New provisions on tax exemption on the basis of the norms

	Goods of a minimum value exempted from Customs duties
	Tax exemption under new provisions of Law on import tax and export tax
	Guiding tax exemption under the new provisions of the Law on export - import duties

Under new regulations in Decree 134, the movable assets such as automobiles and motorcycles are not exempted from tax. Photo: Thu Trang.

Remove norms for duty-free goods of diplomatists

Regarding tax exemption for imported and exported goods of international organizations and members of international organizations who enjoy privileges and immunities, as provided in Article 39, Article 40, Article 41 of the Ordinance on privileges and immunities for diplomatic agencies, consular offices and representatives of international organizations in Vietnam, international organizations of the United Nations system, representatives of international organizations, agencies, representatives and members of non-governmental organizations shall enjoy the privileges and immunities under international treaties which Vietnam has signed with these organizations.

To be consistent with the current situation, Decree 134 has removed norms for duty-free goods (mainly home appliances) of diplomatists, such as: televisions, refrigerators and air conditioners; only applied norms for goods attracting special consumption tax such as cars, motorcycles, alcohol, beer and tobacco, which conforms with the provisions on the jurisdiction of the Prime Minister stipulated in the Law on export tax and import tax 2016 and in Article 5 of Decree 134 regulating temporary imports exempted from tax for cars, motorcycles in excessive quantities.

The norms for duty-free goods, including cars, motorcycles; and alcohol, beer and tobacco are specified in Annex I, II and III attached to Decree 134 on the basis of the current regulations. For goods not on the above list, diplomatic agencies, consular offices and organizations of the United Nations system are exempted from tax on the basis of certification by the Ministry of Foreign Affairs, in accordance with the principle of reciprocity and international practice.

Luggage on entry: 90 days for 1 time of tax exemption

In order to ensure consistency with the provisions of the Law on Special Consumption Tax on classification of alcohol content, Article 6 of Decree 134 has regulated the classification of alcohol content for luggage on entry by below 20% alc/vol and above 20% alc/vol.

Therefore, in order to be consistent with international practices of many countries, Article 6 of Decree 134 specifies norms for goods exempted from tax, including alcohol and cigars as follows: "Alcohol above 20% alc/vol: 1.5 liters, alcohol below 20% alc/vol: 2 liters or alcoholic beverages and beer: 3 liters"; "Cigarettes: 200 cigarettes, or tobacco: 250 grams, or cigars: 20 cigarettes". Also, the Decree regulates that individuals with regular immigration such as pilots and flight attendants; international train drivers and staff on international trains, etc shall not enjoy duty-free luggage norms for each entry but only every 90 days of tax exemption.

Movable assets such as automobiles and motorcycles which are exempted from tax according to Decision 31/QD-TTg of August 4, 2015, include used automobiles and motorcycles of Vietnamese citizens residing abroad, and intellectuals, professionals, skilled workers to Vietnam for a year or more at the invitation of the Vietnamese Government.

In order to fix loopholes of the policy, in Article 7 of Decree 134, the Ministry of Finance has submitted to the Government to remove tax exemption for automobiles and motorcycles of the above people. Also, the Ministry of Finance has proposed to add regulations on the time of residence or work in Vietnam for 12 months or more, in line with the provisions of the labor law on granting work permits with a term of 12 months or more.

Gifts for tax exemption to not exceed 4 times per year

In order to amend the policy, Article 8 of Decree 134 has specified the norms on tax exemption for gifts of organizations and foreign individuals to organizations and individuals in Vietnam; gifts of organizations and individuals in Vietnam to foreign organizations and individuals with Customs value not exceeding 2 million vnd or Customs value of more than 2 million vnd but the total amount of payable tax under 200 thousand vnd, not more than 4 times per year.

For agencies and organizations in Vietnam sponsored by the State budget, gifts for the purpose of humanitarian and charity, the norms are not to exceed 30 million vnd, not more than 4 times per year (in line with the norms prescribed in Decision No. 31/2015 / QD-TTg).

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In the case where the norms of tax exemption are exceeded, the Ministry of Finance shall conduct careful consideration and settlement of tax exemption for each specific case. The Decree also stipulates that gifts of foreign organizations and foreign individuals such as medicines and medical equipment to individuals who are ill or who have serious diseases, with Customs value not exceeding 10 million vnd are exempt from import tax. Thus, the Decree has specified the list of serious diseases as a basis for the Ministry of Finance to implement personal income tax.