Circular No. 237/2009/TT-BTC guides the handling of import tax and value-added tax for raw materials and machinery imported under processing contracts, production of export goods but damaged or lost due to objective reasons such as natural disasters, fire, or unexpected accidents.

CIRCULAR

Guidelines for handling import duties and value-added tax on raw materials and machinery imported under processing and production contracts for export goods but damaged or lost due to objective reasons such as natural disasters, fires, or unexpected accidents进口根据加工合同、生产供出口的货物但已损坏，损失是由于客观原因如：自然灾害、火灾、意外事故造成的

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Pursuant to the Law on Export Tax and Import Tax No. 45/2005/QH11 dated June 14, 2005;

Pursuant to the Decree No. 149/2005/NĐ-CP dated December 8, 2005 of the Government detailing the implementation of the Law on Export Tax and Import Tax;

Pursuant to Decree No. 118/2008/NĐ-CP dated November 27, 2008, of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Circular No. 2927/VPCP-KTTH dated May 8, 2009 of the Office of the Government regarding the Prime Minister's opinion on handling import duties and value-added tax on raw materials and machinery imported under processing and production contracts for export goods but damaged or lost due to objective reasons such as natural disasters, fires, or unexpected accidents,

The Ministry of Finance guides the exemption, reduction, or non-collection of import duties and value-added tax on raw materials, machinery, and equipment imported under processing and production contracts for export that have been damaged by natural disasters, fires, or unexpected accidents as follows:

Article 1. Scope of Regulation

This Circular guides the exemption, reduction, or non-collection of import duties and value-added tax on raw materials, machinery, and equipment imported under processing and production contracts for export that have been damaged by natural disasters, fires, or unexpected accidents.

Article 2. Objects and Conditions for Exemption, Reduction, or Non-Collection of Import Duties and Value-Added Tax

Raw materials, machinery, and equipment imported under processing and production contracts for export that have been damaged by natural disasters, fires, or unexpected accidents must satisfy the following conditions:

- Have been cleared through customs and identified by competent authorities as having damage caused by natural disasters, fires, or unexpected accidents, with the extent of damage clearly determined;

- Have been inspected by customs and tax authorities in terms of accounting records and related documents, confirming that the raw materials, machinery, and equipment were imported but actually suffered damage from natural disasters, fires, or unexpected accidents, and were not consumed in the domestic market or exported abroad.

In cases where raw materials, machinery, and equipment imported suffer damage from natural disasters, fires, or unexpected accidents and insurance has been implemented, with compensation including import duties and value-added tax provided by the insurance agency, such items shall not be eligible for exemption, reduction, or non-collection of import duties and value-added tax.

Article 3. Amounts of Import Duties and Value-Added Tax to be Exempted, Reduced, or Not Collected

1. Exemption of import duties and non-collection of value-added tax if raw materials, machinery, and equipment are completely damaged and no longer usable.

2. Reduction of import duties and value-added tax corresponding to the proportion of loss of raw materials, machinery, and equipment in cases of partial damage or remaining usable.

Article 4. Documents for Exemption, Reduction, or Non-Collection of Import Duties and Value-Added Tax

1. A letter requesting exemption, reduction, or non-collection of import duties and value-added tax for raw materials, machinery, and equipment imported under processing and production contracts for export that have been damaged, specifying the cause of damage, the proportion of loss of imported raw materials, machinery, and equipment, the amount of tax requested to be exempted or reduced, and a commitment to bear legal responsibility for declarations made.

2. Customs documents as stipulated in Article 11 of Circular No. 79/2009/TT-BTC dated April 20, 2009 of the Ministry of Finance guiding customs procedures, customs inspection and supervision, export tax, import tax, and tax management for imported and exported goods;

3. A report confirming the cause of damage by competent authorities at the location where the damage occurred, such as a fire report from the local firefighting authority in case of a fire; a document confirming natural disasters, typhoons, floods causing damage to imported raw materials, machinery, and equipment issued by the provincial People's Committee;

4. A certification report from a commercial service provider on the quantity of imported raw materials, machinery, and equipment lost or the actual proportion of damage to imported goods;

5. A business commitment not to insure the damaged consignment; or in cases where the insurance contract does not include compensation for taxes, confirmation from the insurance agency and the insurance contract, and related documents must be provided.

6. Other relevant documents pertaining to the incident;

7. An inventory list of documents submitted for exemption, reduction, or non-collection of taxes.

Article 5. Procedures and sequence for exemption, reduction, and non-collection of import tax and value-added tax

1. Submission and acceptance of documents:

1.1. The taxpayer shall self-determine the amount of tax to be exempted, reduced, or not collected for cases falling under the scope of tax exemption, reduction, or non-collection due to natural disasters, fire, or unexpected accidents; submit the documents to the Customs Department handling the import procedures.

a) In case the documents for tax exemption, reduction, or non-collection are directly submitted to the customs authority, the customs officer will accept and stamp the receipt, record the time of receipt, and note the number of documents in the file.

b) In case the documents are sent via postal service, the customs officer will stamp the date of receipt and record it in the office's document logbook.

2. The Customs Department of the province or city where the taxpayer imports goods is responsible for reviewing the documents and processing them as follows:

a) If the documents are incomplete, notify the taxpayer within three working days from the date of receiving the documents to complete the file;

b) In case the documents do not meet the criteria, require the payment of full taxes as prescribed;

c) If the documents are complete, coordinate with the local tax authority to check accounting books and warehouse receipts related to the damaged consignment; compare business transactions of the enterprise according to the pre-inspection post-refund guidance stipulated in Clause 5, Article 127 of Circular No. 79/2009/TT-BTC dated April 20, 2009 to determine the actual damage and extent of loss of imported raw materials, machinery, and equipment caused by natural disasters, fire, or unexpected accidents; raw materials, machinery, and equipment that are not consumed in the domestic market and not exported;

The inspection period is sixty days from the date all documents from the enterprise are received.

d) If the inspection results confirm that the imported raw materials, machinery, and equipment meet the conditions for tax exemption, reduction, or non-collection as prescribed, the local Customs Department shall prepare a file to send to the General Department of Customs, including:

- Documents prepared by the enterprise (as guided in Article 4 of this Circular);

- Inspection report at the enterprise as stated in point c, Clause 2 of this Article;

- Report on the request for tax exemption, reduction, or non-collection by the taxpayer, clearly stating: Reasons leading to the damage and loss of imported raw materials, machinery, and equipment; specific amounts of import tax and value-added tax exempted or reduced; remaining tax amount to be paid;

3. Based on the documents and reports sent by the provincial or municipal Customs Department, the General Department of Customs will review and submit to the Ministry of Finance for decision on tax exemption, reduction, or non-collection as prescribed.

Article 6. Effectiveness

1. This Circular takes effect forty-five days from the date of signature. For declarations of customs clearance from July 1, 2007 to before the effective date of this Circular, if there are imported raw materials, machinery, and equipment under processing or production contracts for export that have been damaged by natural disasters, fire, or unexpected accidents and meet the conditions stipulated in this Circular, they should be reported to the Ministry of Finance for individual resolution.

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