An FDI contractor brings construction machinery and equipment into Vietnam under temporary import–re-export: goods enter conditionally, leave on time and the amounts paid come back; overstay and the transaction changes nature, with tax recalculated from scratch. This article follows the life cycle of the contractor’s temporary-import declaration; it is distinct from contractor tax on international transport services covered in another article, and from on-the-spot imports of FDI enterprises in the companion article — three different customs mechanisms that share no single VAT conclusion.
Legal basis and analysis
Temporarily imported construction goods are managed by time limit: on import the enterprise pays import duty and import-stage VAT, or uses the guarantee/deposit mechanism under customs rules, and the liability is revisited on actual re-export — full, on-time re-export is the condition for refunding amounts paid on the goods that have left Vietnam.
VAT at this stage anchors to Value Added Tax Law 48/2024/QH15 (15th National Assembly, passed in 2024, effective 1 July 2025) and the customs regime for temporary imports; the declaration, the approved temporary-import period and re-export evidence form the decisive file, not a lone commercial invoice.
Missing the re-export deadline without a valid extension converts the goods into domestic consumption: the enterprise pays full tax on the value and condition at the time of handling, plus exposure to administrative penalties in the customs field under the current penalty frame.
Frequently asked questions
Is VAT payable on machinery temporarily imported for construction and then re-exported?
For goods properly under the regime, import-stage VAT paid is refunded when the corresponding goods are actually re-exported on time; during the temporary period the enterprise either pays tax under a guarantee/deposit or has the liability managed under the customs mechanism applied to the declaration — the key point is re-export proven by a complete customs file.
How is the security deposit handled?
The guarantee or deposit follows the tax-security mechanism in customs procedures for temporary imports: the enterprise chooses a credit institution’s guarantee or a cash deposit as guided by the customs office managing the declaration, and the security is released once re-export is completed, or drawn to pay tax if the deadline is missed.
What happens if the re-export deadline is missed?
Without a valid extension, overdue goods are handled as imports for domestic consumption: outstanding tax is payable in full on the value at the time of handling, with possible administrative penalties for breaching the re-export deadline; to avoid this, extend before expiry and track deadlines declaration by declaration, not from the project team’s memory.
This article has been quality-reviewed by the FLAW AI Legal Council