Dong Nai Customs: Answering questions on tax deduction, C/O verification for Taiwanese enterprises

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The Conference. Photo: N.H

They are Customs procedures for imported and exported goods; procedures for additional declaration, procedures for notification of export processing and production establishments, storage of raw materials, supplies, machinery, equipment and products for exports; procedures for notification of outsourcing contracts and their appendices.At the conference, Head of Customs Control and Supervision Division under Dong Nai Customs Department Hoang Trong Ky introduced important contents of new legal documents related to Customs and primary customs procedures carried out regularly at the Department.

Besides, they are procedures for settlement reports on the situation of using imported raw materials, supplies and exported goods; procedures for liquidation of machinery, equipment and means of transport to create fixed assets of export processing enterprises.

At the conference, Director of Dong Nai Customs Department Ms. Phung Thi Bich Huong also announced the results of the administrative reforms achieved by the Customs sector in general and Dong Nai Customs Department in particular.

Huong said that in addition to carrying out reform and modernization activities, Dong Nai Customs has always implemented solutions to facilitate the business community such as dissemination of laws, policies on websites, Customs procedure consultancy and Customs – Business information exchange system.

She affirmed that the business community is an important partner and Dong Nai Customs is committed to taking all efforts to improve the quality and efficiency of duty performance and better serve the business community including Taiwanese enterprises in the province.

Director of Dong Nai Customs Department Phung Thi Bich Huong spoke with enterprises

At the conference, Reliable Vietnam Plastics Joint Stock Company raised a question that in May, 2016, the company imported 305,000 kgs of raw materials worth more than VND 7.8 billion from Taiwan. The company used 34,800 kgs and the rest of was re-exported to the seller. The re-exported volume was equivalent to a VAT refund of VND 692.6 million but until now, the company has not received the refund yet despite requests for tax refund to Dong Nai Customs Department.To improve the Customs – Business partnership, Dong Nai Customs expects to receive comprehensive cooperation of the business association and the business community through comments and proposals to the Customs in development, enforcement of laws; enterprises need to actively comply and effectively supervise the Customs processing to ensure accuracy and legal compliance. Moreover, the Taiwanese business association needs to promote its role as a bridge between enterprises and Customs agency, the Customs agency needs to enhance propagation for the business community to understand its tasks, responsibilities and efforts in the reform and modernization, which has benefited the business community.

Regarding this question, Dong Nai Customs said that according to Circular No. 219/2013/TT-BTC, business establishment shall not be entitled to tax refund for imported goods which is then re-exported. However, enterprises shall enjoy input VAT deduction of goods and services used for production and business of goods subject to VAT.

Concerning settlement of VAT on imported goods which is then re-exported, the Ministry of Finance issued guiding documents as follows: Document 16836/BTC-TCHQ dated 13/12/2017 on dealing with VAT on imported goods for export productions, Document No. 3761/BTC-CST dated 2/4/2018 on VAT deduction on imported goods which are then re-exported to foreign sellers. Accordingly, if the enterprises paid VAT on imported goods but then re-exported those goods to foreign sellers, the VAT shall be implemented in accordance with provisions in Clause 3 of Article 1 of Circular 130/2016/TT-BTC for export declarations arising from July 1st, 2016 onwards.

According to Dong Nai Customs, the declaration of Reliable company was made in the period from July 1st 2016 to February 1st 2018, according to Clause 2 of Article 14 of Circular 219/2013/TT-BTC, Clause 3 of Article 1 of Circular 130/2016/TT-BTC, the company shall be not entitled to VAT refund but tax deduction.

However, Reliable Company said that the company has requested the VAT refund since 2016 to now, therefore, the company asked Dong Nai Customs Department to introduce solutions to deal with this tax amount.

Director of Dong Nai Customs Department Phung Thi Bich Huong said that the tax deduction for the company shall be done by Dong Nai Tax Department. Dong Nai Customs will send a document to Dong Nai Tax Department to handle this tax amount as soon as possible for the company.

Another company also raised a question related to C/O verification from 2016 to now without results.

Ky said that the C/O verification depends on the C/O issuing agency. In this case, C/O was issued by a Chinese agency. The term for C/O verification is 180 days. Dong Nai Customs shall review this case and report to the General Department.

Another company located in Ho Nai ward, Bien Hoa city also raised a question that the company is newly established according to custom regime of export processing and production and wants to invite the Customs agency to inspect its establishment. Accordingly, when is the inspection done and which customs branch are documents of the establishment sent to?

Dong Nai Customs strictly monitors the management of materials processed and manufactured for export

Head of Import and Export Duty Division Le Van Tho said that to enjoy tax exemption for export production, enterprises must have manufacturing establishments according to Decree. Accordingly, Customs agency shall inspect manufacturing establishments before outsourcing contracts are registered and goods are imported. Enterprises can send notification to any branches to do customs procedures.