TAX POLICY WHEN USING DOMESTIC RAW MATERIALS AND SUPPLIES TO MANUFACTURE PRODUCTS

1. General introduction

- Export production is a form of production and business in which businesses import raw materials from many sources to process into export products.

- Processing is a type of commercial activity in which the processing party will use part or all of the raw materials to comply with the request of the ordering party. Receive remuneration for product processing from the ordering / outsourcing party.

2. Tax policy when using domestic raw materials and supplies to produce exported or processed products

2.1. Tax policy when using domestic raw materials and supplies to produce export products

Pursuant to Official Dispatch No. 651/TCHQ-TXNK:

“ Pursuant to Clause 7, Article 16 of the Law on Export Tax and Import Tax No. 107/2016/QH14 stipulates that raw materials, supplies and components imported to produce export goods are exempt from tax.

Pursuant to Article 12 of Decree No. 134/2016/ND-CP dated September 1, 2016, amended and supplemented in Clause 6, Article 1 of Decree No. 18/2021/ND-CP dated March 11, 2021 of the Government regulations that on-site export products are not exempt from export tax. On-site exporters register on-site export customs declarations and declare and pay export tax according to the tax rate and value of on-site exported products according to regulations at the time of registration of export customs declarations. in place.

In case an enterprise uses raw materials and supplies of domestic origin to produce export products, when exporting products that are not exempt from export tax, the enterprise must declare and pay export tax on the product. export according to regulations. ”

2.2. Tax policy when using domestic raw materials and supplies to produce processed products

Pursuant to Official Dispatch No. 261/TCHQ-TXNK:

“On the legal basis for domestic raw materials and supplies constituting export processed products

- Pursuant to Clause 1, Article 2 of the Law on Export Tax and Import Tax No. 107/2016/QH13 on Taxable Objects stipulates: "Goods exported and imported through border gates and Vietnamese borders".

- Pursuant to Clause 6, Article 16 of the Law on Export Tax and Import Tax No. 107/2016/QH13 on Tax Exemption stipulates: "Raw materials, supplies and components imported for processing export products; finished products imported to attach to processed products for export;

Export processed products produced from domestic raw materials and supplies with export tax are not exempt from tax on the corresponding value of domestic raw materials and supplies constituting the exported product."

- Pursuant to Point g, Clause 1, Article 10 of Decree No. 134/2016/ND-CP dated September 1, 2016, amended and supplemented in Clause 4, Article 1 of Decree No. 18/2021/ND-CP dated March 11 /2021 regulations: “1. Goods imported for processing and processed products exported under processing contracts are exempt from export tax and import tax according to the provisions of Clause 6, Article 16 of the Law on Export Tax and Import Tax, including:

1. g) Processed products exported abroad or exported to non-tariff zones, on-site exported to organizations and individuals in Vietnam as designated by the ordering party.

Processed products for export are exempt from export tax according to the provisions of this Point if the product is processed from all imported goods. In case export processed products are produced from domestic raw materials and supplies with export tax, when exported, tax must be paid on the value of domestic raw materials and supplies constituting the exported product according to the law. Tax rates of raw materials and supplies. ”

Based on the above regulations, domestic raw materials and supplies that do not constitute exported processed products are not subject to export tax according to the provisions at Point g, Clause 1, Article 10 of Decree No. 134/2016/ND-CP dated September 1, 2016, amended and supplemented in Clause 4, Article 1 of Decree No. 18/2021/ND-CP dated March 11, 2021.”

3. Conclusion

Above is an article clarifying tax policy when using domestic raw materials and supplies to produce processed and exported products. In addition, to update good articles about import and export or ship freight rates; train schedule. Customers can follow the fanpage to be updated with the latest articles.

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