Circular No. 108/2001/TT-BTC guiding accounting for entrusted import and export business activities

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. The subject of this Circular is production and business establishments engaged in entrusted import and export activities under all economic sectors.

2. Production and business establishments engaged in entrusted import and export activities must comply with the invoice and document system for entrusted imported goods according to current regulations of the Ministry of Finance.

3. Economic transactions occurring in foreign currency during the process of entrusted import and export business activities shall be recorded in accounting books and financial reports in Vietnamese Dong at the prevailing exchange rate.

II. GUIDELINES FOR ACCOUNTING OF ENTRUSTED IMPORT BUSINESS ACTIVITIES

A. ACCOUNTING AT THE ENTRUSTING UNIT FOR IMPORTS

1. When prepaying a sum of money for entrusted purchase of goods according to an entrusted import contract to the entrusted import unit to open a Letter of Credit,..., based on relevant documents, record:

Debit Account 331 - Amount Due to Seller (Detailed for each entrusted import unit)

Credit Accounts 111, 112.

2. When receiving entrusted imported goods from the entrusted import unit, based on relevant documents, record:

2.1. Reflecting the value of entrusted imported goods, import tax, VAT on imported goods, or special consumption tax if applicable, based on the delivery invoice from the entrusted import unit and related documents, record:

2.1.1. In case the imported goods are used for producing and trading taxable goods and services under the tax deduction method, the VAT on imported goods will be deductible, record:

a/ If the entrusted import unit pays the taxes on behalf of the entrusting unit to the State Treasury, record:

Debit Accounts 151, 152, 156, 211 (Value of imported goods excluding VAT on imported goods)

Debit Account 133 - Deductible VAT

Credit Account 331 - Amount Due to Seller (Detailed for each entrusted import unit).

b/ If the entrusted import unit processes tax declaration but the entrusting unit pays the taxes directly to the State Treasury, the value of imported goods is recorded as per point a. When paying taxes to the State Treasury, record:

Debit Account 331 - Amount Due to Seller (Detailed for each entrusted import unit)

Credit Accounts 111, 112.

2.1.2. In case the imported goods are used for trading non-VAT taxable goods and services or are taxed under the direct payment method or are used for activities funded by other sources, the VAT on imported goods is not deductible, record:

a/ If the entrusted import unit pays the taxes on behalf of the entrusting unit to the State Treasury, record:

Debit Accounts 152, 156, 211 (Value of imported goods including all payable taxes)

Credit Account 331 - Amount Due to Seller (Detailed for each entrusted import unit).

b/ If the entrusted import unit processes tax declaration but the entrusting unit pays the taxes directly to the State Treasury, the value of imported goods is recorded as per point a. When paying taxes to the State Treasury, record:

Debit Account 331 - Amount Due to Seller (Detailed for each entrusted import unit)

Credit Accounts 111, 112.

2.2. Entrusted import handling fees payable to the entrusted import unit, based on relevant documents, record:

Debit Accounts 151, 152, 156, 211

Debit Account 133 - Deductible VAT

Credit Account 331 - Amount Due to Seller (Detailed for each entrusted import unit).

2.3. Amounts payable to the entrusted import unit for expenses incurred on its behalf, based on relevant documents, record:

Debit Accounts 151, 152, 156, 211

Debit Account 133 - Deductible VAT (if applicable)

Credit Account 331 - Amount Due to Seller (Detailed for each entrusted import unit).

3. When paying the remaining amount for entrusted imported goods, import tax, VAT, special consumption tax (if paid on behalf by the entrusted import unit), entrusted import handling fees, and other expenses, based on relevant documents, record:

Debit Account 331 - Amount Due to Seller (Detailed for each entrusted import unit)

Credit Accounts 111, 112.

4. In case the entrusted import unit returns entrusted imported goods without paying VAT, record:

4.1. Upon receipt of goods, based on the internal dispatch and transportation note from the entrusted import unit, reflect the value of entrusted imported goods including VAT on imported goods, record:

Debit Accounts 152, 156, 211 (Value of imported goods including payable taxes)

Credit Account 331 - Amount Due to Seller. (Detailed for each entrusted import unit)

4.2. Upon receipt of the VAT invoice for entrusted imported goods from the entrusted import unit, reflect the deductible VAT input tax, record:

4.2.1. In case the entrusted imported goods remain in inventory, record:

Debit Account 133 - Deductible VAT

Credit Accounts 152, 156, 211.

4.2.2. In case the entrusted imported goods have been sold, record:

Debit Account 133 - Deductible VAT

Credit Account 632 - Cost of Goods Sold.

B. ACCOUNTING AT THE ENTRUSTED IMPORT UNIT

1. When receiving a sum of money from the entrusting unit for advance payment to purchase goods to open a Letter of Credit,..., based on relevant documents, record:

Debit Accounts 111, 112

Credit Account 131 - Amount Receivable from Customers (Detailed for each entrusting unit).

2. When transferring funds or borrowing from a bank to secure opening a Letter of Credit (if payment is by letter of credit), based on relevant documents, record:

Debit Account 144 - Short-term Collateral, Security Deposit, and Pledge

Credit Accounts 111, 112, 311.

3. When importing materials, equipment, and goods, record:

3.1. The amount due to the entrusting unit for payment to the seller on their behalf, based on relevant documents, record:

Debit Account 151 - Purchased Goods in Transit (If goods are in transit)

Debit Account 156 - Inventory (If goods are received into inventory)

Credit Account 331 - Amount Due to Seller (Detailed for each seller).

In case goods are received directly from abroad and transferred to the entrusting unit without being stored in inventory, record:

Debit Account 331 - Amount Due to Seller (Detailed for the entrusting unit)

Credit Account 331 - Amount Due to Seller (Detailed for the foreign seller).

3.2. Import tax payable on behalf of the entrusting unit, based on relevant documents, record:

Debit Account 151 - Purchased Goods in Transit

Debit Account 156 - Inventory

Credit Account 3333 - Export and Import Taxes (Detailed for import tax).

In case goods are received directly from abroad and transferred to the entrusting unit without being stored in inventory, record:

Debit Account 331 - Amount Due to Seller (Detailed for the entrusting unit)

Credit Account 3333 - Export and Import Taxes (Detailed for import tax).

3.3. VAT on imported goods payable on behalf of the entrusting unit, based on relevant documents, record:

Debit Account 151 - Purchased Goods in Transit

Debit Account 156 - Inventory

Credit Account 3331 - VAT Payable (33312).

In case goods are received directly from abroad and transferred to the entrusting unit without being stored in inventory, record:

Debit Account 331 - Amount Due to Seller (Detailed for the entrusting unit)

Credit Account 3331 - VAT Payable (33312).

3.4. Special consumption tax payable on behalf of the entrusting unit, based on relevant documents, record:

Debit Account 151 - Purchased Goods in Transit

Debit Account 156 - Inventory

Credit Account 3332 - Special Consumption Tax.

In case goods are received directly from abroad and transferred to the entrusting unit without being stored in inventory, record:

Debit Account 331 - Amount Due to Seller (Detailed for the entrusting unit)

Credit Account 3332 - Special Consumption Tax.

3.5. When returning goods to the entrusted import unit, based on the VAT invoice for returned goods and related documents, record:

Debit Account 131 - Receivables from customers (Details for each entrusted import unit)

Credit Account 156 - Inventory (Value of imported goods including taxes payable)

Credit Account 151 - Purchased goods in transit.

3.6. In cases where the entrusted import unit has not yet paid VAT, based on the internal dispatch and transportation note, record as per entry 3.5. After paying VAT at the import stage for the entrusted imported goods, issue a VAT invoice and send it to the entrusting party.

4. For import agency fees and VAT calculated on import agency fees, based on the VAT invoice and related documents, accountants should reflect revenue from import agency fees, record:

Debit Accounts 131, 111, 112 (Total payment amount)

Credit Account 511 - Sales Revenue (5113)

Credit Account 3331 - VAT Payable.

5. For expenses paid on behalf of the entrusted import unit related to the import agency activities (bank fees, customs inspection fees, warehouse rental fees, cargo handling and transportation costs...), based on related documents, record:

Debit Account 131 - Receivables from customers (Details for each entrusted import unit)

Credit Accounts 111, 112.

6. When the entrusted import unit transfers the remaining payment for imported goods, import duties, VAT on imported goods, special consumption tax (if the entrusted unit asks to pay these taxes on their behalf to the State Budget), and expenses paid on behalf of the import agency activities, based on related documents, record:

Debit Accounts 111, 112

Credit Account 131 - Receivables from customers (Details for each entrusted import unit).

7. When paying on behalf of the purchase price of imported goods to the seller for the entrusted import unit, based on related documents, record:

Debit Account 331 - Payable to suppliers (Details for each supplier)

Credit Accounts 112, 144.

8. When paying on behalf of import duties, VAT on imported goods, and special consumption tax to the State Budget, based on related documents, record:

Debit Accounts 3331, 3332, 3333

Credit Accounts 111, 112.

9. In cases where the entrusted import unit handles the procedures for paying import duties, the entrusted import unit pays these taxes directly to the State Budget, based on related documents, accountants should reflect the amount paid by the entrusted import unit to the State Budget, record:

Debit Accounts 3331, 3332, 3333

Credit Account 131 - Receivables from customers (Details for each entrusted import unit).

III. ACCOUNTING FOR EXPORT AGENCY ACTIVITIES

A. ACCOUNTING AT THE EXPORT AGENCY UNIT

1. When delivering goods to the receiving export agency unit, based on related documents, record:

Debit Account 157 - Goods sent for sale

Credit Account 156 - Inventory

Credit Account 155 - Finished products.

2. When the receiving export agency unit has exported the goods to the buyer, based on related documents, record:

2.1. Cost of exported goods, record:

Debit Account 632 - Cost of Goods Sold

Credit Account 157 - Goods sent for sale.

2.2. Revenue from exported goods under agency, record:

Debit Account 131 - Receivables from customers (Details for each receiving export agency unit)

Credit Account 511 - Sales Revenue.

2.3. Export tax, special consumption tax payable, the receiving export agency unit pays on behalf to the State Budget, record:

- The amount of export tax and special consumption tax on exported goods under agency that must be paid, record:

Debit Account 511 - Sales Revenue

Credit Accounts 3332, 3333.

- When the receiving export agency unit has paid the export tax and special consumption tax on behalf to the State Budget, based on related documents, record:

Debit Accounts 3332, 3333

Credit Account 338 - Other Payables and Submissions (Details for each receiving export agency unit)

- Repaying the paid taxes to the receiving export agency unit, record:

Debit Account 338 - Other Payables and Submissions (Details for each receiving export agency unit)

Credit Accounts 111, 112.

2.4. Amounts payable to the receiving export agency unit for expenses paid on behalf related to the exported goods under agency, record:

Debit Account 641 - Selling Expenses

Debit Account 133 - Deductible VAT

Credit Account 338 - Other Payables and Submissions (3388) (Details for each receiving export agency unit).

3. Export agency fee payable to the receiving export agency unit, based on related documents, record:

Debit Account 641 - Selling Expenses

Debit Account 133 - Deductible VAT

Credit Account 338 - Other Payables and Submissions (3388). (Details for each receiving export agency unit)

4. Settling the receivable amount from exported goods with the payable amount to the receiving export agency unit, based on related documents, record:

Debit Account 338 - Other Payables and Submissions (3388) (Details for each receiving export agency unit)

Credit Account 131 - Receivables from customers (Details for each receiving export agency unit).

5. When receiving the remaining proceeds from the sale of exported goods under agency after deducting the export agency fee and other expenses paid on behalf, based on related documents, record:

Debit Accounts 111, 112

Credit Account 131 - Receivables from customers (Details for each receiving export agency unit).

B. ACCOUNTING AT THE RECEIVING EXPORT AGENCY UNIT

1. When receiving goods from the exporting agency unit, based on related documents, record:

Debit Account 003 - Goods received for sale or storage.

2. When the goods have been exported, based on related documents, record:

2.1. The amount of exported goods under agency to be collected on behalf of the entrusting party, record:

Debit Account 131 - Receivables from customers (Details for each foreign buyer)

Credit Account 331 - Payable to suppliers (Details for each exporting agency unit).

- Simultaneously record the value of the exported goods:

Credit Account 003 - Goods received for sale or storage.

2.2. Export tax payable on behalf of the entrusting party, record:

Debit Account 331 - Payable to suppliers (Detailed accounting for each exporting agency unit)

Credit Account 338 - Other Payables and Submissions (3388 detailed submission to the State Budget).

2.3. Special consumption tax payable on behalf of the entrusting party, record:

Debit Account 331 - Payable to suppliers (Detailed accounting for each exporting agency unit)

Credit Account 338 - Other Payables and Submissions (3388 detailed submission to the State Budget).

3. For export agency fees and VAT calculated on export agency fees, based on related documents, accountants should reflect revenue from export agency fees, record:

Debit Account 131 - Receivables from customers (Details for each exporting agency unit)

Credit Account 511 - Sales Revenue (5113)

Credit Account 3331 - VAT Payable.

4. For expenses paid on behalf of the exporting agency unit (bank fees, customs inspection fees, transportation and handling costs...), based on related documents, record:

Debit Account 138 - Other Receivables (1388 detailed for each exporting agency unit)

Credit Accounts 111, 112.

5. When collecting payment on behalf of the exporting agency unit, based on related documents, record:

Debit Account 112 - Bank Deposits

Credit Account 131 - Receivables from customers (Details for each foreign buyer).

6. When paying on behalf of export taxes and special consumption tax for the exporting agency unit, based on related documents, record:

Account 338 - Other Amounts Payable (3388 Detailed Payments to State Budget)

Credit Accounts 111, 112.

7. When the entrusted export agency settles the agency export fee and other expenses on behalf of others, based on relevant documents, record:

Debit Account 331 - Amounts Payable to Sellers (Details for each entrusted export agency)

Credit Account 131 - Amounts Receivable from Customers (Details for each entrusted export agency)

Credit Account 138 - Other Amounts Receivable (Details for each entrusted export agency).

8. When transferring the remaining amount of goods to the entrusted export agency after deducting the agency export fee and other expenses on behalf of others, based on relevant documents, record:

Debit Account 331 - Amounts Payable to Sellers (Details for each entrusted export agency)

Credit Accounts 111, 112.

IV. IMPLEMENTATION PROVISIONS

This Circular takes effect from January 1, 2002. Previous regulations that conflict with this Circular are abolished. Parts not covered by this Circular shall be implemented according to current regulations.

During implementation, if there are any difficulties, please report them to the Ministry of Finance for study and resolution.