Laws of Vietnam

DECISION No. 205/1998/QD-TTg OF OCTOBER 19, 1998 PROMULGATING THE REGULATION ON DUTY-FREE SHOPS

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government of September 30, 1992;

In order to enhance the management over the duty-free shops' activities,

DECIDES:

Article 1.- To promulgate together with this Decision the Regulation on duty-free shops.

Article 2.- This Decision replaces Decision No. 195-TTg of April 8, 1996 of the Prime Minister and takes effect 15 days after its signing; the previous stipulations which are contrary to this Decision are now annulled.

The Minister of Trade, the Minister of Planning and Investment, the Minister of Finance and the General Director of Customs shall have to guide and inspect the implementation of the Regulation promulgated together with this Decision.

Article 3.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the presidents of the People's Committees of the provinces and centrally-run cities shall have to implement this Decision.

For the Prime Minister

Deputy Prime Minister

NGUYEN TAN DUNG

THE REGULATIONS ON DUTY-FREE SHOPS

(Promulgated together with Decision No. 205/1998/QD-TTg of October 19, 1998 of the Prime Minister)

Article 1.- General provisions

1. Shops trading in duty-free goods (hereafter referred to as duty-free shops) are shops that sell goods to passengers on entry or exit and other subjects defined in this Regulation.

2. Goods imported for sale at the duty-free shops shall be exempt from import tax, special consumption tax and value-added tax.

If goods imported for sale at the duty-free shops are permitted by the Ministry of Trade for sale on domestic market, they shall be liable to taxes as prescribed.

3. The duty-free goods trading by the duty-free shops shall be subject to inspection and control by Vietnam's Customs Office, the Ministry of Trade and the Ministry of Finance.

4. Foreign currency(ies) used in transactions at duty-free shops are freely convertible ones which are announced by the State Bank of Vietnam.

5. Domestic enterprises are given priority in conducting duty-free goods trading activities.

Article 2.- The conditions for operation of duty-free shops

Enterprises which wish to open duty-free shops shall have to register their business and be entitled to operate them only after being granted the business qualification certificate by the Ministry of Trade.

The opening and operation of foreign-invested duty-free shops shall comply with the provisions of the Law on Foreign Investment in Vietnam.

Article 3.- Certificates of duty-free goods trading qualifications

1. The conditions for enterprises to be considered and granted certificates of duty-free goods trading qualifications include:

a) They are established under the Vietnamese law and have their head offices operating in provinces and/or centrally-run cities where exist international border gates (airports, sea ports, railway stations, land checkpoints).

b) They have sufficient capital and material facilities including a system of standard shops and warehouses, which are convenient for sale of goods and for the inspection and control by customs authorities.

c) They have personnel qualified for management and sale of duty-free goods.

2. The organizations and/or individuals that fully meet the conditions prescribed in Clause 1 of this Article and wish to open duty-free shops shall have to send their dossiers to the Ministry of Trade; for foreign-invested duty-free shops, the dossiers thereof shall be sent to the Ministry of Planning and Investment to apply for certificates of duty-free goods trading qualifications.

Such a dossier shall include:

- An application for certificate of duty-free goods trading qualifications;

- The valid copy of the decision on the establishment of the enterprise;

- The valid copy of the enterprise's certificate of business qualifications;

- The written approval of the location where the duty-free shop is to be set up;

- The plan for cooperation or joint venture with foreign party(ies) (if any).

3. The Ministry of Trade and the Ministry of Planning and Investment (for foreign-invested shops) shall have to consider and grant certificates of duty-free goods trading qualifications under this Regulation.

Article 4.- Locations for duty-free shops

1. Departure lounges of international airports and seaports, international land-road and railway border checkpoints in service of passengers on exit or transit (including drivers and service employees on transportation means on exit).

2. On international flights of Vietnam Airlines or other airlines established under the Vietnamese law, duty-free goods shall be sold to passengers on board and flight crews.

3. The opening of duty-free shops in service of passengers on entry (including flight crews and stewardesses on international flights) at a number of international airports; the opening of downtown duty-free shops in service of persons awaiting departures and the opening of duty-free shops in service of the diplomats as defined in Decree No.73-CP of July 30, 1994 of the Government, shall be decided by the Prime Minister at the proposals of the People's Committees of the provinces and centrally-run cities and the concerned ministries and branches.

4. The specific locations of duty-free shops mentioned in Clause 3 of this Article must be approved by the People's Committees of the concerned provinces and centrally-run cities as well as the managing ministries and branches; the locations of special-use warehouses for duty-free goods must be approved by the provincial/municipal Customs Departments and subject to the direct supervision by the customs authorities.

5. Duty-free shops at international airports and seaports shall be entitled to open kiosks for on-spot sale of goods to passengers awaiting departures, crew members on ships anchoring at ports. The General Department of Customs shall coordinate with the Ministry of Trade and the Ministry of Finance in providing detailed guidance for these activities.

Article 5.- Goods sold at the duty-free shops

1. Goods traded at the duty-free shops include goods imported for sale at duty-free shops, goods made in Vietnam and goods from lawful import sources.

2. Duty-free shops are encouraged to sell goods made in Vietnam. If these goods items and those imported and lawfully circulated on Vietnamese market are sold at the duty-free shops, they shall be considered export goods and subject to the export goods policy under the current regulations.

3. The duty-free shops selling goods to subjects who enjoy diplomatic privileges and immunity shall be entitled to import goods items to satisfy the latter's demands. Particularly, tourist cars and motorbikes shall be imported only at the orders of subjects eligible for duty-free goods import as prescribed by the Government's Decree No.73-CP of July 30, 1994. The sale and management of goods at such shops shall comply with the Government's regulations.

4. All goods sold at the duty-free shops must be affixed with "VIETNAM DUTY NOT PAID" stamps issued by the Ministry of Finance or the enterprises under the Ministry of Finance's authorization.

5. Goods imported for sale at duty-free shops, if being subject to the conditional import, shall be permitted by the Ministry of Trade.

Article 6.- Re-export, transfer of goods into the domestic market for sale, handling of unsold goods

If goods which have been already imported for sale at the duty-free shops and left in stock for a long time due to their unsaleability need to be handled (destroyed, sold on domestic market or re-exported), they must be certified by the customs authority in term of their respective lists and volumes.

Goods to be re-exported or taken out of areas managed by duty-free shops for sale on the domestic market must be permitted by the Ministry of Trade and subject to tax obligations as prescribed.

For broken, damaged or seriously degenerative-quality goods which cannot be sold for consumption, the concerned enterprises shall have to make records thereon with the customs authority's certification for destruction under the latter's supervision.

Article 7.- Eligible subjects and conditions for sale of goods at duty-free shops

a) Goods are sold to passengers on entry, exit or transit under the provisions of this Regulation, when they produce valid passports already checked for entry or exit;

b) Goods are sold on the airplanes directly to passengers on international flights of Vietnam Airlines or other airlines established under the Vietnamese law;

c) Subjects who enjoy diplomatic privileges and immunity, when buying duty-free goods, shall have to produce goods-buying books together with their passports or identity cards issued by Vietnam's Ministry for Foreign Affairs, if they buy goods for personal use; or the goods-buying books together with diplomatic notes or their agencies' introduction papers if they buy goods for their agencies;

d) Foreigners, overseas Vietnamese and Vietnamese awaiting departures shall have to produce their valid passports and air tickets with registered date of departure when registering to buy goods. The goods shall be delivered to the passengers at the exit checkpoints upon the completion of the exit procedures.

Article 8.- The duty-free goods purchase quantity limits

a) The subjects enjoying the diplomatic privileges and immunity shall be entitled to buy duty-free goods according to the quantity limits prescribed by the Vietnamese Government.

b) Persons on entry shall be entitled to buy goods according to the quantity limits prescribed in the regulations on duty-free luggage limits for entry passengers.

c) Persons on exit with valid passports shall be entitled to buy goods in unlimited quantities and values, but they shall themselves be responsible for the procedures and quantity limits for import of such goods into the destination country(ies).

d) Particularly, duty-free goods in service of sailors' daily needs shall be sold at the orders placed by ship masters or ship representatives. Such goods shall be sealed up or kept intact in their package under the supervision by the customs authority(ies) till the ships leave the ports.

3. Persons on departures with exit/entry laissez-passers shall be entitled to buy goods as those on exit with valid passports.

Article 9.- Management of duty-free shops' activities

The Ministry of Trade shall:

- Guide and receive dossiers for duty-free goods trading registration;

- Grant or refuse to grant the certificates of duty-free goods trading qualifications within 30 days from the date of receiving complete and valid dossiers;

- Permit the import of goods subject to the conditional import and/or re-export of goods of duty-free shops;

Permit the transfer of the goods already imported by duty-free shops into domestic market for sale.

The Ministry of Planning and Investment shall:

- Decide the opening of foreign-invested duty-free shops;

The Ministry of Finance shall:

- Guide the observance of financial and accounting regimes applicable to duty-free shops;

- Periodically or extraordinarily inspect the liquidation and settlement by duty-free shops;

- Guide the tax payment, collection or exemption in accordance with provisions of the tax laws applicable to duty-free shops;

- Guide the policies on tax preferences applicable to goods made in Vietnam sold at the duty-free shops.

The General Department of Customs shall:

- Guide the customs procedures for import or re-export of goods of the duty-free shops, and the transfer of duty-free shops' goods into domestic market for sale;

- Certify the necessity to handle or liquidate the unsold goods; supervise the liquidation or destruction of goods of duty-free shops;

- Conduct the application, calculation and collection of tax(es) on goods already imported for sale at the duty-free shops, which are later permitted to be transferred into domestic market for sale.

Article 10.- Sale of goods at the duty-free shops

Duty-free shops shall have to sell to right subjects only goods on the lists and goods items already stated in their business registrations, and strictly comply with this Regulation's provisions on the sale of duty-free goods.

Article 11.- Responsibility of the enterprises trading in duty-free goods

The enterprises trading in duty-free goods shall have to take self-responsibility before law for the goods imported for sale at the duty-free shops and their quality.

Article 12.- Reports on business activities of duty-free shops

Each year and every six months, the enterprises dealing in duty-free shops shall have to report on the duty-free goods sale activities to the Ministry of Trade, the Ministry of Finance, the General Department of Customs; and the Ministry of Planning and Investment (for foreign-invested duty-free shops).

Article 13.- Handling of violations

Violations of this Regulation's provisions on the sale of duty-free goods shall, depending on their seriousness, be subject to: temporary suspension of operation, withdrawal of certificates of business qualifications, administrative sanctions or examination for penal liability as prescribed by law.

Article 14.- The Minister of Trade, the Minister of Planning and Investment, the Minister of Finance and the General Director of Customs shall have to guide the implementation of this Regulation.

For the Prime Minister

Deputy Prime Minister

NGUYEN TAN DUNG