Revision of Decree 134/2016 / ND-CP: Amending the regulations on establishments to determine duty-free goods for processed goods
Customs operations at Yen Phong Customs Branch, under the Bac Ninh Customs Department. Photo: T.Trang. |
Many different understandings
Regarding analysis of difficulties in the implementation of Clause 2 and Clause 4 of Article 10 of Decree 134/2016 / ND-CP, the drafting Committee said that the content stipulated in Point b Paragraph 2 Article 10 did not specify the taxpayers, the processing-receiving organization or individual, thus leading to problems arising in the implementation thereof. Specifically, the case of processing inland does not arise Customs procedures (guided in Article 62 of Circular 38/2015 / TT-BTC except for export processing enterprises).
According to the provisions of Article 60 of the Customs Law and Article 37 of Decree No. 08/2015 / ND-CP, in case of re-processing, the Customs declarants must inform the production establishments (No. 12 / TB-CSSX / GSQL stipulates Circular No. 38/2015 / TT-BTC). The above provisions are not consistent with the current regulations on Customs management. Moreover, the notification of the processing contract has resulted in the procedures for receiving the processing contract (signed between the processing enterprises for foreign traders and the domestic enterprises for re-processing).
In addition, Point e, Clause 1 of Article 10 states that "goods imported for processing which are allowed to be destroyed in Vietnam shall be entitled to tax exemption". However, Point c Clause 2 of Article 10 states the basis for determination of duty-free goods is "raw materials, supplies and components imported for processing and production of exported products." Therefore, it is suggested that the imported goods should not be used for processing products so they are not eligible for tax exemption.
All the contents specified in Clause 2 of Article 10 shall serve as basis for the Customs declarants to make settlement with the Customs offices. The import tax exemption for import goods for processing according to the provisions of Clause 6, Article 16 of Tax Law No. 107/2016 / QH13 shall take effect right at the time of carrying out Customs procedures, but the title of Clause 2 and Article 10 are not clear for inspections.
Particularly for the 3% tax exemption in Clause 4, Article 10 of Decree 134, the Customs office assesses the implementation of 3% of problems arising from different understandings: Import tax of 3% applies only to surplus raw materials and supplies imported for processing, or is import tax exemption at the rate of 3% applicable to both discarded materials, faulty products and imported raw materials?
Moreover, according to the comments of the enterprises, when processing contracts are settled, the ratio of 3% of raw materials and materials is exempted from tax, despite the fact that the proportion of raw materials surplus is not up to 3%. The surplus raw materials will be exempted from import tax for domestic consumption, although the VAT is payable.
Revision for policy transparency
Therefore, in order to clarify the policy and facilitate the management of the type of processing by the customs office and to overcome the fraudulent situation at a rate of 3%, the Board of Executives proposed amendments and supplements to a number of provisions of Clause 2 and Clause 4, Article 10 of Decree No. 134/2016 / ND-CP.
Specifically, the title of Clause 2, Article 10 is amended and supplemented as follows: "2. The basis for determination of duty-free goods when finalizing the processing contract with the Customs office".
Point b, Clause 2, Article 10 is amended and supplemented as follows: "b / Taxpayers or organizations and individuals that process goods for taxpayers having establishments processing or producing export goods in the Vietnamese territory and issue notices on processing, production or processing contracts to the Customs offices according to the provisions of Customs legislation".
Point c, Clause 2 of Article 10 is amended and supplemented as follows: "c) Raw materials, supplies and components are imported for the performance of export processing contracts".
The value or quantity of raw materials, supplies and components eligible for tax exemption is the value or quantity of raw materials, supplies and components used in the actual production of processed products to settle the management and use of imported raw materials and supplies for processing of export products according to the provisions of Customs legislation.
The value or amount of raw materials, supplies and components imported for non-export processed products are subject to import tax at the rates of raw materials and imported components.
Raw materials, supplies and spare parts must be declared and paid according to regulations when they are sold domestically. Customs declarants shall register new Customs declarations at the time of change of use purposes, declare and calculate import tax at the import tax rates of raw materials, supplies, components and dutiable values at the time of change of use purposes according to the provisions of the Customs legislation.
How to manage enterprises that own many duty free shops? VCN – This is one of practical problems at Hai Phong Customs Department when implementing Decree 167/2016/NĐ-CP ... |
These amendments are based on the recommendations of the General Department of Vietnam Customs which have been consulted by the Customs departments of provinces and cities.
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