Import taxes (import duty, import VAT, and special sales tax) are still an important revenue source for the Vietnamese Government. As a result, Vietnam Customs has become more focused on ensuring that revenue targets are collected. A year-on-year increase in revenue targets has led to a recent surge in the number of clearance audits and investigations being undertaken by Customs. The focus of the audits and investigations is typically customs valuation, such as transfer pricing policies and the treatment of royalties, service fees etc. Consequently companies importing goods into Vietnam have been increasingly faced with additional Customs assessments for import taxes.
On the other hand, the Vietnam customs regulatory environment has undergone significant positive changes over the past years and current customs regulations offer a wide range of programmes to importers and exporters. The programmes are designed to allow them to either minimise the duty impact in Vietnam (e.g. bonded manufacturing or import for export processing, establishment of Export Processing Enterprises (EPE) etc) or to facilitate their import and export transactions or their general business in Vietnam.
Electronic customs programs have now been implemented in most local Customs Departments, helping companies to reduce the time spent for clearing goods and special programs such as the “Priority Enterprise” programme are introduced to allow companies with a good compliance record to receive additional benefits to facilitate their customs operations.
Therefore, understanding the Vietnam Customs environment as well as staying abreast with its laws and regulations, practical implications and interpretation of Vietnam Customs officers is key for every importer or exporter in Vietnam.
In Vietnam we advise clients on all aspects of customs and trade management. In particular we assist with the interpretation of Vietnamese regulations, putting them into a practical context for importers and exporters. Additionally we have significant experience of the following:
Competitiveness improvement through strategic customs and trade planning
Customs Compliance & Risk Management
PwC was approached by a multinational automotive company to provide local expertise to assist with its expansion plans into the Vietnam market. WMS worked with a cross-service line team (including tax and supply chain advisory) to assess potential road blocks to a successful market entry.
How we helped
WMS analysed the relevant licensing and manufacturing agreements as well as the company’s planned import and export transactions in Vietnam. Based on this review, we assessed whether the royalties and license fees paid by the company would be considered dutiable from a Vietnam customs valuation perspective and provided suggested strategies to minimise the risks of being challenged. Our work included:
Benefit for the client
WMS was requested to analyse the bonded manufacturing operation of a multinational garment company to assess the consumption norms and customs handbook liquidation. Based on this review, WMS assessed the risk of being charged additional import duty as well as penalties and provided suggested strategies to minimise the risk of being challenged.
How we helped
WMS analysed the bonded manufacturing operation of a multinational garment company to assess the consumption norms and customs handbook liquidation. Based on this review, WMS assessed the risk of being charged additional import duty as well as penalties and provided suggested strategies to minimise the risk of being challenged. We:
Benefit for the client
Van Vinh Pham
Director, PwC Asia Pacific Customs and Trade
Tel: +84 (8) 3823 0796 Ext. 1503
Nguyen Hong Son
Director, Vietnam, PwC Asia Pacific Customs and Trade
Tel: +84 28 3823 0796 Ext. 1527