Tax policy for processed goods for export production when re-importing

professional activities at Thai Nguyen Customs Branch (Bac Ninh Customs Department). Photo: T.Trang

That is the guidance of the General Department of Customs for export tax for exported goods for processing of Nanotech Vina Co., Ltd.

According to the provisions of Clause 2, Article 2 of Decree No. 134/2016/ND-CP of the Government dated 1-9-2016: Exported goods from the domestic market to processing enterprises, export processing zones, bonded warehouses, tax-suspension warehouses and other non-tariff zones consistent with the provisions of Clause 1, Article 4 of the Law of export tax, import duty; imported goods from processing enterprises, export processing zones, tax-suspension warehouses, bonded warehouses and other non-tariff zones consistent with the provisions of Clause 1, Article 4 of the Law of export tax, import duty into domestic markets will be taxable.

Besides that, in accordance with point a clause 1 of Article 11 of Decree No. 134/2016 / ND-CP: exported goods for processing are natural resources, minerals, products with a total value of natural resources and minerals plus energy costs accounting for 51% of the cost of their products and processed goods for export subject to export duty, shall not be exempt from export duty.

In contrast, at point d Clause 1 of Article 11 of Decree No. 134/2016 / ND-CP stipulates: Products exported for processing in foreign countries when -imports to Vietnam are exempted from import duty for the portion of the value of raw materials and export components that constitute processed products and are taxed on the remaining value of the product at the rate of import duty of imported processed products.

Compared to the provisions above, the case of exporting quartz for processing enterprises, they must declare for paying tax according to export tax rates as stipulated in Export Tax issued together with Decree No. 122 / 2016 / ND-CP. Goods which are processed for export production when re-importing will enjoy tax-exemption for the portion of the value of raw materials, materials, exported components that constitute processed products. The remaining portion of the value of products will be taxed under the import tax rates of imported processed products.