Leased or lent goods in the form of temporary import for re-export are not subject to VAT in Vietnam

Bao Ngoc

08:59, 25/04/2022

On April 21, 2022, the General Department of Customs of Vietnam issued Dispatch 1400/TCHQ-TXNK on taxes on leased or lent goods from export processing enterprises.

According to the Official Dispatch in Vietnam, regarding VAT on leased or lent goods in the form of temporary import for re-export, the General Department of Customs of Vietnam has the following comments:

-Pursuant to Clause 20, Article 5 of Vietnam's Law on Value-Added Tax 2008, it is stipulated that "... goods temporarily imported for re-export; goods temporarily exported for re-import..." are not subject to VAT.

Thus, for leased or lent goods of domestic enterprises from export processing enterprises or Vietnam's enterprises that have registered to declare under the form of temporary import, they are not subject to VAT.

- Upon the end of the lease or lending period, if the domestic enterprise fails to re-export such leased or lent goods, it shall, immediately after ending the lease or lending period, declare and pay VAT and import duty on a new customs declaration as prescribed in Clause 12 Article 1 of Decree No. 59/2018/ND-CP.

- In case of the leased or lent goods which are damaged while being used and for which destruction procedures have been carried out in accordance with regulations of law, the domestic enterprise is not required to declare and pay VAT on these goods.

See more at Official Dispatch 1400/TCHQ-TXNK dated April 21, 2022, Vietnam

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