Customs guides to urgently implement policy of VAT reduction

On June 30, 2023, the Government issued Decree 44/2023/ND-CP stipulating the policy on VAT reduction according to Resolution No. 101/2023/QH15. Decree 44/2023/ND-CP takes effect from July 1, 2023. Accordingly, to implement contents related to the field of customs, the General Department of Customs requires local customs departments to disseminate the contents of Decree 44/2023/ND-CP to all customs officers and employees in their units and customs declarants in the area under their management.

Customs officials of Ho Chi Minh City Customs guide customs procedures for customs declarants. Photo: T.H

In particular, the customs units should pay attention to some contents related to the VAT reduction policy. Specifically, the 2% VAT reduction shall apply to groups currently applying the 10% tax rate (to 8%), except for some of the following groups of goods: telecommunications, information technology, metals, prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products, products and goods subject to excise tax, these items shall comply with the provisions of Clause 1, Article 1 of Decree 44/2023/ND-CP.

In particular, the items that are not eligible for VAT reduction are specified in Appendix 1, 2 and 3 issued together with Decree 44/2023/ND-CP.

Regarding the List of goods not eligible for VAT reduction, the General Department of Customs provides guidance for HS codes in column (10) of Appendix 1, column (10) of part a and column (4) of part b of Appendix 3 to look up. The determination of HS codes for actually imported goods shall comply with the provisions on goods classification in the Customs Law and legal documents guiding the implementation of the Customs Law.

Lines with the symbol () in column (10) of Appendix 1, column (10) of part a and column (4) of part b of Appendix 3, make HS code declaration according to actually imported goods.

The General Department of Customs also requires local customs departments to guide businesses and customs declarants to declare on the VNACCS/VCIS system, choose the correct code VB205 to declare the 8% VAT rate.

Code VB205 does not apply to goods that are not subject to VAT, subject to VAT rates of 0%, 5% and 10% (according to the provisions of the Law on VAT).

The General Department of Customs emphasized that the reduction of VAT rate from 10% to 8%, and declaration of HS code VB205 only applies to customs declarations registered from 0:00 on July 1, 2023 (corresponding to the date of registration on the side of the customs declaration).

If the customs declaration is registered before 0:00 on July 1, 2023 (with the registration date of the customs declaration before 0:00 on the effective date of the Decree), the imported goods shall not be eligible to VAT rate of 8% (declare code VB205).