Answering the contents on the implementation import and export duties

Goods of a minimum value exempted from duties

Customs Assessment Department needs to implement right functions and duties

These questions raised were: What is the time limit of tax payment of re-imported goods for recycling before the clearance of goods. Are exported goods which are made of domestic raw materials and equipment exempted from tax or not? Machinery and processing raw materials for export which are damaged will have reduced tax or not?

The deadline of tax payment for the re-imported goods for recycling

The representative of Hai Phong Customs Department raised the question, currently how does the Customs authority calculate the time limit of tax payment for re-imported goods for recycling? Because Article 9 of the Law on Export and Import duties regulates on the deadline of tax payment that duties on exports and imports have to be paid before Customs clearance, except the goods of an Authorized Economic Operator. Meanwhile, under Clause 5, Article 47 of Decree 08/2015/ND-CP stipulating that for re-imported goods for recycling, Customs declarants have to pay taxes within this time limit.

Thus, for the case of enterprises that are not Authorized Economic Operators which re-import goods that are exported for recycling, they must pay tax before clearance of the goods, the representative of Hai Phong Customs Department said for re-imported goods for recycling Customs declarants have to pay taxes within recycling time limit as per regulation in Clause 5 Article 47 of Decree 08/2015/ND-CP.

Answering the concerns of Hai Phong Customs Department, the representative of the Export-Import Duty Department said that currently Decree 08/2015/ND-CP and Customs Law 2014 were the legal framework for Customs authorities to implement management and inspection procedures. Therefore, the time limit of tax payment for re-imported goods for recycling is implemented according to the regulation under Clause 5 Article 7 of Decree 08/2015/ND-CP. In the coming time the Export-Import Duty Department will gather and report to the leaders of the General Department of Customs to implement uniformly in the entire sector.

Do processed goods for export have reduced tax?

The representative of Hai Phong Customs Department said that Decree 08/2015/NDCP stipulates the tax reduction for raw materials and machinery processing exported goods which are damaged or lost. However, the Law on Export and Import duties and Decree 134/2016/ND-CP regulates only 1 case of imported/exported goods which are in the process of supervision of Customs as per regulations of the Customs Law, and the guidance documents if they are damaged or lost will have reduced tax. Meanwhile, the provisions in the reduced tax dossier will be required to have a certificate of the competent authorities to certify the level of the damage and confirm in writing the cause of the damage by the competent authorities where losses are incurred. The Hai Phong Customs Department asked under the provisions as mentioned above, are the raw materials and the machinery processing for exported goods subject to reduced tax?

For the questions about the processed goods for export having reduced tax, the representative of Export-Import Duty Department said the Law on import and export duties and Decree ar still inherit the current regulations on tax reduction. The regulations under Customs Law cover all the cases including the case of processed goods for export.

The Tax policy for goods exported for processing and manufacturing for export

The question was raised by the Binh Duong Customs Department on the Tax policy for the goods exported for processing and manufacturing for export: In Point a, Clause 1, Article 11 of Decree 134 stipulates: Goods exported for processing are natural resources, minerals or products which the value of natural resources of minerals plus energy cost making up at least 51% of the product price and the goods are subject to export duties, duty exemption shall not be granted.

Clause 6, Article 16 of the Law on export and import duties stipulates: Goods exported for processing and then imported that are natural resources, minerals, or products which the total value of natural resources or minerals plus energy cost make up at least 51% of the product, price shall be taxed.

Hence, are goods subject to export duties when exported for processing to be taxed or not? If they must be taxed on the export duties when the processed products are imported, are the tax payers refunded the export duties equivalent with the rate of the actual products imported Because the Law on export and import duties and Decree 134 do have not yet have regulations on Tax refund as mentioned above.

Besides, the Binh Duong Customs Department also wondered that Point a Clause 9 Article 16 of the Law on export and import duties regulates the machinery imported for manufacturing is exempted from export duties, however if that machinery is then re-exported tax must be paid, is the regulation reasonable?

Answering these questions, the representative of the Import and Export Duty Department said that, according to the provision of the Law, exported goods for processing and then re-import are exempted from tax. However, there are some cases, at the time of exporting goods Customs cannot determine that goods will be re-imported or not, in fact this problem did not happen. Thus, in order to minimize losses in State budget revenue collection. Decree 134 stipulates: Goods exported for processing are natural resources, minerals or products which the value of natural resources of mineral plus energy cost makes up at least 51% of the product price and the goods are subject to export duties, duty exemption shall not be granted.

The regulations on the calculation of tax for imported machinery for processing and then re-import, the representative of the Import-Export Duty Department said that the provisions in the Law were clear, with the policies encouraging manufacture, the Law regulates on tax exemption for the imported machinery for manufacturing. As for imported machinery to be re-exported, tax will be refunded when it is re-exported.

At the Conference, besides the questions raised, there were a number of comments for tax management with an AEO; receipt and implementation of tax exemption for the declarations of the processed goods which are declared before September 1, 2016 but have not paid taxes, the management of processed goods which use domestic materials for manufacturing the exported goods, etc.

The representative of Ho Chi Minh City Customs Department said, the Department is having problems with the management of AEOs, as per the new regulations of the Law on Export and Import duties which stipulates that AEOs are allowed to pay taxes once/month. However, there are AEOs which register from 8,000 to 10,000 declarations, meanwhile Customs has to monitor the tax debt for each declaration. Therefore, the Department has proposed to the General Department of Customs not to require the Customs Department which manages the AEO for each declaration and the AEO declare and pay tax by themselves.

Besides, there are many declarations which apply for tax exemption, goods, materials, equipment, spare parts which are imported for manufacturing exported goods and the product has not yet been exported, temporary imported goods for re-export which have not been re-exported under the declarations which are registered with Customs before September 1,2016 but have not yet paid taxes lead to the task of Customs increased significantly. Hence, the Department has proposed that the requirement for the enterprises to declare and submit only 1 declaration with Customs.

Replying to the recommendations of the Ho Chi Minh City Customs Department on the management of AEOs, Mr Le Duc Thanh- the Deputy Director of the Customs IT and Statistics Department said that, currently the General Department of Customs is building an AEO management system under the new regulations of the Law on Export and Import duties which will automatically update and classify the tax for these enterprises and Customs does not have to monitor and manage the AEO.

Related to tax refund for declarations submitted before September 1, 2016, the representative of the Import-Export Duty Department said that the requirement for enterprises to register and declare as per Customs guidance to be exempted from tax, is aimed at creating transparency in management. Hence, it is necessary to implement Customs declaration procedures for imported goods which are the material, equipment, and spare-parts for export, and products which have not yet been exported, and temporary imported goods for re-export which have not been re-exported under the declarations which are registered with the Customs before September 1, 2016, but have not yet paid taxes.