Conditions for enterprises to select whether applying FTA or tax exemption

Producting import - export products at Matrix Vinh Company (Nghe An province). Photo: H.Nụ

Regarding this problem for enterprises, General Department of Vietnam Customs said that, according to Clause 6 of Article 16 of the Import and Export Tax Law, "raw materials and components imported for processing of export products; finished products imported for attaching to processed products; processed products for export production” are exempted from import-export tax.

In cases where enterprises registered their declarations in the form of importing raw materials for processing for foreign traders, they shall enjoy tax exemption and have to carry out customs procedures and apply tax policies on import – export goods for processing for foreign traders in accordance with regulations.

In cases where enterprises registered their declarations in the form of importing for business operation, if the imported goods satisfy all the conditions as prescribed in the Decrees promulgating the special preferential import tariff, the enterprises will be applied the rate of special preferential import tariff.

At the same time, in the Article 6 and Article 8 of the Import – Export Tax Law stipulated preferential tax rate shall be based on the actual import and export goods at the time of tax calculation. If the enterprise meets both the conditions as stipulated in the FTA and the tax exemption as specified in the Import – Export Tax Law, enterprises shall be entitled to choose for applying the FTA or tax exemption in accordance with the Import – Export Tax Law.

In cases where enterprises choose preferential policies, they shall have to carry out the customs procedures corresponding to their choice in accordance with the provisions of law.

For example, in order to apply the tariff rate under the ASEAN Trade in Goods Agreement (ATIGA), the Decree 156/2017/ND-CP of the Government dated 27/12/2017 stipulates that imported goods must meet the conditions stipulated in the Article 4 of the Decree.