Imported processed products for export processing not subject to import tax refund

Answering FDI enterprises’ queries on tax refund for on-spot export

Ninh Binh Customs inspects the use of raw materials at the enterprise's premise. Photo: H.Nu

The General Department of Vietnam Customs (GDVC) responded to the question from Ken Logistics Co., Ltd. about import tax refunds for products processed aboard.

The country’s top customs regulator cites Article 19 of the Law on Import and Export Duty as saying that any taxpayer who has paid export duty or import duty but has no exports or imports, or the number of exports or imports is smaller than the quantity on which duty is paid; any taxpayer who has paid export duty but the exports have to be re-imported will receive a refund of export duty and does not have to pay import duty; any taxpayer who has paid import duty but the imports have to be re-exported will receive a refund of import duty and does not have to pay export duty; any taxpayer who has paid tax on goods imported to serve manufacture or business operation and they have been used for the manufacture of exports and the products are already exported.

Accordingly, these products are eligible for tax refund when they have not been used, processed, and tax refund procedures will comply with the provisions of the Law on Tax Administration.

In addition, the GDVC said that Point a4, Clause 2, Article 12 of Decree 134/2016/ND-CP amended and supplemented in Clause 6, Article 1 of Decree 18/2021/ND-CP, stipulated that imported goods and semi-finished products made from imported goods for outsourcing at non-tariff zones or abroad described in the following cases at Points a.1, a2, a.3 Clause 2 Article 12 are exempt from export tax.

The outsourced products abroad must pay import tax when they are re-imported to Vietnam. The outsourced products at non-tariff zones also must pay import tax when they are sold in the Vietnamese market.

The GDVC said that Ken Logistics Co., Ltd. imported raw materials for export production and then used outsourcing for semi-finished products manufactured from all imported processed raw materials will be exempted from export tax.

However, the processed products abroad and then imported to Vietnam are subject to import tax payment.