Faculty of Management and Tourism – Taxation – Spring 2023

TUTORIAL 5: CUSTOMS DUTY

Question 1: In a tax period, Tiger Inc - a trading company has made the following transactions:
1. Exported 15,000 units of product A at FOB price of $5. Total deductible input VAT
related to this export is VND 250 million.
2. Imported 1,000 air conditioners with capacity of 12,000 BTU for sale in domestic
market. The actual payable price up to the first border gate of importation is $300.
3. During tax period, 900 air conditioners have been sold to a commercial domestic
enterprise at before-VAT price of $600. The remaining imported goods were still in the
inventory.
Required: Calculate customs duty, excise duty and VAT payable by Tiger Inc. Given that
- Exported goods are entitled for 0% export tax and are accompanied with sufficient
documents as prescribed.
- Tax rates applicable to air conditioner are as follow: import tax 10%, excise duty 10%
and VAT 10%.
- Base price for import duty is determined in the basis of transaction value.
- Exchange rate applicable is $1 = VND 23,000.
- Deductible input VAT for activities other than export is VND30 millions.

Transaction Import duty Excise duty VAT

s
Exported 15,000*5*23000*0% = Excise duty (0%) = 0 Output VAT (0%) =
15,000 units 0 0Deductible input
of product VAT= 250 mi
A
Imported 1,000*300*23,000*10% (300*23,000)*1.1*1000*10 Deductible input VAT
1,000 air = 690 mil % = 759 mil = 30 mil
conditioner
s with
capacity of
12,000 BTU
for sale in
domestic
market
900 air 0 Non-excisable Output VAT =
conditioner 600*900*10%*23,000
s have been = 1,242 mil
sold to a
commercial

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 Faculty of Management and Tourism – Taxation – Spring 2023

domestic
enterprise
End of 690 mil 759 mil = 1,242 – 250 - 30 =
period 962 mil

Question 2: Goat Inc.- a joint-stock company has incurred the following transactions during a
tax month
1. Imported 3,000 motorcycles with capacity of 150 cm3 from Thailand. The price at the
border gate of Thailand stated in the commercial contract is $800. International freight
and insurance attached to the cargo from Thailand to the first border gate of Vietnam is
$600,000.
2. During the month, Goat Inc has sold 2,800 units to Miller– a trading company in
Vietnam at the VAT-exclusive price of VND40 million.
3. Exported 10,000 pairs of sport shoes to Russia. The price at the border gate of Russia is
set at $15 each pair. International shipping cost and insurance is determined at $5 for
each pair.
Required: Determine custom duty, excise duty and VAT payable by Goat Inc. for this tax
period. Given that
- Export duty for shoes is 5%, for motorcycle is 7%.
- Import duty applicable on motorcycle is 30%, excise duty is 20%.
- Shoes and motorcycle are subject to 10% VAT rate.
- Exchange rate for tax purpose is VND23,000/$1.
- Exports are supported with sufficient documents as prescribed.
- All transactions are made through bank and backed up with legitimate invoices and
vouchers.
- VAT at importation had been paid by the time of declaration of VAT to tax office.

Transacti Import duty Excise duty VAT

ons
Export …. (15 - 0 Output VAT=0 (0%)
5)*23,000*10,00
Deductible input VAT=
0*5% = 115 mil
20*23,000*10,000*10% =
460 mil

Import… (800*3000 + (800*3000+600,000)*23,000* Deductible input VAT =

600,000)*23,000 1.3*20% = 1,794e10 (600,000+800*3000)*23,0
*30% = 2,07e10 00*10% = 6,900 mil

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 Faculty of Management and Tourism – Taxation – Spring 2023

Output
Sale… 0 0

VAT=
2,800*4
0
mil*10%
= 11,200
mi
Output VAT = 2,800*40
mil*10% = 11,200 mil
End of 2,07e10 1,794e10 11,200 – 460 – 6,900 =
period 3,840 mil

Question 3: In a tax period, Snake Ltd – a company engaging in production and trading of
various goods has made the following transactions:
1. Imported 1,000 air conditioners with capacity of 12,000 BTU for sale in domestic market.
The actual payable price up to the first border gate of importation is $300. Import duty
20%, Excise duty 10%, VAT 10%.
2. During period, 900 air conditioners were sold to a commercial domestic enterprise at
before-VAT price of $600.
3. 20 air conditioners were installed in company offices.
4. Imported 400 dish-washing machine from Taiwan under FOB contract for domestic sale.
The price at the border gate of Taiwan specified in contract is $400 each. The
international freight cost attached to this cargo from Taiwan to the first border gate of
Vietnam was $20,000. Import duty 15%, VAT 10%.
5. Sold 360 washing machines at before-VAT price of VND 12,000,000 to home appliance
retailers.
6. Sold 10 washing machines to households in an export processing area at before-VAT price
of VND 14,000,000.

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 Faculty of Management and Tourism – Taxation – Spring 2023

7. Imported fabric from China to produce sport shoes under exporting contract signed with a
European company. Total price up to Vietnam importing check point was $50,000. Import
duty 5%. VAT 10%.
8. Exported 10,000 pairs of sport shoes. The price at the border gate of Russia is set at $15
each pair. International shipping cost and insurance is determined at $5 for each pair.
Export duty 0%.
9. Purchased 500 kg of processed tobacco with before-VAT price of 82,500 dongs per kg to
produce 2,500 packets of cigarette. Excise duty 75%. VAT 10%.
10. Sold 2,000 packets of cigarette in stores for before-VAT price of VND9,900.
11. Use 100 packets of cigarette as free gift to customers in a sale promotion.
12. Other deductible input VAT: VND150 mil.
Required: Calculate taxes payable by Snake Inc. during the period. Given that base price for
import duty is determined on the basis of transaction value. Exchange rate applicable is $1 =
VND 23,000.

Transacti Import duty Excise duty VAT

ons
1 1,000*300*23,000*20% 1,000*300*23,000*1. Deductible Input VAT =
= 1,380 mil 2*10% = 828 mil 1,000*300*23,000*1.2*1.1*
10% = 910.8 mil
2 0 Non-excisable Output VAT=
900*600*23,000*10% =
1,242 mil
3 Not for personal use For biz => Exempt (Non-
=> Exempt (non- taxable VAT
excisable)
4 (400*400+20,000)*23,0 Deductible input VAT=
00*15% = 621 mil (400*400+20,000)*23,000*1
.15*10% = 476.1 mil
5 Output VAT= 360*
12,000,000*10%= 432 mil
6 Goods are not consumed in
VN => Non-taxable
7 Import materials for Non-taxable (VAT)
export processing =>
Exempt
8 0 Output VAT = 0 (0%)
Deductible Input VAT =
10,000*(15+5)*23,000*10%
= 460 mil

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 Faculty of Management and Tourism – Taxation – Spring 2023

9 Processed tobacco => Deductible input Deductible input VAT =

Import duty = 0 excise duty = 500*82,500*10% = 4.125 mil
75%*500*82,500/1.75
=17.68 mil
10 2,000*75%*9900/1.75 Output VAT =
= 8.49 mil 2,000*9,900*10% = 1.98 mil
11 Non-excisable Output VAT = 0 (BP = 0)
12 Other deductible input VAT:
VND 150 mil
End of 2,001 mil 854.17 mil VAT payable
period = 1,241 + 432 + 1.98 – 910.8
– 476.1 – 460 – 4.125 – 150
= - 326.045 mil (This amount
will be deducted against VAT
payable of the next period)