Removing problems with settlement reports and storage for export processing enterprises

VCN - During the process of carrying out customs procedures, issues such as management of raw materials, supplies or settlement reports are always concerned by processing, export manufacturing and export processing enterprises. Recently, Hanoi Customs Department has answered many questions about customs procedures for export processing enterprises.
Professional activities of civil servants of Hanoi Customs Department. Photo: N.Linh
Professional activities of civil servants of Hanoi Customs Department. Photo: N.Linh

Mitsubishi Pencil Vietnam Co., Ltd. raised the issue: The company is an export processing enterprise, before exporting products, the semi-finished products must go through a processing stage. The company hires foreign traders to perform processing contracts, then imports and exports under type E42. The company ask the question whether processing contracts have to be registered consumption norms in advance with the Customs office. When making a final settlement report, must the company declare the actual norm as the norm for making exported products, including: the norm for producing semi-finished products before being processed and the norm after processing or declare the norms separately in each part?

Responding to the company's problem, Hanoi Customs Department requested the company to study the provisions in Article 39 of Decree 69/2018/ND-CP on processing contracts. According to this, the processing contract must be made in writing document or in another form with equivalent legal value according to the provisions of the Commercial Law and must include at least 10 clauses., This included content on norms for using raw materials, auxiliary materials, supplies, norms for consumable supplies and the rate of material loss in processing. The company was responsible for notifying the processing contract, reprocessing contract, processing contract appendix, and reprocessing contract appendix to the Customs authority in accordance with the customs regulations.

In case that an export processing enterprise outsources processing abroad, it must submit a final settlement report according to Article 69a of Circular 38/2015/TT-BTC, amended and supplemented in Clause 47, Article 1 of Circular 39/2018/TT-BTC, At the end of the fiscal year, the enterprise must submit 2 settlement reports including getting outsource and outsourcing abroad and the norms of each settlement report.

Regarding the issue of management of raw materials and supplies that are not subject to pay tax or tax exemption, Thang Long Tobacco One Member Company Limited asked the question: Because the enterprise uses two management systems, the raw codes of materials, supplies, and products were different among Accounting, Warehouse, and Import-Export departments. In this case, how should the enterprise declare the code to the Customs authority and how to store it to prove to the Customs authority if there were post-customs clearance inspections?

Regarding this issue, Hanoi Customs Department said that based on Clause 39, Article 1 of Circular 39/2018/TT-BTC amending and supplementing Circular 38/2015/TT-BTC as follows “In case of production management of organizations and individuals that use raw material, supply, or product codes different from those declared on the customs declaration when importing raw materials, supplies, or exporting products, organizations and individuals must build and store the equivalent conversion table among these codes and they must present them when the Customs authority checks or requests explanation”. Therefore, companies need to research and comply with regulations. In addition, the codes of raw materials and supplies were declared and united by the enterprise. When presented to the Customs authority, the enterprise was responsible for building and converting the codes from the declaration codes on the customs declaration, import-export codes, warehouse codes and accounting codes. The enterprise need to create tables and track uniform codes and conversions among departments.

In addition, some enterprises raised the issue of buying and selling among export processing enterprises. When carrying out export and import procedures, do they use sales invoices or warehouse delivery notes holding inland transportation to complete customs procedures?

Responding to the above issue, Hanoi Customs Department said that based on the provisions in Clause 2, Article 8, Decree 123/2020/ND-CP of the Government, Sales invoices were invoices for organizations, individuals as follows: “a) Organizations and individuals declare and calculate value added tax under the direct method used for activities:

- Selling goods and providing services domestically;

- International transport activities;

- Exporting to non-tariff zones and cases considered as exports;

- Exporting goods and providing services abroad.

b) Organizations and individuals in the non-tariff zone when selling goods and providing services to the domestic market and when selling goods and providing services among organizations and individuals in the non-tariff zone and exporting and providing services abroad, the invoice clearly states "For organizations and individuals in the non-tariff zone".

Under the provisions of Clause 1, Article 9 of Decree 123/2020/ND-CP, “time of invoice issuance for sales of goods (including sale of state assets, confiscated assets, putting into public treasury and sale of national reserve goods) is the time transferring ownership or rights to use goods to the buyer, regardless of whether money has been collected or not”.

In addition, based on the guidance of the General Department of Customs on the use of documents to replace sales invoices of export processing enterprises, at the time carrying out customs procedures, on-site import and export goods of the export processing enterprises for export processing enterprises according to the provisions of Clause 58, Article 1 of Circular 39/2018/TT-BTC, the customs declarant has not issued a sales invoice because the transfer of ownership or use rights has not been completed. When using goods, they must submit a delivery note holding internal transportation instead of a sales invoice.

By Ngoc Linh / Binh Minh

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