Importing returned exported goods: Is value-added tax required?

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Your company exported handicrafts overseas, but 200 batches were returned due to defects arising during transportation. Do you need to pay value-added tax when importing the returned goods? If you later resell those goods domestically, what are the tax implications?

Pursuant to the provisions at Point g, Clause 7, Article 5 of Circular 219/2013/TT-BTC, supplemented by Clause 1, Article 3 of Circular 119/2014/TT-BTC, it states:

"Enterprises do not have to pay VAT on imported goods in cases where the exported goods are returned by the foreign party. When the enterprise sells the returned goods domestically, it must declare and pay VAT as per regulations."

According to the information you provided, your company exported handicrafts to a foreign country and they were returned. In reference to the above regulation, your company is not required to declare or pay value-added tax when re-importing the returned shipments into Vietnam.

Note: If your company circulates the re-imported goods in the domestic market, the declaration and payment of value-added tax must still be performed according to regulations.

Sincerely!

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