Seafood enterprises propose many questions relating to export contracts

Mr. Au Anh Tuan, Acting Director of the Customs Control and Supervision Department chaired the seminar. Photo: T.D

Au Anh Tuan, Acting Director of Customs Control and Supervision Department, General Department of Vietnam Customs, said in implementing the programme of developing legal documents in 2019, the General Department of Vietnam Customs was assigned to draft content of amending and supplementing Circular No. 38/2015/TT-BTC (Circular 38) dated March 25, 2015 of the Ministry of Finance regulating customs procedures; customs inspection and supervision; import and export duty and tax administration for import and export goods; and Circular No. 39/2018/TT-BTC (Circular 39) dated April 20, 2018 of the Ministry of Finance amending and supplementing articles in Circular No. 38.

Through this seminar, it aimed to collect suggestions of enterprises related to the management of processed goods, export production, export processing enterprises (EPEs) and the content of physical inspection for goods irradiation to complete the draft contents of the Circular amending the above circulars soon to thoroughly the problems the business community has in implementing customs procedures for import and export goods and transit goods.

After listening to the representative of the Customs Control and Supervision Department introducing to the business community the proposed amendments and supplements such as: actual production rate; notice of production base and export contracts; procedures for processing waste, scrap and defective products; and content of on-spot export, the enterprises contributed many practical ideas.

Representative of enterprises gave opinions at the seminar. Photo: T.D

According to representatives of many enterprises, seafood enterprises were often buying raw materials for export production seasonally. So when the price of raw materials fell, enterprises would sign contracts with partner for buying and sign with other partners to sell output for export. Therefore, according to regulations, when opening import declarations, enterprises must present contracts or appendices of sale contracts to export products, so enterprises could not meet this requirement. Accordingly, enterprises proposed when amending the Circular, it could remove this problem for businesses.

In response to this problem, the representative of the Customs Control and Supervision Department said that in implementing processed goods, the contract showed relatively clear information such as place of origin and place of arrival, time of export but customs authorities have no basis for monitoring goods of export production.

In some cases, enterprises imported inputs and declared them as imports for export production but they keep inventory at warehouses, even for 2-3 years or without a production plan to process those goods. Regarding tax obligations when goods have not had their use purposes changed yet, customs authorities were not entitled to collect the tax amounts on those imported goods for export production. This led to difficulties in monitoring the inventory of import goods of the enterprise.

Accordingly, the presentation of export contract at the time of opening the declaration aimed to determine whether the enterprise did actually import goods for export production or not. It was one of the criteria for tax exemption for export production goods. In cases where enterprises did not have contracts or appendices of export production contracts, enterprises would have to declare and pay taxes and then after the goods are put into actual export production, they will be refunded in accordance with Article 36 of Decree 134/2016/ND-CP.

If the enterprise could not immediately provide the export contract, the Department would record the opinion to reflect to the Ministry of Finance and the General Department of Vietnam Customs for further consideration.

In response to the problems of Nguyen Thi My, Head of Import and Export Department, Highland Dragon Co., Ltd. on the procedures for processing waste, scrap and defective products when sold in the country, what must be declared and pay taxes to the customs authorities in accordance with the draft contents of the Circular amending and supplementing Circular No. 38/2015/TT-BTC, Au Anh Tuan, Acting Director of the Customs Control and Supervision Department said that when businesses sold waste and scrap in domestic market, it would apply VAT to this scrap. It would not apply VAT for input products and the tax declaration would be in accordance with VAT regulations when selling scrap.

Besides that, the Customs Control and Supervision Department also received and answered many comments of seafood enterprises related to the amendment of the content of the announcement of processing establishments, export production and storage of raw materials, machinery, equipment and exported products.

Accordingly, the enterprise only informed the production establishment once. When there was a change of information, they just needed to add the information and sent back to the customs authorities. The inspection of production base would be based on the assessment of the customs authorities and complied with the provisions of Article 39 of Decree 08/2015/ND-CP amended and supplemented at Clause 17 Article 1 Decree No. 59/2018/ND-CP.