3.2. Risks when applying the wrong HS code

Determining the correct HS code is very important when carrying out cosmetic import procedures. Misidentifying the HS code will bring certain risks to you such as:

1. Delaying customs procedures: Declaring the wrong HS code can lead to delays in customs procedures, because it takes time to check and verify accurate information about the type of goods.
2. Delayed delivery: If the goods are found to have an incorrect HS code declared, the customs authority may request correction or clarification of the information. This can lead to delays in delivery and affect the production and business cycle of the business.
3. Penalties for declaring incorrect HS codes according to Decree 128/2020/ND-CP;
4. In case of import tax, you will face a penalty of at least 2,000,000 VND and a maximum penalty of 3 times the tax amount.

To accurately determine the HS code for each specific cosmetic type, please contact our hotline or email for advice.

4. Cosmetic import tax

Import tax is an obligation to the state that the importer must complete when carrying out import procedures. Import tax depends on the cosmetic HS code of the types selected above.

There are two types of cosmetic import tax: import tax and import VAT.

To determine import tax, you can refer to the calculation below as follows:

• Import tax determined by 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 rate.

The above import tax rates are preferential import and export taxes. To enjoy special preferential import tax rates, the shipment must have a certificate of origin (C/O). 

5. Cosmetic import dossier set

Set of documents for import procedures for cosmetics in particular and other items in general are regulated in Circular 38/2015/TT-BTC dated March 25, 2015; Amended and supplemented 39/2018/TT-BTC dated April 20, 2018. The dossier set for import procedures includes the following documents:

1. Customs declaration;
2. Commercial invoice;
3. Bill of lading;
4. Packing list;
5. Commercial contract (Sale contract);
6. Cosmetic announcement;
7. Certificate of origin (C/O) if any;
8. Catalog (if any).

In the above import dossier, the most important documents are: Customs declaration, commercial invoice, bill of lading, certificate of origin and cosmetic declaration dossier. These are the most important documents, but other documents will have to be provided if requested by customs.

Cosmetic declaration is an important document when carrying out import procedures. Declaration documents should be made before importing goods. Making the announcement in advance will save you a lot of costs.

6. Cosmetic announcement procedures

According to regulations in Circular No. 06/2011/TT-BYT, cosmetics are on the list of goods that must be announced before being put into circulation. All types of cosmetics must be declared, and should be declared before importation.

6.1. Dossier for cosmetic publication

Cosmetic declaration dossier includes the following documents:

1. Cosmetic announcement form;
2. Soft and hard copies of published content: Ingredients table with product percentage, product uses;
3. CFS (Certificate of Free Sale);
4. Authorization letter from the manufacturer to the importer;
5. Business registration license of the importer.

6.2. Cosmetic announcement process

There are two ways to make a cosmetic declaration: direct application and submission via the national electronic information portal. Anlita would like to introduce the online application process.

Step 1. Create an account on the national one-stop system https://vnsw.gov.vn/There are two tasks that need to be done in this step: creating an account and preparing documents for cosmetic publication.

Step 2. Select a management agency and enter information

Enter complete information as required by the one-stop information portal. Attach the publication documents to the one-stop page. After the application is submitted, there will be a return fee. Proceed to pay the fee according to the returned information.

Step 3. Receive published results

Check and receive published results from the one-stop information portal.

7. Procedures for importing cosmetics

Procedures for importing cosmetics as well as many other items are specifically stipulated in Circular 38/2015/TT-BTC dated March 25, 2015, amended and supplemented 39/2018/TT-BTC dated April 20, 2018. We summarize the steps in a short description so you can get an overall picture.

Step 1: Fill out the customs declaration

After having complete import and export documents: Contract, commercial invoice, packing list, bill of lading, certificate of origin, arrival notice and determining the cosmetic HS code, you can then enter declaration information into the customs system via software.

Step 2: Open the customs declaration

After completing the customs declaration, the customs system will return the declaration classification results. Once the declaration channel is assigned, print out the declaration and bring the import dossier to the customs department to open the declaration. Depending on the green, yellow, and red channel, follow the steps to open the declaration.

Step 3. Clear customs declaration

After checking the documents, if there are no questions, the customs officer will accept customs clearance of the declaration. You can now pay cosmetic import tax for the customs declaration to clear the goods.

Step 4. Bring the goods to the warehouse for preservation and use

Upon customs clearance, proceed with the liquidation of the declaration and carry out the necessary procedures to bring it back to the warehouse. After customs clearance, you must make a self-declaration of cosmetics to be able to circulate cosmetics on the market.

Above are 4 basic steps to carry out cosmetic import procedures. In the import procedure process, the most difficult step is making a self-declaration of cosmetics. Please contact our hotline or email for advice and service quotes.

8. Notes when importing cosmetics

During the process of import procedures for cosmetic products. Anlita has gained experience that we want to share with you for your reference.

1. Goods are only cleared through customs when tax obligations to the state are fulfilled.
2. Cosmetic products must be declared before import. Avoid the situation where the goods arrive before processing, which will incur storage fees.
3. Documents such as CFS and manufacturer’s authorization must have the consulate’s stamp.
4. The import tax on cosmetics of all kinds is quite high. When negotiating with the seller, you should request a certificate of origin to receive tax incentives.
5. When importing, goods must be labeled according to 43/2017/ND-CP.
6. Determine the correct HS code to determine the correct tax and avoid penalties.

Those are the notes that we want to send to you for your reference. If you find it useful, you can share it with your friends for reference. If there are any inappropriate points, please give us feedback so we can improve the article.

9. Conclusion

Above is the entire cosmetic import procedure process, HS code, import tax, VAT, import policy. Hopefully this article will bring the information you are looking for.