Latest articles

The General Department of Customs shall promptly respond to many requests of enterprises

Tax policy with surplus raw materials

Vietnam Association of Seafood Exporters and Producers (VASEP) said that the regulations and guidance of the General Department of Vietnam Customs on tax exemption, only 3% of waste, waste products, raw materials, supplies in excess are not suitable with the reality, especially with the fishery sector. Therefore, VASEP requested the Ministry of Finance to propose the Government to amend Clause 4, Article 10 of Decree 134/2016 / ND-CP.

In this regard, the General Department of Vietnam Customs has stated that as for the tax policy on scrap, waste products and surplus raw materials and supplies of the type for processing, the Ministry of Finance issued Official Letter No. 17786 / BTC-TCHQ dated 28 December 2017, to report to the Prime Minister on the application of tax policy on discarded materials and defective products for processing as stipulated in Clause 4, Article 10 of Decree 134/2016 / ND-CP as follows: Scraps and defects of processing contracts shall be exempt from import tax when they are domestically consumed, but must be declared and pay VAT, special consumption tax and environmental protection tax (if any). It is unrestricted 3% for waste and scrap, but only limited to 3% for excess of materials.

Accordingly, in order to deal with tax exemption for waste, defective products and raw materials and materials imported for processing according to the provisions of Clause 4, Article 10 of Decree No. 134/2016 / ND-CP, Circular No. 39/2018 / TT-BTC has amended and supplemented the provisions of Articles 55 and 71 of Circular No. 38/2015 / TT-BTC with the guidance on tax exemption for waste materials, faulty products and raw materials. The surplus imported for processing is determined on the basis of actual production norms of enterprises.

As a result, the General Department of Vietnam Customs stated that current tax-related obstacles to waste, defective products and surplus raw materials imported for processing were prescribed in Clause 4, Article 10 of Decree No. 134/2016 / Decree No. 39/2018 / TT-BTC amending and supplementing a number of articles of Circular 38/2015 / TT-BTC.

With regard to the problems in Decree 134/2016 / ND-CP, the General Department of Vietnam Customs is currently coordinating with the Tax Policy Department (under the Ministry of Finance) amending and supplementing Decree 134/2016 / ND-CP. This includes changes in tax exemption for waste materials, faulty products and surplus raw materials and supplies for processing in order to ensure transparency in the course of implementation.

Enterprises use production norms to settle with Customs offices

According to the Association of European Business Enterprises (EuroCham), in the case where there is a difference in Customs inspection of norms and reality, the Customs will collect the import tax, while it is difficult to determine the norms accurately. As a result, EuroCham and Tinh Loi Co., Ltd., asked to provide further guidance on this matter.

According to the General Department of Vietnam Customs, the problems mentioned by EuroCham have been specifically guided in Clause 35, Article 1 of Circular No. 39/2018 / TT-BTC, amending and supplementing Article 55 of Circular No. 38/2015 / TT-BTC. Accordingly, enterprises are not required to declare technical norms before exporting the first batch of goods, and enterprises are allowed to use production norms to settle with Customs offices.

The General Department of Vietnam Customs affirmed that the actual production norm was the quantity of raw materials and materials actually used for processing or production of a unit of export product according to the provisions in Form 27 Appendix II issued with Circular 39/2018 / TT-BTC.

In particular, discarded materials and materials removed during processing and production of export goods that were recovered to be used as raw materials for other production processes. Defective products which do not meet the technical standards (specifications, size and quality) are excluded from the process of processing and producing export goods and fail to meet the quality standards for export.

The General Department of Vietnam Customs added that organizations and individuals were responsible for storing data, vouchers and documents related to the determination of actual norms and notification of actual norms of the quantity of products produced based on the financial year when making the settlement report as prescribed in Clause 2, Article 60 of Circular No. 39/2018 / TT-BTC. Particularly for products manufactured at the end of a fiscal year without complete products, organizations and individuals shall not have to pay the actual norms when submitting the final settlement reports. For example, for the processing and export of seafood to be shipped with the expected time to complete in 3 years, in the third fiscal year they must pay the actual norm.

According to the General Department of Vietnam Customs, organizations, individuals and Customs agencies shall use actual production norms to determine the tax amount when converting their use purposes, transferring domestic consumption of products, refunding taxes when the Customs implements post-clearance audits and specialized inspections.

As a result, the content of enterprises' difficulties has been guided in detail in Clause 35, Article 1 of Circular No. 39/2018 / TT-BTC of the Ministry of Finance amending Article 55 of Circular No. 38/2015 / TT-BTC on technical norms before exporting the first lot of goods.

Source:  Customs News