“Hello, lawyer. I have a question to ask as follows. According to current regulations, are processed goods for export taxable? satellite industry, small and medium enterprises in Vietnam or not? Looking forward to your lawyer’s response to answer questions. Thank you very much!“. To dig deeper into this, today, LSX Lawfirm will give you an article about “Are Vietnamese processed goods exported subject to tax?“, as follows:
Legal grounds
- Law on export tax and import tax 2016.
Are processed goods for export taxable?
Pursuant to the provisions of Clause 7 Article 16 of the Law on Import Tax and Export Tax No. 107/2016/QH13, Clause 1 Article 12 of Decree No. 134/2016/ND-CP dated September 1, 2016, of the Government, goods imported for the production of goods for export are exempt from duty.
Raw materials, supplies, components, semi-finished products, and finished products imported for the production of exported goods are exempt from import tax as prescribed in Clause 7 Article 16 of the Law on Import and Export Tax, including:
- Raw materials and supplies (including materials for packaging or packaging for export product packaging), components, and semi-finished products are imported directly into the export product or directly involved in the manufacturing process. producing goods for export but not directly converting them into goods;
- Finished products imported for attaching, assembling to export products, or packing together into goods in sync with exported products;
- Components and spare parts are imported for warranty for exported products; Imported goods are not used for purchase, sale, exchange, or consumption, but are only used as samples.
- It can be said that the case where the taxpayer has paid import tax on goods imported for production and business but has put them into production for export and exported the products in the form of on-spot export ( not exported abroad or exported to a non-tariff zone) are not eligible for import tax refund
Cases eligible for import and export tax exemption
Articles 5 to 29 of Decree No. 134/2016/ND-CP specify subjects and cases eligible for import and export tax exemption. Accordingly, the subjects eligible for import and export tax exemption include:
- Goods imported and exported by foreign organizations and individuals enjoying privileges and immunities; goods in the duty-free baggage allowance of people on exit or entry; imported goods for sale at duty-free shops.
- Gifts, gifts within the norms of foreign organizations and individuals for Vietnamese organizations and individuals or vice versa.
- Goods are traded and exchanged across borders by border residents on the List of goods and within the norms to serve the production and consumption of border residents.
- Then Goods are exempt from export tax and import tax under international treaties to which the Socialist Republic of Vietnam is a signatory.
- Goods with a value or amount of tax payable below the minimum.
- Raw materials, supplies, and components imported for processing export products; imported finished products to attached to processed products; processed products for export.
- Raw materials, supplies, and components imported for the production of exported goods.
- Goods produced, processed, recycled, or assembled in a non-tariff area without using raw materials and components imported from abroad when imported into the domestic market.
- And Goods temporarily imported for re-export or temporarily exported for re-import within a certain period of time.
- Goods are not for commercial purposes in the following cases: sample goods; Photo, film, replacement model for samples; small quantity advertising.
- Then Goods imported to create fixed assets of subjects entitled to investment incentives in accordance with the investment law.
- Type of tree; livestock breeds; fertilizers and plant protection drugs that cannot produced in the country and need to imported according to regulations of competent state management agencies then.
- Raw materials, supplies, and components that cannot domestically produced and imported for production of an investment project on the list of industries and trades with special investment incentives or areas with special socio-economic conditions In difficult situations according to the provisions of the law on investment, high-tech enterprises, science and technology enterprises, science and technology organizations are exempt from import tax for a period of 5 years from the date of commencement of production. export then.
- Raw materials, supplies, and components imported into the country. That cannot produced in the country of an investment project for the production and assembly of medical equipment. Prioritized for research and manufacture are exempt from import tax for a period of 5 years. years, from the start of production then.
- Goods imported to serve oil and gas activities.
- Projects and shipyards on the list of preferential industries and trades according to the provisions of the law on investment exempt from tax for Goods imported to create fixed assets of the shipbuilder; Imported goods are machinery, equipment, raw materials, supplies, components, semi-finished products that cannot produced domestically and can used for shipbuilding; Ships for export.
In addition
– Machinery, equipment, raw materials, supplies, components, parts, and spare parts imported for printing and minting activities.
Imported goods are raw materials, supplies, and components that cannot produced domestically. And directly used for the production of information technology products, digital content, and software.
– Goods imported and exported to protect the environment
– Specialized imported goods that have not produced domestically and directly served for education.
– Imported goods specialized machinery, equipment, spare parts, and supplies. That cannot produced domestically, specialized scientific documents, books, and newspapers directly used. Scientific research and technological development, develop activities of technology incubation, science and technology business incubation, and technological innovation then.
– Specialize imported goods directly serving security and defense, in which special-use means of transport must those that cannot produced domestically then.
Goods exported or imported to serve social security, overcoming consequences of natural disasters, disasters, epidemics, and other special cases then.
The basis for determining tax-exempt goods
The basis for determining tax-exempt goods shall comply with the provisions of Clause 2, Article 12 of Decree No. 134/2016/ND-CP. Specifics include:
- Organizations and individuals producing goods for export have establishments producing goods. For export in the Vietnamese territory; have the right. To own or use the machinery and equipment at the production establishment. That is suitable for imported raw materials, and supplies. And components for the production of goods for export, and notify the manufacturer. According to the regulations. regulations of law on customs;
- Imported raw materials, supplies, and components used to manufacture exported products.
The value or quantity of imported raw materials, supplies, and components is exempt. Tax is the value or quantity of imported raw materials, supplies, and components. Actually used for the production of actually exported products. when finalizing the management and use of imported. Raw materials, supplies, and components for the production of export products in accordance with the law on customs.
When finalizing, taxpayers are responsible for declaring accurately and truthfully the value or quantity of exported raw materials, supplies, and components actually used for the production of actually imported processed products that are exempt from tax. during customs clearance.
Regulations on the selection of locations for customs clearance
Pursuant to Article 58 of Circular 38/2015/TT-BTC, when performing the processing contract, we allowed to choose one of the following branches:
- Firstly, For goods being raw materials, supplies, machinery, and equipment imported for processing; Raw materials and supplies imported for the production of export goods: Organizations and individuals may choose to carry out import procedures at the following 01 Customs Sub-Department:
- Secondly, The Sub-department of Customs where the organization or individual has its head office or branch office or production facility;
- Thirdly, The Customs Sub-Department of the border gate or the Customs Sub-Department of the port of export or import of goods established inland;
- Finally, The Sub-department of Customs that manages processed and manufactured goods for export belongs to the Customs Department where the production facility is located or where the import border gate is located.
The choice of the Customs branch is at the discretion of the enterprise, after choosing a place to carry out customs procedures, we need to notify the production facility
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Related questions
Processing export goods is a method of producing export goods; there:
– Firstly, The person ordering the processing abroad provides machinery, equipment, raw materials, or semi-finished products according to the given samples and norms;
– Secondly, The domestic outsourcer organizes the product production process at the request of the outsourcing orderer abroad and returns to the outsourcer all the products made to receive remuneration.
All types of goods can be processed. Except for goods banned from trading. In the case of processing goods for foreign traders for consumption abroad, goods banned from business, export, or import may be processed if so permitted by competent state agencies.
So In case, the taxpayer notifies the re-processing establishment or the re-processing contract within the time limit prescribed by the customs law, the customs authority shall only be subject to an administrative sanction corresponding to the violation act. Customs authorities still handle tax exemption for goods imported for processing if they meet the conditions specified in Article 10 of Decree 134/2016/ND-CP then.
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