1. Policy on importing used machinery and equipment
Procedures for importing used machinery and equipment. Regulated in the following legal documents:
According to the above documents, old machinery and used equipment are not on the list of prohibited imports. However, when carrying out procedures for importing used machinery, the following points must be noted:
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Old machinery and equipment with HS codes in Chapter 84 or 85 shall be managed according to Decision 18/2019/QD-TTg;
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For machinery and equipment not in Chapter 84 or 85, the age of the equipment shall not be bound by the age of the equipment in Decision 18/2019/QD-TTg;
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Importation is only allowed for production purposes;
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The label of the machinery must satisfy the requirements of Decree 43/2017/ND-CP;
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Electrical components and parts of used machinery are prohibited from import;
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Determine the correct HS code to determine the correct tax and avoid fines;
Above are policies regulating the procedures for importing used machinery. If you do not fully understand the above policies. Please contact hotline or hotmail for advice.
2. Determine the HS code of the machinery
Determining the HS code is the most important step when doing the procedures for importing used machinery. Determining the HS code will determine import tax, VAT and import policy. To determine the correct HS code of machinery, you need to understand the characteristics of the goods: Material, composition and characteristics of the product.
2.1. HS code of all types of machinery
The HS code (Harmonized System) is a series of codes used for all goods worldwide. Between different countries in the world, only the tail number is different. Therefore, the first 6 digits of the HS code worldwide for an item are the same. Machinery is a common noun, to determine the HS code of each type of machine. Please check each type below:
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Chapter 84: Machinery, mechanical appliances and parts thereof
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8407-8410: Motors
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8413: Pumps and pumping equipment
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8421: Filters or purifiers for liquids/gases
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8438: Machinery for food processing
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Chapter 85: Electrical machinery, electronic equipment
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8501: Electric motors, generators
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8504: Transformers, rectifiers
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8517: Telecommunication equipment
For items not listed above, please contact the hotline or hotmail for advice.
2.2. Risks of applying the wrong HS code
Determining the correct HS code is very important when carrying out import procedures for used machinery and equipment. Determining the wrong HS code will bring certain risks to you such as:
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Delay in customs procedures: Declaring the wrong HS code can lead to delays in customs procedures, due to the time needed to check and verify the correct information about the type of goods.
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Penalty for declaring the wrong HS code according to Decree 128/2020/ND-CP;
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Delayed delivery: If the goods are found to have declared the wrong HS code, the customs authority may request correction or clarification of the information. This can lead to delays in the delivery process and affect the production and business cycle of the enterprise.
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In case of import tax, you will face a penalty of at least 2,000,000 VND and a maximum fine of 3 times the tax amount.
To accurately determine the HS code for a specific type of machinery. Please contact the hotline or hotmail for advice.
3. Import tax on used machinery and equipment
Calculating import tax is one of the important steps in the process of importing used machinery and equipment. The import tax of goods depends on the HS code of that item. Each HS code has a specific tax rate. Here, Just In Time would like to introduce how to calculate import tax and notes when determining tax on used machinery and equipment.
3.1. How to calculate import tax on used machinery and equipment
Import tax on used machinery and equipment is calculated according to the same formula as other items. There are two types of import tax on this item: import tax and import VAT.
Import tax is determined according to the HS code, import tax is calculated according to the formula:
Import tax = CIF value x % tax rate
Import VAT is determined according to the formula:
Value added tax = (CIF value + Import tax) x % VAT.
CIF value is determined by the factory value of the goods plus all costs to bring the goods to the first port of entry of the importing country. Import tax is a cost included in the cost of goods sold of the order. Therefore, you must check the correct HS code to get the best import tax code.
3.2. Notes when determining import tax on used machinery
When determining import tax on lithium batteries, the following points must be noted:
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For countries that have signed trade agreements with Vietnam such as: Europe, India, Australia, Chile, China, Korea, Japan, ASEAN countries. It is necessary to note that the special preferential tax rate is usually 0%.
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To enjoy the preferential tax rate, a certificate of origin is required;
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The taxable value is the CIF value. For orders purchased under other conditions. When calculating import tax, the value must be converted to the CIF value to calculate import tax.
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Import tax will also be subject to VAT;
These are notes when calculating import tax for used machinery. If you do not understand how to calculate tax and the above notes. Please contact the hotline or hotmail for advice.
4. Import documents for used machinery and equipment
Documents for procedures for importing used machinery and equipment in particular, and procedures for importing other items in general. Stipulated in Circular 38/2015/TT-BTC dated March 25, 2015; amended and supplemented by 39/2018/TT-BTC dated April 20, 2018.
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Customs declaration;
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Sale contract;
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Commercial invoice;
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Packing list;
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Bill of lading;
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Catalog (if any) ... and other documents if required by customs;
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Copy of the Enterprise Registration Certificate with the enterprise's seal;
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Certificate of inspection issued by an inspection organization;
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In case there is no QCVN, there must be a certificate of the year of manufacture of the factory in the exporting country and confirmation from the Vietnamese consulate in that country;
Above are all the documents used to carry out customs clearance procedures for used machinery and equipment. The most important are the customs declaration, certificate of inspection, commercial invoice, bill of lading. Other documents will be supplemented if requested by the Customs authority.
Of the above documents, the customs declaration and the inspection certificate are documents made after the goods have arrived at the port. Other documents are available from the beginning, so the importer should prepare in advance, avoiding the situation where the goods have arrived at the port and then prepare. This will prolong the time for procedures to import used machinery, equipment and technology.
5. Procedures for importing used machinery and equipment
The procedures for importing used machinery and equipment are the same as many other items. They are very specifically regulated in Circular 38/2015/TT-BTC dated March 25, 2015, amended and supplemented by Circular 39/2018/TT-BTC dated April 20, 2018. We summarize the steps briefly so that you can visualize the whole picture. Below are the main steps for procedures to import machinery.
Step 1. Declare customs declaration
After having all import and export documents: Contract, commercial invoice, packing list, bill of lading, certificate of origin, notice of arrival of goods and determining the HS code of used machinery, equipment and technology. Then you can enter the declaration information into the customs system via software.
Declaring customs declaration on customs software. Requires the importer to have knowledge about entering data into the software. Do not declare customs declaration on your own when you do not fully understand this work. Declare on your own can easily cause points that cannot be corrected on the customs declaration. At that time, it will cost a lot of money and time to fix.
Within 30 days from the date the goods arrive at the port, the customs declarant must declare the customs declaration. If this deadline is exceeded, the importer will face a penalty fee from the customs.
This is the most important step in the import procedure for used machinery and equipment. All declaration contents will be pushed to the customs system. If there are errors affecting the tax or origin of the goods. The importer may face penalties according to customs law. Therefore, it is necessary to pay attention to the information entered on the declaration such as HS code, tax rate, product name, origin.
Step 2. Open the customs declaration
After completing the customs declaration, the customs system will report the declaration flow results. If there is a declaration flow, print the declaration and bring the import documents to the customs office to open the declaration. Depending on the green, yellow, red flow, perform the steps to open the declaration. For old equipment, machinery, and technology, at this step, an additional five-year age assessment must be done. The assessment procedure depends on the assessment center.
The declaration opening must be carried out as soon as possible, no later than 15 days from the date of declaration. The declarant must bring the documents to the Customs Department to open a customs declaration. After 15 days, the declaration will be canceled and you will face a penalty fee from the customs.
Note: For the import procedures for used machinery and equipment under Chapter 84 or 85, when importing, the year of manufacture must be checked and determined according to Decision 18/2019/QD-TTg. For goods under the HS code of other chapters. Please contact the hotline or hotmail for advice.
Step 3. Clear the customs declaration
After completing the customs declaration, the customs system will return the declaration classification results. If there is a declaration classification, print the declaration and bring the import documents to the customs branch to open the declaration. Depending on the green, yellow, or red classification, perform the steps to open the declaration.
The declaration must be opened as soon as possible, no later than 15 days from the date of declaration. The declarant must bring the documents to the customs branch to open the customs declaration. After 15 days, the declaration will be canceled and you will face a penalty fee from the customs.
Step 4. Bring the goods to the warehouse for storage and use
For the customs declaration, proceed to the declaration liquidation step and complete the necessary procedures to bring the goods to the warehouse. To be able to receive the goods conveniently, you need to fully prepare the release order, means of transport, and goods accepted to pass through the surveillance area.
Above are four steps to complete the procedures for importing used machinery and equipment. If you do not understand or have any questions, please contact the hotline or hotmail for advice.
6. Notes when importing used machinery and equipment
When completing the procedures for importing used machinery and equipment, you need to note the following points:
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For used machinery and equipment with HS codes in Chapter 84 or 85, the age of the equipment is managed according to Decision 18/2019/QD-TTg;
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For machinery and equipment not in Chapter 84 or 85, the age of the equipment is not bound by Decision 18/2019/QD-TTg;
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For used machinery and equipment with HS codes in Chapter 84 or 85, the quality must be checked according to Decision 18/2019/QD-TTg; For goods in other chapters, they are managed according to each HS code of other agencies;
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Import tax on used machinery and equipment is the same as new machinery.
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When importing printers, the goods must be labeled according to 43/2017/ND-CP.
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Determine the correct HS code to determine the correct tax and avoid fines.
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For used machinery and equipment not listed in QCVN, there must be a certificate from the seller and confirmation from the Vietnamese consulate in the exporting country.
If you have difficulty with customs procedures, you can choose Just In Time as your companion.
Just In Time's staff is always enthusiastic to support you to handle your work quickly and professionally.
JUST IN TIME JOINT STOCK COMPANY
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