Many obstacles on tax are revised in Circular 38/2015 / TT-BTC

	20th March 2017: Online exchange on amendment and supplementation of Circular 38/2015 / TT-BTC
	Consultation on the draft Circular amending and supplementing Circular 38/2015 / TT-BTC

Operational activity at the North Ha Noi Customs Branch. Photo: Ngoc Linh

Avoid double taxation

Regarding the questions in tax calculation for products processed abroad when being imported back to Vietnam, Decree 134/2016/ND-CP of the Government does not clearly stipulate whether the amount of export tax paid when exporting raw materials, supplies and components are subtracted from the value of import duty or not. Ensuring to avoid double taxation, the drafting committee is expected to stipulate that: When importing exported processed products, taxpayers shall pay tax at the import tax rate of the product. The taxable value shall be subtracted from the value of domestic raw materials, supplies and components, including the previously paid export duty amount.

Regarding Export duty on goods produced from imported raw materials and supplies, the draft Circular on amending and supplementing Circular 38/2015/TT-BTC will clearly stipulate to avoid problems in actual implementation. Currently, Article 16 of the Law on Export and Import Duty stipulates that imported raw materials for export production are exempted from Import duty and that there is no tax exemption for exported products made from 100% of imported raw materials. Thus, export goods produced from imported raw materials are equal to each other. When exporting products made from imported materials and supplies, taxpayers shall pay the same Export duty as for export goods made from domestic raw materials. This regulation aims to encourage the export of products made from domestic raw materials and supplies.

To specify this content, the draft Circular stipulates in the following direction: When exporting products made from whole or part of imported raw materials and supplies, taxpayers must declare and pay same Export duty as that of export goods.

The tax calculation method for export processed goods is also revised in the draft Circular amending and supplementing Circular 38/2015/ TT-BTC. Currently, Circular 38/2015/TT-BTC does not regulate the tax calculation for exported goods for overseas processing. Last time, the General Department of Vietnam Customs has some guidelines for implementation. To answer the questions and provide a legal basis for implementation, the drafting committee will submit four clear cases to the Ministry of Finance. Specifically: the case of exporting processed products which use domestic raw materials and supplies subject to Export duty, when exporting products taxpayers must declare Export duty on the value of domestic raw materials and supplies constituting exported products in accordance with Export duty of such raw materials and supplies.

Feedback of enterprises on amendment and supplementation of Circular 38 is received and solved VCN- The seminar was attended by representatives of nearly 100 enterprises and associations in many fields in ...

For exported goods for processing, the detailed names and code of the goods are stipulated at the level of 08 digits or 10 digits, the Customs declares must declare and pay Export duty at the prescribed Export duty rate defined in the export tariffs issued together with the Government's Decree No. 122/2016 / ND-CP.

For exported goods for processing which are not specified in the export tariff, and have the total value of natural resources and minerals plus energy costs accounting for less than 51% of product cost, taxpayers shall declare themselves and be responsible for identifying export goods with a total value of natural resources and minerals plus energy costs accounting for less than 51% of product cost before carrying out Customs procedures as a basis for defining conditions for tax exemption.

For cases where exported goods for processing are not on the list of commodities subject to export tax but have a total value of natural resources and minerals plus energy costs equal to 51% of product cost or more, taxpayers shall prescribe full name, quantity, value, the export duty rate of 5%.

Dealing with tax deduction from natural disasters and fire

This issue is expected to be specifically stipulated in the direction of "export and import goods under inspection by Customs as stipulated in Clause 1, Article 32 of Decree No. 134/2016/ND-CP, including raw materials, supplies, components, machinery and equipments imported under processing contracts; if raw materials, supplies and components imported for export production are damaged or lost due to objective reasons, they shall be entitled to deduction of Import duty corresponding to the loss ratio ".

In addition to the above content, many other questions related to Tax are also guided in the revised draft Circular 38/2015/TT-BTC such as: questions about average imposed tax; questions about whether the paid export duty for exported products manufactured and processed from imported raw materials, supplies and components subject to import duty, shall be refunded or not; questions about the payment of imposed tax; issues regarding the tax policy for the non-refundable aid project of Vietnam to Laos; tax exemption for imported goods to create fixed assets subject to the investment incentives; adding sanctions in cases taxpayers fail to pay in full and on time the payable customs charge and fee amounts.