Non-commercial goods? Compare with imported trade goods

1. What does it mean to have non-tradable goods? Trade goods: what are they?

Terms like "trade goods" and "non-trade goods" are employed in the context of international commerce, particularly in the import-export sector and global trade. The following describes the significance of these two ideas:

• Trade products: Products that are moved from one place to another by road, rail, sea, or air are considered trade goods. Until trade products arrive at their destination or cross a national border, they are typically not formally classified as imported or exported.
• Goods that are shipped across national boundaries without having to pay import duties are referred to as non-trade items. Generally speaking, this tax credit is applicable to products used for leisure or travel that are unrelated to business. Non-commercial border crossings are frequently set up to make traveling and shopping easier without adding to the expense of import taxes.

>>>> SEE MORE: Code of types of imports a12 and current import output type

2. Examine the parallels and discrepancies between two categories of non-tradable and traded goods

Many of you who are unfamiliar with import and export won't be able to tell the difference between things that are intended for commercial use and those that are not. Below, let's respond to Dolphin Sea Air.

2.1 The identical idea

Tradable and nontradable goods have the following similarities:

• Both have to give the state their VAT and regulatory international fees.
• Both must be accompanied with an invoice that includes all applicable international and shipping expenses so that the appropriate authorities may monitor the items' accuracy and control their worth.

2.2 Variations

3. Questions about non-tradable goods 

The commonly asked questions concerning non-trade goods are listed below. Please respond as follows:

3.1 Which goods cannot be traded?

Products that fall under this category of non-commercial goods include:

• Presents given to Vietnamese organizations and people by individuals and organizations abroad, and vice versa.
• The assets of foreign organizations and diplomatic missions in Vietnam, as well as the personnel employed by these institutions.
• Commodities intended to help the needy.
• The Vietnamese State does not impose taxes on products that individuals temporarily import or export.
• Samples are not compensated.
• Expert instruments and operational resources temporarily exported or imported for a brief duration by entities, groups, and individuals upon departure or arrival.
• Movable assets owned by companies and people.
• Upon entering the nation, individuals send their own luggage in accordance with the bill of lading, and the items they bring with them surpass the threshold for tax exemption.
• More categories of non-commercial products.

3.2 Can goods that cannot be traded be sold?

Goods that are not imported are not allowed to be sold again. Non-commercial goods may be imported without needing to be utilized or examined as samples. In this situation, handling non-commercial commodities of this nature must be taken into consideration. The Investment Law No. 61/2020/QH14, dated June 17, 2020, contains laws for business operations that are prohibited. Among these regulations is Article 6, which does not forbid the selling of non-commercial goods.

On the other hand, non-tradable goods will be handled as liquidated assets when sold. Both import taxes and input VAT are not deductible throughout the liquidation process. Revenue from non-commercial sales is shown under other revenue.

3.3 Are things that cannot be traded deductible from input taxes?

VAT is a tax that businesses frequently wish to deduct, however this deduction is not always allowed. There is no exemption for non-commercial products; all import taxes pertaining to them will be factored into the expenses associated with production and operation.

The General Department of Taxation has issued the following official dispatches with precise instructions about the VAT deduction for non-commercial goods:

• Official communication dated April 8, 2010, 1136/TCT-CS.
• On August 14, 2014, official transmission 3271/TCT-KK was sent.

It is abundantly evident from the aforementioned official communications that non-commercial goods are not entitled to a VAT reduction. This is due to the fact that non-commercial imported goods are not useful for business or production. Consequently, there is no appropriate tax deduction.

3.4 What does a non-tradable goods sample business invoice look like?

Compared to commercial invoices for commercial goods, commercial invoices for non-commercial commodities differ in a number of ways. The absence of payment information on non-commercial invoices is the sole distinction.

A commercial invoice for non-commercial goods will specifically contain the following details:

• Title: Non-Commercial Invoice
• No payment information available

The rest of the details will be the same as they would be on a standard business invoice. Online, you can get templates for commercial invoices. However, please alter the following details to turn a commercial invoice template for commercial items into a commercial invoice for non-commercial goods:

• Title: "Commercial Invoice" should be changed to "Non-Commercial Invoice."
• Details about payments: Don't read the section on payment details.

3.5 What is the import and export code for non-commercial use?

The following codes are associated with the import and export of non-commercial products, as stated in Decision 1357/QD-TCHQ on May 18, 2021:

• Code of non-commercial export type: H21 (Export of other goods).
• Non-commercial import type code: H11 (Other imported goods).

Businesses must apply the correct import type code with care when executing operations for importing non-commercial items. It is necessary to cancel the customs declaration if the import type code is applied erroneously. It will be challenging to cancel customs declarations that have been approved.

As a result, while importing items, it's important to ascertain whether they are being imported for commercial and production purposes or just as samples. When a direct importer imports items on their own, the express delivery unit typically opens a declaration on their behalf. Notably, Decision 78/2010/QD-TTg dated November 30, 2010, states that import and export orders valued at less than one million VND shall not be liable to import tax and import VAT in any case.

>>>> CLICK FOR MORE INFO: Import customs procedures for the non-commercial - detailed service

3.6 Which places aid in the execution of non-tradable commodities import and export protocols?

When non-commercial imported products are transferred to the port in accordance with regulations, they might go through customs processes at border gate Customs Sub-Departments or Customs Sub-Departments. Furthermore, products intended for non-commercial use may be subject to customs procedures at Customs Branches that have been created in compliance with rules.

3.7 What is the procedure for importing non-tradable goods?

Products imported and exported for non-commercial uses are referred to as non-commercial products. In general, non-commercial products still have to abide by import and export laws; however, some non-commercial commodities will have favorable tax rates and won't require specialist inspection.

The following steps are involved in importing non-tradable goods:

Step 1: Fill out the customs declaration

In compliance with rules, importers must prepare the necessary import and export documentation, which includes:

• Sale contract
• Commercial invoice
• Menu of goods
• Bill of lading
• Certificate of origin (if any)
• Import license (if any)

The importer declares information on the computerized customs declaration once they have all the necessary paperwork.

Step 2: Open the customs declaration

The customs system will return the channeling results once the customs declaration has been completed. The importer performs the following actions based on the channeling results:

• Green channeling: Customs declarations are processed automatically. To pay import tax, importers merely need to print the customs declaration and deliver it to the customs office.
• Yellow channeling: It is necessary to verify customs declarations. Documents are brought by the importer to the customs office for review. The customs declaration will be cleared if there are no issues once the documents are checked.
• Red channeling: Physical inspection of the products is required for customs declarations. The importer delivers the merchandise to the customs office for examination. If there are no issues following the physical examination of the goods, the customs declaration will be approved.

Step 3: Clear customs declaration

If there are no issues after reviewing the paperwork or personally examining the merchandise, the customs declaration will be approved. For the customs declaration, import duty is paid by the importer.

Step 4: Bring the goods to the warehouse for storage and use

Once the customs declaration has been approved, the importer transports the goods to the warehouse for storage and utilization.

Note:

• Before importing, importers must conduct certain inspection procedures for some non-commercial commodities.
• Import tax rates can change based on the kind of product.

3.8 For import and export of non-tradable goods, who declares customs?

• Customs declaration for non-commercial import and export items may be authorized individuals or the owner of the products (individual, organization, or agency).
• Declaring information about the items is mainly the responsibility of the commodities owner.
• The person authorized by written authorization or other legal documents acts as the owner of the goods' representative and completes customs procedures.

4. A few things to consider while importing non-tradable goods

The following are some crucial guidelines for importing non-commercial goods that do not conflict with the provided content:

• Non-commercial goods are likewise liable to import tax, with the exception of items valued less than one million Vietnamese Dong, in which case no tax is necessary.
• Preferential tax is also available for non-commercial goods if they have a certificate of origin (C/O).
• Imported non-commercial goods' VAT is not deducted and is added to the other costs listed in the tax declaration file.
• Non-commercial items may be sold as part of an asset liquidation; the proceeds will be reported to the company as other revenue.
• Bank payments may or may not be made for non-commercial goods. For instance, donations of humanitarian items and samples are typically accepted without remuneration.
• It is typically not necessary for non-commercial goods to undergo specialist testing or get certificates of compliance with rules, laws, or product declarations.

The following are crucial points to remember when completing import procedures for non-tradable goods. Gain a better understanding of the notion of non-commercial items, sales capacities, and associated restrictions with the aid of this material. Readers should find value in the content that Dolphin Sea Air has supplied!

• DOLPHIN SEA AIR SERVICES CORPORATION
• Hotline: 1900986813
• Email: saleshan6@dolphinseaair.com
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• Specialized inspection procedures for imported and exported goods [New]
• Guide for Vietnam customs declaration form online