THE MINISTRY OF TRADE
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No: 02/2007/TT-BTM
Hanoi, February 02, 2007
 CIRCULAR
ON THE DETAILED CLASSIFICATION OF PRODUCTION RAW MATERIALS, SUPPLIES AND COMPONENTS WHICH ARE Pursuant to the Government's Decree No. 149/2005/ND-CP of December 8, 2005, detailing the implementation of the Law on Import Tax and Export Tax;
Pursuant to the Government's Decree No. 108/2006/ND-CP of September 22, 2006, detailing and guiding the implementation of a number of articles of the Investment Law;
After reaching agreement with concerned ministries and branches, The Ministry of Trade hereby guides the detailed classification of production raw materials, supplies and components which are exempt from import tax under Clause 15, Article 16 of the Government's Decree No. 149/2005/ND-CP as follows:
I. GENERAL PROVISIONS
1. Subjects of application and governing scope
Investment projects in domains entitled to special investment preferences (Part A - Appendix I to Decree No. 108/2006/ND-CP) and geographical areas with exceptional socio-economic difficulty (Appendix II to Decree No. 108/2006/ND-CP) and investment projects for the production of mechanical, electrical and electronic components and spare parts are exempt from import tax on production raw materials, supplies and components for five years from the date of commencement of production.
2. Interpretation of terms
a/ "Production raw materials" means raw materials to be processed and/or manufactured which directly constitute products prescribed in investment certificates.
b/ "Supplies" means necessary materials to be used in the process of producing products, which, however, do not directly constitute products.

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c/ "Components" means electronic, semi-conductor or mechanical details imported for assembly of complete products.
3. General conditions for production raw materials, supplies and components to be exempt from import tax
a/ Production raw materials, supplies and components are not on the list of raw materials, supplies and semi-products which can be produced at home, promulgated by the Ministry of Planning and Investment.
b/ Production raw materials, supplies and components do not include scraps and defective products.
c/ Supplies do not include packing materials and packings for finishing products; spare parts, oil and grease used for maintenance and operation of machines and equipment; and industrial cleaning chemicals.
4. Amendments and supplements to the classification
The classification of production raw materials, supplies and components which are exempt from import tax prescribed in this Circular shall be amended or adjusted to suit practical conditions at the proposal of specialized state management agencies.
II. CLASSIFICATION OF PRODUCTION RAW MATERIALS, SUPPLIES AND COMPONENTS THAT ARE
A. Investment projects in domains entitled to special investment preferences
1. Manufacture of new materials and generation of new energy; manufacture of products of high technology, biotechnology and information technology; mechanical manufacturing

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a/ Manufacture of composite materials, light construction materials, precious and rare materials
- Initial structureless materials for manufacturing composite materials, light construction materials, precious and rare materials;
- Additives.
b/ Manufacture of high-quality steel alloys, special metals, porous iron and steel cast
- Steel casts and non-ferrous metal casts used for manufacturing high-quality steel, alloys, non-ferrous metals, special metals and porous iron;
- Metal ores and iron ores for manufacturing steel casts;
- Surface coatings;
- Antirust agents and fireproof agents used in metallurgy;
- Supplies and fluxes used in metallurgy.
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