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Customs-Tax

Customs Sector has the roles and responsibilities in certifying the customs policy in accordance with Investment Promotion Policy.

Based on the instruction of the Minister of Finance on the implementation of Customs-Tax Policy in accordance with  Investment Promotion Policy No. 3578/MoF, dated 19/12/2012, they are as follows:

1        Purposes

The purposes are to organize and expand the Investment Promotion Law 2009 and the Decree of Investment Promotion Implementation Law 2011in setting principles, customs-tax policies, procedures and operational methods of approving the plan for importing raw materials, construction materials, tools, spare parts, engines, vehicles, machinery and others for the utilization in the investment activities, and to facilitate the investors in Lao PDR.

 2        Principles in certifying the annual plan

The investor is to create an annual import plan. If it is a new investment, the investor shall set the import plan as general, by separating the import list of raw materials, production materials, varieties, spare parts and others to be imported annually and the import list of construction materials for infra-structure construction; vehicles, machinery for business movement utilization and office equipment as the fixed assets whose import is allowed one time only with tax exemption during the enterprise establishment.

The approval for import, in line with the investment promotion policy, must be appropriate with the work volume by basing on the technical-economic analysis and actual requirement of each project, officially certified by concerned sectors and must not exceed the registered fund of the enterprise.

The investor must have submitted the annual import plan and attach complementary documents, i.e. request paper, enterprise registration certificate or tax registration certificate for general activities, and concession certificate for concession activities, certificate of registered fund deposit (as stipulated in Article 4 of Prime Minister’s Decree No. 119/PM, dated 20 April 2011), and the economic analysis submitted to a finance sector or One-Stop Service (OSS) of Planning and Investment (IP) sector.

 

3        Customs-Tax Promotion Policy

Enterprises whose investments were approved prior to Investment Promotion Law No. 02/NA,dated 8/07/2009 and Decree No. 119/PM, dated 20 /04/2011, wanted to receive the tax exemption policy must follow the procedures set in the instruction of this guidebook.  If the investors do not have any purpose to receive the tax exemption policy for the import in accordance with the Investment Promotion Law No. 02/NA,dated 08/07/2009, they can continue to follow the tax policy for the import of raw materials, equipment, spare parts and others, based on the conditions that the Investment Promotion Law has determined in the investment promotion license.

 

4        Plan of annual import

Plan of the enterprise annual import is a document providing information to concerned government parties for facilitation, inspection and evaluation, and needs to be implemented as follows:

1. Import quantity and volume of raw materials, variety, construction materials, equipment, tools, spare parts, engines, office equipment, vehicles, machinery and others for the use of the enterprise must be compatible with the investment scale and must only be used in accordance with the project objectives.

2. Actual plan of annual import is created by the investors and set based on the actual requirement for the use in their business activity development.  The documents comprise of:

- Main code of 4 digits based on commodity list,

- Description of commodity,

- Quantity of commodity,

- Weight of commodity,

- Value of commodity.

3. Commodities, items to be imported must be set in each individual list as follows:

- List of customs and tax exempted import plan,

- List of customs-exempted and tax-paid import plan,

- List of temporary import plan,

- List of customs-tax reduced import plan.

4. The proposal for annual import of the enterprise for the investment at central level shall be submitted to Customs Department, and for the investment at local levels, if OSS of Planning and Investment (PI) Sector has been established at a province, the request shall be submitted to OSS, if OSSof PI Sector has not been established at a province, the request shall be submitted to Finance Section of the province where the enterprise is located.

5. The certified annual import plan is not allowed for a change or amendment solely.

- The annual import plan is valid for 1 year or as per the time frame of the project operations.  After the expiration, commodities, items to be imported, but yet imported, must be cancelled immediately.

6. In case the enterprise has fund increase or decrease, the proposal for the amendment of the certified annual import plan can be done once a year to suit the actual business operations.

7. Vehicles, machinery and engines certified for import with tax-customs exemption or reduction in accordance with Investment Promotion Law must be used within the enterprise for at least 5 years before the import for replacement is approved.  Prior to the import for replacement, tax and customs for old vehicles, machinery and engines must be immediately paid in accordance with Customs Law, and then the import of the replacement will be approved as per the regulations.

 

5        Procedures of approving the annual import plan

Procedures of approving the annual import plan are divided in 2 levels: central and local levels.

  • Investment at central levels: Customs Department is to summarise the annual import plan, study and propose to the Minister of Finance to consider and issue the agreement to certify and annual import plan which is separately listed as follows:

-       List of customs and tax exempted import plan;

-       List of customs-exempted and tax-paid import plan;

-       List of temporary import plan;

-       List of customs and tax reduced import plan;

 

After that, Customs Department must distribute the annual import plans together with the agreement of the Minister of Finance to the concerned enterprises and sectors for information, and also issue a letter to advise the customs borders where the commodities and items will be imported for their implementation and facilitation as regulated.

          In case of some projects that concerned government sectors take the lead in organizing the meeting to study the annual import plan with the participation from concerned parties, including Customs Department in the consideration.  The Customs Department can certify the meeting resolutions to propose to Minster of Finance to consider the issuance of Agreement of Annual Import Plan.

          For the annual unplanned import of mainly the emergency equipment or spare parts to replace the old and broken items and the total value is not more than 30,000 US dollars and the import approval, not more than 2 times per year and certified by the concerned government sectors, shall be considered and approved by Customs Department in accordance with the regulations; In case the total value is more than 30,000 US dollars, the consideration must be carried out with concerned sectors in accordance with the regulations.

 

Remarks: In the study to certify the plan of importing fuel, vehicles, steel and cement for large-scale investment projects, concession projects, the study to certify the import plan at central level will be summarized at Customs Department (Ministry of Finance only),but in the investment in mineral-energy sectors under the Ministry of Energy and Mines, the concerned ministry will organize the meeting to study and certify the plan.

 

  • Investment at local levels: Provincial Finance Section or OSS of PI sectors is to summarize the annual import plan and propose to the president of provincial Committee for Investment Promotion (CIP) to consider and issue the certification of the annual plans, then distribute the annual import plans to concerned sectors and customs checkpoints.

          For the annual unplanned import of mainly the emergency equipment or spare parts to replace the old and broken items and the total value is not more than 30,000 US dollars and the approval of not more than 2 times per year, certified by concerned government sectors, provincial Finance Section or OSS of PI Sector, must be studied and discussed together with concerned sectors and submit the proposal to President of provincial CIP for approval in accordance to the regulations.

 

Remarks: The implementation at local levels that finance section studies and certifies the annual import plan to propose to the President of CIP at provincial levels exists only in 2 following provinces: Xiengkhouang Province and Champasack Province.  For other provinces, it is the provincial PI Section who proposes to the President of provincial CIP to certify the annual import plan.

 

6        Creating of import plan of projects out of investment promotion policy.

  1. Creating the import plan for grant and loan projects for developments will be proposed to the Ministry of PI to study and consider in accordance with the Decree on the Management and Utilization of Grant for Development No. 75/PM, dated 20/03/2009.
  2. Creating import plan for state-invested projects shall follow State Investment Law No. 08/NA, dated 26/11/2009.
  3. Creating annual import plan of developers or investors in Special Economic Zone and Specific Economic Zone is to comply with the regulations of Special Economic Zone and Specific Economic Zone.

 

  • Complementary documents required for approval of annual import plan

  1. Proposal of the enterprise;
  2. Investment license or Concession registration certificate;
  3. Enterprise registration certificate;
  4. Tax registration certificate (if any);
  5. Other documents from concerned sectors (if any);
  6. Economic analysis or development master plan;
  7. Project contract;
  8. Plan of requirement for the import of raw materials, equipment, machinery, and vehicles to be directly used in the production
  9. For factories, annual production plan must be created, then submitted for certification by Industry-Commerce Sectors;

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Last update: 04 July 2017.