Duty exemption and international money transfer: Businesses must be aware of changes in Vietnam

From 15 February 2023, materials that can be used to manufacture information technology products are exempt from import duties in Vietnam. Another change also came into effect on this date regulating the unilateral transfer of funds from Vietnam abroad. The Ecovis consultants know exactly what companies need to consider.

Import duty exemption for information technology production components

According to Circular No. 25/2022/TT-BTTTT, issued by the Ministry of Information and Communications on 28 April 2022, import duty will be exempted for raw materials, supplies and components imported directly for use in the production of information technology products, digital content, and software under the two conditions:

• They are imported to produce the products on any of the following lists
  • List of software, hardware and electronics prescribed by Circular No. 09/2013/TT-BTTTT and its amending and supplementing Circular No. 20/2021/TT-BTTTT, or
  • List of digital content products prescribed by the Ministry of Information and Communications

The above conditions are subject to periodic review and change by the Ministry of Information and Communications.

• They are not on the list of domestically available machinery, equipment, raw materials, supplies and components for the telecommunications industry, information technology, digital content and software in Appendix 8 of Circular No. 05/2021/TT-BKHDT.

Synchronising regulations on overseas money transfer

To align Vietnam’s regulations on money transfer abroad with international standards, the State Bank of Vietnam issued Circular No. 20/2022/TT-NHNN on 30 December 2022. The circular sets out the rules on one-way money transfer from Vietnam abroad and payment and money transfer for other current transactions by organisations and individuals resident in Vietnam. There are several important points:

• Organisations resident in Vietnam are allowed to buy, transfer, or take foreign currencies abroad as a one-way money transfer for:
  • Sponsorship or aid
  • Rewarding non-resident individuals or organisations who participated in programmes and contests held in Vietnam
  • Allocating funds to overseas members participating in scientific research projects in Vietnam and abroad
  • Refunding sponsorship for project implementation in Vietnam according to agreements with foreign parties
• Payment and remittance activities for current transactions by organisations and individuals include:
  • Temporary import/export, re-export/re-import, transit, receipt of goods processing for foreign traders, order processing of goods abroad, and other activities related to the international purchase and sale of goods under commercial law
  • Social insurance contributions and payments
  • Fines and compensation for property damage or injury not covered by insurance
  • Other items as specified in the circular

For further information please contact:

Nghia Tran, Partner of Tax, Accounting and Consulting, ECOVIS AFA VIETNAM, Da Nang City, Vietnam
Email: Nghia.Tran@ecovis.com.vn