Tax Policy for destroyed products, waste products, scrap materials complying with provisions of Decree 134/2016/NĐ-CP

VCN- Facing reflection by some enterprises about different provisions between Decree 134/2016/ND-CP and Circular 39/2018/TT-BTC on Tax policy for destroyed products, waste products, scrap materials of goods that are manufactured for exports, the reporter of Customs Newspaper  discussed with the representative of Tax Policy Division under the Import and Export Duty Department. Accordingly, the representative said that in the short term, enterprises shall comply with provisions of the Law on import and export, and Decree 134/2016/ND-CP.
tax policy for destroyed products waste products scrap materials complying with provisions of decree 1342016nd cp Revision of Decree 134/2016 / ND-CP: Amendment of tax exemption regulations for specialized goods
tax policy for destroyed products waste products scrap materials complying with provisions of decree 1342016nd cp Amend Decree 134/2016 / ND-CP: Amend tax exemption regulations for exported goods to process
tax policy for destroyed products waste products scrap materials complying with provisions of decree 1342016nd cp 28 articles will be amended and supplemented in Decree 134/2016 / ND-CP
tax policy for destroyed products waste products scrap materials complying with provisions of decree 1342016nd cp
Customs operation at Yen Phong Customs Branh, Bac Ninh Customs Department. Photo: T.TR

According to some enterprises, the Law on Import and Export Duty, Decree 134/2016/ND-CP, specifically Clause 2, Article 12 Decree 134/2016/ND-CP stipulates that the basis for determination of eligibility for duty exemption for imported raw materials, supplies and components for export production, the value or quantity of imported raw materials, supplies and components exempt from duty is the actual value or quantity of raw materials, supplies and components used for manufacture of the products that are exported in reality and is determined when making a statement of raw materials, supplies and components imported for manufacture of exports in accordance with Customs law.

This means that only raw materials, supplies and components imported for export production are exempted from import duty. Other items such as waste products, scrap materials, raw materials, supplies, components which are not exported will be subject to import duty, including the destroyed products. This is detailed in Official Document 8127/TCHQ-TXNK dated 13rd December 2017.

As per regulations in Clause 49 Article 1 of Circular 39/2018/TT-BTC, ‘waste products, scrap materials obtained in the process of export production when they are sold or domestically consumed are subject to import duty exemption but must be declared and subject to Value Added Tax, Special Consumption Tax (if any) and Environmental Protection Tax’ (if any).

Hence, enterprises said that there is difference between the two documents. As per Decree 134, when waste products, scrap materials that are domestically consumed or destroyed, will be subject to import duty; but as per Circular 39, they are exempted from import duty. Enterprises said that as per Decree 134 the destroyed redundant raw materials are subject to import duty, why as per Circular 39 when they are domestically sold, are they subject to import duty exemption?

According to the representative of Tax Policy Division under the Import and Export Duty Department, Clause 7 Article 16 of the Law on Import and Export Duty stipulates that imported raw materials, supplies and components for export production are subject to import duty exemption.

According to Article 12, Decree 134/2016/ND-CP, raw materials, supplies, components, semi-finished products and finish products imported for export production shall be exempted from import duty. The basis for determination of eligibility of goods for duty exemption complies with provisions in Clause 2, Article 12 of Decree 134/2016/ND-CP.

tax policy for destroyed products waste products scrap materials complying with provisions of decree 1342016nd cp Tax exemptions under the new Law on export and import Duties

VCN- The Government has issued Decree 134/2016 / ND-CP detailing a number of articles and measures to ...

Under these regulations, goods as raw materials, supplies and components imported for export production but no longer used, which must be destroyed and raw materials, supplies and components imported for export production, which are used to manufacture semi-products and finished products but are damaged and enforced to be destroyed must be declared and subject to import duty.

According to the regulations on the implementation of legal documents, the higher-level documents shall be applied. Therefore, in the short term, enterprises comply with the provisions of the Law on Import and Export Duty, and Decree 134/2016/ND-CP.

Also the representative said that the Import and Export Duty Department realized shortcomings and would propose to amend Decree 134/2016/ND-CP to be in line with reality.

By Thu Trang/Ngoc Loan

Related News

Adding goods item subjected to special consumption tax

Adding goods item subjected to special consumption tax

VCN - According to Ministry of Finance – drafting agency, one of the purposes of amending Law on Special Consumption Tax this time is to perfect regulations on special consumption tax policy to expand the collection base and ensure transparency, ease of understanding, and ease of implementation to contribute to improving the capacity and efficiency of tax management activities. To achieve this goal, the draft Special Consumption Tax Law has many amendments on taxable objects.
The auto industry does not shrink from many challenges

The auto industry does not shrink from many challenges

VCN - In the context of the import tax reduction roadmap being implemented when Vietnam participates in commitments in Free Trade Agreements, the pressure of competition on the Vietnamese automobile industry is also increasingly fierce. Therefore, in addition to tax and fee support, many breakthrough solutions and policies are needed to create a boost for the auto industry.
Personal Income Tax Law to be amended in 2025

Personal Income Tax Law to be amended in 2025

VCN - On March 29, answering questions from the press at the Ministry of Finance's regular press conference for the first quarter of 2024, the leader of the Department of Management and Supervision of Tax, Charges and Fees Policy (Ministry of Finance) said, continue to focus on drastically implementing solutions to support businesses that the National Assembly and the National Assembly Standing Committee have approved; At the same time, closely monitor the situation to research and advise competent authorities on appropriate solutions.
Notes for businesses on tax policy

Notes for businesses on tax policy

VCN - According to experts, some businesses do not understand clearly tax documents and policies, especially new ones, leading to many risks in implementation.

Latest News

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.
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.

More News

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.
Considering to impose 5% of VAT on fertilizers

Considering to impose 5% of VAT on fertilizers

VCN - Under the draft amended Law on Value-Added Tax (VAT), fertilizers are expected to be included in the category of goods subject to VAT at a rate of 5% to address the difficulties faced by domestic production enterprises and ensure that this item can compete effectively with imported products of the same type.
Read More

Your care

Latest Most read
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
VAT reform promotes sustainable development of the agricultural sector

VAT reform promotes sustainable development of the agricultural sector

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
Customs implements VAT reduction policy from July 1st

Customs implements VAT reduction policy from July 1st

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.
Mobile Version