On May 31, 2023, the Ministry of Finance issued Circular No. 33/2023/TT-BTC ("Circular 33") on determining the origin of exported and imported goods. Circular 33 contains several noteworthy provisions for export and import enterprises, as follows:
1. Customs clearance is allowed for imported goods even if the Certificate of Origin (C/O) has yet been submitted, with a requirement to supplement it within 1 year after customs clearance
Previously, Circular 38/2018/TT-BTC stipulated that imported goods subject to C/O submission would not be granted customs clearance without the C/O or its submission.
However, Circular 33 allows clearance without the immediate submission of the C/O for "imported goods originating from countries, groups of countries, or territories that have preferential customs agreements in commercial relations with Vietnam, and goods imported into the domestic market from non-tariff zones that meet the origin requirements from countries, groups of countries, or territories that have preferential customs agreements in commercial relations with Vietnam." The submission of the document will be made within one (01) year from the date of customs declaration registration (in the case of goods with C/O applying to the Vietnam-EU Free Trade Agreement, Vietnam-United Kingdom Free Trade Agreement, and Vietnam-Northern Ireland, the submission of the C/O may be extended to 02 years).
During the period when the document has not been supplemented, imported goods must apply either preferential import tax rates or normal tax rates. In cases where the credit institution guarantees the amount of the differential tax, a special preferential tax rate shall be applied.
After submitting the supplementary documents on time, the imported goods will be subject to a special preferential tax rate, and the customs authority will handle the excess tax payment in accordance with regulations.
2. C/O supplementation is allowed for goods with changes in purpose of use, changes in goods codes, or no longer being eligible for investment incentives during the period of non-submission of C/O
Circular 33 allows customs declarants to submit supplementary C/O documents for consideration of applying special preferential tax rates in cases where goods undergo changes in purpose of use, changes in goods codes, or transition from being eligible for investment incentives to goods that are not eligible for investment incentives.
For goods with a change in purpose of use, the time of submitting the supplementary C/O documents is the time when the customs declarant carries out procedures for the change in purpose of use. For the other two cases, the time of submitting the supplementary C/O documents is within 05 working days from the date the customs authority issues the conclusion of post-clearance inspection, specialized inspection, customs inspection, or when the customs declarant discovers imported goods that are not eligible for investment incentives or have errors in the goods codes compared to the time of import procedures.
3. Quantity of goods exceeding the C/O limitation is eligible for incentives after dossier supplementation
Circular 38/2018/TT-BTC stipulates that in cases where the actual quantity, weight, or volume of imported goods exceeds the quantity, weight, or volume stated on the C/O, the customs authority will only accept incentives based on the quantity, weight, or volume stated on the C/O.
Circular 33 provides conditions for import enterprises by allowing the portion of goods exceeding the quantity stated on the C/O to still enjoy incentives if the excess does not affect the validity of the C/O, and the enterprise submits supplementary C/O documents within the prescribed time limit and quantity.
4. Tax guarantee is allowed in cases where there is no C/O for imported goods at the time of customs procedures
The tax guarantee mechanism has been recognized in the guidance documents of the Ministry of Finance in 2015 and 2018. However, Circular 38/2018/TT-BTC did not apply this mechanism to imported goods that had not provided the C/O at the time of customs procedures or during the waiting time for the supplementary C/O documents.
Circular 33 supplements provisions that allow imported goods (except for goods imported from embargoed countries or those that may have a negative impact on the community, society, or environment) to apply special preferential tax rates even when the C/O is not presented at the time of customs procedures, provided that the credit institution guarantees the amount of the differential tax. The guarantee process is carried out in accordance with the regulations of Circular 38/2015/TT-BTC and Circular 39/2018/TT-BTC.
5. Customs authorities are not allowed to reject C/O due to technical errors in the declaration documents
Circular 38/2018/TT-BTC recorded many cases where customs authorities rejected C/O documents, such as when the customs authority determined that the document was invalid when the customs declarant did not declare the reference number and date of issuance of the document in the dossier, when there was no document at the time of procedures but the customs declarant did not declare the late submission in the dossier, or when the customs declarant declared the late submission but later declared the supplementary document beyond the deadline.
To create favorable conditions for import enterprises, Circular 33 only acknowledges two cases in which customs authorities can reject C/O documents:
- The customs declarant submits supplementary documents beyond the prescribed deadline.
- The imported goods for which the competent authority of the exporting country issues the C/O document notifies the cancellation of the document or does not meet the origin criteria as prescribed by the exporting country.
Therefore, errors related to technical issues in the declaration documents will no longer be a basis for customs authorities to reject C/O documents.
Circular 33 takes effect on July 15, 2023, replacing Circulars No. 38/2018/TT-BTC, No. 62/2019/TT-BTC, No. 47/2020/TT-BTC, and No. 07/2021/TT-BTC.
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