Is a company manufacturing exported plastic bags subject to environmental protection tax in Vietnam?

Are exported plastic bags considered plastic bags in Vietnam?

Based on Clause 4, Article 1 of Circular 152/2011/TT-BTC (amended and supplemented at Article 1 of Circular 159/2012/TT-BTC) it is stipulated as follows:

Taxable Objects

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4. Plastic bags subject to taxation (referred to as plastic bags) are the type of thin plastic bags or packaging that have a bag shape (with an opening, a base, and sides capable of containing products within) made from HDPE (high-density polyethylene resin), LDPE (low-density polyethylene), or LLDPE (linear low-density polyethylene resin) films, excluding packaging for pre-packed goods and plastic bags that meet environmentally friendly criteria from the date of receiving an Environmental Friendly Plastic Bag Certification issued by a competent authority as per the regulations of the Ministry of Natural Resources and Environment.

Pre-packed goods packaging (whether in the shape of a bag or not) in this clause is specified as follows:

a) Pre-packed goods packaging includes:

a1) Imported pre-packed goods packaging.

a2) Packaging produced or imported by organizations, households, or individuals for packaging products manufactured, processed, or purchased for repackaging or offering packaging services by those organizations, households, or individuals.

Example 1: If Company A produces or imports 100 kg of packaging (plastic bags) to package shoes (whether manufactured, processed, or bought by Company A to be packaged or offered packaging services), the above 100 kg of packaging will not be subject to environmental protection tax.

If a producer or importer has initially declared or committed at the time of importation that the packaging would be used for packaging but later uses it for exchange, internal consumption, or gifting, the producer or importer must declare and pay environmental protection tax and will be subject to penalties as per tax management laws.

Example 2: Company A produces or imports 100 kg of packaging (plastic bags), has committed at the import phase that it will be for shoe packaging (products manufactured, processed, or purchased by Company A for packaging or packaging services). If only 20 kg of the packaging is used for shoe packaging and 30 kg for exchange, 40 kg for internal consumption, and 10 kg for gifting, Company A must declare and pay environmental protection tax on the 80 kg used for exchange, internal consumption, and gifting and will be subject to penalties as per tax management laws.

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Therefore, according to the regulations, exported plastic bags (Plastic Bags) are indeed considered plastic bags under legal provisions.

Is a company manufacturing exported plastic bags subject to environmental protection tax in Vietnam? (Image from the Internet)

Is a company manufacturing exported plastic bags subject to environmental protection tax in Vietnam?

Based on Article 3 of the Law on Environmental Protection Tax 2010, it stipulates as follows:

Taxable Objects

1. Petrol, oil, and lubricants, including:

a) Petrol, excluding ethanol;

b) Jet fuel;

c) Diesel oil;

d) Kerosene;

đ) Mazut oil;

e) Lubricants;

g) Grease.

2. Coal, including:

a) Lignite;

b) Anthracite coal;

c) Fat coal;

d) Other types of coal.

3. Hydro-chloro-fluoro-carbon (HCFC) solution.

4. Plastic bags subject to taxation.

5. Herbicides restricted in usage.

6. Termite pesticides restricted in usage.

7. Forest product preservatives restricted in usage.

8. Warehouse disinfectant restricted in usage.

9. In cases deemed necessary to supplement other taxable objects suitable for each period, the Standing Committee of the National Assembly shall consider and provide regulations.

The Government of Vietnam details this Article.

Additionally, based on point c, clause 2, Article 4 of the Law on Environmental Protection Tax 2010, it is stipulated as follows:

Non-taxable Objects

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c)** Goods directly exported by producers or consigned to exporting business establishments for export, except for cases where organizations, households, or individuals purchase goods subject to environmental protection tax for export.

Simultaneously, clause 1, Article 5 of the Law on Environmental Protection Tax 2010 stipulates as follows:

Taxpayers

1. Environmental protection taxpayers are organizations, households, and individuals producing and importing goods subject to taxation as specified in Article 3 of this Law.

Therefore, according to the above regulations, a company manufacturing plastic bags for export will not be subject to environmental protection tax.

When is the tax calculation time for a company producing plastic bags for export in Vietnam?

Pursuant to the provisions of Article 8 of the Law on Export and Import Tax 2016 on tax valuation and calculation time, it is stipulated as follows:

Tax Valuation and Calculation Time

1. The export and import tax valuation is the customs value as prescribed by the Customs Law.

2. The tax calculation time for export and import tax is the time of registration of the customs declaration.

For goods that are exported or imported and are exempt from tax, or entitled to preferential tax rates or absolute tax quotas but later shifted to non-tax-exempt status or other changes, the tax calculation time is the time of registration of the new customs declaration.

The time of registration of the customs declaration is performed as per customs law.

Therefore, the tax calculation time for a company producing plastic bags for export is the time of registration of the customs declaration.