Customs procedures and tax policies for exported goods designated for delivery

VCN - In cases where export processing enterprises sell goods to a foreign company but deliver the goods to another export processing enterprise as designated by the foreign company, how to carry out customs procedures and tax policies? This question has been answered clearly by the General Department of Customs.
customs procedures and tax policies for exported goods designated for delivery HCM City: More than 42,000 enterprises implement procedures via HCM City ports
customs procedures and tax policies for exported goods designated for delivery US - funded program launched to improve Vietnam’s customs procedures
customs procedures and tax policies for exported goods designated for delivery New points about list of import goods must be carried out procedures at entry gate
customs procedures and tax policies for exported goods designated for delivery
Inspecting goods at Thai Nguyen Customs Branch, Bac Ninh Customs Department. Photo: T.Trang

About customs procedures

The General Department of Customs said that Clause 1, Article 15 of Decree No. 69/2018 / ND-CP dated May 15, 2018 of the Government stipulates that except for goods prohibited from export or import; goods suspended from export or import, a trader may temporarily import goods to Vietnam under a contract concluded with a foreign party for the purposes of the warranty and maintenance, lease, borrowing, use or other purposes for a specified period and then re-export them out of Vietnam.

Article 41 of Decree No. 69/2018 / ND-CP specifies: The processor is entitled to lease or borrow machinery of the ordering party to perform the processing contract. The leasing, borrowing or giving of such machinery and equipment shall be agreed in the processing contract.

Besides, Article 50 of Decree No. 08/2015 / ND-CP dated January 21, 2015 (amended and supplemented in Clause 23, Article 1 of Decree No. 59/2018 / ND-CP dated April 20, 2018 ) stipulates Customs procedures for temporary import – re-export, temporary export – re-import of equipment, machinery, moulds or models for production, construction, project execution or experimentation and Clause 2 Article 61 Circular No. 38/2015 / TT-BTC dated March 25, 2015 (amended and supplemented in Clause 40 Article 1 of Circular 39/2015 / TT-BTC dated April 20, 2018) of the Ministry of Finance stipulate customs procedures for hired and borrowed machinery and equipment serving processing contracts.

According to the General Department of Customs, for hired or borrowed goods as agreed in the processing contract, the enterprise designated to receive goods shall carry out the procedures for temporary import and re-export prescribed in clause 2 of Article 61 of Circular 38/2015/TT-BTC (amended and supplemented at clause 40, Article 1 of Circular 39/2015/TT-BTC).

In the case of goods being a model of temporary import for re-export under a borrowing contract, the enterprise designated to receive goods shall base it on actual goods in accordance with the provisions of Article 15 of Decree No. 69/2018 / ND-CP, customs procedures according to Article 50 of Decree No. 08/2015 / ND-CP (amended and supplemented in Clause 23, Article 1 of Government’s Decree No. 59/2018 / ND-CP).

About tax policy

Guiding tax policy in this case, the General Department of Customs analysed, according to Clause 1, Article 4 of the Law on Import and Export Duties No. 107/2016 / QH13, non-tariff area means an economic zone located within Vietnam’s territory, established in accordance with law, having a definite geographic boundary, and separated from the outer area by hard fences in order to facilitate customs inspection and customs control by the customs authority and relevant agencies with regard to exports and imports, inbound and outbound vehicles and passengers; the trading relationship between the non-tariff area and the outside area is considered exportation and importation.

Specifically, Point c, Clause 4, Article 2 of the Law on Import and Export Duties No. 107/2016 / QH13, clarifies that goods exported from a non-tariff area to abroad; goods imported from abroad to a non-tariff area and used within such non-tariff area and goods transported from one non-tariff area to another are not subject to import or export duty

While Clause 2, Article 2 of Decree No. 134/2016 / ND-CP regulates that goods exported from the domestic market into export processing enterprises, export processing zones, tax-suspension warehouses, bonded warehouses and other non-tariff areas defined in Clause 1 Article 4 of the Law on Import and Export duties; goods imported from export processing enterprises, export processing zones, tax-suspension warehouses, bonded warehouses and other non-tariff areas defined in Clause 1 Article 4 of the Law on Export and import duties to the domestic market, are subject to import and export duties.

Pursuant to Clause 9, Article 16 of the Law on Import and Export Duties No. 107/2016 / QH13, machinery and equipment, tools temporarily imported for re-export or temporarily exported for re-import to be used for a certain period of time or serve overseas processing, except for machinery, equipment, tools, vehicles permitted to be temporarily imported for re-export to serve investment projects, construction, installation, or manufacture, are subject to import and export tax exemption.

With the above regulations, the General Department of Customs said, in the case where an export processing enterprise sells goods to a foreign company but delivers those goods to another export processing enterprise as designated by the foreign company, if the enterprise designated to receive meets provisions of Clause 1, Article 4 of the Law Import and Export Duties No. 107/2016 / QH13, such goods will not be subject to import tax.

If the enterprise designated to receive goods is a domestic enterprise signing a processing contract with the foreign company and goods is a model temporarily imported for reported as agreed in the processing contract, such goods shall be exempt from import tax according to the provisions of Clause 9 Article 16 Law on Import and Export Duties No. 107/2016 / QH13.

customs procedures and tax policies for exported goods designated for delivery Discussion "Tax policies and customs procedures when implementing CPTPP"

VCN - To discusses and provide more information on tax policies and customs procedures when implementing the ...

If the enterprise designated to receive goods is a domestic enterprise but not signing a processing contract with the foreign company and goods is a model under the borrowing contract (without payment), such goods shall not be exempt from import tax according to the provisions of Clause. 9 Article 16 of Law on Import and Export Duties No. 107/2016 / QH13, the enterprise designated to receive goods must declare and pay import tax according to regulations and shall be refunded the paid import tax. The refund tax will be determinate on the basis of remaining use value of the goods upon reporting according to point đ, clause 1 of Article 19 of Law on Import and Export Duties No. 107/2016/QH13.

By T. Trang/ Huyen Trang

Related News

The Customs agency has a variety of solutions to support businesses

The Customs agency has a variety of solutions to support businesses

VCN - That is the assessment of Mr. Kwon Yeong Min, Chairman of Hyundai Thanh Cong Vietnam Automobile Manufacturing Company on solutions to support and facilitate import and export activities of enterprises of the Customs agency in general and Ha Nam Ninh Customs Department in particular.
Chi Ma Customs Branch’s revenue increases

Chi Ma Customs Branch’s revenue increases

VCN – As of April 4, Chi Ma Border Gate Customs Branch’s revenue increased by 209% to over VND273 billion year-on-year, accounting for 60.66% of the target. The positive results in the revenue collection expect to help the branch accomplish the revenue target.
Thanh Hoa Seaport Customs improves efficiency from support enterprises

Thanh Hoa Seaport Customs improves efficiency from support enterprises

VCN – Leader of Thanh Hoa Border Gate Customs Branch (Thanh Hoa Customs Department) said that the accompanying businesses and actively supporting procedures not only helps businesses stabilize production but also ensure state management of customs.
Personal Income Tax Law to be amended in 2025

Personal Income Tax Law to be amended in 2025

VCN - On March 29, answering questions from the press at the Ministry of Finance's regular press conference for the first quarter of 2024, the leader of the Department of Management and Supervision of Tax, Charges and Fees Policy (Ministry of Finance) said, continue to focus on drastically implementing solutions to support businesses that the National Assembly and the National Assembly Standing Committee have approved; At the same time, closely monitor the situation to research and advise competent authorities on appropriate solutions.

Latest News

E-commerce frauds require utmost in attention from regulators

E-commerce frauds require utmost in attention from regulators

Great efforts have been made to combat counterfeit goods and trade fraud products on e-commerce channels as online shopping has become increasingly popular for many people amid booming e-commerce activities.
Is animal feed containing Formic Acid precursors "helpless" in management?

Is animal feed containing Formic Acid precursors "helpless" in management?

VCN - According to regulations, import activities of precursors must be controlled from raw materials to final products. However, there are some items containing precursors that have management inadequacies and it is not clear which sector is responsible for?
Businesses and people expect VAT cut extension to be approved

Businesses and people expect VAT cut extension to be approved

People and businesses are looking forward to the Government's proposal on extending VAT reduction in the last six months being considered and approved by the National Assembly.
Proposal to continue reducing VAT by 2% to support people and businesses

Proposal to continue reducing VAT by 2% to support people and businesses

In the first 4 months of 2024, Vietnam's economy achieved a higher growth rate than the same period of 2020-2023. However, the difficulties of the economy are still great, the recovery of the business community is still slow. Therefore, the Government has just submitted a proposal to the National Assembly for consideration, allowing to the continued implementation of the policy of reducing the value-added tax (VAT) rate by 2% for a number of groups of goods and services that are being subjected to VAT rate of 10% in the last 6 months of 2024. This is a support policy that is bringing many practical effects to people and businesses.

More News

Research and correct customs supervision processes at international airports

Research and correct customs supervision processes at international airports

VCN - To continue to improve professional processes related to customs inspection and supervision, General Department of Vietnam Customs has drafted a decision to amend Decision No. 3280/QD-TCHQ dated September 30, 2016 on the inspection and supervision process for luggage of people on exit and entry; customs supervision activities at international airports.
Small, low-value items imported on e-commerce platforms should be taxed

Small, low-value items imported on e-commerce platforms should be taxed

Millions of packages of small, low-value items that are crossing the border into Vietnam daily should be subjected to VAT, special consumption and environmental taxes, according to industry experts and domestic e-commerce sellers.
Customs finds difficulties because there is no e-cigarette management policy

Customs finds difficulties because there is no e-cigarette management policy

VCN - E-cigarette products are invading and being used more and more commonly in our country, especially among young people, teenagers, and students. Meanwhile, there is currently no management policy for this item, making it difficult for Customs to determine violations and apply sanctions.
Are goods imported on-spot for export production eligible for tax refund?

Are goods imported on-spot for export production eligible for tax refund?

VCN - That is a problem of the Binh Duong Customs Department related to the process of handling tax refunds for goods imported to produce exported goods and exported by Thai Binh Investment Joint Stock Company.
Risk prevention solutions for export processing and production enterprises

Risk prevention solutions for export processing and production enterprises

VCN - Identifying common errors to comply with regulations, prevent risks, and limit mistakes arising in preparing final settlement reports is an issue which many export processing and production enterprises concern.
Conditions for price reduction of imported goods

Conditions for price reduction of imported goods

VCN - To meet the price reduction conditions, the documents, sales contracts, and price reduction agreements must state the reason for the price reduction.
Circular 83/2014/TT-BTC will be abolished from June 8

Circular 83/2014/TT-BTC will be abolished from June 8

VCN - On April 23, the Minister of Finance issued Circular 25/2024/TT-BTC on abolishing Circular 83/2014/TT-BTC guiding the implementation of Value Added Tax (VAT) under Vietnam's Nomenclature of imports. Accordingly, Circular 83/2014/TT-BTC will be abolished from June 8, 2024.
Proposal to continue reducing VAT by 2% in the last  6 months of 2024

Proposal to continue reducing VAT by 2% in the last 6 months of 2024

VCN - The Government has just submitted a proposal to the National Assembly to consider and allow the continued implementation of the policy of reducing Value Added Tax (VAT) by 2% for a number of groups of goods and services that are currently subject to a VAT rate of 10% in the last 6 months of 2024 (from July 1, 2024 to December 31, 2024). According to the Government's calculations, applying the policy of reducing the VAT rate by 2% for the last 6 months of 2024 reduces revenue by about 24 trillion VND.
Seafood exporters are worried about some inadequacies from the two new decrees

Seafood exporters are worried about some inadequacies from the two new decrees

VCN - From May 2024, two new Government decrees directly related to the enforcement of fisheries laws by seafood exporting enterprises will take effect, but have inadequate contents, makes businesses worried.
Read More

Your care

Latest Most read
E-commerce frauds require utmost in attention from regulators

E-commerce frauds require utmost in attention from regulators

Great efforts have been made to combat counterfeit goods and trade fraud products on e-commerce channels as online shopping has become increasingly popular for many people amid booming e-commerce activities.
Is animal feed containing Formic Acid precursors "helpless" in management?

Is animal feed containing Formic Acid precursors "helpless" in management?

VCN - According to regulations, import activities of precursors must be controlled from raw materials to final products. However, there are some items containing precursors that have management inadequacies and it is not clear which sector is responsible
Businesses and people expect VAT cut extension to be approved

Businesses and people expect VAT cut extension to be approved

People and businesses are looking forward to the Government's proposal on extending VAT reduction in the last six months being considered and approved by the National Assembly.
Proposal to continue reducing VAT by 2% to support people and businesses

Proposal to continue reducing VAT by 2% to support people and businesses

The Government has just submitted a proposal to the National Assembly for consideration, allowing to the continued implementation of the policy of reducing the VAT rate by 2% in the last 6 months of 2024
Research and correct customs supervision processes at international airports

Research and correct customs supervision processes at international airports

GDVC has drafted a decision to amend Decision No. 3280/QD-TCHQ dated September 30, 2016 on the inspection and supervision process for luggage of people on exit and entry
Mobile Version