VCN- In response to Ha Phong Garment Export Joint Stock Company for tax treatment of surplus raw materials and auxiliary materials upon settlement of processing contract, the General Department of Vietnam Customs said that surplus residues and waste products when consuming domestically are exempt from import duties but they must be declared and paid for VAT, special consumption tax and environmental protection tax (if any) to the Customs office.
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|Customs operations at the Thai Nguyen Customs Branch. Photo: T. Trang.|
As for current regulations on tax policy for imported raw materials, supplies and components for processing export products, the General Department of Vietnam Customs said that under Clause 6, Article 16 of the Law on Export-Import Duties 107/2016 / QH13: "Imported raw materials, supplies, components for processing export products, finished products imported for attachment to processed products and products processed for export" are exempt from import duties.
Clause 4, Article 10 of Government’s Decree No. 134/2016 / ND-CP of 1st September 2016 stipulated: "Excess scraps, faulty materials, and materials for processing are not more than 3% of the weight of each raw material under the processing contract, they shall be exempt from import duties in domestic market, but they must be declared and paid value added tax and consumption tax, especially the environmental protection tax (if any) to the Customs".
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Accordingly, the company should base on the regulations as mentioned above to apply appropriate tax policy. In the case of any problems, the company is requested to contact the Customs Department where it conducted the import and export procedures for specific guidance.
By Hai Nam/ Hoang Anh