Resolve problems related to tax procedures and policies for businesses

Quang Binh Customs Department officials inspect import-export goods. Photo: M.H

Procedures for goods containing Formic Acid precursors

According to the feedback of enterprises regarding goods containing Formic Acid precursors (specifically: animal feed, aquatic feed, etc.), do they need to apply for a license when importing and exporting? If so, which management agency is responsible for granting licenses for the above-mentioned goods?

Regarding this issue, the General Department of Customs said that on August 31, 2024, the Government Office issued Official Dispatch No. 6254/VPCP-KGVX notifying the Deputy Prime Minister's opinion on granting import-export licenses and managing products containing Formic Acid precursors.

Specifically: "The Ministry of Industry and Trade, according to its functions, tasks and authority, shall grant import-export licenses and take measures to manage products containing Formic Acid precursors in accordance with the provisions of the Law on Drug Prevention and Control, Decree 105/2021/ND-CP of the Government and relevant legal documents. The Ministry of Agriculture and Rural Development shall take the lead in urgently reviewing and promptly recommending to competent authorities appropriate management measures for drug precursors used in animal feed, aquatic feed and other agricultural products”.

Therefore, the Customs authority will handle customs clearance procedures for goods based on import-export licenses issued by specialized ministries as prescribed.

Reasonable tax policy for enterprises

Many enterprises said that there are currently issues related to unequal regulations between export production and export processing forms; regulations on on-site import and export for foreign traders with and without presence in Vietnam. Therefore, enterprises request to respond to the proposal to abolish on-site import tax and VAT for export production goods as prescribed for export processing goods stated in Decree 18/2021/ND-CP of the Government.

The General Department of Customs said that regarding the proposal to abolish on-site import tax and VAT on exported manufactured goods as prescribed for exported processed goods, on October 10, 2023, the Ministry of Finance issued Official Dispatch No. 10961/BTC-TCHQ reporting to the Prime Minister on the results of the assessment and summary of the implementation of regulations on imported and exported goods, proposing a plan to amend and supplement the provisions in Clause 1, Article 35 of Decree 08/2015/ND-CP and Official Dispatch No. 12241/BTC-TCHQ dated November 9, 2023 to seek comments from the Ministry of Justice, the Ministry of Industry and Trade and the Ministry of Planning and Investment.

Basing on the comments of the ministries, the Ministry of Finance has compiled, accepted and explained the comments and completed the Impact Assessment Report proposing the abolition of the regulations on on-spot import and export in Article 35 of Decree 08/2015/ND-CP (abolishing Point c, Clause 1, Article 35 regulating on on-spot import and export for goods traded between Vietnamese enterprises and foreign organizations and individuals without a presence in Vietnam and designated by foreign traders to deliver and receive goods with other enterprises in Vietnam, including goods of the export production type) to submit to the Government in the coming time.

Thus, in the case of abolishing the regulations at Point c, Clause 1, Article 35 of Decree 08/2015/ND-CP, there will be no on-spot import and export activities for the export production type, no import tax obligations will arise, and the VAT policy will be applied as for transactions between domestic enterprises.

Also related to the corporate tax policy, in case the trader has a presence in Vietnam, the goods traded between Vietnamese enterprises and foreign traders are not subject to on-site import and export procedures, the goods can only be traded directly between Vietnamese enterprises. Will on-site import and export declarations that do not meet the conditions specified in Point c, Clause 1, Article 35 of Decree 08/2015/ND-CP be considered for on-site import tax refund?

To solve this problem, according to the General Department of Customs, the tax policy for on-site import and export goods has been stipulated in the Law on Export Tax and Import Tax; Decree 134/2016/ND-CP and Decree 18/2021/ND-CP. Specifically: according to the provisions of the Law on Export Tax and Import Tax, on-site import and export goods and import and export goods of enterprises exercising import and export rights and distribution rights are subject to tax. In case an enterprise opens an on-site import and export declaration, it must declare and pay tax according to regulations (if any); Decree 18/2021/ND-CP stipulates the tax exemption and refund policy for on-site import and export goods originating from processed and manufactured goods for export.

Thus, in essence, locally imported goods (originating from processed goods and export production) that have been put into product processing and these products have actually been exported abroad are exempt from import tax. Local imported goods (originating from processed goods and export production) that have been put into product manufacturing and these products have actually been exported abroad are entitled to a refund of the paid export tax.

In cases where on-spot imported and exported declarations do not comply with the provisions in Point c, Clause 1, Article 35 of Decree 08/2015/ND-CP, the Customs authority must review the tax policy applied to locally imported and exported declarations that do not comply with these provisions. Currently, the law on import and export tax does not have any provisions to handle declarations that do not ensure legal value because they do not comply with the provisions of the law. Therefore, the General Department of Customs believes that this problem needs to be synthesized and opinions from relevant units inside and outside the Finance sector should be sought to report to competent authorities for consideration and handling.