VAT not levied on damaged rental or borrowed goods that have been destroyed

By Nu Bui/ Huyen Trang

17:27 | 04/05/2022 Regulations Follow english.haiquanonline.com.vn on

VCN - According to the General Department of Customs, in the process of using leased or borrowed goods, if the goods are damaged and ineligible for re-export, required for destruction, and went through the destruction procedures according to regulations, domestic enterprises will not be required to declare and pay value-added tax (VAT).

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The provisions in Clause 20, Article 5 of the Law on VAT 13/2008/QH12 clearly state: “goods temporarily imported for re-export; goods temporarily exported or re-import” are not subject to VAT.

Production of high-tech products at the enterprise. Photo: H.Nu

Accordingly, goods leased or borrowed by domestic enterprises from export processing enterprises and declared to customs under the form of temporary import are not subject to value-added tax.

However, if the lease time has expired, but the domestic enterprise continues to use and fails to re-export the goods, the domestic enterprise must declare and pay VAT and import tax in the new customs declaration as prescribed in Clause 12, Article 1 of Decree 59/2018 dated April 20, 2018 of the Government.

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However, if in the process of using leased or borrowed goods, they are damaged and ineligible for re-export, required for destruction, and went through the destruction procedures, domestic enterprises will not be required to declare and pay VAT for the goods.

By Nu Bui/ Huyen Trang

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