1. What is the tax refund for imported goods used in export production?
The current legal framework allows a tax refund for goods imported for production and business activities but later used in the production of export goods, provided the final products are exported either abroad or into non-tariff zones.
(According to Clause 1, Article 36 of Decree No. 134/2016/ND-CP)
2. Which imported goods are eligible for an import tax refund?
The term “goods” has a broad meaning. To clarify, imported goods eligible for a tax refund when used for export production include:
- Raw materials, supplies (including packaging materials or packaging used for export product packing), components, and semi-finished products that directly constitute the export product.
- Raw materials and supplies that are directly involved in the production process of the export goods but do not physically transform into the goods themselves.
- Complete products imported to be assembled or incorporated into the export product or packed as a part of a synchronized product set with the export goods.
- Components and spare parts imported for the purpose of providing warranty services for the export products.
(According to Clause 2, Article 36 of Decree No. 134/2016/ND-CP)
3. Criteria for determining goods eligible for tax refund
- Export production facility: The enterprise must have a production facility located in Vietnam and possess ownership or usage rights over machinery and equipment suitable for processing the imported raw materials.
- Scope of the tax refund: The value or quantity of the imported raw materials eligible for a tax refund must correspond to the actual amount used for producing the export goods.
- Customs procedures: The exported goods must undergo customs clearance under the export production category.
- Forms of export: This can be done either through direct export or through entrusted import and export arrangements.
Learn more about tax refund requirements for enterprises: Tax refund for goods imported for production and business but put into export production.
(According to Clause 3, Article 36 of Decree No. 134/2016/ND-CP)
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4. Instructions for preparing the import tax refund dossier:
A complete tax refund dossier includes:
- Official request letter for an export or import tax refund, following the information criteria in Form No. 01, Appendix VIIa of Decree No. 18/2021/ND-CP.
(Download the form: here)
- Payment documents for exported or imported goods, in case payment has been made (one scanned copy).
- Export or import contracts and invoices as per the relevant contracts; entrusted export or import contracts, if the transaction is conducted through entrusted arrangements (one scanned copy).
- Processing contract with a foreign customer (one scanned copy), in cases where the imported materials or components are used to produce goods for further processing under a contract with a foreign partner.
- Documents proving ownership or usage rights over the production facility located within Vietnam, as well as machinery and equipment at the facility compatible with the imported materials, supplies, and components (one scanned copy).
- Processing contract with a foreign customer (one scanned copy), in cases where the imported materials or components are used to produce goods for further processing under a contract with a foreign partner.
- Documents proving ownership or usage rights over the production facility located within Vietnam, as well as machinery and equipment at the facility compatible with the imported materials, supplies, and components (one scanned copy).
After preparing the complete dossier, the applicant must submit it to the Customs Authority where the import or export declaration was registered.
The Customs Authority will review and process the application. If the dossier is valid, a tax refund decision will be issued, granting the refund to the enterprise.
To explore further details about tax refund solutions of customs authorities, please refer to this article of UNI.
5. Notes on declaring information for tax refund
When exporting goods, taxpayers must declare on the export declaration that the products were manufactured using previously imported goods.
- Specifically, in the “Notes” section of the electronic customs declaration or the “Other Remarks” section on a paper customs declaration, the enterprise should include the statement: “The exported product is manufactured from imported goods.”
- Customs declarants are not required to provide a detailed list of import declarations on the export product declaration..
When applying for a tax refund, enterprises must provide detailed information about the imported raw materials for which the refund is requested..
Key information includes: the import declaration, the quantity of raw materials used, the actual usage rate, and other relevant details outlined in Form No. 10 of Appendix VII of Decree No. 18/2021/NĐ-CP.
Enterprises are required to submit supporting documents related to these details so that Customs has a basis for processing the tax refund.
(According to Official Dispatch No. 4855/TCHQ-TXNK dated October 8, 2024)
6. Legal basis
- Decree no. 134/2016/NĐ-CP: governs tax refunds for imported goods used in production and business, but later exported as products.
- Tax Administration Law 2019: specifies the procedures for tax refund applications.
- Circular no. 06/2021/TT-BTC provides guidance on tax refund procedures.
- Official Letter no. 4855/TCHQ-TXNK offers guidance on tax refunds for imported goods used in production and subsequently exported.
7. Conclusion
The tax refund process can be challenging and complex, requiring accurate information declaration and complete documentation for verification. We hope that the above article by UNI Customs Consulting will assist enterprises in navigating these procedures more effectively.