What do Customs Documents for domestic enterprises renting or borrowing equipment, machinery and moulds or models from export processing enterprises in Vietnam comprise?
Please ask: What do Customs Documents for domestic enterprises renting or borrowing equipment, machinery and moulds or models from export processing enterprises in Vietnam comprise?- Question from Thanh Hien (Binh Duong).
What do Customs Documents for domestic enterprises renting or borrowing equipment, machinery and moulds or models from export processing enterprises in Vietnam comprise?
According to Official Letter 300/TCHQ-GSQL in 2023 on export processing enterprises leasing or borrowing machinery, equipment and moulds or models issued by the General Department of Customs, the instructions are as follows:
The General Department of Customs provides guidance on customs procedures and tax policies applicable to EPE activities for domestic enterprises to rent or borrow machinery, equipment and moulds or models as follows:
1. In case an EPE leases or lends machinery, equipment and moulds or models to a domestic enterprise to serve the export processing activities of the EPE in accordance with the objectives stated in the Investment Registration Certificate or written certification of a competent investment registration agency (in case the issuance of an Investment Registration Certificate is not required):
1.1. About customs procedures
EPEs carry out procedures for temporary export, domestic enterprises carry out procedures for temporary import; After the lease or loan contract is terminated, the domestic enterprise shall carry out re-export procedures, and the export processing enterprise shall carry out procedures for re-importing the leased or borrowed goods.
Pursuant to Clause 1, Article 50 of Decree 08/2015/ND-CP as amended by Clause 23, Article 1 of Decree 59/2018/ND-CP stipulating customs dossiers for temporarily imported equipment, machinery and moulds or models - re-export as follows:
1. Customs Documents for temporary importation - re-exportation of equipment, machinery, heavy equipment, means of transportation, moulds or models.
a. A customs declaration issued by the Ministry of Finance.
b. Transportation document, if cargos are conveyed by means of sea, air or rail transport: 01 copy.
c. Import permit; a written announcement of the result of specialized inspection according to the relevant laws: 01 original.
According to this Article in Vietnam, customs dossiers for domestic enterprises renting or borrowing equipment, machinery and moulds or models from export processing enterprises include:
+) The customs declaration according to the form;
+) Transport documents in case goods are transported by sea, air or railway;
+) Import license, written notification of specialized inspection results in accordance with relevant laws.
What are Customs Documents for export processing enterprises that lease or lend equipment, machinery and moulds or models to domestic enterprises in Vietnam?
According to Official Letter 300/TCHQ-GSQL in 2023 on export processing enterprises leasing or borrowing machinery, equipment and moulds or models issued by the General Department of Customs, the instructions are as follows:
The General Department of Customs provides guidance on customs procedures and tax policies applicable to EPE activities for domestic enterprises to rent or borrow machinery, equipment and moulds or models as follows:
1. In case an EPE leases or lends machinery, equipment and moulds or models to a domestic enterprise to serve the export processing activities of the EPE in accordance with the objectives stated in the Investment Registration Certificate or written certification of a competent investment registration agency (in case the issuance of an Investment Registration Certificate is not required):
1.1. About customs procedures
EPEs carry out procedures for temporary export, domestic enterprises carry out procedures for temporary import; After the lease or loan contract is terminated, the domestic enterprise shall carry out re-export procedures, and the export processing enterprise shall carry out procedures for re-importing the leased or borrowed goods.
Pursuant to Clause 2, Article 50 of Decree 08/2015/ND-CP as amended by Clause 23, Article 1 of Decree 59/2018/ND-CP stipulating customs dossiers for temporary exportation - re-exportation of equipment, machinery, heavy equipment, means of transportation, moulds or models as follows:
2. Customs Documents regarding the temporary exportation - re-exportation of equipment, machinery, heavy equipment, means of transportation, moulds or models:
a. A customs declaration issued by the Ministry of Finance
b. Export permit, a written announcement of the result of specialized inspection according to the relevant laws: 01 original.
Based on the above provisions in Vietnam, a customs document for an export processing enterprise that leases or lends equipment, machinery and moulds or models to domestic enterprises includes:
+) The customs declaration according to the form;
+) Export license, written notification of specialized inspection results in accordance with relevant laws.
Are domestic enterprises renting or borrowing machinery, equipment and moulds or models from export processing enterprises subject to VAT in Vietnam?
Pursuant to Clause 20, Article 5 of the Law on Value-Added Tax 2008, stipulates that objects are not subject to VAT as follows:
20. Goods transferred out of border gate or transited via the Vietnamese territory; goods temporarily imported for re-export; goods temporarily exported for re-import; raw materials imported for the production or processing of goods for export under contracts signed with foreign parties; goods and services traded between foreign countries and non-tariff areas and between non-tariff areas.
In Official Letter 300/TCHQ-GSQL in 2023 on export processing enterprises leasing or borrowing machinery, equipment and moulds or models issued by the General Department of Customs, the instructions are as follows:
1.2. About tax policy
b) Regarding VAT
Domestic enterprises that hire or borrow to register customs declarations in the form of temporary import for re-export are not required to pay VAT because goods temporarily imported for re-export are not subject to VAT. In case the lease or loan term has expired but the domestic enterprise continues to use it or does not re-export, the domestic enterprise must carry out procedures for changing the purpose of use and declare and pay VAT together with import tax on the new customs declaration as prescribed in Clause 12, Article 1 of Decree No. 59/2018/ND-CP dated April 20, 2018 of the Government.
In the process of using leased or borrowed goods, which are damaged and cannot be re-exported, must be destroyed, and have undergone destruction procedures as prescribed by law, domestic enterprises are not required to declare pay VAT on these rented or borrowed goods.
Thus, domestic enterprises that hire or borrow machinery, equipment and moulds or models from export processing enterprises that register customs declarations in the form of temporary import for re-export are not required to pay VAT on goods temporarily imported for re-export or exports are not subject to VAT in Vietnam.
Do domestic enterprises have to declare and pay import tax when renting or borrowing machinery, equipment, and moulds or models from export processing enterprises in Vietnam?
In Official Letter 300/TCHQ-GSQL in 2023 on export processing enterprises leasing or borrowing machinery, equipment and moulds or models issued by the General Department of Customs, the instructions are as follows:
1.2. About tax policy
a) About import tax
Domestic enterprises must declare and pay import tax when carrying out temporary import procedures and are not entitled to a refund of paid import tax when carrying out re -export procedures. Import tax calculation value for leased or borrowed goods complies with the provisions of Clause 9 Article 1 of Circular 60/2019/TT-BTC of the Ministry of Finance.
In case a domestic enterprise imports machinery and equipment as agreed in the processing contract to perform the processing contract, the domestic enterprise is exempt from import tax as prescribed at Point c, Clause 1, Article 10 of Decree No. 134/2016/ND-CP dated September 1, 2016 of the Government.
According to this Article in Vietnam, domestic enterprises must declare and pay import tax when renting or borrowing machinery, equipment, and moulds or models from export processing enterprises when carrying out procedures for temporary import and are not entitled to a refund of the paid import tax upon implementation. carry out re-export procedures.
Best Regards!
