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On October 20, 2021, the General Department of Customs issued Official Letter No. 4948/TCHQ-TXNK to give opinions on tax treatment for imported goods entrusted for export production. As follows:
– For goods imported for production and export:
(i) Raw materials, supplies (including those for the manufacture of packages of exports), components, semi-finished products imported incorporated into the exports or used during the manufacture of exports without being incorporated into the exports.
(ii) Finished products that are imported for packaging, labeling, or attaching to exports or packaging with exports as a whole.
(iii) Components and parts imported for the repair of exports under warranty.
(iv) Goods imported as samples that are not traded or used.
(v) Goods imported for manufacture of domestic exports but are permitted to be destroyed in Vietnam and have been destroyed in reality.
(According to the provisions of Clause 7 Article 16 of the Law on Import Tax and Export Tax No.107/2016/QH13, Article 12 of Decree No.134/2016/ND-CP dated September 1, 2016, as amended and supplemented at Clause 6 Article 1 of Decree No.18/2021/ND-CP)
Organizations and individuals that are eligible for import tax exemption for goods imported for production and export mentioned above but entrust other organizations and individuals (referred to as entrusted organizations or individuals) to import goods for export goods to be supplied to organizations or individuals entrusting the production of export goods, the goods imported by the entrusting organizations or individuals for the production of export goods shall be exempt from import tax provided that the supply of the prices of the goods are under the entrustment contract does not include import tax.
– Entrusting organizations and individuals are responsible for making announcements to production facilities and final settlement reports in accordance with the law.
– The inspection of production facilities shall be carried out by the customs authority for entrusting organizations and individuals.
This Official Letter takes effect from October 20, 2021.