Import customs procedures required when investors import production line machinery and equipment to Vietnam

Foreign Direct Investment (FDI) capital inflow to Vietnam is increasing significantly (especially from Chinese and Taiwanese companies) across various industries and manufacturing technologies. However, many businesses encounter numerous obstacles and challenges while relocating their production lines to Vietnam. In this article, we highlight some common issues faced by investors and provide potential solutions.

Compliance with the regulations in Decision No. 18/2019/QD-TTg dated April 19, 2019, by the Prime Minister, regarding the import of used machinery, equipment, and production lines. Among the requirements, the age of machinery and equipment is one of the crucial criteria for consideration.

In cases where machinery and equipment exceed the prescribed age in Clause 1, Article 6 of Decision No. 18/2019/QD-TTg, for import approval, they must meet the criteria stated in Clause 1, Article 9: “The remaining capacity or performance of the machinery and equipment must still achieve 85% or higher compared to the designed capacity or performance, and the consumption of raw materials, fuel, and energy must not exceed 15% of the design.” Additionally, approval from the Ministry of Science and Technology is required.

To be considered for approval, aside from the prescribed Letter of Request template in Appendix 2 of Decision No. 18/2019/QD-TTg, enterprises need to supplement the following documents:

• A certificate of appraisal issued by the appraisal organization, following the provisions in Article 11. The content of the appraisal certificate must adhere to points a, b, c, d, g in Clause 1, Article 10.
• A certified copy of the Business Registration Certificate.

Furthermore, investors should note that, according to Clause 1, Article 6 of Decision No. 18/2019/QD-TTg, the age of machinery and equipment should not exceed 10 years. For machinery and equipment in certain specific sectors, detailed age limitations are specified in Appendix I of the mentioned Decision (ranging from 15 to 20 years). Therefore, enterprises should carefully consider signing purchase contracts for machinery and equipment after registering the Import Profile and receiving the written approval from the Ministry of Science and Technology.

To enjoy tax and fee incentives for imported production line machinery, the synchronicity of the machinery chain is vital.

The “tax-exempt list” for machinery chains granted to enterprises does not differentiate machines imported from various sources, from one or multiple shipments, or from one or multiple customs checkpoints. This list allows enterprises to benefit from the import tax incentive for machinery (nearly 0%) and reduces the risk of post-customs inspection.

Basic documents to apply for the “tax-exempt list” include:

• Investment Certificate.
• Business Registration Certificate and machinery purchase contracts.
• Invoice and Packing list.
• Descriptive document and diagram of the machinery chain.

Enterprises are allowed to modify and add components or equipment to the list and accompanying reverse-tracking slips if needed. Besides, they are granted a new list and reverse-tracking slips in case of loss. These regulations are stated in Circular No. 14/2015/TT-BTC guiding the classification of goods for analysis for the classification of exported and imported goods’ quality and safety inspection, valid from March 15, 2015.

Accordingly, when importing this machinery chain, customs declarants must electronically register the List of details and detachable components of machinery and equipment, hereinafter referred to as the List (according to Form 03/DMTBĐKNK-TDTL/2015 appended to this Circular), along with a Detachable component tracking slip (according to Form 04/PTDTL-TBNC/2015, appended to this Circular) before importing the first batch with the most convenient customs office.

For cases where the equipment is disassembled into multiple containers, the importer of the production line machinery may have to conduct a synchronous inspection.

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