Some comments on tax exemption for construction materials to create fixed assets

VCN - Criteria to determine "materials used for manufacture of machinery and equipment" and "construction materials" has not been defined clearly, which confuses Customs agencies in the implementation of tax exemption.
some comments on tax exemption for construction materials to create fixed assets Temporary exports for re-import for construction are not subject to Tax exemption and Tax refund
some comments on tax exemption for construction materials to create fixed assets Goods are not subject to tax exemption if not certified by ministries and sectors
some comments on tax exemption for construction materials to create fixed assets Eligible export processing and manufacturing facilities will be exempted from tax
some comments on tax exemption for construction materials to create fixed assets
Quang Ngai Customs officers supervise import and export goods. Picture: M. Hung

Clause 11 of Article 16 of the Law on Import and Export Duties No. 107/2016 / QH13 dated 6th April 2016, stipulates that goods imported to create fixed assets of subjects entitled to investment preferences under the law on investment shall be exempted from import tax, including:

Group 1: Machinery and equipment; components, parts, spare parts for assembly or operation of machinery and equipment; raw materials for manufacture of machinery and equipment, components, parts, or spare parts of machinery and equipment.

Group 2: Special-use transportation means in a technological line directly used for the production of a project.

Group 3: Construction materials that cannot be domestically manufactured.

The tax exemption process under this regulation shall comply with the procedures stipulated in Article 17 of the Law on Import and Export Duties No. 107/2016 / QH13 and Articles 30 and 31 of Decree No. 134/2016 / ND. - CP dated 1st September 2016 of the Government detailing a number of articles and measures to implement the Law on Import and Export Duties.

However, during reviewing procedures for tax exemption for the group as construction materials, there are still many unclear issues, leading to incorrect implementation of tax exemption.

In the three groups mentioned above, it can be realized that the conditions of import tax exemption for the first two groups do not require that the goods are domestically manufactured or not. However, the conditions for tax exemption for construction materials require that the goods must be construction materials that can not be domestically manufactured. The determination of a product that can be domestically manufactured or not is based on the provisions in 8 List Domestically manufacturable goods, enclosed to Circular 14/2015 / TT-BKHDT dated 17th November 2015 by the Ministry of Planning and Investment. Article 3 of this Circular, provides that “Domestically manufacturable goods as stated in the Lists enclosed to this Circular are universal regardless of purposes of use, except specialized-use goods”

With this regulation, in order to check whether the construction materials are domestically manufactured or not to implement the tax exemption procedures, it is required to check the eight Lists enclosed to Circular 14/2015/BKHDT. The problem is how to distinguish between "materials used for the manufacture of machinery and equipment" and "construction materials" because the conditions for import tax exemption for two groups are different. Currently, there are only concepts of "construction materials" but there are not any official legal concepts that clarify what are "materials used for the manufacture of machinery or equipment” or what are “construction materials". For "construction materials", the condition for import tax exemption is that the materials cannot be domestically manufactured. But for "materials used for the manufacture of machinery and equipment", the above condition is not required. If the two above groups cannot be clearly distinguished, the implementation of the import tax exemption policy will be inconsistent, leading to wrong implementation, affecting state budget revenues.

Currently, regarding the making of List of exemptions prior to registration of declarations for import tax exemption under Article 17 of the Law on Import and Export Duties and Articles 30 and 31 of Decree 134/2016 / ND-CP, all three groups of import tax exemption stipulated in Clause 11, Article 16 of the Law on Import and Export Duties shall be included in a list of tax exemption, rather than be separated from each group. Thus, when applying the regulations on import tax exemption for the group as materials used for the manufacture of machinery and equipment” or “ construction materials” in a same List of tax exemption, there will be different understandings.

In the past, there were also no clear concepts or criteria to distinguish between "materials used for the manufacture of machinery and equipment" and "construction materials" and the previous tax policies were similar to those in the current time, but the implementation of tax exemption was relatively easy and was not puzzling or confusing. To check whether the goods are "construction materials" or not, and whether the country has produced them or not, enterprises only check the List of “domestically manufacturable construction materials "issued together with the Circulars of the Ministry of Planning and Investment.

Although, the Ministry of Planning and Investment issued Circular No. 01/2018 / TT-BKHDT on 30th March 2018 on the list of machinery, equipment, spare parts, specialized-use transportation means, raw materials, semi-finished products that can be produced domestically, to replace Circular 14/2015 / TT-BKHDT, the problems mentioned in the article have not been removed.

some comments on tax exemption for construction materials to create fixed assets Ha Noi Customs Department rigorously checks Tax exemption dossiers to prevent losses

VCN- The checking of import tax exemption dossiers of goods subject to investment incentives, duty-free goods under ...

The Ministry of Planning and Investment should continue to consider and amend the regulations of Article 3 of Circular 14/2015 / TT-BKHTT for more reasonable implementation, or soon have official regulation to distinguish between “materials used for the manufacture of machinery and equipment” and “construction materials”.

By Ly Van Dong/ Huyen Trang

Related News

Documents required for vehicles transporting cargo across Lang Son Border Gate from August 1

Documents required for vehicles transporting cargo across Lang Son Border Gate from August 1

VCN - VCN- Vehicles carrying import and export cargo across customs clearance routes and specialized roads in the international border gate pair of Huu Nghi (Vietnam) - Huu Nghi Quan (China) must comply with international treaties and regulations of Vietnam Law. Accordingly, the vehicles transporting import and export cargo across Lang Son border gates are required to have at least seven valid documents from August 1, 2024, Lang Son Department of Industry and Trade notified.
Businesses highly appreciate the Customs-Business partnership in Bac Ninh

Businesses highly appreciate the Customs-Business partnership in Bac Ninh

VCN - Bac Ninh Customs officers support businesses in solving problems that arise during the procedure process, thanks to that goods can be circulated quickly, meet customs clearance time, production progress, and well implement commitments with customers, deliver on time.

Latest News

Promoting review, classification and management of tax debt

Promoting review, classification and management of tax debt

VCN - According to the General Department of Customs, the amount of overdue debt recovered and processed in the first 6 months of 2024 for the all Customs sector reached VND 349 billion. To ensure completion of tax debt collection and settlement targets, the General Department of Customs requires units to focus on reviewing debt management records to effectively implement measures to urge, collect and handle tax debt.
Does goods imported for investment incentives project subjected to tax exemption?

Does goods imported for investment incentives project subjected to tax exemption?

VCN - That is the problem of Ba Ria - Vung Tau Customs Department related to processing tax exemption documents for imported goods to serve investment incentive projects.
Border gate area planning associated with digital transformation needs to prioritize human resources, equipment, and infrastructure

Border gate area planning associated with digital transformation needs to prioritize human resources, equipment, and infrastructure

VCN - According to Lang Son Customs Department, to implement the master plan of the land border gate area associated with the goal of digital transformation, in which, to ensure successful implementation of the Customs Development Strategy until 2023, Building digital Customs, a smart Customs model, it is necessary to review and evaluate the overall system of land border gates, paying attention to investment in equipment, facilities, and human resources.
Proposal to reduce registration fees to restore growth of domestic automobile industry

Proposal to reduce registration fees to restore growth of domestic automobile industry

VCN - Facing the significant decline in auto market sales in the last months of 2023 and early 2024, the Ministry of Finance is asking for opinions from ministries, central agencies and relevant agencies on continuing to reduce registration fee to restore growth of the domestic automobile industry amid many difficulties and challenges in the economy.

More News

VAT reform promotes sustainable development of the agricultural sector

VAT reform promotes sustainable development of the agricultural sector

VCN - In the revised Draft Law on Value Added Tax (VAT), the conversion of fertilizers and specialized machinery and equipment serving agricultural production to applying 5% VAT since it belongs to the group of subjects not subject to tax according to current law, it is a content that receives attention from the business community, especially fertilizer production enterprises. According to experts and businesses, converting this item to a taxable object will have a huge impact on agricultural production.
Customs implements VAT reduction policy from July 1st

Customs implements VAT reduction policy from July 1st

VCN - To implement the contents relating to customs field, General Department of Vietnam Customs requested local customs departments to reduce VAT for group of commodities as stipulated at Decree 72/2024/NĐ-CP.
Amend the Law on Corporate Income Tax to ensure stable revenue sources for the budget

Amend the Law on Corporate Income Tax to ensure stable revenue sources for the budget

VCN - According to the Ministry of Finance, the amendment of the Law on Corporate Income Tax (CIT) aims to overcome inadequacies and overlaps, ensure stable revenue sources for the state budget, and contribute to restructuring state budget revenues in a sustainable direction.
List of imported and exported medicine and medicinal ingredients identified commodity codes

List of imported and exported medicine and medicinal ingredients identified commodity codes

VCN – 14 lists of imported and exported medicine and medicinal ingredients for human use and cosmetics that have been identified commodity codes under Vietnam’s Imports and Exports Nomenclature, have been approved and issued by the Ministry of Health from July 26, 2024.
Hundreds of tons of imported raw cashew nuts stuck in quarantine

Hundreds of tons of imported raw cashew nuts stuck in quarantine

VCN – A company is facing problems with plant quarantine regulations when carrying out procedures to import over 384 tons of "raw cashew nuts, originating from Tanzania" from a bonded warehouse in Dong Nai.
Extend deadline for paying Special Consumption Tax on domestically produced and assembled cars

Extend deadline for paying Special Consumption Tax on domestically produced and assembled cars

VCN – The Government has issued Decree 65/2024/ND-CP dated June 17,2024 extending the deadline for paying Special Consumption Tax on domestically produced and assembled cars. The Decree takes effect from the date of signing until December 31, 2024.
Extend the deadline for paying taxes and land rent in 2024

Extend the deadline for paying taxes and land rent in 2024

VCN - The Government has just issued Decree No. 64/2024/ND-CP dated June 17, 2024 extending the deadline for paying value added tax (VAT), corporate income tax (CIT), personal income tax (PIT) and land rent in 2024. This Decree takes effect from June 17, 2024 to December 31, 2024. After the extension period according to this Decree, the deadline for paying taxes and land rent will comply with current regulations.
Tax payment deadline for domestic cars extended

Tax payment deadline for domestic cars extended

The Government has decided to extend the deadline for special consumption tax payment for domestically manufactured or assembled automobiles.
13 cases must register for tax at Tax office

13 cases must register for tax at Tax office

VCN - The Ministry of Finance is collecting comments on a draft Circular guiding tax registration to replace Circular 105/2020/TT-BTC. According to the draft, in case the National Population Database proactively transmits information to the Tax Database when issuing personal identification numbers, the Tax agency will immediately update the personal identification number into the Tax registration system to use as a tax code for individuals without requiring individuals to carry out tax registration procedures with the Tax authority.
Read More

Your care

Latest Most read
Promoting review, classification and management of tax debt

Promoting review, classification and management of tax debt

According to the General Department of Customs, the amount of overdue debt recovered and processed in the first 6 months of 2024 for the all Customs sector reached VND 349 billion.
Documents required for vehicles transporting cargo across Lang Son Border Gate from August 1

Documents required for vehicles transporting cargo across Lang Son Border Gate from August 1

VCN - On July 18, Lang Son Department of Industry and Trade notified the method of delivery and receipt of import and export cargo transported across customs clearance routes and specialized roads in the International Border Gate pair of Huu Nghi (Vietnam
Does goods imported for investment incentives project subjected to tax exemption?

Does goods imported for investment incentives project subjected to tax exemption?

That is the problem of Ba Ria - Vung Tau Customs Department related to processing tax exemption documents for imported goods to serve investment incentive projects.
Border gate area planning associated with digital transformation needs to prioritize human resources, equipment, and infrastructure

Border gate area planning associated with digital transformation needs to prioritize human resources, equipment, and infrastructure

VCN - According to Lang Son Customs Department, to implement the master plan of the land border gate area associated with the goal of digital transformation, in which, to ensure successful implementation of the Customs Development Strategy until 2023, Bui
Proposal to reduce registration fees to restore growth of domestic automobile industry

Proposal to reduce registration fees to restore growth of domestic automobile industry

VCN - Facing the significant decline in auto market sales in the last months of 2023 and early 2024, the Ministry of Finance is asking for opinions from ministries, central agencies and relevant agencies on continuing to reduce registration fee to restore
Mobile Version