On 30 August 2019, the Ministry of Finance issued Circular No. 60/2019/TT-BTC (Circular No. 60), which will come into effect on 15 October 2019, amending a number of provisions under Circular No. 39/2015/TT-BTC (Circular No. 39) on customs valuation. Noteworthy amendments include:
1. Details for customs valuation and cost allocation for exported goods
While the principle for determining the customs value of exported goods remains unchanged, Circular No. 60 sets forth details for customs valuation methods that will be applied to the following hierarchy:
- Selling price at the export border gate
- Selling price of identical or similar goods in customs database
- Selling price of identical or similar goods sold in the Vietnamese market
- Reference price.
Circular No. 60 also provides guidelines for allocating costs in connection with the exportation process in order to harmonize the customs valuation with different delivery terms, in this case the customs value is determined by the selling price at the export border gate.
2. Change in customs valuation of software
Circular No. 60 provides for customs valuation for imported equipment having operating system software and imported carrier media having application software.
The customs value of imported equipment having operating system software includes transaction values of equipment and operating system software. The rule remains the same even if the operating system software is imported before or after the importation of the equipment. If the operating system software is recorded on carrier media and the value of carrier media can be separated, the customs value of the operating system software does not include the value of carrier media. Circular No. 60, however, is silent on the customs value of standalone imported carrier media bearing operating system software.
For application software on carrier media, the principle remains unchanged, which means application software is duty and tax-free provided that the commercial invoice separates the value of the application software from the value of the carrier media.
3. Customs valuation of borrowed goods
Circular No. 60 supplements the customs valuation for borrowed goods, which was not provided under Circular No. 39. Particularly, the customs value of borrowed goods is all the costs and expenses that a borrower pays to deliver the goods to the first import border gate. The customs authority reserves the right to re-determine the customs value if there is sufficient evidence to prove that the declared value is not appropriate.