TAX HANDLING OF EXPORTED PRODUCTION GOODS PERMITTED FOR DESTRUCTION

Is your business currently confused with the tax policy on exported manufactured goods that are allowed to be destroyed in Vietnam? You don't know how to apply tax treatment in this case? Let's find out with DOLPHIN Company!

On October 8, 2021, the General Department of Customs issued Official Dispatch No. 4783/TCHQ-TXNK to answer questions related to tax policies on imported raw materials, scrap, waste products, and finished products produced for export. destroy.

1.   Legal grounds

According to official dispatch No. 4783/TCHQ-TXNK , then:

Pursuant to Clause 7, Article 16 of the Law on Export Tax and Import Tax No. 107/2016/QH13 stipulates tax exemption for: "Raw materials, supplies and components imported to produce export goods."

Pursuant to Point dd, Clause 1, Article 12 of Decree No. 134/2016/ND-CP dated September 1, 2016, amending and supplementing Clause 6, Article 1 of Decree No. 18/2021/ND-CP dated March 11, 2021 of the Government stipulates that goods imported to produce exported goods are exempt from import tax according to the provisions of Clause 7, Article 16 of the Law on Export and Import Taxes, including: “dd) Goods imported for production exports are allowed to be destroyed in Vietnam and have actually been destroyed.”

Pursuant to Point dd, Clause 2, Article 12 of Decree No. 134/2016/ND-CP amending and supplementing Clause 6, Article 1 of Decree No. 18/2021/ND-CP stipulates: “dd) Goods imported for production production, manufactured products, scrap, and waste products created during the production process that are allowed to be destroyed and actually destroyed according to customs laws are exempt from import tax.

Goods imported for export production but not used or imported goods used for production but not exported products are not exempt from import tax, taxpayers must register a new customs declaration and Declare and pay tax to the customs authority according to the tax rate and taxable value of imported goods at the time of registering a new customs declaration, except in the case of gifts or gifts as prescribed in Article 8. This Decree.”

Based on the above regulations, the tax treatment of raw materials and supplies imported for export production, export production products, scrap and waste products created during the production process, the Company needs Destruction request is carried out as follows:

2. In case of destruction of imported raw materials, supplies, scrap, waste products, and finished products

2.1. For imported raw materials and supplies that have not yet been put into production; scrap (raw materials and supplies removed due to oxidation, breakage during production... no longer have original use value); waste products need to be destroyed

According to Official Dispatch No. 4783/TCHQ-TXNK:

“Procedures for destruction of raw materials, supplies, scrap and waste products comply with the provisions of Article 72 of Circular No. 38/2015/TT-BTC dated March 25, 2015 of the Ministry of Finance.

In case after destruction, other products are obtained that the Company uses to sell domestically, it must declare and pay special consumption tax (if any), environmental protection tax (if any), value added tax. increase for tax authorities according to tax laws.”

2.2. For finished products that are of sufficient quality before being shipped, but are then tested and then destroyed or cannot find an export market and are forced to destroy them.

According to Official Dispatch No. 4783/TCHQ-TXNK:

“In cases where manufactured products are allowed to be destroyed and have actually been destroyed according to customs laws, they will be exempt from import tax according to the provisions of Point dd, Clause 1, Point dd, Clause 2, Article 12 of Decree No. 134/ 2016/ND-CP amending and supplementing Clause 6, Article 1 of Decree No. 18/2021/ND-CP.

In case after destruction, other products are obtained that the Company uses to sell domestically, it must declare and pay special consumption tax (if any), environmental protection tax (if any), and VAT to the tax authority according to the provisions of the Law. tax law.”

3. In case of preliminary destruction of imported raw materials, supplies, and finished products

According to Official Dispatch No. 4783/TCHQ-TXNK:

“In case of preliminary destruction of raw materials, supplies, finished products, and semi-finished products produced for export to sell domestically, they are not considered scrap and are not eligible for import tax exemption. The company must declare a new customs declaration, pay full tax on raw materials and supplies used to produce finished products, and semi-finished products must be destroyed. Import tax calculation value is the value declared by the enterprise according to the provisions of Clause 9, Article 1 of Circular No. 60/2019/TT-BTC amending and supplementing a number of articles of Circular No. 39/2015/TT- The BTC regulates customs values for exported and imported goods.”

Above is an article clarifying tax treatment of exported manufactured goods that are allowed to be destroyed in Vietnam. In addition, to update good articles about import-export or ship freight rates; Train schedule, customers can follow the fanpage to be updated with the latest articles.

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