories’ names as stipulated in Clause 2, Article 1 of this Ordinance”.
Pursuant to Article 2 of the International Treaty Law No. 108/2016 / QH12 stipulating: “1.Treaty refers to any written agreement concluded in the name of the State or Government of Socialist Republic of Vietnam with foreign signatories which creates, changes or terminates rights or obligations of the Socialist Republic of Vietnam governed by international laws, regardless of whatever its particular designations including, inter alia, treaty, convention, pact, covenant, protocol, understanding and exchange of notes …
3.Foreign signatory refers to any State, international organization or other entity is recognized as a subject of international law”.
Pursuant to Article XVI of the Product Division Contract Lot 06.1 signed on 19/5/1988 regulating “TAX TYPES”, then: “In accordance with current and future Vietnamese Law, contractors, subcontractors, personnel of their members provide all supplies, spare parts, services or vessels, aircraft, machinery, equipment or factories (in the form of leasing or selling) to serve oil operations. Gas will be exempt from corporate tax, income tax or other taxes on income in Vietnam, customs duties, import and export or any other taxes or donations under any name due to Vietnamese or local authorities are set or can set out.”
Pursuant to the point 4.4 of the Guarantee Agreement and the Government Commitment dated December 15, 2000 (signed by the Minister of Planning and Investment on behalf of the Government of Vietnam and representatives of foreign investors): “The obligations to pay taxes, exemptions and reductions to foreign parties as agreed in NCS Gas Agreements are now guaranteed and will not be changed without prior written agreement.” .
According to Official Letter No. 66 / BKHĐT-PC dated January 3, 2018 of the Ministry of Planning and Investment: “According to the agreement in the product dividing contract, Lot 06.1 signed on May 19, 1988, the tax payment obligation, Tax exemption and reduction for foreign parties are carried out in accordance with current Vietnamese laws and later. The current law regulating export and import tax is the Law on Import and Export Taxes in 2016 ”.
Based on the regulations, based on the opinion of the Ministry of Foreign Affairs in Official Letter No. 2345 / BNG-LPQT dated June 27, 2017, Ministry of Justice in Official Letter No. 2198 / BTP-PLQT dated 28/6/2017, Ministry of Planning and Investment in Official Letter No. 5894 / BKHĐT-PC dated July 19, 2017, No. 66 / BKHDT-PC dated January 3, 2018, the Government Guarantee and Commitment Agreement dated December 15, 2000 is not an international treaty, so the imported goods for oil and gas activities of Lot 06.1 are not exempted from import tax in accordance with the provisions of Clause 4, Article 16 of the Law on Export and Import Tax No. 107/2016 / QH13 but exempted from tax under the Government Guarantee and Commitment Agreement dated December 15, 2000, Product Sharing Contract Lot 06.1 signed on 19/5/1988.
Accordingly, at the present time, imported goods for oil and gas activities of Lot 06.1 are exempted from import tax under the provisions of Clause 15, Article 16 of the Law on Import and Export Tax No. 107/2016 / QH13, Article 16 Decree 134/2016 / ND-CP. Dossiers and procedures for tax exemption and notification of lists of duty-free goods expected to import comply with Article 30 and Article 31 of Decree 134/2016 / ND-CP.
General department of Vietnam Customs reply to Rosneft Vietnam B.V for knowledge and action.