Circular No. 39/2015/TT-BTC

CIRCULAR

ON CUSTOMS VALUE OF EXPORTED AND IMPORTED GOODS

Pursuant to the Law on Customs No. 54/2014/QH13 dated June 23, 2014;

Pursuant to the Law on Tax Administration No. 78/2005/QH11 dated November 29, 2006; the Law No. 21/2012/QH13 dated November 20, 2012 on amendments to certain articles of the Law on Tax Administration;

Pursuant to the Law on Intellectual Property No. 50/2005/QH11 dated November 29, 2005, and the Law No. 36/2009/QH12 dated June 19, 2009 on amendments to certain articles of the Law on Intellectual Property;

Pursuant to the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade;

Pursuant to the Government's Decree No. 08/2015/ND-CP dated January 21, 2015 elaborating and providing measures for implementation of the Law on Customs regarding customs procedures, customs inspection, supervision and control;

Pursuant to the Government's Decree No. 83/2013/ND-CP dated July 22, 2013 elaborating the implementation of certain articles of the Law on Tax Administration and the Law on amendments to certain articles of the Law on Tax Administration;

Pursuant to the Government's Decree No. 215/2013/ND-CP dated December 23, 2013 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the request of the Director General of the General Department of Customs,

The Minister of Finance hereby promulgates the Circular on customs value of exports and imports as follows:

Chapter I

GENERAL PROVISIONS

Article 1. Scope and subjects of application

1. Scope: This Circular provides for the customs value of exported and imported goods.

2. Subjects of application: Organizations and individuals exporting or importing goods, customs authorities, customs officials, and other relevant organizations and individuals.

Article 2. Interpretation of terms

The terms used in this Circular are construed as follows:

1. A goods sale contract is an agreement on the purchase and sale of goods established in writing or in forms of equivalent validity to a written document, including telegram, telex, fax and data message. Under such contract, the seller is obliged to deliver the goods, transfer the ownership of the goods to the buyer and receive payment; the buyer is obliged to pay the seller and take delivery of the goods and the ownership of the goods as agreed; the goods are transferred from the seller to the buyer, across a border gate or border of Vietnam, or from a non-tariff zone into the domestic market, or from the domestic market into a non-tariff zone.

The seller includes the seller of goods and the supplier of services.

2. Buying commission is an amount of money paid by the buyer to its representative agent for the purchase of imported goods at the most reasonable price.

3. Selling commission is an amount of money paid to an agent representing the seller for selling the exported goods to the buyer.

4. Brokerage is an amount of money that the buyer or the seller or both the buyer and the seller must pay to a broker for acting as an intermediary in the transaction of purchase and sale of imported goods.

5. Software means data, programs or instructions expressed in the form of commands, codes, schemas or any other form which, when loaded into a data processing device, enables such device to perform a task or achieve a specific result. Audio, film or image products are not regarded as software under this regulation.

6. Intermediary media means floppy disks, CDs, DVDs, magnetic tapes, magnetic cards, external hard drives or any object capable of storing information, used as a means of temporary storage or for conveying software. For use, the software is transferred to, installed on or integrated into a data processing device. Intermediary media do not include integrated circuits, microcircuits, semiconductors and similar devices, or components attached to such circuit boards or devices.

7. Values of goods are regarded as “approximate” to one another if the difference between them is attributable to the following objective factors:

a) The nature of the goods and the characteristics of the industry producing the goods;

b) The seasonality of the goods;

c) Commercially insignificant differences.

When considering the approximation of two values, they must be brought to the same conditions of sale.

8. Identical exported goods are exported goods which are alike in all respects, including:

a) Physical characteristics, including product surface, constituent materials, production method, functions, intended use, and mechanical, physical and chemical properties;

b) Product quality;

c) Product trademark;

d) Being produced in Vietnam, by the same producer or by an authorized or franchised producer.

9. Identical imported goods are imported goods which are alike in all respects, including:

a) Physical characteristics, including product surface, constituent materials, production method, functions, intended use, and mechanical, physical and chemical properties, and having the same commodity code under Vietnam's List of exports and imports;

b) Product quality;

c) Product trademark;

d) Being produced in the same country, by the same producer or by an authorized or franchised producer.

Imported goods which are basically alike in all respects but have insignificant differences in appearance, such as color, size or design, that do not affect the value of the goods are still regarded as identical imported goods.

Imported goods are not regarded as identical if, in their production process, engineering designs, construction designs, development plans, artistic designs, design drawings, diagrams, sketches or similar products or services made in Vietnam and supplied free of charge by the buyer to the seller were used.

10. Similar exported goods are exported goods which, although not alike in all respects, share the same basic characteristics, including:

a) Being made from equivalent raw materials and materials, by the same production method;

b) Having the same functions and intended use;

c) Having equivalent product quality;

d) Being commercially interchangeable, i.e. the buyer accepts one in substitution for the other;

dd) Being produced in Vietnam, by the same producer or by another authorized or franchised producer.

11. Similar imported goods are imported goods which, although not alike in all respects, share the same basic characteristics, including:

a) Being made from equivalent raw materials and materials, by the same production method;

b) Having the same functions and intended use;

c) Having equivalent product quality;

d) Being commercially interchangeable, i.e. the buyer accepts one in substitution for the other;

dd) Being produced in the same country, by the same producer or by another authorized or franchised producer, and being imported into Vietnam.

Imported goods are not regarded as similar if, in the production process of any of such goods, engineering designs, construction designs, artistic designs, development plans, design drawings, diagrams, sketches or similar products or services made in Vietnam and supplied by the buyer to the seller free of charge or at a reduced cost were used.

12. The date of exportation is the date of issue of the bill of lading. In the absence of a bill of lading, the date of exportation is the date of registration of the customs declaration of the imported goods.

13. Imported goods of the same class or kind are goods which have the same origin and fall within the same group or range of goods produced by a particular industry or industry sector. Identical imported goods and similar imported goods are goods of the same kind.

Example: Construction steel such as plain round steel, twisted steel and shaped steel (U, I, V) produced by the steel industry are goods of the same kind.

a) In the method of customs valuation based on deductive value, “imported goods of the same class or kind” are goods imported into Vietnam from all countries, regardless of origin;

b) In the method of customs valuation based on computed value, “imported goods of the same class or kind” must be imported goods having the same origin as the goods undergoing customs valuation.

14. Objective and quantifiable data are specific figures of the additions and deductions relating to the imported goods undergoing customs valuation, as reflected in the agreement or in documents and records of the parties to the transaction.

Article 3. Rights and obligations of the customs declarant; responsibilities and powers of the customs authority

1. The customs declarant shall self-declare and self-determine the customs value according to the principles and methods of customs valuation prescribed in the Law on Customs No. 54/2014/QH13 dated June 23, 2014, the Government's Decree No. 08/2015/ND-CP dated January 21, 2015 elaborating and providing measures for implementation of the Law on Customs regarding customs procedures, customs inspection, supervision and control, and this Circular; be legally responsible for the accuracy and truthfulness of the declared contents and the results of self-determination of the customs value; submit and produce documents and records at the request of the customs authority, with the submission of documents and records complying with Article 3 of the Circular on customs procedures; customs inspection and supervision; export duty, import duty and tax administration applicable to exports and imports; participate in consultation to discuss and clarify the customs authority's doubts concerning the declared value; and request the customs authority to notify in writing the dutiable value and the basis and method used for customs valuation where the customs value is determined by the customs authority.

2. When examining the declaration and determination of the customs value of exported or imported goods by the customs declarant, the customs authority is entitled to request the customs declarant to submit and produce documents and records relating to the method of determining the declared value as prescribed in this Circular in order to prove the accuracy and truthfulness of the declared value;

3. The customs authority shall determine the customs value on the basis of the principles and methods of customs valuation, the valuation database and relevant documents and records prescribed in this Circular in the following cases:

a) The customs declarant is unable to determine the customs value by the methods prescribed in this Circular;

b) The cases prescribed in Clause 2 and Clause 5 of Article 17 of this Circular.

Chapter II

DETERMINATION OF CUSTOMS VALUE

Section I: PRINCIPLES AND METHODS OF DETERMINATION OF CUSTOMS VALUE

Article 4. Principles and methods of determining customs value of exported goods

1. Principle: The customs value is the selling price of the goods calculated up to the border gate of exportation, exclusive of international insurance cost (I) and international freight cost (F), determined by the methods prescribed in Clause 2 of this Article.

2. Methods of determination:

a) The selling price of the goods calculated up to the border gate of exportation is determined on the basis of the selling price stated in the goods sale contract or in forms of equivalent legal validity to a goods sale contract, the commercial invoice, and relevant documents consistent with the goods actually exported;

b) Where the customs value cannot be determined under Point a of this Clause, the customs value is the value of identical or similar exported goods in the valuation database at the time closest to the date of registration of the export declaration of the goods being valued, after conversion to the selling price calculated up to the border gate of exportation. Where two or more values of identical or similar exported goods are determined at the same time, the customs value is the lowest value of the identical or similar exported goods.

Article 5. Principles and methods of determining customs value of imported goods

1. Principle: The customs value is the actual price payable calculated up to the first border gate of importation, determined by the methods prescribed in Clause 2 of this Article.

2. Methods of determination: The actual price payable calculated up to the first border gate of importation is determined by applying in sequence the six methods of customs valuation prescribed in Article 6, Article 8, Article 9, Article 10, Article 11 and Article 12 of this Circular, stopping at the first method by which the customs value can be determined. The methods of customs valuation include:

a) The transaction value method;

b) The method of transaction value of identical imported goods;

c) The method of transaction value of similar imported goods;

d) The deductive value method;

dd) The computed value method;

e) The fallback method.

Where the customs declarant so requests in writing, the order of application of the deductive value method and the computed value method may be interchanged.

Article 6. Transaction value method

1. The transaction value is the price actually paid or payable for the imported goods after adjustment under Article 13 and Article 15 of this Circular.

2. The price actually paid or payable for the imported goods is the total amount of money that the buyer has paid or will have to pay, directly or indirectly, to the seller for the purchase of the imported goods. It includes the following:

a) The purchase price stated on the commercial invoice;

b) The adjustments prescribed in Article 13 and Article 15 of this Circular;

c) Amounts of money payable by the buyer but not yet included in the purchase price stated on the commercial invoice, including:

c.1) Prepayments, advances and deposits for the production, purchase and sale, transport or insurance of the goods;

c.2) Indirect payments to the seller (for example: amounts paid by the buyer to a third party at the request of the seller; amounts settled by offsetting debts).

3. The transaction value is applied if all of the following conditions are satisfied:

a) The buyer is not restricted in the right to dispose of or use the goods after importation, except the following restrictions:

a.1) Restrictions imposed by Vietnamese law, such as regulations requiring imported goods to bear labels in Vietnamese, conditional imported goods, or imported goods subject to a form of inspection before customs clearance;

a.2) Restrictions on the place of consumption of the goods;

a.3) Other restrictions which do not affect the value of the goods. Such restrictions are one or more factors relating directly or indirectly to the imported goods but not increasing or decreasing the price actually paid for such goods.

Example: The car seller requires the car buyer not to sell or display the imported cars before the date on which this car model is launched on the market.

b) The price or the sale is not subject to conditions or considerations for which the value of the goods undergoing customs valuation cannot be determined.

Example: The seller sets the price of the imported goods on the condition that the buyer will also buy a certain quantity of other goods; the price of the imported goods depends on the price of other goods that the importer will sell back to the exporter.

Where the sale of the goods or the price of the goods is subject to one or several conditions, but the buyer has objective documents to determine the monetary extent of the influence of such dependence, this condition is still deemed satisfied; when determining the customs value, the amount of the price reduction attributable to such dependence must be added to the transaction value.

c) After reselling, transferring or using the imported goods, the buyer is not required to pay any additional amount out of the proceeds of the disposal of the imported goods, except the addition prescribed in Point e, Clause 2, Article 13 of this Circular;

d) The buyer and the seller have no special relationship or, if they do, such special relationship does not affect the transaction value as prescribed in Article 7 of this Circular.

4. Determination of customs value of imported goods containing software

a) The customs value of imported goods being intermediary media containing software is the value actually paid or payable for the imported goods, exclusive of the value of the software used for the data processing devices that it contains, provided that the value of the software is stated separately from the value of the intermediary media on the commercial invoice;

b) The customs value is the actual value paid or payable for the imported goods, including the value of the software and the cost of recording or installing the software onto the imported goods, in one of the following cases:

b.1) On the commercial invoice, the value of the software is not separated from the value of the intermediary medium;

b.2) The value actually paid or payable for the software is related to the additions prescribed in Article 13 of this Circular;

b.3) The software is recorded, installed, or integrated in imported goods other than intermediary media.

5. Documents and records for determining the value under this method include:

a) The contract for sale of goods;

b) Documents and records proving that the special relationship does not affect the transaction value (if it is declared that a special relationship exists but such special relationship does not affect the transaction value);

c) Documents and records proving the amounts payable by the buyer but not yet included in the purchase price stated on the commercial invoice (if any);

d) Documents and records proving the additions (if any);

đ) Documents and records proving the deductions (if any);

e) Other documents and records proving the determination of the customs value based on the transaction value declared by the customs declarant.

Article 7. Special relationship

1. The buyer and the seller have a special relationship if they fall into one of the following cases:

a) They are both employees, or one is an employee and the other is a director, in the enterprise of the other;

b) They are legally recognized partners contributing capital in business;

c) They are employer and employee;

d) The seller has the right to control the buyer or vice versa;

đ) They are both controlled by a third party;

e) They both control a third party;

A person having the right to control another person as prescribed in Points d, đ, and e of this Clause is a person who can, directly or indirectly, restrain or direct the other person.

g) They have one of the following family relationships: husband and wife; parents and children recognized by law; grandparents and grandchildren related by blood; aunts or uncles and nieces or nephews by blood; siblings; siblings-in-law;

h) A third person owns, controls, or holds 5% or more of the voting shares of both parties;

i) Parties associated with each other in business, in which one party is the exclusive agent, exclusive distributor, or exclusive concessionaire of the other, are considered to have a special relationship if such relationship falls within one of the cases in Points a through h above.

2. The special relationship between the buyer and the seller does not affect the transaction value if one of the following two conditions is satisfied:

a) The sale transaction between the buyer and the seller is conducted in the same manner as sale transactions with buyers having no special relationship with the seller who also import such goods into Vietnam. The customs authority must examine the manner in which the buyer and the seller establish their commercial relationship and the manner of negotiation to reach the declared price, in order to conclude whether or not the declared value is affected by the special relationship;

Examples:

- The purchase and sale price of the imported goods is negotiated and agreed in the commercial contract in a manner consistent with the normal price negotiation and agreement practices of the industry concerned, or in the manner in which the seller offers sale prices of the goods to other buyers having no special relationship.

- The purchase and sale price of the imported goods includes general costs and profit, corresponding to the general costs and profit of selling goods of the same class or kind.

b) The transaction value of the imported goods approximates one of the following values of a shipment exported to Vietnam on the same day or within 60 days before or 60 days after the date of exportation of the shipment being examined:

b.1) The customs value determined by the transaction value method of identical or similar imported goods sold to another importer having no special relationship with the exporter (the seller);

b.2) The customs value of identical or similar imported goods determined by the deductive value method prescribed in Article 10 of this Circular;

b.3) The customs value of identical or similar imported goods determined by the computed value method prescribed in Article 11 of this Circular.

3. The customs values prescribed in Point b Clause 2 of this Article are for comparison purposes only, and the customs value of the identical imported goods or similar imported goods must be adjusted to the same conditions of sale as the imported goods being examined:

a) Adjustment to the same conditions of sale: The adjustment of the customs value of identical or similar imported goods to the same conditions of sale as the shipment being examined shall be carried out as prescribed in Point b Clause 2 Article 9 of this Circular; or

b) Adjustment of the additions and deductions as prescribed in Article 13 and Article 15 of this Circular.

4. Declaration and examination procedures:

a) At the time of registration of the declaration, where the buyer and the seller have a special relationship that does not affect the transaction value, the customs declarant must declare it on the imported goods declaration and on the customs value declaration, in cases where a customs value declaration is required;

b) Based on available information, where it is suspected that the special relationship affects the transaction value, the customs authority shall notify and organize a dialogue for the customs declarant to explain and provide additional information relating to that special relationship, in order to clarify that the special relationship between the buyer and the seller does not affect the transaction value of the imported goods as prescribed in Clause 2 of this Article.

Article 8. Method of transaction value of identical imported goods

1. Cases of application: If the customs value cannot be determined by the transaction value method prescribed in Article 6 of this Circular, the customs value of the imported goods shall be determined by the method of transaction value of identical imported goods.

2. The method of transaction value of identical imported goods shall be applied as prescribed in Article 9 of this Circular, in which the phrase “similar imported goods” is replaced with the phrase “identical imported goods”.

Article 9. Method of transaction value of similar imported goods

1. Cases of application: If the customs value cannot be determined by the methods prescribed in Article 6 and Article 8 of this Circular, the customs value of the imported goods shall be determined by the method of transaction value of similar imported goods, provided that the similar imported goods have had their customs value determined by the transaction value method as accepted by the customs authority and have the same conditions of sale and conditions on the time of exportation as the imported goods whose customs value is being determined, as prescribed in Clause 2 of this Article.

Where no similar imported shipment having the same conditions of sale as the imported shipment whose customs value is being determined can be found, a similar imported shipment with different conditions of sale shall be selected, but it must be adjusted to the same conditions of sale.

2. Conditions for selecting a similar imported shipment: A similar imported shipment shall be selected if it fully satisfies the following conditions:

a) Condition on the time of exportation:

The similar imported shipment must be exported to Vietnam on the same day or within 60 days before or 60 days after the date of exportation of the imported goods whose customs value is being determined.

b) Conditions of sale:

b.1) Conditions on commercial level and quantity:

b.1.1) The similar imported shipment must have the same conditions on commercial level and quantity as the imported shipment whose customs value is being determined;

b.1.2) If no imported shipment mentioned in Point b.1.1 of this Clause can be found, an imported shipment at the same commercial level but in a different quantity shall be selected, and the transaction value of the similar imported goods shall then be adjusted to the same quantity as the shipment whose customs value is being determined;

b.1.3) If no imported shipment mentioned in Points b.1.1 and b.1.2 of this Clause can be found, an imported shipment at a different commercial level but in the same quantity shall be selected, and the transaction value of the similar imported shipment shall then be adjusted to the same commercial level as the shipment whose customs value is being determined;

b.1.4) If no imported shipment mentioned in Points b.1.1, b.1.2, and b.1.3 of this Clause can be found, an imported shipment differing in both commercial level and quantity shall be selected, and the transaction value of the similar imported shipment shall then be adjusted to the same commercial level and quantity as the shipment whose customs value is being determined.

b.2) Conditions on the distance and mode of transport and insurance:

The similar imported shipment has the same distance and mode of transport as, or has been adjusted to the same distance and mode of transport as, the shipment whose customs value is being determined.

If there is a significant difference in insurance costs, an adjustment to the same insurance conditions as the shipment whose customs value is being determined shall be made.

c) When applying the method of transaction value of similar imported goods, if no similar imported goods produced by the same producer or by another authorized producer can be found, only then shall goods produced by another producer be considered, and such goods must have the same origin.

d) When determining the customs value by this method, if two or more transaction values of similar imported goods are determined, then, after adjustment to the same conditions of sale as the shipment whose customs value is being determined, the customs value shall be the lowest transaction value.

If, during the completion of customs procedures, there is insufficient information to select imported goods identical or similar to the imported goods whose customs value is being determined, the customs value of the imported goods shall not be determined as prescribed in Article 8 or Article 9 of this Circular, and the next method must be applied.

3. Documents for determining the customs value by this method, 01 photocopy of each, include:

a) The customs declaration of the similar imported goods;

b) The customs value declaration of the similar imported goods, in cases where a customs value declaration is required;

c) The transport contract of the similar imported goods (if this cost is adjusted);

d) The insurance contract of the similar imported goods (if this cost is adjusted);

đ) The export sale price list of the overseas producer or seller (if adjustments are made in respect of quantity or commercial level);

e) Other records and documents relating to the determination of the customs value.

Article 10. Deductive value method

1. Cases of application: If the customs value cannot be determined by the methods prescribed in Article 6, Article 8, and Article 9 of this Circular, the customs value of the imported goods shall be determined by the deductive value method, based on the unit selling price of the imported goods, identical imported goods, or similar imported goods on the domestic market of Vietnam as prescribed in Clause 2 of this Article, minus (-) reasonable costs and the profit obtained after selling the imported goods.

This method shall not apply if the goods selected for determining the unit selling price fall into one of the following cases:

a) They have not been sold on the domestic market of Vietnam, or the sale of the goods has not been recorded in accounting documents and books in accordance with the law on accounting of Vietnam;

b) They are related to assists provided by any person as prescribed in Point d.1 Clause 2 Article 13 of this Circular.

2. The selling price of imported goods on the Vietnamese market shall be determined according to the following principles:

a) The selling price of imported goods is the actual selling price of such goods on the Vietnamese market. Where there is no actual selling price of the imported goods whose customs value needs to be determined, the actual selling price of identical imported goods or similar imported goods remaining in the same condition as when imported and sold on the Vietnamese market shall be used to determine the actual selling price.

Imported goods remaining in the same condition as when imported are goods that, after importation, are not subject to any impact that changes their shape, characteristics, nature, or use, or increases or decreases the value of the imported goods.

b) The importer and the domestic buyer have no special relationship as prescribed in Article 7 of this Circular;

c) The selling price level is calculated on the greatest quantity sold and sufficient to establish a unit price. The selling price level calculated on the greatest quantity sold is the price at which the goods have been sold in the greatest aggregate quantity in sale transactions at the first commercial level immediately after importation;

d) The goods are sold (wholesale or retail) on the earliest date immediately after importation, but not later than 90 days (calendar days) after the date of importation of that shipment. The earliest date immediately after importation is the date on which the goods are sold in a quantity sufficient to establish a unit price (at least equal to 10% of the quantity of that item in the imported shipment).

3. Conditions for selecting the unit selling price on the Vietnamese market:

a) The unit selling price on the Vietnamese market must be the unit selling price of the imported goods whose customs value is being determined, of identical imported goods, or of similar imported goods, sold in the same condition as when imported;

b) The selected unit selling price is the unit price corresponding to the goods sold in the greatest aggregate quantity at a level sufficient to establish a unit price; the goods are sold immediately after importation but not more than 90 days after the date of importation of the goods whose customs value is being determined; the domestic buyer and the seller have no special relationship.

Example: Shipment A consists of many items, among which item B must have its customs value determined by the deductive method. Shipment A was imported on January 1, 2014. A shipment containing an item identical to item B was imported earlier and sold to many domestic buyers at various price levels and times as follows:

In the above example, the unit selling price selected for deduction is VND 800/unit, corresponding to the greatest quantity sold (450 units), at a level sufficient to establish a unit price. This unit price satisfies the conditions for selecting the unit selling price, namely:

- It has the greatest cumulative quantity (450 units) among the imported goods sold immediately after importation.

- The time of sale is within 90 days from the date of importation.

4. Deduction principles:

The determination of deductible amounts must be based on lawful, available accounting data and documents that are recorded and reflected in accordance with the regulations and standards of Vietnamese accounting. The deductible amounts must be amounts permitted to be recorded as reasonable costs of the enterprise under the Vietnamese Law on Accounting.

5. Amounts deductible from the unit selling price:

The amounts deductible from the unit selling price are reasonable costs and the profit obtained after selling the goods on the Vietnamese market, including:

a) Transport costs, insurance costs, and costs of other activities relating to the transport of the goods after importation, specifically:

a.1) Transport costs, insurance costs, and other costs relating to the transport of the goods incurred from the first border gate of importation to the importer's warehouse or the place of delivery within inland Vietnam;

a.2) Transport costs, insurance costs, and other costs relating to transport from the importer's warehouse within inland Vietnam to the place of sale, if the importer bears these amounts.

b) Taxes, fees, and charges payable in Vietnam upon the importation and sale of the imported goods on the domestic market of Vietnam;

c) Commissions or general costs and profit relating to the activities of selling the imported goods in Vietnam:

c.1) Where the importer is a sales agent for a foreign trader, the commission shall be deducted. If the commission already includes the expenses mentioned at Points a and b of this Clause, these amounts shall not be deducted again;

c.2) Where goods are imported under an outright sale and purchase arrangement, general expenses and profit shall be deducted: General expenses and profit must be considered as a whole when determining the deductive value. The determination and allocation of general expenses and profit to the imported goods shipment must be carried out in accordance with Vietnamese accounting regulations and standards.

General expenses include direct and indirect expenses serving the importation and sale of goods on the domestic market, such as: expenses for marketing the goods, expenses for storing and preserving the goods before sale, and expenses for management activities serving the importation and sale of the goods.

The basis for determining the deductions is the figures recorded and reflected in the accounting documents and books of the importer, in conformity with Vietnamese accounting regulations and standards. These figures must correspond to figures obtained from activities of trading imported goods of the same class or kind in Vietnam.

6. Imported goods that have undergone further processing or working in the country shall have their customs value determined according to the principle prescribed in Clause 1 of this Article, minus the processing or working costs that increase the value of the goods. The customs valuation method prescribed in this Article shall not apply to the following cases:

a) The imported goods, after processing or working, no longer remain in the same condition as when imported and the value added by the processing or working cannot be accurately determined;

b) The imported goods, after processing or working, still retain the same characteristics, nature and use as when imported but are only a component of the goods sold on the Vietnamese market.

7. Documents and records for determining the customs value under this method include:

a) Sales invoices or value-added tax invoices as prescribed;

b) The sales agency contract if the importer is the exporter's sales agent. This contract must specify the commission to which the agent is entitled and the types of expenses payable by the agent;

c) The written explanation of sales turnover and the accounting documents and books reflecting the expenses mentioned in Clause 5 of this Article;

d) The customs declaration and the customs value declaration of the goods shipment selected for deduction;

dd) Other documents necessary for inspecting and determining the customs value.

Article 11. Computed value method

1. Cases of application: If the customs value cannot be determined by the methods prescribed in Articles 6, 8, 9 and 10 of this Circular, the customs value of imported goods shall be determined by the computed value method. The computed value of imported goods includes:

a) Direct costs of producing the imported goods: The cost or value of materials, and the costs of the production process or other processing used in producing the imported goods. These costs also include the following:

a.1) The costs prescribed at Points a, b and c, Clause 2, Article 13 of this Circular;

a.2) The value of assists as prescribed at Point d.1, Clause 2, Article 13 of this Circular;

a.3) The value of assists prescribed at Point d.1, Clause 2, Article 13 of this Circular that are undertaken in Vietnam shall be included in the customs value only if the producer bears the cost of such assists.

b) General expenses and profit arising from the sale of goods of the same class or kind as the imported goods being valued, produced in the country of exportation for sale to Vietnam. The profit and general expenses must be considered as a whole when determining the computed value.

General expenses include all direct or indirect costs of the process of producing and selling the goods for export, which have not been included under Point a of this Clause.

c) Transport costs, insurance costs and costs related to the transport of the imported goods as prescribed at Points g and h, Clause 2, Article 13 of this Circular.

2. Basis for determining the computed value:

It is the figures recorded and reflected in the accounting documents and books of the producer, unless these figures are inconsistent with figures collected in Vietnam. These figures must correspond to figures obtained from the production and sale of imported goods of the same class or kind, produced by the producer in the country of exportation for export to Vietnam.

3. No examination shall be conducted, and no accounting books or any other records of persons not resident in the territory of Vietnam shall be required to be produced for examination, for the purpose of determining the computed value prescribed in this Article.

The verification of information provided by the producer of the goods for the purpose of customs valuation prescribed in this Article may be carried out outside the territory of Vietnam with the consent of the producer, provided that advance written notice is given to the competent authority of the country concerned and that authority consents to the conduct of the verification.

4. Documents and records for determining the customs value under this method include:

a) The producer's written explanation of the costs mentioned at Points a and b, Clause 1 of this Article, with the producer's certification of the accounting documents and figures consistent with such explanation;

b) The producer's sales invoices;

c) Documents on the costs mentioned at Point c, Clause 1 of this Article.

Article 12. Fallback method

1. Cases of application: If the customs value cannot be determined by the methods prescribed in Articles 6, 8, 9, 10 and 11 of this Circular, the customs value shall be determined by the fallback method, based on objective documents and data available at the time of customs valuation.

The customs value under the fallback method shall be determined by applying, sequentially and flexibly, the customs valuation methods prescribed in Articles 6, 8, 9, 10 and 11 of this Circular, stopping at the method by which the customs value can be determined, provided that such application complies with the provisions of Clause 2 of this Article.

2. When determining the customs value under this method, the customs declarant and the customs authority must not use the following values to determine the customs value:

a) The selling price on the domestic market of goods of the same kind produced in Vietnam;

b) The selling price of goods on the domestic market of the country of exportation;

c) The selling price of goods for export to another country;

d) The cost of producing the goods, other than the costs of producing goods used in the computed value method;

dd) The minimum dutiable value;

e) A value determined by the customs authority not in accordance with the principles and customs valuation methods prescribed in this Circular, or a value declared by the customs declarant where no sale of goods has taken place for the importation of the goods into Vietnam;

g) The use of the higher of two alternative values as the customs value.

3. Certain cases of flexible application of customs valuation methods:

a) Flexible application of the transaction value method of identical imported goods or similar imported goods.

If there are no identical imported goods or similar imported goods exported to Vietnam on the same day or within 60 days before or 60 days after the date of exportation of the imported goods shipment being valued, identical imported goods or similar imported goods exported within a longer period, but not exceeding 90 days before or 90 days after the date of exportation of the shipment being valued, shall be selected.

b) Flexible application of the deductive value method in one of the following ways:

b.1) If, within 90 days from the date of importation, the unit price used for deduction cannot be determined, the unit price at which the goods are sold in the greatest aggregate quantity within 120 days from the date of importation of the shipment selected for deduction shall be selected;

b.2) If there is no unit price of resale of the imported goods themselves or of identical imported goods or similar imported goods to persons having no special relationship with the importer, the unit price of resale of the goods to a buyer having a special relationship shall be selected, provided that the special relationship does not influence the price in the sale transaction.

c) The customs value of the imported goods shall be determined as the customs value of identical imported goods already determined under the deductive value method or the computed value method.

d) The customs value of the imported goods shall be determined as the customs value of similar imported goods already determined under the deductive value method or the computed value method.

4. In addition to the cases mentioned in Clause 3 of this Article, the flexible application of customs valuation methods shall be based on the price database, but must not violate the provisions of Clause 2 of this Article.

5. Documents and records: documents and records related to the determination of the customs value under the method flexibly applied to determine the customs value as prescribed in Articles 6, 8, 9, 10 and 11 of this Circular.

Article 13. Additions

1. Additions shall be made only if all of the following conditions are met:

a) They are paid by the buyer and have not been included in the price actually paid or payable;

b) They must relate to the imported goods;

c) There are objective and quantifiable data consistent with the relevant documents.

Where the imported goods shipment involves additions but there are no objective and quantifiable data for determining the customs value, the customs value shall not be determined by the transaction value method and the next method must be applied.

2. Additions:

a) Selling commissions and brokerage fees. Where these costs include taxes payable in Vietnam, such taxes shall not be added to the customs value of the imported goods.

b) The cost of packaging attached to the imported goods, including: the purchase price of the packaging and other costs related to the purchase and transport of the packaging to the place of packing and preservation of the goods.

Containers, tanks and racks used as a means of packing for the transport of goods and used repeatedly shall not be regarded as packaging attached to the goods and are therefore not an addition in respect of the cost of packaging attached to the goods.

c) The cost of packing the goods, including:

c.1) The cost of packing materials, including the purchase price of the packing materials and other costs related to the purchase and transport of the packing materials to the place where the packing is carried out;

c.2) The cost of packing labour, including the cost of hiring labour and costs related to hiring labour to pack the goods being valued.

Where the buyer must bear the costs of accommodation and travel for workers during the packing, these costs also form part of the packing labour cost.

d) Assists: The value of goods and services supplied by the buyer free of charge or at reduced cost, provided directly or indirectly to the producer or the seller, for the production and sale of goods for export to Vietnam.

d.1) Assists include:

d.1.1) Materials, components, parts and similar items incorporated in the imported goods;

d.1.2) Materials, supplies and fuel consumed in the production of the imported goods;

d.1.3) Tools, instruments, dies, moulds, patterns and similar items used in the production of the imported goods;

d.1.4) Design drawings, technical drawings, artwork, development plans, construction designs, model designs, diagrams, sketches and similar services undertaken abroad and necessary for the production of the imported goods.

d.2) Determination of the value of assists:

d.2.1) If the assisting goods or services are purchased from a person having no special relationship in order to be supplied to the seller, the value of the assist is the purchase price of such assisting goods or services;

d.2.2) If the assisting goods or services are produced by the importer or a person having a special relationship with the importer in order to be supplied to the seller, the value of the assist is the production cost of such assisting goods or services;

d.2.3) If the assisting goods or services are made by a production facility of the buyer located abroad but there are no documents or records for accounting separately for such assisting goods or services, the value of the assist shall be determined by allocating the total production costs of that facility in the same period to the quantity of assisting goods or services produced;

d.2.4) If the assist is leased by the buyer, the value of the assist is the cost of the lease;

d.2.5) If the assist is used goods, the value of the assist is the residual value of such goods;

d.2.6) If the assisting goods are processed or worked by the buyer before being transferred to the seller for use in producing the imported goods, the value added by such processing or working must be added to the value of the assist;

d.2.7) If the assist is sold by the buyer to the exporter at a reduced price, the discounted portion of the value must be added to the customs value;

d.2.8) Where, after the production of the imported goods, surplus materials or scrap is recovered from the assisting goods, the value recovered from such surplus materials and scrap shall be deducted from the value of the assist, if there are data showing the value of the scrap or surplus materials.

The value of assists as determined includes costs related to the purchase, transport and insurance to the place where the imported goods are produced.

d.3) Allocation of the value of assists to the imported goods.

d.3.1) Principles for allocating the value of assists:

d.3.1.1) The value of assists must be allocated in full to the imported goods;

d.3.1.2) The allocation must be documented in lawful documents;

d.3.1.3) The allocation must comply with Vietnamese accounting regulations and standards.

d.3.2) Methods of allocating the value of assists:

The customs declarant shall allocate the assists to the imported goods by one of the following methods:

d.3.2.1) Allocation to the quantity of imported goods in the first import shipment;

d.3.2.2) Allocation according to the number of units of goods produced up to the time of importation of the first shipment;

d.3.2.3) Allocation to the entire quantity of products expected to be produced under the sale agreement between the buyer and the seller (or the producer);

d.3.2.4) Allocation on a descending or ascending basis;

d.3.2.5) In addition to the above methods, the buyer may use other allocation methods (for example: allocation by month, quarter or year), provided that they comply with the law on accounting and are documented.

dd) Royalties and licence fees as prescribed in Article 14 of this Circular.

e) Amounts that the importer must pay out of the proceeds of the resale, disposal or use of the imported goods and that are transferred directly or indirectly to the seller in any form. Declaration and inspection procedures are as follows:

e.1) Where this amount can be determined at the time of registration of the declaration:

e.1.1) The customs declarant shall declare it in the corresponding box on the import goods declaration or on the customs value declaration in cases where a customs value declaration must be made;

e.1.2) The customs authority shall inspect and handle the inspection results in accordance with Article 25 of the Circular on customs procedures; customs inspection and supervision; export duty, import duty and tax administration of exports and imports.

e.2) Where this amount cannot be determined at the time of registration of the declaration because it depends on sales turnover after importation or for other reasons specifically provided in the sale contract or a separate written agreement:

e.2.1) At the time of registration of the declaration, the customs declarant shall clearly declare the reason why the amount payable by the importer out of the proceeds from the resale, disposal or use of the imported goods cannot yet be declared on the import goods declaration or on the customs value declaration in cases where a customs value declaration is required. Within 05 days from the date of actual payment, the customs declarant shall declare and calculate the tax payable on the amount actually paid on the post-clearance additional declaration, and at the same time pay the tax in full as prescribed;

e.2.2) The customs authority shall examine the documents related to this amount and the declaration made by the customs declarant as prescribed at Point e.2.1 of this Clause, and handle it as follows:

e.2.2.1) Where the customs declarant fails to declare or incorrectly declares the amount actually payable, issue a decision on sanctions as prescribed and, at the same time, request the customs declarant to make the declaration or the additional declaration. Where the customs declarant fails to make the declaration or the additional declaration as requested, the customs authority shall determine the customs value, assess the tax, and collect in full the tax and the late-payment interest (if any) as prescribed;

e.2.2.2) Where the customs declarant makes the declaration beyond the time limit prescribed at Point e.2.1 of this Clause, the customs authority shall impose sanctions as prescribed.

g) Transport costs and costs related to the transportation of the imported goods to the first border gate of importation, exclusive of the costs of loading, unloading and handling of the goods from the means of transport at the first border gate of importation.

Where the costs of loading, unloading and handling of the goods from the means of transport at the first border gate of importation have been included in the international transport costs or in the price actually paid or payable, they shall be deducted from the customs value of the imported goods if the conditions prescribed in Clause 1, Article 15 of this Circular are fully satisfied.

g.1) The value of this adjustment shall be determined on the basis of the transport contract and the documents and records related to the transportation of the goods;

g.2) Where the purchase price does not include transport costs but the buyer does not have a transport contract or documents and records related to the transportation of the goods, or has them but they are not lawful, the transaction value method shall not be applied;

g.3) Where the shipment consists of various kinds of goods but the transport contract or the documents and records related to the transportation of the goods do not give details for each kind of goods, the customs declarant shall select one of the following allocation methods:

g.3.1) Allocation on the basis of the freight tariff of the carrier of the goods;

g.3.2) Allocation according to the weight or volume of the goods;

g.3.3) Allocation in proportion to the purchase value of each kind of goods over the total value of the shipment.

h) Costs of insurance of the imported goods to the first border gate of importation.

h.1) Where the importer does not purchase insurance for the goods, this cost shall not be added to the customs value;

h.2) Where the insurance premium is purchased for a whole shipment consisting of various kinds of goods but is not specified for each kind of goods, it shall be allocated according to the value of each kind of goods.

i) The costs mentioned at Point g and Point h of this Clause do not include value-added tax payable in Vietnam. Where this tax has been included in the international transport costs or insurance premium, or in the price actually paid or payable, it shall be deducted from the customs value of the imported goods if the conditions prescribed in Clause 1, Article 15 of this Circular are fully satisfied.

Article 14. Royalties and licence fees

1. Royalties are amounts of money that the buyer must pay directly or indirectly to the holder of intellectual property rights in order to receive the transfer of the ownership of, or the right to use, intellectual property rights.

a) Intellectual property rights are the rights of organizations and individuals to intellectual assets, including copyright, copyright-related rights, industrial property rights and rights to plant varieties.

a.1) Copyright is the right of an organization or individual to a work it has created or owns;

a.2) Copyright-related rights are the rights of organizations and individuals to performances, audio and video recordings, broadcasts and encrypted program-carrying satellite signals;

a.3) Industrial property rights are the rights of organizations and individuals to inventions, industrial designs, layout designs of semiconductor integrated circuits, marks, trade names, geographical indications and trade secrets they have created or own, and the right to prevent unfair competition;

a.4) Rights to plant varieties are the rights of organizations and individuals to new plant varieties they have created, or have discovered and developed, or the ownership of which they enjoy.

The contents of these rights shall comply with the Law on Intellectual Property.

b) Holder of intellectual property rights: means the owner of intellectual property rights, or an organization or individual to whom the owner has transferred intellectual property rights.

2. Licence fees are amounts of money that the buyer must pay directly or indirectly to the holder of intellectual property rights in order to carry out certain activities falling within the rights under industrial property rights.

3. Royalties and licence fees shall only be added to the imported goods if the following conditions are fully satisfied:

a) The buyer must pay the royalties and licence fees for the use or transfer of intellectual property rights related to the imported goods whose customs value is being determined, as prescribed in Clause 4 of this Article;

b) The royalties and licence fees must be paid by the buyer directly or indirectly as a condition of the sale of the goods whose customs value is being determined, as prescribed in Clause 6 of this Article, as shown in the goods sale contract, the licence contract or other agreements on the transfer of intellectual property rights;

c) They have not been included in the price actually paid or payable for the imported goods whose customs value is being determined.

4. Royalties and licence fees are related to the imported goods when:

a) The royalties and licence fees are payable for the use of a trademark and are consistent with the set of documents and records related to the agreement on, and payment of, the royalties and licence fees, if the following conditions are fully satisfied:

a.1) The imported goods are resold in their original state in the Vietnamese market or undergo simple processing after importation as prescribed in Clause 5 of this Article;

a.2) The imported goods bear the trademark when sold in the Vietnamese market.

b) The royalties and licence fees are payable for the use of an invention, technical know-how or other intellectual property rights shown in the sale contract, the licence contract or other agreements on the transfer of intellectual property rights, in one of the following cases:

b.1) The invention, technical know-how or other intellectual property rights are used to produce the imported goods;

b.2) The imported goods bear the invention, industrial design or other rights under intellectual property rights;

b.3) The imported goods are machinery or equipment made or produced to apply the invention, technical know-how or other rights under intellectual property rights.

Examples of royalties and licence fees satisfying the condition of being “related to the imported goods” are provided in Appendix I to this Circular.

5. Simple processing after importation includes:

a) Operations for the preservation of goods during transportation and storage (ventilation, spreading out, drying, chilling or thawing, placing in salt, sulphur fumigation or adding other additives, removal of damaged parts and similar operations);

b) Operations such as dusting, sifting, sorting, classifying (including making up into sets), cleaning, painting and cutting up into parts;

c) Changing of packaging and breaking up or assembly of consignments; bottling, packing in flasks, bags, cases or boxes and other simple packaging operations; simple operations such as milling, husking, grinding, cutting, tearing, bending, coiling or peeling;

d) Affixing labels, marks or other similar distinguishing signs on products or their packaging;

đ) Simple mixing of the imported goods with other components, including dilution with water or other substances, without altering the basic characteristics of the product;

g) Simple fitting or assembly of parts of a product to constitute a complete product;

Simple assembly means the assembly of details, components and parts together by means of assembly devices (screws, bolts, nuts) or by riveting or welding, provided that these activities are merely assembly. Regardless of the complexity of the assembly method, the constituent parts do not undergo any other working process for the product to reach its finished form.

h) A combination of two or more of the operations listed at Points a through g of this Clause;

i) Slaughter of animals without processing.

6. Royalties and licence fees shall be considered a condition of the sale of the imported goods in one of the following cases:

a) The buyer can only purchase the imported goods from a supplier designated by the intellectual property owner or a supplier related to the intellectual property owner; or the imported goods must meet the technical standards required by the intellectual property owner;

b) The buyer may only purchase the imported goods upon payment of the royalties and licence fees to the seller or to the holder of intellectual property rights.

Some examples of imported goods satisfying the condition “as a condition of the sale of the imported goods” are provided in Appendix I to this Circular.

7. The following amounts shall not be added to the customs value:

a) Amounts that the buyer must pay for the right to reproduce the imported goods or to copy works of art in Vietnam (for example: where a sample is imported and then used to produce copies exactly identical to the imported sample, the amount payable for producing goods according to the imported sample is understood as being for the right to reproduce the imported goods);

b) Amounts that the buyer must pay for the right to distribute or resell the imported goods, if such amounts are not considered a condition of the sale of the imported goods.

Where the amounts paid by the buyer for the right to reproduce, distribute or resell the imported goods have been included in the price actually paid or payable, they shall not be deducted from the customs value when determining the value of such imported goods.

8. Declaration and examination procedures:

a) Where the royalties and licence fees are determinable at the time of registration of the declaration:

a.1) The customs declarant shall declare the royalties and licence fees on the import goods declaration or on the customs value declaration in cases where a customs value declaration is required;

a.2) The customs authority shall conduct examination and handle the examination results in accordance with Article 25 of the Circular on customs procedures; customs inspection and supervision; export duty, import duty and tax administration applicable to exports and imports.

b) Where the royalties and licence fees are not determinable at the time of registration of the declaration because they depend on post-importation sales revenue or for other reasons specified in the goods sale contract or in a separate written agreement on the payment of royalties and licence fees, the declaration and examination procedures shall be carried out as follows:

b.1) At the time of registration of the declaration, the customs declarant shall clearly declare the reason why the royalties and licence fees cannot yet be declared on the import goods declaration or on the customs value declaration in cases where a customs value declaration is required. Within 05 days from the date of actual payment, the customs declarant shall declare and calculate the tax payable on the royalties and licence fees actually paid on the post-clearance additional declaration, and at the same time pay the tax in full as prescribed;

b.2) The customs authority shall examine the documents related to the royalties and licence fees and the declaration made by the customs declarant as prescribed at Point b.1 of this Clause, and handle it as follows:

b.2.1) Where the customs declarant fails to declare or incorrectly declares the royalties and licence fees, issue a decision on sanctions as prescribed and, at the same time, request the customs declarant to make the declaration or the additional declaration. Where the customs declarant fails to make the declaration or the additional declaration as requested, the customs authority shall determine the customs value, assess the tax, and collect in full the tax and the late-payment interest (if any) as prescribed;

b.2.2) Where the customs declarant makes the declaration beyond the time limit prescribed at Point b.1 of this Clause, the customs authority shall impose sanctions as prescribed.

9. Where the royalties and licence fees are based partly on the imported goods and partly on other factors not related to the imported goods:

a) Where there are data enabling the portion of the royalties and licence fees related to the imported goods to be identified and separated, that portion shall be added to the transaction value;

b) Where the portion of the royalties and licence fees related to the imported goods cannot be identified or separated, the customs value shall not be determined by the transaction value method, and the next method shall be applied.

Article 15. Deductions

1. Deductions may only be made if the following conditions are fully satisfied:

a) There are objective, quantifiable data consistent with the relevant lawful documents and available at the time of value determination;

b) The amounts have been included in the price actually paid or payable;

c) They are consistent with the provisions of Vietnamese accounting law.

2. Deductions:

a) Costs of activities arising after the importation of the goods, including costs of construction, architecture, installation, maintenance or technical assistance, technical consultancy, supervision costs and similar costs;

b) Transport and insurance costs arising after the goods have been transported to the first border gate of importation. Where these costs relate to various kinds of goods but are not specified for each kind of goods, they shall be allocated in accordance with the principles set out at Point g and Point h of Article 13 of this Circular;

c) Taxes, fees and charges payable in Vietnam that are already included in the purchase price of the imported goods. Where the fees and charges relate to various kinds of goods and are not separated for each kind of goods, they shall be allocated in proportion to the purchase value of each kind of goods.

d) Discounts:

d.1) Deductions may only be made when the following conditions are fully satisfied:

d.1.1) The discount falls into one of the following types of discount:

d.1.1.1) Discount according to the commercial level of the goods sale transaction;

d.1.1.2) Discount according to the quantity of goods sold;

d.1.1.3) Discount according to the form and time of payment.

d.1.2) The discount is made in writing before the goods are loaded onto the means of transport in the country of exportation of the goods;

d.1.3) There are objective, quantifiable data consistent with the documents for separating this discount from the transaction value. These documents shall be submitted together with the customs declaration;

d.1.4) Payment is made via bank by L/C or TTR for all of the imported goods under the sale contract.

d.1.5) The declared and actual values regarding the quantity of imported goods, the commercial level, and the form and time of payment must be consistent with the seller's discount announcement.

d.2) Dossier of request for consideration of the discount:

d.2.1) A written request for deduction of the discount after completion of the importation of, and payment for, all goods under the contract: 01 original;

d.2.2) The goods sale contract: 01 copy;

d.2.3) A list monitoring the actual importation of the goods, using Form No. 01/GG/2015 in Appendix II to this Circular, in cases where the goods under the same contract are imported in different shipments (under different declarations): 01 original;

d.2.4) The seller's discount announcement: 01 copy;

d.2.5) Payment documents for all goods under the sale contract: 01 copy;

d.3) Procedures for declaration and examination of the discount, and handling competence:

d.3.1) Responsibilities of the customs declarant:

d.3.1.1) Declare the existence of the discount at the “value declaration details” criterion on the import declaration or at the corresponding criterion on the customs value declaration, but do not yet make the deduction of the discount on the customs value declaration.

d.3.1.2) Calculate and pay tax according to the value from which the discount has not yet been deducted;

d.3.1.3) Submit a dossier of request for consideration of the discount as prescribed at Point d.2 of this Clause after completing the importation of and payment for all goods under the sale contract.

d.3.2) Responsibilities of the customs authority:

The customs authority to which the customs declarant submits the dossier of request for consideration of the deduction of the discount shall:

d.3.2.1) Examine the dossier, documents and relevant materials enclosed with the written request of the customs declarant;

d.3.2.2) Examine and compare the declared value and the actual situation in terms of quantity; commercial level; form and time of payment against the seller's announced discount schedule;

d.3.2.3) The Director of the provincial or municipal Customs Department shall consider and decide on the deduction of the discount if all the conditions prescribed at Point d.1 of this Clause are fully satisfied, the value of the discount is under 5% of the total value of the goods lot, and the declared value is not lower than the reference price of identical goods in the List of imports posing valuation risk. For other cases of discount, the Director General of the General Department of Customs shall consider and decide;

d.3.2.4) The tax difference arising from the deducted discount shall be handled in accordance with regulations.

dd) Costs borne by the buyer related to the marketing of imported goods, including:

dd.1) Costs of market research and survey on the product to be imported;

dd.2) Costs of advertising the mark or brand of the imported goods;

dd.3) Costs related to the display and introduction of newly imported products;

dd.4) Costs of participation in trade fairs and exhibitions for new products;

e) Costs of inspecting the quantity and quality of goods before importation. Where such costs are agreed upon between the buyer and the seller and constitute a part of the price actually paid or payable by the buyer to the seller, they shall not be deducted from the transaction value;

g) Costs of opening an L/C and remittance fees for payment for the imported goods lot, if such costs are paid by the buyer to the bank acting on behalf of the buyer to make payment for the goods.

h) The interest amount corresponding to the interest rate under the buyer's financial arrangement and related to the purchase of the imported goods: The interest amount may only be deducted from the transaction value when all of the following conditions are fully satisfied:

h.1) The financial arrangement is made in writing;

h.2) The customs declarant can prove that, at the time the financial arrangement is made, the declared interest rate is not higher than the ordinary credit interest rate in the exporting country, and does not exceed the interest rate ceiling announced by the State Bank of Vietnam.

Article 16. Apportionment of adjustments

1. Where an addition or a deduction is eligible to be added to or deducted from the customs value of imported goods but the sale contract or the documents and materials related to such addition or deduction do not specify details for each type of goods, the customs declarant shall select an apportionment method prescribed in Clause 2 of this Article (except for adjustments subject to separate apportionment rules prescribed in Article 13 and Article 15 of this Circular) to apportion such adjustments to each type of goods on the principle that the value of the adjustment must be fully apportioned to the imported goods subject to that adjustment.

2. Apportionment methods: The customs declarant shall select one of the following apportionment methods:

a) Apportionment by quantity;

b) Apportionment by weight;

c) Apportionment by volume;

d) Apportionment by invoice value.

Article 17. Customs value of exported and imported goods in certain special cases

1. For exported or imported goods that do not have an official price at the time of registration of the customs declaration, the customs value is the provisional price declared by the customs declarant on the basis of relevant documents and materials available at the time of value determination. When the official price becomes available, the customs value shall be determined according to the valuation methods prescribed in Clause 2, Article 4 and Clause 2, Article 5 of this Circular. The determination procedures are as follows:

a) Provisional price:

a.1) The customs declarant shall: Declare the provisional price in the corresponding box on the export or import customs declaration when registering the declaration, and at the same time declare the time when the official price becomes available in the "notes" box.

a.2) The customs authority shall: Examine the provisional price and the time when the official price becomes available in accordance with Article 25 of the Circular on customs procedures; customs inspection and supervision; export duty, import duty and tax administration for exported and imported goods; monitor and urge the customs declarant to declare the official price at the right time when the official price becomes available.

b) Official price:

b.1) The customs declarant shall: Declare the official price on the post-clearance amended and supplemented declaration and pay the tax difference (if any) within 05 working days from the time the official price becomes available.

b.2) The customs authority shall: Examine the customs declarant's declaration, the time when the official price becomes available, and the conditions for acceptance of the time when the official price becomes available as prescribed at Point c of this Clause, and handle as follows:

b.2.1) Determine the customs value, assess tax, collect in full the tax amount and late payment interest (if any), and issue a decision on sanctioning of administrative violations where the customs declarant fails to declare, or declares the official price in contravention of regulations; issue a decision on sanctioning of administrative violations where the customs declarant fails to declare within the time limit prescribed at Point b.1 of this Clause;

b.2.2) Handle the tax difference in accordance with the regulations on handling of overpaid tax in the Law on Tax Administration and its guiding documents where the tax amount calculated at the official price is lower than the tax amount already paid at the provisional price;

c) Where the time when the official price becomes available exceeds 90 days from the date of registration of the declaration, the customs declarant shall declare and submit the goods sale contract and the commercial invoice (01 copy) to prove the time when the official price becomes available, and shall take legal responsibility for the accuracy of such time; the Directors of the provincial and municipal Customs Departments shall, based on the dossier, documents and the actual exported or imported goods lot, examine, consider, decide, and take responsibility for the decision to accept the time when the official price becomes available.

d) Conditions for acceptance of the time when the official price becomes available: The time when the official price becomes available shall be accepted if all of the following conditions are fully satisfied:

d.1) The goods sale contract contains an agreement on the time when the official price becomes available that is consistent with the exported or imported goods sector according to international practice;

d.2) The time when the actual price becomes available is consistent with the time when the official price becomes available as agreed in the contract;

d.3) The official price is consistent with the price actually paid or payable for the exported or imported goods according to payment documents.

Where the conditions for acceptance of the time when the official price becomes available are not fully satisfied, and the tax amount calculated at the official price is higher than the tax amount already paid at the provisional price, the customs declarant shall pay late payment interest on the tax difference.

2. For imported goods that have been used in Vietnam and whose use purpose has changed from the purpose for which they were determined not to be subject to tax or to be eligible for tax exemption or tax exemption consideration:

a) Imported goods being automobiles or motorcycles: The customs value shall be determined on the basis of the remaining use value of the goods, calculated according to the period of use in Vietnam (from the time of importation according to the customs declaration to the time of tax calculation), and shall be specifically determined as follows:

If the price declared at the time of importation of goods not subject to tax, or eligible for tax exemption or tax exemption consideration, is lower than the price in the price database at the same time, the price in the price database and the rates prescribed above shall be used to determine the customs value.

b) Other imported goods: The customs value is the price actually paid or payable at the time of change of use purpose, determined according to the principles and methods of customs valuation prescribed in this Circular.

3. The customs value of goods imported into Vietnam after being processed abroad under a processing arrangement is the processing charge and the value of the raw materials used in the processing supplied by the foreign party as stated in the processing contract, plus the adjustments prescribed in Article 13 and Article 15 of this Circular. The value of supplies and raw materials exported from Vietnam for processing under the processing contract shall not be included in the customs value of the processed products.

4. For imported goods being goods sent abroad for repair that are subject to tax upon importation back into Vietnam, the customs value is the actual cost paid for the repair of the imported goods, consistent with the documents related to the repair of the goods.

5. For imported goods without a goods sale contract or without a commercial invoice, the customs value is the declared value. Where there are grounds for determining that the declared value is inappropriate, the customs authority shall determine the customs value according to the principles and methods of customs valuation prescribed in Articles 8 through 12 of this Circular.

6. Imported goods in excess of the goods sale contract or commercial invoice:

a) Where the excess imported goods are identical or similar to the imported goods stated in the sale contract or commercial invoice: The customs value of the excess imported goods shall be determined according to the customs valuation method applied to the quantity of imported goods stated in the goods sale contract;

b) Where the excess imported goods are different from the imported goods stated in the goods sale contract or commercial invoice: The customs value shall be determined according to the customs valuation methods prescribed in Articles 8 through 12 of this Circular.

7. Imported goods not conforming to the goods sale contract or not conforming to the commercial invoice:

a) Imported goods not conforming in specifications: The customs value is the value actually paid for the imported goods. Goods not conforming in specifications are understood as actually imported goods with differences in color, size or design compared with the description in the sale contract, where such differences do not affect the price actually payable.

b) Imported goods not conforming to the sale contract or commercial invoice other than the case prescribed at Point a of this Clause: The customs value shall be determined according to the customs valuation methods prescribed in Articles 8 through 12 of this Circular.

8. Where the actual quantity of imported goods differs from that on the commercial invoice due to the nature of the goods, consistent with the delivery terms and payment terms in the sale contract or commercial invoice: The determination of the customs value must be based on the commercial invoice and the sale contract (delivery terms, tolerance rate, natural characteristics of the goods, and payment terms). The customs value must not be lower than the value actually paid stated on the commercial invoice and relevant documents.

9. For imported goods being leased goods, the customs value is the price actually paid or payable for the lease of the goods, consistent with the documents related to the lease of the goods.

10. Exported or imported goods in other special cases: The provincial and municipal Customs Departments shall report to the General Department of Customs for reporting to the Ministry of Finance for consideration and decision on a case-by-case basis in conformity with the principles of customs valuation of exported and imported goods.

Section II: CUSTOMS VALUE DECLARATION

Article 18. Subjects of customs value declaration

The customs value of imported goods must be declared on the customs value declaration, except in the following cases:

1. Goods not subject to tax, or eligible for tax exemption or tax exemption consideration in accordance with the Law on Export Duty and Import Duty;

2. Goods imported under the form of importation of raw materials for the production of exports;

3. Goods eligible for application of the transaction value method prescribed in Clause 3, Article 6 of this Circular, for which full customs value information has been declared on the imported goods declaration of the VNACCS electronic customs clearance System and this System automatically calculates the customs value;

4. Imported goods without a sale contract or without a commercial invoice.

Article 19. Forms of the customs value declaration

1. The customs value declaration used to declare the customs value under the transaction value method for imported goods prescribed in Article 6 of this Circular: Form HQ/2015-TG1, with declaration instructions provided in Appendix III to this Circular.

2. The customs value declaration used to declare the customs value under the customs valuation methods prescribed in Articles 8 through 12 of this Circular: Form HQ/2015-TG2, with declaration instructions provided in Appendix III to this Circular.

Article 20. Principles of declaration and submission of the customs value declaration

1. The customs value shall be declared in detail on the customs value declaration for each corresponding goods item in the imported goods declaration. The goods items declared on the customs value declaration must be numbered consecutively, consistent with the ordinal numbers of such items on the imported goods declaration.

2. The customs value declaration is an integral part of the imported goods declaration and shall be submitted together with the imported goods declaration when carrying out customs procedures. The customs value declaration must be made in 02 copies, one kept by the customs authority and one kept by the goods owner, and shall be archived together with the imported goods declaration in accordance with law.

Section III: VALUATION DATABASE

Article 21. Valuation database

1. The valuation database comprises information related to the customs valuation of exported and imported goods that is collected, consolidated and classified by the customs authority. The customs valuation database is built by the General Department of Customs in a centralized and uniform manner and is regularly updated. It includes:

a) The customs price data management system;

b) The List of exports and imports posing valuation risk and the accompanying reference prices.

2. Sources of information forming the valuation database:

a) Information from export and import dossiers: Available sources of information shown in export and import dossiers, declared by customs declarants or recorded by the customs authority in the course of carrying out customs procedures and after the goods have been cleared.

b) Information from the List of exports and imports posing valuation risk as prescribed in this Circular;

c) Information on enterprises' compliance with law: Sources of information related to enterprises' compliance with legal policies in the declaration and determination of value, and the number and seriousness of violations, consolidated and analyzed by the customs authority on the risk management system;

d) Information from other sources: Sources of information collected by the customs authority or provided by other relevant agencies, the reliability of which has been verified.

3. The valuation database shall be used to:

a) Develop the List of exports and imports posing valuation risk;

b) Examine the customs value of exported and imported goods;

c) Serve the State management of the export and import of goods and other fields.

4. The Director General of the General Department of Customs shall prescribe in detail the regulation on the development, management and use of the valuation database.

Article 22. Competence to develop, supplement and amend, and principles of use of, the List of exports and imports posing valuation risk and reference prices

1. The Director General of the General Department of Customs shall organize the development, supplementation and amendment of:

a) Goods items in the List of exports and imports posing valuation risk, on the basis of the results of risk assessment according to the criteria prescribed in Article 24 of this Circular, professional information, and information and data available on the information systems of the Customs sector at the time of assessment. The List of exports and imports posing valuation risk must reflect information on the goods, such as: code and goods name.

b) Reference prices of goods items in the List of exports and imports posing valuation risk, on the basis of the sources of information collected as prescribed in Article 25 of this Circular.

2. The List of exports and imports posing valuation risk and reference prices serve as a basis for the customs authority to compare, cross-check and examine the values declared by customs declarants in the course of carrying out customs procedures or after the goods have been cleared in accordance with regulations; they shall not be used to impose customs values, and shall be circulated internally and used uniformly within the Customs sector.

Article 23. Time limits and responsibilities for developing, adding, and amending goods in the List of exports and imports posing valuation risk and the accompanying reference prices

1. Time limits for developing, adding to, and amending the List of exports and imports posing valuation risk and the accompanying reference prices: periodically at least once every six months, or where necessary, on the basis of consideration of:

a) Recommendations of organizations and individuals;

b) Proposals of provincial and municipal Customs Departments and units under the General Department of Customs as prescribed in Clause 2 of this Article.

2. Directors of provincial and municipal Customs Departments shall organize the implementation of:

a) Updating the results of document examination, results of physical inspection of goods, results of consultation and value determination, and results of post-clearance audit, inspection, and anti-smuggling investigation into the corresponding database systems.

b) Based on the results of document examination, results of physical inspection of goods, anti-smuggling results, turnover situation, export and import duty rates, and the situation of smuggling and trade fraud, proposing and reporting to the General Department of Customs:

b.1) Adding reference prices for exports and imports included in the List of exports and imports posing valuation risk but not yet having reference prices, using the Report proposing additions to the List of exports and imports posing valuation risk (Form No. 02/DMBX/2015 in Appendix II to this Circular), on the basis of collecting information sources as prescribed in Article 25 (except Point h Clause 1) of this Circular;

b.2) Amending reference prices where the declared prices and the collected information fluctuate upward or downward by more than 10% compared with the reference prices in the List of exports and imports posing valuation risk, using the Report proposing amendments to the List of exports and imports posing valuation risk (Form No. 03/DMSĐ/2015 in Appendix II to this Circular), on the basis of collecting information sources as prescribed in Article 25 (except Point h Clause 1) of this Circular;

b.3) Adding goods to the List of exports and imports posing valuation risk and these reference prices where exports and imports satisfy one of the criteria prescribed in Article 24 of this Circular but have not yet been included in the List of exports and imports posing valuation risk, using the Report proposing additions to the List of exports and imports posing valuation risk, on the basis of collecting information sources as prescribed in Article 25 (except Point h Clause 1) of this Circular.

3. Units under the General Department of Customs shall, based on their functions and tasks of managing the information sources prescribed in Clause 1 Article 25 of this Circular, update such information into the corresponding data systems of the General Department of Customs.

4. The Export and Import Duty Department (the General Department of Customs) shall monitor, urge, and direct provincial and municipal Customs Departments in updating information and preparing Reports proposing additions to and amendments of the List of exports and imports posing valuation risk as prescribed in Clause 2 of this Article.

Article 24. Criteria for developing, adding, and amending goods in the List of exports and imports posing valuation risk

1. For exported goods:

a) Goods subject to export duty and with large export turnover;

b) Goods with a high frequency of customs value violations during the assessment period;

c) Goods with a risk of incorrect declaration of transaction value for the purpose of tax fraud, evasion of export duty, or obtaining value-added tax refunds on exported goods.

2. For imported goods:

a) Goods subject to high import duty rates;

b) Goods accounting for a large proportion of total import turnover;

c) Goods with a high frequency of customs value violations during the assessment period;

d) Goods with a risk of incorrect declaration of transaction value for the purpose of tax fraud or evasion of import duty;

dd) Goods with a risk of under-declaring the import value in order to dump goods into the domestic market of Vietnam.

Article 25. Information sources; development, addition, and amendment of reference prices accompanying the List of exports and imports posing valuation risk

1. Information sources of the customs authority:

a) Information on the export and import prices of identical and similar exported and imported goods whose customs values declared by enterprises have been accepted by the customs authority, available in the Customs Valuation Data Management Information System;

b) Information on the results of document examination, results of physical inspection of goods, results of consultation, and results of price adjustment carried out by provincial and municipal Customs Departments during customs procedures and updated daily in the Customs Valuation Data Management Information System;

c) Information on the results of settlement of complaints about customs value handled by provincial and municipal Customs Departments and the General Department of Customs, updated in the Customs Valuation Data Management Information System;

d) Information on the results of post-clearance audit of customs value conducted by post-clearance audit forces during post-clearance audits and updated in the enterprise management information system serving post-clearance audit and risk management;

dd) Information on the results of inspection and handling of customs value fraud conducted by anti-smuggling forces during anti-smuggling control and investigation activities, updated in the information collection database system;

e) Information on the situation of trade fraud and the results of handling violations during channel classification, available in the risk management information system;

g) Information on the results of examinations and inspections conducted by the Inspectorate or other forces of the customs sector before, during, and after the clearance of goods;

h) Information from the reports proposing additions and amendments prepared by provincial and municipal Customs Departments as prescribed in Clause 2 Article 23 of this Circular.

2. Information sources from outside the customs authority:

a) Information on transaction prices on the world market (for goods traded on the world market) as shown on the website of the market where such goods are traded;

b) Information on declared prices publicly posted by specialized agencies of Ministries in charge of specialized-law management on the websites of such Ministries;

c) Information from newspapers, magazines, and specialized documents for lines of goods such as automobiles, motorcycles, electronics, and iron and steel, collected monthly by the customs authority;

d) Information on offer prices on the Internet from official manufacturers' websites or websites linked to official manufacturers' websites, and transaction prices on the world market (for goods traded on the world market) as shown on the website of the market where such goods are traded;

dd) Information on signs of trade fraud in value declaration provided to the customs authority by relevant agencies such as market surveillance agencies, police authorities, and commercial banks, or by Ministries, sectors, tax authorities, associations, enterprises, organizations, and individuals;

g) Information on domestic market selling prices of goods identical or similar to the exported or imported goods and the relationship between market selling prices and selling prices of exported and imported goods, collected periodically by the customs authority or provided by tax authorities (if any);

h) Information on the selling prices of goods for export to Vietnam provided by customs authorities of other countries under bilateral or multilateral customs cooperation agreements.

3. The above information sources shall be collected over a period of at least six months from the date of signing and promulgation of the List of exports and imports posing valuation risk currently in effect. After collection, the Export and Import Duty Department shall analyze and convert the above information sources to the same conditions of sale in order to submit them to the Director General of the General Department of Customs for promulgation of the List of exports and imports posing valuation risk and the accompanying reference prices.

Chapter III

ORGANIZATION OF IMPLEMENTATION

Article 26. Effect

1. This Circular takes effect from April 1, 2015.

The following Circulars and Decisions are annulled:

a) Circular No. 205/2010/TT-BTC dated December 15, 2010 guiding the Government's Decree No. 40/2007/NĐ-CP dated March 16, 2007 on the determination of customs value of exported and imported goods;

b) Circular No. 29/2014/TT-BTC dated February 26, 2014 amending and supplementing a number of articles of Circular No. 205/2010/TT-BTC dated December 15, 2010 guiding the Government's Decree No. 40/2007/NĐ-CP dated March 16, 2007 on the determination of customs value of exported and imported goods;

c) Decision No. 30/2008/QĐ-BTC dated May 21, 2008 promulgating the customs value declaration for duty calculation of imported goods and declaration guidance;

d) Circular No. 182/2012/TT-BTC dated October 25, 2012 amending and supplementing Clause 1 Section I of Decision No. 30/2008/QĐ-BTC dated May 21, 2008 promulgating the customs value declaration for duty calculation of imported goods and declaration guidance;

dd) Decision No. 1102/QĐ-BTC dated May 21, 2008 on the development, management, and use of the valuation database.

2. The determination and examination of customs value for customs declarations registered from January 1, 2015 to before the effective date of this Circular shall be carried out under the guidance of Circular No. 205/2010/TT-BTC dated December 15, 2010 and Circular No. 29/2014/TT-BTC dated February 26, 2014 of the Minister of Finance.

3. During implementation, if the relevant documents referred to in this Circular and the appendices attached to this Circular are amended, supplemented, or replaced, the newly amended, supplemented, or replacing documents shall apply.

4. Advance determination of customs value of exported and imported goods, examination of customs value during clearance procedures, and examination of value after goods have been cleared shall be carried out in accordance with the Circular of the Minister of Finance on customs procedures; customs inspection and supervision; export duty, import duty, and tax administration applicable to exported and imported goods.

Article 27. Implementation responsibilities

1. The General Department of Customs shall coordinate with Ministries, commodity associations, and units under and affiliated to the Ministry of Finance to organize the collection and exchange of price information serving the examination and determination of customs value as prescribed in Article 25 of this Circular.

2. Directors of provincial and municipal Customs Departments shall organize the collection and processing of information and report to the General Department of Customs for the development and amendment of the List of exports and imports posing valuation risk as prescribed in Clause 2 Article 23 of this Circular.

3. Customs authorities, customs declarants, taxpayers, and relevant organizations and individuals shall determine customs value in strict accordance with this Circular; any difficulties arising shall be reported to the Ministry of Finance and the General Department of Customs for consideration and guidance./.

APPENDIX I

SOME EXAMPLES OF ROYALTIES AND LICENCE FEES (Issued together with Circular No. 39/2015/TT-BTC dated March 25, 2015)

1. Examples of royalties and licence fees satisfying the condition of being “related to the imported goods”

Example 1: an example for Point b Clause 4 Article 14 of this Circular:

Company Y (the seller) in country B uses technical know-how Z to manufacture brand-K motorcycle engines. Company X (the buyer) in Vietnam imports brand-K motorcycle engines from Company Y. In addition to paying for the imported goods, Company X must pay Company Y royalties for the use of brand-K motorcycle engines. This case satisfies Point b.1 Clause 4 Article 14 of this Circular.

Example 2: an example for Point b Clause 4 Article 14 of this Circular:

Company I in Vietnam signs a contract with Company J in country X for the import of a medicine containing active ingredient A protected under invention patent B, and must pay royalties (calculated per product unit) to Company J in order to purchase the medicine containing active ingredient A. In this case, the medicine containing active ingredient A satisfies Point b.2 Clause 4 Article 14 of this Circular.

2. Examples of royalties and licence fees satisfying the condition of being “as a condition of the sale of the imported goods”.

All situations from 1 to 7 (except situation 2) satisfy the condition of being “as a condition of the sale of the imported goods”. Specifically:

Situation 1:

The royalties paid by the buyer in this situation satisfy the condition of being “as a condition of the sale of the imported goods” prescribed in Clause 6 Article 14 of this Circular because the buyer pays royalties to seller S (who is also the intellectual property right holder) in order to purchase the goods.

Situation 2:

The royalties paid by the buyer in this situation do not satisfy the condition of being “as a condition of the sale of the imported goods” prescribed in Clause 6 Article 14 of this Circular because there is no agreement whatsoever requiring buyer B to pay royalties in order to purchase the goods from seller S.

Situation 3:

The royalties paid by the buyer in this situation satisfy the condition of being “as a condition of the sale of the imported goods” prescribed in Clause 6 Article 14 of this Circular because buyer B and seller S have an agreement that buyer B must pay royalties to company L in order to purchase the goods.

Situation 4:

The royalties paid by the buyer in this situation satisfy the condition of being “as a condition of the sale of the imported goods” prescribed in Clause 6 Article 14 of this Circular because seller S and intellectual property right holder L have a special relationship (parent-subsidiary companies) (at Point Clause 6 Article 14 of this Circular); the buyer can only purchase the goods upon payment of royalties (at Clause 6 Article 14 of this Circular).

Situation 5:

The royalties paid by the buyer in this situation satisfy the condition of being “as a condition of the sale of the imported goods” prescribed in Clause 6 Article 14 of this Circular because buyer B purchases the goods from seller S designated by intellectual property right holder L.

Situation 6:

The royalties paid by the buyer in this situation satisfy the condition of being “as a condition of the sale of the imported goods” prescribed in Clause 6 Article 14 of this Circular because buyer B can only purchase the goods upon payment of royalties to seller S.

Situation 7:

The royalties paid by the buyer in this situation satisfy the condition of being “as a condition of the sale of the imported goods” prescribed in Clause 6 Article 14 of this Circular because buyer B must pay royalties in order to purchase the goods of seller S, which meet the technical standards of intellectual property right holder L.

APPENDIX II

LIST OF FORMS (Issued together with Circular No. 39/2015/TT-BTC dated March 25, 2015)