Which goods exported for processing and processed imports are subject to import and export duty exemption in Vietnam?

Which goods exported for processing and processed imports are subject to import and export duty exemption in Vietnam?

Under Clause 1, Article 11 of Decree 134/2016/ND-CP, as amended by Clause 5, Article 1 of Decree 18/2021/ND-CP, goods exported for processing and processed imports under processing contracts exempt from export and import duties comprise:

- Raw materials, supplies and components for export.

Export duties shall be charged on the value or quantity of raw materials, supplies and components corresponding to the quantity of processed products that are not re-imported at the duty rates applied to such raw materials, supplies and components.

Where goods exported for processing are natural resources, minerals or products in which the value of natural resources or minerals plus (+) energy cost makes up at least 51% of the product price and the goods are subject to export duties (except scraps produced during the manufacture or processing of the imports for export), duty exemption shall not be granted.

Products in which the value of natural resources or minerals plus (+) energy cost makes up less than 51% of the product price shall be determined in accordance with Decree 100/2016/ND-CP and Decree 146/2017/ND-CP.

- Goods exported as samples that are not traded or used;

- Machinery and equipment exported for processing under a processing contract;

- When products that are processed overseas are imported into Vietnam, import duties on the value of raw materials, supplies and components incorporated into the processed products shall be exempt; the remaining value of the products shall be dutiable at the import duty rates applied to processed imports.

Which goods exported for processing and processed imports are subject to import and export duty exemption in Vietnam? (Image from Internet)

What is the basis for the determination of eligibility for exemption of duties on goods exported for processing and processed imports in Vietnam?

Under Clause 2, Article 11 of Decree 134/2016/ND-CP, as amended by Point b, Clause 20, Article 1 of Decree 18/2021/ND-CP, the basis for the determination of eligibility for exemption of duties on goods exported for processing and processed imports in Vietnam is as follows:

- The taxpayer has a processing contract in accordance with the provisions of Decree 187/2013/ND-CP.

- Exported raw materials, supplies and components are used for processing or manufacture of the imported products.

The value or quantity of raw materials, supplies and components exempt from duty is the actual value or quantity of raw materials, supplies and components used for manufacture of the processed products that are imported in reality and is determined when making a statement of raw materials, supplies and components imported for processing imports in accordance with customs laws.

The taxpayer shall truthfully declare the value or quantity of raw materials, supplies and components that are used for manufacture of the processed products that are imported in reality and is granted duty exemption while following customs procedures.

Which goods imported for further processing and processed exports under processing contracts are subject to import and export duty exemption in Vietnam?

Under Clause 1, Article 10 of Decree 134/2016/ND-CP, as amended by Clause 4, Article 1 of Decree 18/2021/ND-CP, goods imported for further processing and processed exports under processing contracts that are exempt from export and import duties include:

- Raw materials, semi-finished products, supplies (including those for manufacture of packages of exports), imported components that are incorporated into the exports or used during the processing of exports not incorporated into the exports, including those imported by the processor to execute the processing contract;

- Goods imported as samples that are not traded or used;

- Machinery and equipment imported for processing under a processing contract;

- Imported finished products that are attached on processed products or packed with processed products as a whole for export according to the processing contract or appendices thereof and are considered raw materials or supplies imported for processing;

- Components and parts imported for repair of processed exports under warranty according to the processing contract or appendices thereof and are considered raw materials or supplies imported for processing;

- Goods imported for further processing but are permitted to be destroyed in Vietnam and have been destroyed in reality.

Goods imported for further processing and used as gifts shall be exempt from duties in accordance with Article 8 of Decree 134/2016/ND-CP.

When the processing contract expires, it is not required to re-export goods imported for processing. Imported goods that are not re-exported shall be dutiable;

- Processed products that are exported to a foreign country, a free trade zone or an organization or individual in Vietnam as requested by the hirer.

Processed exports are exempt from export duties as prescribed by this Point if they are entirely processed from imported goods. In case processed exports are made of dutiable domestic raw materials or supplies, export duties on the value of raw materials or supplies incorporated into the products at the duty rates applied to such raw materials or supplies shall be paid when the products are exported.