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Duties and Tax Exemption

For contact information regarding government custom authorities, please follow the link below: 

4.2.1 Tonga Government Contact List

 

Emergency Response

For Customs clearance of relief consignments, Customs regulations (Regulation 136, Customs and Excise Management Regulations 2008) allow for simplified and facilitated Customs procedures and declarations in the case of relief consignments.

Furthermore, relief consignments received as gifts by an organization approved by the Minister for use by or under the control of that organization or for distribution free of charge by the organization or under their control shall be admitted free of all duties, excise taxes and charges.


Agreements / Conventions Description

Ratified by Country?

Date of Ratification

Annex J-5 Revised Kyoto Convention

No

 

OCHA Model Agreement

No

 

Tampere Convention (on the Provision of Telecommunication Resources for Disaster Mitigation and Relief Operations)

Yes

2003

WCO (World Customs Organization) member

Yes

1/07/2005


Regular Regime (Non-Emergency Response)

Once an official request for international assistance has been submitted, the Director of Customs and Quarantine are to make the necessary arrangements for the on-going clearance of all donor assistance that is provided for “disaster relief purposes”.

This may include duty exemption for goods that are purchased locally with disaster relief funding.

The CCG is responsible for providing information on donor assistance to Customs and Quarantine to facilitate this process. This includes details on type, quantity, source, means of transportation, arrival point and estimated time of arrival. As for normal Customs and Quarantine situations, disaster relief operations should not in themselves cause a breakdown in established security and/or immigration regulations

Organizational Requirements to obtain Duty Free Status

United Nations Agencies

All Charitable organisations must register with the Ministry of Commerce, Labour and Industries as a charitable entity. Registration is voluntary, but if an entity wishes to retain or obtain an exemption from income tax then it will need to register.

Non Governmental Organizations

All Charitable organisations must register with the Ministry of Commerce, Labour and Industries as a charitable entity. Registration is voluntary, but if an entity wishes to retain or obtain an exemption from income tax then it will need to register.

Exemption Certificate Application Procedure

Duties and Taxes Exemption Application Procedure

Generalities (include a list of necessary documentation)

Filing income tax returns:

If the agency is assessed as being fully exempt from income tax, no need to file an income tax return unless required. However, the agencies need to keep accurate records for the organisation.

Charity - Income Tax

Charitable organisations can receive many types of income, including subscriptions, grants, subsidies, donations, fees, raffle money, trading profits, proceeds from selling assets and so on.

Charitable organisations are liable for income tax if:

  • they operate with no written rules, constitution or trust deed
  • they operate under a set of rules, a constitution or a trust deed that does not meet the requirements for an income tax exemption
  • they use business income for charitable purposes outside Tonga

Process to be followed

 Under regulation 9 of the Consumption Tax Regulations 2005 (CT Regulations), the “Chief Commissioner may authorize the granting of a refund in respect of Consumption Tax paid or borne on a taxable supply to, or taxable import, by –

  1. A public international organization, foreign government, or any other person to the extent that organization, government, or person is entitled to exemption from Consumption Tax under an international agreement; or
  2. A non-profit organization in respect of a taxable supply to, or taxable import by the organization of goods or services acquired for the purposes of providing charitable activities.”
    1. An “international agreement” for purposes of Regulation 9 is an agreement between the Government of the Kingdom Tonga and a foreign government or public international organization for the provision of financial, technical, humanitarian, or administrative assistance to the Government of Tonga. The agreement can constitute an exchange of letters or any formal agreement in writing.
    2. A “non-profit organization” is defined in Regulation 9 to mean “an institution, body, or trust of a public character that the Chief Commissioner has certified as conducting activities exclusively for charitable purposes, which includes the relief of poverty, advancement of education or religion beneficial to the community”.  The words “charitable activities” are also defined in Regulation 9  to mean “activities consisting of the free distribution of food, meals, board, lodging, clothing, necessities or amenities to any persons in necessitous circumstances, but not including any activities relating to the conduct of a business”.
    3. The Chief Commissioner is given a discretionary power under Regulation 9 to authorize any relief “on such conditions and subject to such restrictions as he may consider appropriate”.
    4. Any claim for a refund of Consumption Tax under Regulation 9 must be made in a form that has been prescribed (see attachment) and should be accompanied by proof of payment of Consumption Tax, for example a receipt issued by the Customs “one stop shop” or if the purchase is made locally, a proper invoice disclosing the amount of Consumption Tax paid. The application for refund can be made personally at the Revenue Services Department.
    5. It is important to note that it is first necessary to establish that there is an agreement between the Kingdom of Tonga and the public international organization, and foreign government providing for certain exemptions from local indirect taxes which would include the Consumption Tax. Having established that, it is necessary in each case to determine if the public international organization, foreign government or person is entitled to relief from Consumption Tax in respect of the particular import or supply. Most international agreements have limited exemptions and apply to a limited category of imports and supplies for a pre-determined purpose.
    6. In the case of non-profit organizations it is first necessary for the particular non-profit organization seeking the refund to establish that it has been certified by the Chief Commissioner as a non-profit organization “conducting activities exclusively for charitable purposes”. Secondly, it would be necessary for the non-profit organization to establish that the relevant import or supply is to be used for charitable activities consisting of the free distribution of food, meals, board, lodging, clothing, necessities or amenities to any persons in necessitous circumstances.

Exemption Certificate Document Requirements

All document requirements in the below table apply to both UN agencies and NGO’s

NOTE: Although it specifies ‘originals’ of all documents are required, customs will accept copies for clearance of aid commodities provided the originals are supplied at a later date.

Duties and Taxes Exemption Certificate Document Requirements (by commodity)

 

Food

NFI (Shelter, WASH, Education)

Medicines

Vehicle & Spare Parts

Staff & Office Supplies

Telecoms Equipment

Invoice

 Yes, original

  

Yes, original

 

Yes, original

 

Yes, original

 

Yes, original

 

Yes, original

 

AWB/BL/Other Transport Documents

Bill of lading, Certificate of Origin, Cargo Manifesto

Bill of lading, Certificate of Origin, Cargo Manifesto

Bill of lading, Certificate of Origin, Cargo Manifesto

Bill of lading, Certificate of Origin, Cargo Manifesto

Bill of lading, Certificate of Origin, Cargo Manifesto

Bill of lading, Certificate of Origin, Cargo Manifesto

Donation/Non-Commercial Certificates

Yes, original

Yes, original

Yes, original

Yes, original

Yes, original

Yes, original

Packing Lists

Packing list / container list, Yes, Original

Packing list / container list, Yes, Original

Packing list / container list, Yes, Original

Packing list / container list, Yes, Original

Packing list / container list, Yes, Original

Packing list / container list, Yes, Original

Other Documents

N/A

N/A

N/A

N/A

N/A

N/A

Additional Notes

NGOs have different procedures from the UN. NGOs must be registered with Social Welfare Council, Ministry of Finance with notification from the Ministry of Foreign Affairs. After the registration procedure is done with the above mentioned entities, application for registration is made to the Department of Customs. All exemption requests are submitted to the Ministry of Foreign Affairs who certifies the documents. If the items requested for exemption are on the Ministry’s approved list then the request is approved and processed. If the items are not on the Ministry’s approved list, the request has to be submitted and approved by the Ministry of Finance. Documents required for the this request are:

  • Bill of Lading
  • Insurance policy (only for commercial goods for risk of loss)
  • Certificate of Origin
  • Invoice
  • Packing List
  • Mode of Payment (grant, donation, non-commercial certificate)


Customs Clearance

General Information 

Customs Information

Document Requirements

Invoices, Air Waybills or other Transport Documents, Donation / Non-Commercial Certificate, Packing List

Embargoes

None specified

Prohibited Items

  • Narcotics
  • Pornography (please consider the term as used under the Islamic law)
  • Alcohol
  • Creams (cosmetics) not registered with the Ministry of Health
  • Counterfeit items
  • Potassium Bromides 

General Restrictions

Tonga has regulated against importation of GMO products.



Customs Clearance Document Requirements

Customs Clearance Document Requirements (by commodity)

 

Food

NFI (Shelter, WASH, Education)

Medicines

Vehicles & Spare Parts

Staff & Office Supplies

Telecoms Equipment

D&T Exemption Certificate

 Yes, Original, 1 copy

Yes, Original, 1 copy

Yes, Original, 1 copy

Yes, Original, 1 copy

Yes, Original, 1 copy

Yes, Original, 1 copy

Invoice

Yes, original

Yes, original

Yes, original

Yes, original

Yes, original

Yes, original

AWB/BL/Other Transport Documents

Bill of lading, Certificate of Origin, Cargo Manifesto

Bill of lading, Certificate of Origin, Cargo Manifesto

Bill of lading, Certificate of Origin, Cargo Manifesto

Bill of lading, Certificate of Origin, Cargo Manifesto

Bill of lading, Certificate of Origin, Cargo Manifesto

Bill of lading, Certificate of Origin, Cargo Manifesto

Donation/Non-Commercial Certificates

Yes, Original

Yes, Original

Yes, Original

Yes, Original

Yes, Original

Yes, Original

Packing Lists

Yes, Original Packing list / container list

Yes, Original Packing list / container list

Yes, Original Packing list / container list

Yes, Original Packing list / container list

Yes, Original Packing list / container list

Yes, Original Packing list / container list

Phytosanitary Certificate

Required covering all produce in each shipment

Required covering all produce in each shipment

Required covering all produce in each shipment

Required covering all produce in each shipment

Required covering all produce in each shipment

Required covering all produce in each shipment

Other Documents

N/A

N/A

N/A

N/A

N/A

N/A

Additional Notes

N/A

Transit Regime

PICs governments are used to assisting each others and will not hesitate facilitating transit or export of relief goods and shipments. Goods intended for transit or transhipment in Tonga must be given prior approval from Customs. An application for transit or transhipment must be made to Customs in the approved form (Form C10 - Customs Transhipment).

Customs may take all necessary steps to ensure that the consignment is easily identified and to enable detection of any unauthorized interference. Such steps may include the setting of specific time limits for the transit or transshipment operation to take place.

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