Removing difficulties in tax exemption and refund policies for export processing enterprises

VCN - The Customs agency has received many proposals from businesses about answering and guiding policies on tax exemption, import tax and VAT refund for export processing enterprises. The General Department of Customs has responded and provided instructions for each specific case.
Accelerate tax refunds Accelerate tax refunds
Unify and standardize tax refund dossier classification index to ensure accuracy Unify and standardize tax refund dossier classification index to ensure accuracy
The Tax sector strives to implement value-added tax refunds The Tax sector strives to implement value-added tax refunds
Ninh Binh Customs inspects production activities at export processing enterprises. Photo: H.Nu
Ninh Binh Customs inspects production activities at export processing enterprises. Photo: H.Nu

Businesses stated that, according to the instructions in Official Dispatch 4032/TCHQ-GSQL dated August 16, 2021 of the General Department of Customs, for imported goods that must be re-exported according to type code B13- Export of imported origin (which have not been processed or manufactured), businesses should note when declaring export declarations at the "Notes section" on the electronic export declaration or the "other notes" box of the paper declaration, businesses must clearly declare "Goods subject to non - export tax payment, import tax refund according to regulations".

Businesses believe that, if they follow the instructions of Official Dispatch 4032/TCHQ-GSQL, for re-export declarations under type code B13 without noting and accurate noting that "Goods subject to non- export tax payment, import tax refund according to regulations", businesses face risk of not receiving import tax refund.

Businesses propose that import tax and VAT refund for imported goods that must be re-exported to the supplier or exported to a third country or exported to a non-tariff zone according to type B13 will be implemented if the goods meet the regulations in Article 34, Decree 134/2016/ND-CP even though the B13 re-export declarations do not note the information "Goods subject to non-export tax payment or import tax refund according to regulations" in the “Notes section” on the re-export declaration .

In this regard, the General Department of Customs believes that import tax refund for imported goods that must be re-exported shall comply with the provisions of Article 19 of the Law on Export Tax and Import Tax and Article 34 of Decree 134/2016/ND-CP amended and supplemented in Decree 18/2021/ND-CP. Official Dispatch 4032/TCHQ-GSQL is only a document guiding the declaration of criteria on the customs declaration, not a basis to refuse tax refund to businesses. Therefore, for tax refund, the Customs agency will be based on prevailing legal regulations, policies and specific cases of businesses.

According to businesses, prevailing regulations do not have clear instructions on the tax payment deadline in case of tax assessment for the amount of imported raw materials and supplies imported for export processing and manufacturing (including export processing) arising a negative difference between the actual quantity of inventory and the quantity of inventory declared to the Customs agency. Businesses propose that there should be specific regulations as a basis for customs declarants to pay taxes and calculate late payment interest (if any).

Also according to businesses, at the time of tax assessment, the Customs agency and the customs declarant could not determine exactly which the original import declaration is taxed goods belonged to. At the same time, when goods are taxed due to a negative difference, the amount of taxed goods is considered no longer in the original state, so it is appropriate to apply point b, clause 6 instead of point c, clause 6, Article 1 of Decree 126/2020/ND-CP. Businesses also believe that, because the regulations do not have clear instructions on the tax payment deadline, the tax payment deadline will be described in the tax assessment decision and the late payment interest will not be charged if the customs declarant pays in full according to the time limit in the tax assessment decision.

Responding to the issues raised by businesses, the General Department of Customs said that Point a, Clause 6, Article 17 of Decree 126/2020/ND-CP very specifically stipulates the tax payment deadline.

In addition, import and export goods which are taxed but the tax declarant does not declare it on the customs declaration or declares it on the customs declaration but the customs declaration is canceled according to the provisions of law on customs, imported goods that have been processed and manufactured no longer keep status quo, imported goods that are tax-exempted or non-taxable can be pledged or mortgaged as collaterals for loans because the tax declarant cannot afford to repay debt and is treated by credit institutions according to the provisions of law, imported goods which are distrained for auction according to decisions of competent authorities, judgments and decisions of the Court, must pay tax and the tax payment deadline is the date of signing the tax assessment decision.

In the case of tax assessment for goods imported for export processing and production, imported goods that are not subject to tax, and other goods that are included in many different customs declarations but are still in the same state when imported, the customs cannot determine the exact quantity of goods according to each import declaration, then the declaration to apply the tax payment deadline is the last import declaration with the same goods subject to tax assessment during the inspection and audit period.

In case the quantity of goods subject to tax assessment in the final import declaration is smaller than the quantity of goods subject to tax assessment, the difference in the quantity of goods subject to tax assessment is calculated according to the tax payment deadline of the adjacent previous declaration with the same goods subject to tax assessment.

Enterprises propose that the Customs authority considers the tax refund case "Taxpayers have paid import tax but the goods must be re-exported, taxpayers will receive a tax refund but pay import and export tax” stipulated in the point C, Clause 1, Article 19 , Law on Export Tax and Import Tax for approval in the following cases: Raw materials provided by domestic enterprises to an export processing enterprise under processing contracts are raw materials purchased domestically, with clear and complete invoices and documents and paid VAT according to regulations; an export manufacturing enterprise hires another export processing enterprise to process partial imported materials and then re-imports processed products to export abroad or to non-tariff zone; an export processing enterprise hires an export manufacturing enterprise to manufacture partial imported materials and re-imports processed to export abroad or non-tariff zone.

According to the General Department of Customs, Article 19 of the Law on Export Tax and Import Tax; Article 10, Article 12, Article 33, Article 34, Article 35, Article 36, Article 37 Decree 134/2016/ND-CP amended and supplemented in Decree 18/2021/ND-CP regulating import and export tax refund stipulates that imported products which are outsourced, manufactured, and assembled in non-tariff zones using imported raw materials and components from abroad into Vietnam must pay import tax at the tax rate, taxable value of imported goods.

Studying tax refund process to perform effectively Studying tax refund process to perform effectively

VCN – To effectively implement the tax refund process under Decision 679, the Deputy Director General of ...

The General Department of Customs emphasized that, considering current regulations, outsourced products in non-tariff zones imported into domestic Vietnam must pay import tax according to regulations. Imported processed products which are exported abroad or further processed in Vietnam and then exported abroad, are not subject to import tax refund cases as prescribed in the law on import and export taxes.

By Nu Bui/ Huyen Trang

Related News

The Prime Minister requested that before April 25, complete the revision of regulations on import and export of medicinal materials

The Prime Minister requested that before April 25, complete the revision of regulations on import and export of medicinal materials

VCN - The Ministry of Health, according to its assigned functions, tasks and authority, presides and coordinates with the Ministry of Finance and relevant agencies to urgently review, research, amend and complete the Ministry's regulations on import and export of medicinal materials.
Quang Ninh Customs: Flexible solutions to raise revenue

Quang Ninh Customs: Flexible solutions to raise revenue

VCN - In addition to closely following budget revenue developments, Quang Ninh Customs Department flexibly and creatively organizes accompanying activities to support businesses, contributing to attracting and retaining businesses and increasing budget revenue across the province.

Latest News

Reporting to the National Assembly for considering VAT reduction in the second half of 2024

Reporting to the National Assembly for considering VAT reduction in the second half of 2024

VCN - The Government assigned the Ministry of Finance to summarize and evaluate the results of reducing VAT rates to report at the 7th Session, and the 15th National Assembly for consideration and allowing to implementing in the second half of 2024.
No need to reduce the output of manufacturing and assembling automobile to enjoy preferential tariff

No need to reduce the output of manufacturing and assembling automobile to enjoy preferential tariff

VCN - The Ministry of Finance has responded to the suggestions of Vietnam Automobile Manudacturers’ Association (VAMA) regarding the adjustment of reducing automobile volume to apply a tax rate of 0% for imported components and spare parts used for manufacturing and assembling automobiles. According to the Ministry of Finance, based on the current situation, the request to continue reducing the volume of VAMA is not suitable.
Hundreds of tons of cinnamon essential oil are left in inventory due to export regulations

Hundreds of tons of cinnamon essential oil are left in inventory due to export regulations

VCN - Enterprises exporting cinnamon essential oil are facing difficulties due to regulations on pharmaceutical trading of the Ministry of Health, leading to hundreds of tons of essential oil being left in stock in raw material areas.
Business suspension of temporary import and re-export of Monazite ores and ore concentrates will be valid on May 13th

Business suspension of temporary import and re-export of Monazite ores and ore concentrates will be valid on May 13th

VCN - The Ministry of Trade and Industry issued Circular 05/2024/TT-BCT regulating the temporary suspension of temporary import and re-export of Monazite ores and ore concentrates business.

More News

Improving the customs legal system to be modern, synchronous, unified and transparent

Improving the customs legal system to be modern, synchronous, unified and transparent

VCN - This is one of the contents related to the Customs field recently reported to the National Assembly by the Ministry of Finance.
New points about rules of origin in AKFTA

New points about rules of origin in AKFTA

VCN - The Ministry of Trade and Industry promulgated Circular 04/2024/TT-BCT amending and supplementing some articles of Circular 20/2014/TT-BCT dated June 25, 2014; the circular took effect from May 11, 2024.
It is necessary to build a national database on cross-border trade and transport

It is necessary to build a national database on cross-border trade and transport

VCN - Build a national database on cross-border trade and transport to store and share information to facilitate cross-border trade and transport as well as improve the efficiency and effectiveness of state management.
Reviewing the list of scrap that is temporarily suspended from temporary import and re-export business

Reviewing the list of scrap that is temporarily suspended from temporary import and re-export business

VCN - Scrap is a sensitive item with many potential risks of environmental pollution, directly affecting human health and the ecosystem. Therefore, strict management measures are needed to avoid the risk that Vietnam become a scrap gathering country in the world.
New law expected to boost financial leasing

New law expected to boost financial leasing

The law, which will take effect from July 1 this year, allows financial leasing companies to establish subsidiaries to handle and exploit bad debt assets. It also states that small financial leasing deals with value under VNĐ100 million do not need to control the purpose of capital use.
5% VAT on fertilisers to create fairer market: domestic producers

5% VAT on fertilisers to create fairer market: domestic producers

The absence of VAT on fertilisers has prevented domestic producers from declaring and deducting input VAT, which leads to higher cost of domestically produced fertilisers, by an estimated 5-8 per cent, and makes them vulnerable in competition from imported fertilisers.
Why not reduce export tax on fertilizer products to 0%?

Why not reduce export tax on fertilizer products to 0%?

VCN - Clarifying a number of contents related to the draft Decree amending and supplementing a number of articles of Decree No. 26/2023/ND-CP on Preferential Export Tariffs, Import Tariffs, List of Goods and Rates Absolute tax, mixed tax, import tax outside the tariff quota regarding the export tax rate for some types of fertilizers, the Ministry of Finance has clarified the reason why it does not adjust the export tax rate for this product.
Ho Chi Minh City Customs proposed to reduce VAT

Ho Chi Minh City Customs proposed to reduce VAT

VCN - Ho Chi Minh City Customs Department proposed that the Ministry of Finance advise the Government to apply a reduction in the Value Added Tax (VAT) rate of 2% for all groups of goods and services which currently subject to the 10% VAT rate, uniform at the stages of import, production and consumption.
Limiting the "power" of major shareholders under the Law on Credit Institutions (amended)

Limiting the "power" of major shareholders under the Law on Credit Institutions (amended)

VCN - The Law on Credit Institutions (amended) has tightened the maximum ownership ratio and lending ratio to limit the influence of shareholder groups as well as minimize risks from credit concentration for banks.
Read More

Your care

Latest Most read
Reporting to the National Assembly for considering VAT reduction in the second half of 2024

Reporting to the National Assembly for considering VAT reduction in the second half of 2024

The Government assigned the Ministry of Finance to summarize and evaluate the results of reducing VAT rates to report to National Assembly for consideration and allowing to implementing in the second half of 2024.
The Prime Minister requested that before April 25, complete the revision of regulations on import and export of medicinal materials

The Prime Minister requested that before April 25, complete the revision of regulations on import and export of medicinal materials

VCN - The Ministry of Health, according to its assigned functions, tasks and authority, presides and coordinates with the Ministry of Finance and relevant agencies to urgently review, research, amend and complete the Ministry's regulations on import and e
No need to reduce the output of manufacturing and assembling automobile to enjoy preferential tariff

No need to reduce the output of manufacturing and assembling automobile to enjoy preferential tariff

The Ministry of Finance has responded to the suggestions of VAMA regarding the adjustment of reducing automobile volume to apply a tax rate of 0% for imported components and spare parts used for manufacturing automobile
Hundreds of tons of cinnamon essential oil are left in inventory due to export regulations

Hundreds of tons of cinnamon essential oil are left in inventory due to export regulations

VCN - Enterprises exporting cinnamon essential oil are facing difficulties due to regulations on pharmaceutical trading of the Ministry of Health, leading to hundreds of tons of essential oil being left in stock in raw material areas.
Business suspension of temporary import and re-export of Monazite ores and ore concentrates will be valid on May 13th

Business suspension of temporary import and re-export of Monazite ores and ore concentrates will be valid on May 13th

The Ministry of Trade and Industry issued Circular 05/2024/TT-BCT regulating the temporary suspension of temporary import and re-export of Monazite ores and ore concentrates business.
Mobile Version