VIETNAM GENERAL CONFEDERATION OF LABOUR

TON DUC THANG UNIVERSITY

FACULTY OF BUSINESS ADMINISTRATION

CUSTOMS PROCEDURES REPORT

TOPIC: PRESENTATION OF RELATED WORKS TO

GOODS CLEARANCE FOR BUSINESS CONTRACTS OF
ENTERPRISE

Lecturer: Ph.D Nong Thi Nhu Mai

Group : 5 –Shift 3
Trần Quốc Bảo 720I0514
Nguyễn Vũ Hoàng Phương B20i0093
Hoàng Nguyễn Xuân Thường 721D0045
Vũ An Phong 721D0018

HO CHI MINH CITY 9/12 /2023

 LIST OF GROUP MEMBERS
Student
STT Full name Content implementation Evaluation
ID
1 Trần Quốc Bảo 720I0514 Intro + Chapter 1 100%
2 Vũ An Phong 721D0018 Chapter 3 100%
3 Nguyễn Vũ Hoàng Phương B20I0093 Chapter 1 + Chapter 2 100%
4 Hoàng Nguyễn Xuân Thường 721D0045 Chapter 3 + Conclusion 100%

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 TABLE OF CONTENTS
INTRODUCTION......................................................................................................................... 4
CHAPTER 1: THEORETICAL FOUNDATIONS RELATED TO CUSTOMS
CLEARANCE FOR THE SALE CONTRACTS OF BUSINESS ........................................... 5
1.1. Theoretical Basis of International Commercial Contracts ............................................ 5
1.1.1. Concept of International Commercial Contracts .................................................... 5
1.1.2. Characteristics of International Commercial Contracts......................................... 5
1.1.3. Classification of International Commercial Contracts ........................................... 6
1.1.4. Contents of International Commercial Contracts ................................................... 6
1.1.5. Steps to Implement an International Commercial Contract .................................. 7
1.2. Legal Framework for Customs Procedures for Import and Export Goods ................. 7
1.2.1 Legal Framework ......................................................................................................... 7
1.2.2. Classification of HS Codes ....................................................................................... 10
1.2.3. Calculation of Customs Duties ................................................................................. 12
1.2.3.1. Types of Taxs for a Shipment ........................................................................... 12
1.2.3.2. Sequence for calculating import and export Duties: ...................................... 13
1.2.3.3. Calculation of Import and Export Duties ........................................................ 13
1.2.4. Electronic Customs Declaration Process ................................................................ 14
CHAPTER 2: ANALYSIS OF CUSTOMS CLEARANCE FOR AN IMPORTED BATCH
BY THE BUSINESS. .................................................................................................................. 16
2.1. Analysis of the Trade Contract ....................................................................................... 16
2.2. State Management Policies for Goods in the Trade Contract ..................................... 17
2.3. Determining the HS Code of the Goods ......................................................................... 17
2.4. Determining Customs Duties to be Paid ........................................................................ 18
2.5. Steps for Electronic Customs Declaration ..................................................................... 19
CHAPTER 3: COMMON RISKS ENCOUNTERED WHEN IMPLEMENTING
CONTRACTS ............................................................................................................................. 23
3.1 Risks when declaring electronic customs ........................................................................ 23
3.2 The risk management system ........................................................................................... 23
CONCLUSION ........................................................................................................................... 25
REFERENCE .............................................................................................................................. 26
APPENDIX .................................................................................................................................. 27

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 INTRODUCTION
1.Reason for Choosing the Topic
In the current era of open market economies, the exchange of tangible and intangible
benefits through free trade activities among nations and territories is increasing rapidly and
becoming widespread. In these trading activities, to ensure the interests of both parties, the
seller (exporter) and the buyer (importer) often enter into a commercial contract with
detailed provisions regarding goods, transportation, payment, etc. This contract serves as
the basis for allocating risks in case of unforeseen events.
Once the commercial contract is negotiated and signed between the two parties, the
involved entities commence the implementation of the buying and selling contract,
involving tasks such as preparing goods, packaging, delivering to the transport party,
completing customs procedures, transportation, payment, etc. Each stage carries distinct
responsibilities. However, arguably, the most crucial activity is customs clearance, as it
requires direct interaction with government agencies to determine trade incentives and
customs duties that businesses must bear. This activity does not allow for any errors, as it
significantly affects the cost and timing of goods delivery. Therefore, it requires businesses
to be extremely cautious and accurate.
Recognizing the significance of customs clearance for business contracts, the topic
"Presentation of related works to goods clearance for business contracts of enterprise"
has been chosen for this report to provide readers with an overview of activities related to
customs clearance, highlighting considerations during the process. The aim is to assist
businesses in avoiding unnecessary risks during the customs clearance of shipments. To
facilitate a better understanding, the report includes an analysis of an imported batch of
goods by the May Song Hong Joint Stock Company.
2.Report Structure
In addition to the introduction, conclusion, and references, the report consists of three
chapters:
 Chapter 1: Theoretical foundations related to customs clearance for the sale
contracts of business.
 Chapter 2: Analysis of customs clearance for an imported batch by the business.
 Chapter 3: Common risks encountered when implementing contracts

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CHAPTER 1: THEORETICAL FOUNDATIONS RELATED TO CUSTOMS
CLEARANCE FOR THE SALE CONTRACTS OF BUSINESS

1.1. Theoretical Basis of International Commercial Contracts

1.1.1. Concept of International Commercial Contracts
According to Article 3, Section 1 of the 2017 Law on Foreign Trade Management:
"Foreign trade activities are international buying and selling activities carried out in the
forms of export, import; temporary import, re-export; temporary export, re-import; transit;
transshipment; and other activities related to international buying and selling activities as
regulated by laws and international agreements of the Socialist Republic of Vietnam."
The entities involved in foreign trade activities negotiate and enter into international
commercial contracts to stipulate the terms, obligations, responsibilities, and rights of both
parties.
An international commercial contract is defined as "An official contract in which the
seller agrees to sell, and the buyer agrees to buy, according to specific terms and conditions
written in a document with signatures of both parties. In export-import, it determines the
roles and responsibilities of both parties:
 Buyer: Receives the goods and pays the amount to the seller.
 Seller: Delivers the goods in the specified quantity and quality within the agreed-
upon time."
Thus, an international commercial contract, also known as an import-export contract,
is an agreement between a buyer and a seller from different countries, specifying that the
seller must provide goods, transfer related documents, and ownership rights to the buyer,
while the buyer must make the payment.
1.1.2. Characteristics of International Commercial Contracts
 The parties involved in the contract are the buyer and the seller, who can be
individuals, legal entities, or, in special cases, the government.
 The object of the contract must be goods.
 The content of the contract encompasses all the obligations of both parties regarding
the transfer of ownership rights, delivery of goods to the buyer, and payment to the
seller.
 The form of the contract can be oral, written, or established through specific actions.
 The commodity sales contract is a bilateral, commitment-based contract.

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1.1.3. Classification of International Commercial Contracts
Based on the duration of the contract, there are two types:
 Long-term contracts: typically spanning around 1 year, with goods divided into
multiple deliveries.
 Short-term contracts: usually for a specific batch of goods, with delivery
occurring in a single instance.
According to the business form, contracts include various types:
 Sales contracts
 Processing contracts
 Temporary import and re-export contracts
 Technology transfer contracts, etc.
1.1.4. Contents of International Commercial Contracts
Some mandatory contents in an international commercial contract include:
 Commodity: General description of the goods.
 Quality: Description of the quality of the goods.
 Quantity: Quantity of the goods.
 Price: Unit price and total amount.
 Shipment: Time and place of delivery.
 Payment: Payment method.
 Packing and Marking: Packaging and labeling of the goods.
 Warranty: Goods warranty policy.
 Insurance: Goods insurance policy.
 Arbitration: Provision for arbitration in case of disputes.
 Claim: Provisions for complaints during the transaction.
 Force Majeure: Provisions for unforeseeable circumstances or exemptions
from liability.
 Penalty: Provisions for penalties or damages compensation.
 Other terms and conditions: Additional clauses.
Corresponding to these contents are specific clauses within the contract:
 Clause 1: Definition.
 Clause 2: Scope of the contract.
 Clause 3: Value of the contract.
 Clause 4: Conditions for delivery.
 Clause 5: Payment method.
 Clause 6: Chartering a vessel.

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  Clause 7: Insurance.
 Clause 8: Inspection.
 Clause 9: Warranty.
 Clause 10: Implementation.
 Clause 11: Termination.
 Clause 12: Legal enforcement.
1.1.5. Steps to Implement an International Commercial Contract
To execute an export contract, a business entity must go through the following steps:
Urging the opening of an L/C (Letter of Credit) and checking the L/C (if the contract
specifies the use of a documentary credit method), applying for an export license, preparing
goods, chartering a vessel or booking cargo space, inspecting and quarantining goods,
completing customs procedures, loading goods onto the ship, purchasing insurance,
handling payment procedures, and resolving complaints if any.
To implement an import contract, a business entity must go through the following
steps: Applying for an import license, opening an L/C (if the contract specifies payment by
L/C), chartering a vessel or booking cargo space, purchasing insurance, completing
customs procedures, receiving cargo from the cargo vessel, inspecting goods (quarantine
and inspection), delivering goods to the importing entity, completing payment procedures,
and addressing complaints (if any) regarding missing or damaged goods.
1.2. Legal Framework for Customs Procedures for Import and Export Goods
1.2.1 Legal Framework

The legal framework for customs procedures related to import and export goods
includes the following legal documents:
Legal documents

 Law on Customs 2001; amended in 2005 and 2014.

Customs and  Amended Law on Customs in 2014 (effective from 1/1/2015).
Import-Export  Commercial Law 2005.
Taxes  Law on Export Tax, Import Tax 2005.
 Tax Management Law 2006; amended in 2012.

Customs
 Decree No. 154/2005/ND-CP stipulating customs procedures,
Procedures
inspection, and supervision.

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  Decree No. 08/2015/ND-CP on the implementation of the Customs
Law regarding customs procedures, inspection, and supervision.
 Circular No. 39/2018/TT-BTC, amending Circular No. 38/2015/TT-
BTC (replacing Circular No. 128/2013/TT-BTC), on customs
procedures, inspection, and supervision; export and import taxes; and
tax management for export and import goods.
 Decision No. 1966/QD-TCHQ on the issuance of procedures for
customs clearance of export and import goods.

 Decree No. 87/2012/ND-CP detailing certain articles of the Customs

Law on electronic customs procedures for commercial export and
import goods.
Electronic
 Circular No. 22/2014/TT-BTC providing guidance on electronic
Customs
customs procedures when using the VNACCS system (replacing
Procedures
Circular No. 196/2012/TT-BTC).
 Decision No. 988/QD-TCHQ in 2014 on the process of electronic
customs procedures for commercial export and import goods.

 Decree No. 06/2003/ND-CP on the classification of export and import

goods.
 Circular No. 49/2010/TT-BTC guiding the classification and
Classification,
application of tax rates for export and import goods.
HS Code
 Circular No. 103/2015/TT-BTC issuing the list of Vietnam's export
Application
and import goods (replacing Circular No. 65/2017/TT-BTC).
 Circular No. 14/2015/TT-BTC on the classification of goods and
analysis for goods classification.

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  Decree No. 40/2007/ND-CP on determining customs valuation for
export and import goods.
 Circular No. 39/2015/TT-BTC on determining customs valuation for
export and import goods (replacing Circulars No. 205/2010/TT-BTC
Determination
and No. 29/2014/TT-BTC).
of Customs
 Decree No. 134/2016/ND-CP guiding the Law on export tax and
Valuation
import tax (replacing Decree No. 87/2010/ND-CP).
 Decree No. 83/2013/ND-CP detailing the implementation of certain
provisions of the Law on tax administration and amending and
supplementing some articles of the Law on tax administration.

 Decree No. 187/2013/ND-CP detailing the implementation of the

Law on Commerce regarding international commodity trading
activities and the activities of purchasing, selling, processing, and
transiting goods with foreign countries. This includes important
content such as:
Goods for  List of prohibited export and import goods.
Import and  List of temporarily suspended export and import goods.
Export  List of export and import goods under licenses.
 Circular No. 04/2014/TT-BCT on the list of used consumer goods
prohibited from importation (under the management of the Ministry
of Industry and Trade).
 Circular No. 11/2012/TT-BTTTT regulating the list of used
information technology products prohibited from importation.

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  Circular No. 182/2015/TT-BTC on export tax tables, preferential
import tax tables, effective from 1/1/2016.
 Circular No. 165/2014/TT-BTC issuing the special preferential
import tax table of Vietnam with ASEAN for the period 2015-2018.
 Circular No. 166/2014/TT-BTC issuing the special preferential
import tax table of Vietnam for the implementation of the ASEAN-
China Free Trade Area for the period 2015-2018.
 Circular No. 167/2014/TT-BTC issuing the special preferential
import tax table of Vietnam for the implementation of the ASEAN-
Korea Free Trade Area for the period 2015-2018.
Import and  Circular No. 24/2015/TT-BTC on the special preferential import tax
Export tax table of Vietnam for the implementation of the ASEAN-Japan
schedule Comprehensive Economic Partnership Agreement for the period
2015-2019.
 Circular No. 25/2015/TT-BTC issuing the special preferential
import tax table of Vietnam for the implementation of the Vietnam-
Japan Economic Partnership Agreement for the period 2015-2019.
 Circular No. 168/2014/TT-BTC issuing the special preferential
import tax table for the ASEAN-Australia-New Zealand Free Trade
Agreement for the period 2015-2018.
 Circular No. 169/2014/TT-BTC issuing the special preferential
import tax table of Vietnam for the implementation of the ASEAN-
India Trade in Goods Agreement for the period 2015-2018.

1.2.2. Classification of HS Codes

The HS code, or Harmonized System code, is a numerical code used globally for
the classification of import and export goods. It is part of the Harmonized Commodity
Description and Coding System developed by the World Customs Organization (WCO).
The Harmonized System (HS) is an internationally standardized system for the
nomenclature and coding of goods. It provides a common language for classifying and
identifying over 98% of traded goods worldwide. According to the HS, goods are
categorized into Parts, further divided into Chapters, then into Groups, and finally into
Subgroups. The HS comprises 21 Parts, 99 Chapters, 1,228 Groups, and 5,612 Subgroups.

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 Section I: Live Animals; Animal Products (5 chapters)
 Section II: Vegetable Products (9 chapters)
 Section III: Animal or Vegetable Fats and Oils; Prepared Edible Fats; Animal or
Vegetable Waxes (1 chapter)
 Section IV: Prepared Foodstuffs; Beverages, Spirits, and Vinegar; Tobacco and
Manufactured Tobacco Substitutes (9 chapters)
 Section V: Mineral Products (3 chapters)
 Section VI: Products of the Chemical or Allied Industries (11 chapters)
 Section VII: Plastics and Articles Thereof; Rubber and Articles Thereof (2 chapters)
 Section VIII: Raw Hides and Skins, Leather, Furskins, and Articles Thereof;
Saddlery and Harness; Travel Goods, Handbags, and Similar Containers; Articles
of Gut (Other Than Silkworm Gut) (3 chapters)
 Section IX: Wood and Articles of Wood; Wood Charcoal; Cork and Articles of
Cork; Manufactures of Straw, of Esparto or of Other Plaiting Materials; Basketware
and Wickerwork (3 chapters)
 Section X: Pulp of Wood or of Other Fibrous Cellulosic Material; Recovered (Waste
and Scrap) Paper or Paperboard; Paper and Paperboard and Articles Thereof (3
chapters)
 Section XI: Textile and Textile Articles (14 chapters)
 Section XII: Footwear, Headgear, Umbrellas, Sun Umbrellas, Walking Sticks, Seat-
Sticks, Whips, Riding-Crops, and Parts Thereof; Prepared Feathers and Articles
Made of Feathers; Artificial Flowers; Articles of Human Hair (4 chapters)
 Section XIII: Articles of Stone, Plaster, Cement, Asbestos, Mica, or Similar
Materials; Ceramic Products; Glass and Glassware (3 chapters)
 Section XIV: Natural or Cultured Pearls, Precious or Semiprecious Stones, Metals,
Clad With Precious Metal, and Articles Thereof; Imitation Jewelry; Coin (1 chapter)
 Section XV: Base Metals and Articles of Base Metal (12 chapters)
 Section XVI: Machinery and Mechanical Appliances; Electrical Equipment; Parts
Thereof; Sound Recorders and Reproducers, Television Image and Sound
Recorders and Reproducers, and Parts and Accessories of Such Articles (2 chapters)
 SectionXVII: Vehicles, Aircraft, Vessels, and Associated Transport Equipment (4
chapters)
 Part XVIII: Optical, Photographic, Cinematographic, Measuring, Checking,
Precision, Medical or Surgical Instruments and Apparatus; Clocks and Watches;
Musical Instruments; Parts and Accessories Thereof (3 chapters)
 Part XIX: Arms and Ammunition; Parts and Accessories Thereof (1 chapter)

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  Part XX: Miscellaneous Manufactured Articles (3 chapters)
 Part XXI: Works of Art, Collectors' Pieces, and Antiques (1 chapter)

In each country, the HS code can have 8 to 10 digits, but in Vietnam, the HS code
consists of only 8 digits, following the ASEAN – AHTN (ASEAN Harmonized Tariff
Nomenclature) for tax harmonization. The first 6 digits represent the international scope of
the HS code and cannot be changed, while the last 2 digits indicate the national scope.
The structure of the HS code in Vietnam is as follows:

 The first 2 digits represent the chapter (for raw materials).

 The next 2 digits represent the heading (for unfinished products).
 The following 2 digits represent the sub-heading (for semi-finished products).
 The last 2 indicate the Local classification Number(for finished products).

1.2.3. Calculation of Customs Duties

1.2.3.1. Types of Taxs for a Shipment
The various types of duties applicable to a shipment include:
 Import Duty: This is the duty imposed on goods when they are imported into a
country.
 Export Duty: This duty is applicable when goods are exported out of a country.
 Special Consumption Tax : This tax is applied to certain goods considered as
special consumption items.
 Environmental Protection Tax : This tax is levied on goods that may have an
impact on the environment.
 Value Added Tax on Imported Goods (VAT): VAT is a consumption tax applied
to the value added to goods and services at each stage of production and distribution,
and it also applies to imported goods.

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  Safeguard/anti-dumping duties: This duty is imposed to protect domestic
industries from unfair trade practices, such as dumping or subsidies from foreign
countries.
1.2.3.2. Sequence for calculating import and export Duties:

Value Added Tax on Sum of all types of

Calculate the taxable Imported Goods taxes = total tax
value
(VAT) payable

Environmental
Import/Export duties
Protection Tax

Special Consumption Safeguard/anti-

Tax dumping duties

1.2.3.3. Calculation of Import and Export Duties

After determining the HS code of the goods, we will identify the import Duty rates,
determine whether the goods are subject to environmental protection tax, value-added tax
(VAT), or special consumptiontax.
Taxable Value (TV): For imported goods, it is the actual price paid up to the first
importation border (commonly referred to as CIF price); for exported goods, it is the actual
price paid up to the export border (commonly referred to as FOB price).
The calculation of various taxes is as follows:
 Calculation of import duty/export duty:

Import duty/Export duty = Taxable Value x duty rate

Where:
Taxable Value = Value of goods + international transportation charges under delivery
terms + other applicable charges.
Duty rate: Depending on the HS code, the duty rate can be determined, or if the goods
have preferential Certificate of Origin (C/O), the duty rate of the C/O goods will be
applied.

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  Calculation of special consumption tax:
Special Consumption tax = VAT. Special Consumption tax x duty rate

Where:
VAT. Special Consumption tax is the taxable value for special consumption tax =
(Import Duty+ Value of taxable import) x duty rate

 Calculation of Safeguard/anti-dumping duties:

Safeguard/anti-dumping duties = Taxable value for import duties x Protective tariff rate

Where:
Taxable value for import duties is the taxable value for import duty
Protective tariff rate is the duty rate for safeguard duties (refer to the import and
export tax schedule)
 Calculation of Environmental protection tax:

Environmental protection tax = Quantity of goods x absolute tax rate

 Calculation of VAT on imported goods:

VAT = (Taxable value for import duties + Import duty+ Special Consumption tax +
Safeguard/anti-dumping duties + Environmental protection tax) x VAT rate

Where:
The VAT rate is 10% (refer to the import and export tax schedule)

 Total duties:
Total duties = Import duty+ Special Consumption tax + Safeguard/anti-dumping
duties + Environmental protection tax + VAT

1.2.4. Electronic Customs Declaration Process

Electronic customs declaration consists of 5 steps as follows:
Step 1: Declare Import Information (IDA)
Customs declarants input import information using the IDA (Import Declaration
Application) business function before registering the import declaration. Once all 133
criteria are completed on the IDA screen, the customs declarant submits it to the VNACCS
system. The system automatically assigns a number, generates relevant criteria related to
tax rates, and provides corresponding names for the entered codes (e.g., the name of the
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importing country corresponding to the country code, the name of the importing unit
corresponding to the business registration number, etc.). The system also automatically
calculates criteria related to value, taxes, etc., and provides feedback to the customs
declarant on the declaration registration screen (IDC).
 When the system assigns a number, the IDA import information declaration is stored
in the VNACCS system.
Step 2: Register Import Declaration (IDC)
Upon receiving the feedback screen for declaration registration (IDC) from the
system, the customs declarant verifies the declared information, the information
automatically generated by the system, and the calculations. If the declarant confirms the
accuracy of the information, they submit it to the system to register the declaration.
In case discrepancies are found during verification, the customs declarant must use
the IDB (Import Declaration Correction) business function to revisit the IDA screen to
correct the necessary information and perform tasks as in step 1.
Step 3: Check Declaration Registration Conditions
Before allowing declaration registration, the system automatically checks the list of
businesses that do not meet the conditions for declaration registration (e.g., businesses with
overdue debts exceeding 90 days, businesses temporarily suspended, dissolved, bankrupt,
etc.). If the business is on the mentioned list, declaration registration is not permitted, and
the system will provide feedback to the customs declarant.
Step 4: Routing, Inspection, and Customs Clearance
After the declaration is registered, the system automatically routes it into three lanes:
green, yellow, and red.
 For the green lane, after paying the import taxes (if applicable), it will be cleared
immediately. At the end of the day, the VNACCS system consolidates all green lane
declarations that have been cleared and transfers them to the VCIS system.
 For the yellow lane, businesses must attach detailed documents to the system for
customs inspection. If there are no issues after paying the import taxes (if
applicable), the declaration will be cleared. If there are document issues, customs
may redirect it to the red lane for physical inspection.
 For the red lane, businesses must bring the goods to the designated customs location
for physical inspection. After a successful physical inspection, the goods will be
cleared.
Step 5: Declaration Modification and Supplement during Customs Clearance

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CHAPTER 2: ANALYSIS OF CUSTOMS CLEARANCE FOR AN IMPORTED
BATCH BY THE BUSINESS.

2.1. Analysis of the Trade Contract

Contract: Purchase and Sale Contract for Digital Equipment 01/SHJ-TCP/22

Buyer: SONG HONG GARMENT JOINT STOCK COMPANY
Seller: THE CHILDREN’S PLACE SERVICES CO., LLC

The contract comprises 11 sections as follows:

Section 1: Purpose of the Contract This section outlines the commitments that the
seller will undertake regarding the provision of documents and instructions related to the
purchased equipment.
Section 2: Technical Standards and Quantity of Equipment
 Equipment Name: Handheld Barcode Scanner Model 05H02047 - Brand
Denso BHT 1505B
 Quantity: 1 machine
 Brand new 100%
Section 3: Unit Price and Payment Method
 Unit Price: 1,355 USD (including fees, surcharges, inspection fees,
installation, and operation fees)
 Payment Terms: 100% payment of the contract value within 30 days of
receiving the equipment through bank transfer. The buyer bears all
transaction costs. In case of late payment, a penalty of 0.02% of the contract
value per day will be imposed, with a maximum delay of 10 days.
Section 4: Delivery and Installation
 Delivery within 15 days from the contract signing date.
 Liability for Contract Violation: If the seller delivers late as agreed, a penalty
of 0.05% of the contract value per day will be applied. If the seller delivers a
faulty product, they must replace it with another product for the buyer, and a
penalty of 0.05% of the contract value per day will be imposed from the
agreed delivery date.
 Installation: The seller is responsible for providing all installation and usage
instructions to the buyer.

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 Section 5: Warranty
 The product is warranted for 12 months.
 If within the warranty period, the seller is responsible for replacing any
machine components and covering all associated modification costs.
 In case of malfunction, the buyer must notify the seller via phone, email, or
fax. The seller will send an employee to the buyer's address or dispatch
components with instructions within 3 working days.
Section 6: Rights and Obligations of Both Parties
Section 7: Occurrence of Events
Section 8: Governing Law and Dispute Resolution
Section 9: Early Termination Agreement
Section 10: Notification
Section 11: General Terms

2.2. State Management Policies for Goods in the Trade Contract

The import procedure for barcode scanners is regulated by the following legal
documents:
 Circular 38/2015/TT-BTC dated March 25, 2015; amended and supplemented by
Circular 39/2018/TT-BTC dated April 20, 2018.
 Decree No. 69/2018/NĐ-CP dated May 15, 2018.
 Decree No. 58/2016/NĐ-CP dated July 1, 2016, amended and supplemented by
Decree No. 53/2018/NĐ-CP dated April 16, 2018.
 Decision No. 18/2019/QĐ-TTg dated April 19, 2019.
According to these documents, barcode scanners are not listed in the prohibited import
goods category.
2.3. Determining the HS Code of the Goods
Product Name: Handheld Barcode Scanner Model 05H02047 - Brand Denso BHT
1505B, brand new 100%.
Upon analysis, the imported goods, barcode scanners, fall under Chapter 84 of the
import-export tax classification: Machinery and mechanical appliances; Electrical
equipment; Parts thereof; Sound recorders and reproducers, television image and sound
recorders, and parts and accessories of such articles. We can determine the first two digits
are 84.
Within Chapter 84, handheld barcode scanners belong to group 71: Automatic data
processing machines and units thereof; Magnetic or optical readers, machines for

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transcribing data onto data media in coded form, and machines for processing such data,
not elsewhere specified or included. We determine the next two digits are 71.
In group 71, barcode scanners are classified under subgroup 90, other types. We
determine the next two digits are 90.
Within subgroup 90, there are four types of goods, including barcode scanners.
Therefore, we can determine that the HS code for the barcode scanner is 84719010.
2.4. Determining Customs Duties to be Paid
After determining the HS code of the barcode reader as 84719010, we refer to the
import-export tax schedule for the year 2023 to determine the applicable duties.
The duties to be paid are as follows:
 Normal import duty: 5%, but since this machine is imported from Hong Kong -
China, it will be subject to the preferential ACFTA duty rate of 0%.
 Value-added tax (VAT): 10%
 Special consumption tax: 0%
 Environmental protection tax: 0%
Applying the formula to calculate the customs duties as follows:
 Taxable value: 1,355 USD
 Exchange rate: The exchange rate of Vietcombank at the end of the previous
Thursday. Let's assume the exchange rate is 24,420.
 Taxable value in Vietnamese Dong (VND): 1,355 x 24,420 = 33,089,100 VND
Step 1: Calculate the import duty
Import duty = 33,089,100 x 0% = 0 VND

Step 2: Calculate the special consumption tax

Special consumption tax = 33,089,100 x 0% = 0 VND

Step 3: Calculate the environmental protection tax

Environmental protection tax = 33,089,100 x 0% = 0 VND

Step 4: Calculate the value-added tax (VAT) for imported goods

VAT = (33,089,100 + 0 + 0 + 0) x 10% = 3,308,910 VND

Step 5: Total duties

Total duties = 0 + 0 + 0 + 3,308,910 = 3,308,910 VND

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2.5. Steps for Electronic Customs Declaration
Electronic customs declaration for this batch of goods involves the following 4 steps:

Step 1: Log in to ECUS5 VNACCS 5.0 software to register declaration information

In the business information registration window (Figure 2.2), complete the required
fields:
 Import Code: 0600333307 (The tax code of the importing company)
 Business Name: CÔNG TY CỔ PHẦN MAY SÔNG HỒNG
 Address: 105 Nguyễn Đức Thuận, Thành phố Nam Định, Tỉnh Nam Định
 Phone Number: (+84) 2283 649365
 After filling in the information, click 'Agree' to proceed.

Figure 2.2: The business information registration window

Step 2: Declare Import Information (IDA)

Click on 'Declaration of Import and Export' on the menu bar, then select 'Register a
new import declaration' and provide relevant information about the batch of goods. (Figure
2.3)

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 Figure 2.3: Register a New Import Declaration

In the 'General Information' menu, fill in mandatory fields:

 Type Code: Business investment - A12
 Customs Office: CCHQNDINH – Nam Dinh Customs Department
 Individual/organization classification: 4 – Company
 Transport method code: 2 – Sea transport
 Importer: Sông Hồng Corporation Limited
 Exporter: THE CHILDREN’S PLACE SERVICES CO., LLC
 Bill of Lading Number: FCR20232259601
 Quantity of packages: 1 PK
 Total gross weight: 0.5 KG
 Warehouse code: 03TGC02 - VICONSHIP
 Means of transport: HAIAN CITY / 032S
 Arrival date of goods: 31/10/2022
 Unloading location: VNGEE - GREEN PORT (HP)
 Loading location: HKHKG HONGKONG

In the 'General Information 2' menu, provide additional information:

 Invoice type classification: Commercial invoice
 Invoice number: SB-0016/23B
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  Issuance date: 27/10/2022
 Payment method: TT – Bank transfer
 Invoice price classification code: A – Commercial invoice
 Invoice price conditions: FOB HONGKONG
 Total invoice value: 1,355 USD
 Invoice currency code: USD
 Shipping fee: Type code: A - Total common fee amount for all goods on the
document. Currency code: USD
 Insurance fee: Type code: D – No insurance
 Tax payment deadline code: D – Immediate tax payment

In the 'List of Goods' menu, click 'Add new' and fill in the following information:
 Item description: Handheld Barcode Scanner Model 05H02047 - Brand Denso
BHT 1505B, brand new 100%
 HS code: 84719010
 Origin: China
 Unit of measurement: KGW
 Invoice unit price: 1,355 USD
 Total invoice value: 1,355 USD
 Tax calculation unit price: 33,089,100 VND

For tax-related fields, including special consumption tax, environmental protection tax,
value-added tax, etc., enter the required information, then click 'Save.'
The system will return a draft declaration with the total payable tax for Sông Hồng on
the declaration registration screen (IDC). The declaration officer will review the tax section
based on the tax code registered in the customs system.

 Import duty = invoice value x exchange rate x import duty rate = tax calculation
unit price x import duty rate = 33,089,100 x 0% = 0

 VAT: (Tax calculation unit price + import duty) x VAT rate = (33,089,100 + 0) x
10% = 3,308,910 VND
Upon receiving the declaration registration screen (IDC) feedback from the system, the
declaration officer will review all information on the declaration. If any inaccuracies are
found, corrections must be made using the IDB transaction to recall the import declaration
information screen (IDA) to rectify the incorrect information. Once all information is

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correct, the data will be transmitted to the Customs Department by clicking the 'Declare'
button.
Step 3: Registering the Import Declaration with Customs
After clicking the "Declaration" button, a notification window will appear asking
whether to apply a digital signature. The customs declaration officer will select "yes" to
agree to apply the digital signature.
The "Verify User PIN" window will appear: the customs declaration officer will
enter the PIN code from the USB token into the password field and confirm the password,
then click "accept" to register the import declaration.
Upon receiving the import declaration data (IDC), the Customs system will
automatically verify its accuracy, including the HS code, foreign currency value, tax rates,
etc. If there are no errors reported by the system, click on the "Get Feedback from Customs"
button. The system will provide the enterprise with the acceptance number, declaration
number, and declaration classification result. If the customs officer has filled in the
information correctly, the system will return a status of "Declaration Successful."

Step 4: Retrieving Declaration Results

After receiving the acceptance number for the declaration from customs, click the
"Get Feedback from HQ" button to retrieve information from Customs, including the
declaration number, registration date and time, and classification. Depending on the
classification result, the enterprise may need to provide additional documents or undergo
inspection.

After paying the taxes and completing customs procedures at the port, the system
will return a list of goods that meet the conditions through the customs surveillance area.

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CHAPTER 3: COMMON RISKS ENCOUNTERED WHEN IMPLEMENTING
CONTRACTS
3.1 Risks when declaring electronic customs
Challenges in customs procedures are often unavoidable during the import and
export process. When dealing with different types such as export production, foreign
investment, import processing or temporary import for re-export, each type poses specific
and diverse requirements in implementing procedures. import.
Therefore, the customs clearance process for each transaction method has unique
characteristics. Businesses can choose to declare customs themselves or entrust this task to
reputable and highly specialized customs declaration service companies.

Firstly, is incorrect information when declaring information on the VNACCS

system. It is important to ensure that all data is entered correctly. Some information can be
edited after logging in, but some information cannot be edited after being entered into the
system. If an error occurs here, the company may have to submit a new declaration,
increasing processing time. Reconciliation becomes more complicated and difficult,
especially if you have already paid taxes on your original return. Unnecessary additional
costs arise.

Secondly , if the tax number is entered incorrectly, the customs declarant will be
subject to administrative violations according to the provisions of law. The level of
penalties for administrative violations in the customs field for incorrectly entering tax
numbers is specified in Article 20 of Decree No. 125/2016/ND-CP dated July 28, 2016 of
the Government detailing and Guiding the implementation of the Law on Export Tax and
Import Tax.
3.2 The risk management system
In order to recognize and assess risk impacts, we utilize the risk management system
from VNACCS/VCIS which includes 6 steps:

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 Accordingly, the penalty for recording incorrect tax codes is prescribed as follows:
 Fine from 500,000 VND to 1,000,000 VND if incorrect tax amount is recorded
by less than 10%.
 Fine from 1,000,000 VND to 2,000,000 VND if incorrect tax amount is recorded
by 10% to 20%.
 Fine from 2,000,000 VND to 5,000,000 VND if incorrect tax amount is recorded
by 20% to 30%.
 Fine from 5,000,000 VND to 10,000,000 VND if the tax amount is incorrectly
recorded by 30% to 50%.
 Fine from 10,000,000 VND to 20,000,000 VND if the tax amount is incorrectly
recorded by 50% to 70%.
 Fine from 20,000,000 VND to 40,000,000 VND if incorrect tax amount is
recorded by 70% to 100%.
 Fine from 40,000,000 VND to 80,000,000 VND for incorrect tax recording by
more than 100%.
In addition, customs declarants are also forced to pay the missing tax amount due to
entering the wrong tax code.
If the tax code is incorrectly recorded, there are signs of tax evasion, the customs
declarant will also be prosecuted for criminal liability according to the provisions of law.
To avoid administrative sanctions or criminal prosecution, customs declarants need to
carefully check tax information before declaring customs. If any errors are discovered,
promptly amend and supplement them to ensure the accuracy of customs records.

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 CONCLUSION
In summary, a trade agreement will be signed by the buyer and the seller for the
selling of goods between the two nations. The terms and conditions of delivery, payment
method, shipping method, quantity, quality, pricing, total price, and description of the items
will all be included in the signed commercial contract. We shall utilize the HS code
provided by the World Customs Organization (WCO) to ascertain the duty that must be
paid upon import. In Vietnam, the HS code includes 8 numbers that are looked up in the
2023 import and export tax schedule issued by our country. The HS code will be used to
calculate the import duty, special consumption tax, environmental protection tax, value
added tax, and total company tax payable. For the shipment to pass through the gate, the
company needs to report the customs on the VNACCS electronic customs system. These
are the five steps for electronic customs clearance: Clearance of Import Information (IDA);
Import Declaration (IDC) registration; Verify the requirements for the declaration's
registration; Split, verify, and approve: The system immediately splits into three streams
after the declaration is registered: green, yellow, red, and Release any necessary notice
additions or revisions.

Importing goods from another country can be a complex process, and one of the
most important steps is customs clearance. This is the process of ensuring that your goods
meet all legal and regulatory requirements before they can be released into your country.
Therefore, we give three recommendations for import customs clearance in paragraph.
Firstly, the company should know the customs regulations of the country they are
importing from. This includes what types of goods are prohibited or restricted, and what
duties and taxes apply. The second suggestion is to use a customs broker. A customs broker
is a licensed professional who can help you navigate the customs clearance process and
ensure that your shipment complies with all applicable regulations. Finally, it is important
to prepare accurate and complete documentation. This includes your commercial invoice,
bill of lading, packing list, and any other required documents.

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 REFERENCE

1. Bộ Tài Chính (2010), Thông tư 49/2010/TT-BTC hướng dẫn việc phân loại, áp
dụng mức thuế đối với hàng hóa xuất khẩu, nhập khẩu
2. Bộ Tài Chính (2014), thông tư 22/2014/TT-BTC hướng dẫn Thủ tục hải quan điện
tử khi sử dụng hệ thống VNACCS (thay thế cho thông tư 196/2012/TT-BTC)
3. Bộ Tài chính (2018), Thông tư 39/2018/TT-BTC, sửa đổi 38/2015/TT-BTC (thay
thế thông tư 128/2013/TT-BTC), về thủ tục hải quan; kiểm tra, giám sát hải quan;
thuế xuất khẩu, thuế nhập khẩu và quản lý thuế đối với hàng hoá xuất khẩu, nhập
khẩu.
4. Chính phủ (2003), Nghị định 06/2003/NĐ-CP quy định về việc phân loại hàng hoá
xuất khẩu, nhập khẩu
5. Chính phủ (2012), Nghị định 87/2012/NĐ-CP quy định chi tiết một số điều của
Luật Hải quan về thủ tục hải quan điện tử đối với hàng hóa xuất khẩu, nhập khẩu
thương mại
6. Chính phủ (2007), Nghị định 40/2007/NĐ-CP quy định về việc xác định trị giá
Hải quan đối với hàng hóa xuất nhập khẩu.
7. Hải Quan Quảng Ninh (2023), Biểu thuế xuất nhập khẩu 2023
8. Tổng cục hải quan (2014), Quyết định 988/QĐ-TCHQ năm 2014 về quy trình thủ
tục hải quan điện tử đối với hàng hóa xuất, nhập khẩu thương mại
9. Tổng cục hải quan (2015), Quyết định số 1966/QĐ-TCHQ ngày 10/07/2015 về
việc ban hành Quy trình thủ tục hải quan đối với hàng hóa xuất khẩu, nhập khẩu.
10. Quốc hội (2017), Luật quản lý ngoại thương
11. Văn phòng quốc hội (2014), Luật Hải quan 2014
12. Jan Ramberg ,ICC Guide to Incoterms® 2010, 38 Cours Albert ler, 7008 Paris,
2011
13. John F Wilson, Carriage of goods by sea 7th edition, Pearson, Great Britain , 2010

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 APPENDIX
Include:
1. Arrival Notice
2. Draft Forwarder’s Certificate of Receipt
3. Commercial Invoice
4. Sale Contract
5. Packing List
6. Import customs declaration (Excel page)

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