Are imported goods that have not been used, processed and must be re-exported subject to tax refund

Regarding VAT refund for imported goods, Clause 1, Article 8 of the Law on Value-Added Tax No. 13/2008/QH12 stipulates the value-added tax rate: “The tax rate of 0% is applicable to exported goods and services”.

Clause 2, Article 1 of Decree 146/2017/ND-CP dated December 15, 2017 stipulates value-added tax refund: “Business establishments in the month (for the case of monthly declaration), quarterly (for the case of quarterly declaration) have exported goods and services, including the following cases: Goods are imported and then exported to a non-tariff zone; goods imported and then exported abroad, whose input value-added tax amount has not yet been deducted is VND300 million or more, they will be refunded value-added tax on a monthly or quarterly basis; in the case that input value-added tax amount has not yet been deducted is less than VND300 million in a month or quarter, it shall be deducted in the following month or quarter”.

“In the case that business establishments have both exported goods and provided goods and services for domestic consumption, if after clearing the payable tax amount, the input value-added tax amount has not yet been deducted from the exported goods, services is VND300 million or more, the business establishments will be entitled to a tax refund”.

“Business establishments must separately account for input value-added tax amounts used for production and business of exported goods and services. For the case that they do not separately account, the input VAT amount will be determined following the ratio between the turnover of exported goods and services to the total turnover of goods and services of value-added tax periods, calculated from the tax period following the tax refund period immediately preceding the tax refund period to the current tax refund application period".

Dong Thap Customs officer checks imported goods. Photo: T.H

Compared with these regulations, according to the General Department of Vietnam Customs, goods imported and then exported are eligible for a VAT refund. The domestic tax authority shall refund and deduct value-added tax at the stage of importation following the provisions of Clause 2, Article 1 of Decree 146/2017/ND-CP.

Regarding export tax on goods when re-exported, Point c, Clause 1, Article 19 of the Law on Import Tax and Export Tax No. 107/2016/QH14 stipulates: “Taxpayers have paid import tax, but the imported goods are subject to re-export, they will be refunded import tax and not have to pay export tax”; Clause 2, Article 19 of the Law on Import Tax and Export Tax No. 107/2016/QH14 stipulates that “Goods specified in Points a, b, c, Clause 1 of this Article are eligible for tax refund when they have not been used or processed".

Point a, Clause 1, Article 34 of Decree No. 134/2016/ND-CP stipulates tax refund for imported goods that are not subject to export tax: “Imported goods for which import tax has been paid but must be re-exported will be refunded imported tax and do not have to pay export tax, including goods imported but re-exported or exported into a non-tariff zone for use in a non-tariff zone. The re-export of goods must be made by the original importer or by the person authorized by the original importer; taxpayers are responsible for making accurate and truthful declarations on customs declarations about re-exported goods being previously imported goods; the information about the number, date of the contract, the name of the partner purchasing the goods”.

With these regulations, the General Department of Vietnam Customs said that if imported goods have not been used or processed but must be re-exported (type code B13), the import tax will be refunded and they won’t have to pay export tax.

Notably, import tax refund dossiers comply with the provisions of Clause 2, Article 34 of Decree 134/2016/ND-CP. Dossiers of non-collection of export tax shall comply with the provisions of Clause 2, Article 37a mentioned in Clause 19, Article 1 of Decree 18/2020/ND-CP.