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In brief

Government Resolution No. 178/NQ-CP dated 12 December 2020, approves the Ministry of Finance’s proposal to grant import duty exemptions for materials imported by export manufacturers for outsourcing activities. Specifically, if export manufacturers subcontract specific processing steps to third parties, any materials imported by the export manufacturers for the implementation of such processing steps will also be exempted from import duties.

On 23 February 2021, the General Department of Customs issued Official Letter No. 879/TCHQ-TXNK (OL 879) to provide guidelines on the implementation of the Resolution.

In more detail

During the government’s meeting in November 2020, Prime Minister Nguyen Xuan Phuc approved the proposal of the Ministry of Finance regarding the import duty exemption for goods imported for manufacturing products for export, where export manufacturing enterprises outsource certain manufacturing activities. OL 879 was issued to implement the government’s approval and cover the following notable points:

  • Export manufacturing enterprises can enjoy import duty exemption if the following conditions are met:
    • Customs declarations for raw material/parts/components, etc., imported for export manufacturing are made from 1 September 2016 onwards.
    • Export manufacturing enterprises have outsourced a part of their manufacturing activities for finished products or have outsourced one/several steps of the manufacturing process.
    • Export manufacturing enterprises receive either semi-finished products (then continue the manufacturing process) or finished products ready for export.
  • The customs duty treatment for import duty and Value Added Tax (VAT) at the imported stage are set out in the following scenarios:
    • Customs authorities will not issue a tax and duty imposition decision if similar decisions have not been issued.
    • Customs authorities will amend, supplement or revoke tax and duty imposition decisions if such decisions have been issued, but related taxes and duties have not been paid.
    • Customs authorities will amend, supplement or revoke tax and duty imposition decisions if such decisions have been issued, and related tax and duties have been paid. Any paid tax and duty, late payment interest and administrative penalties, if any, will be refunded according to the regulations.
    • Any pending VAT credit will be refunded.

Thanh Vinh Nguyen is a partner in Baker McKenzie's Ho Chi Minh City office. Prior to joining the Firm, he practiced tax and consultancy work for two international accounting firms and worked as a compliance counsel for an international insurance company. He has co-written Business Operations in Vietnam, published by The Bureau of National Affairs, Inc.


Ngoc Trung Tran is a Senior Regulatory Advisor in Baker McKenzie's Ho Chi Minh City office.