Filing and paying taxes on goods processed by export processing enterprises for domestic enterprises

(TCT online) – General Department of Customs received the official letter no BHF20220120 dated 20th January 2022 of BHFLEX VINA Limited Company asking about filing and paying taxes on goods processed by export processing enterprises for domestic enterprises. Regarding the issue, on 23rd March 2022 General Department of Customs issued the official letter no 966/TCHQ-TXNK guiding as follow:

1. Regarding the applicable customs procedure

In case where the BHFLEX VINA Limited Company is a domestic enterprise with 100% foreign capital hires an export processing enterprise to process goods, then the Company must perform the customs procedure applicable to case of export of materials/supplies serving outward processing as provided for in Article 67 of Circular no 38/2015/TT-BTC which was supplemented\, amended by Clause 44, Article 1 of Circular no 39/2018/TT-BTC.

2. Regarding filing, paying taxes upon importing goods to be re-imported to the territory

In case where a domestic enterprise had imported goods to manufacture, process goods to export; and later than delivered the imported goods, semi-products manufactured from the whole imported goods to export processing enterprises for purposes of manufacturing, processing under the hiring contract, then upon re-importing manufactured/processed goods to the territory the enterprise must file and pay import duty imposed on processed products upon importing to domestic market in accordance with provisions as provided for in clause 2, Article 22 of the Decree no 134/2016/NĐ-CP of Government.

The customs value used to calculate the import duty shall include the costs for processing, the value of raw materials provided by the export processing enterprises to use in processing process and adjusting items (if any) in accordance with provisions as provided for in clause 3, Article 17 of the Circular no 39/2015/TT-BTC. The value of supplies, materials of the domestic enterprise to use in processing process at the export processing enterprises shall not be calculated in the tax calculation value of the processed products.

(General Department of Customs already issued the official letter no 3634/TCHQ-TXNK dated 19th July 2021 guiding filing and paying taxes on goods processed by export processing enterprises under the order from domestic enterprises (attached)).