Circular No. 2865/TC/TCT provides detailed regulations on the implementation of tax finalization according to the domestic production ratio for mechanical-electrical-electronic products and spare parts to ensure compliance with tax policies and prevent revenue loss. The document specifically guides the responsibilities of enterprises and customs authorities during the finalization process.
Đối tượng áp dụng
General Tax Department, Customs Departments of provinces and centrally-administered cities; enterprises importing mechanical-electrical-electronic products and spare parts
Các điểm cốt lõi
- Enterprises failing to submit finalized reports with independent auditor confirmation will be subject to back taxes based on the domestic production ratio (Article 2).
- Customs authorities shall calculate and collect import duties according to the actual achieved domestic production ratio and apply the appropriate import duty rate for the next fiscal year (Point a, Article 3).
- If the domestic production ratio exceeds the registered level without increasing domestically produced components, a detailed review must be conducted before processing refunds or applying new domestic production ratios (Point b, Article 3).
- In cases where only simple assembly is performed and the domestic production ratio exceeds the prescribed range, the lowest applicable domestic production ratio tax rate will be applied (Point c, Article 3).
- Customs and Tax authorities must cooperate to inspect the finalization of import duties according to the domestic production ratio and report the results to the Ministry of Finance (Article 4).
🌐 Tác động xã hội từ văn bản này
- Enterprises complying with domestic production ratio regulations will be eligible for preferential tax rates, reducing import costs.
- Customs and Tax authorities have additional responsibilities to inspect the finalization of import duties according to the domestic production ratio, enhancing tax management.
- Enterprises failing to comply with domestic production ratio regulations will face back taxes and lose the opportunity to apply preferential tax rates.
❓ Câu hỏi thường gặp
What actions will be taken if an enterprise fails to submit a finalized report with independent auditor confirmation?
The enterprise will be subject to back taxes based on the domestic production ratio and will not be eligible for preferential tax rates for subsequent import shipments (Article 2).
How does the Customs authority calculate and collect import duties?
The Customs authority will calculate and collect import duties according to the actual achieved domestic production ratio and apply the appropriate import duty rate for the next fiscal year (Point a, Article 3).
What should be done if the domestic production ratio exceeds the registered level but does not increase domestically produced components?
A detailed review must be conducted before processing refunds or applying new domestic production ratios (Point b, Article 3).
What action will be taken if only simple assembly is performed and the domestic production ratio exceeds the prescribed range?
The lowest applicable domestic production ratio tax rate will be applied (Point c, Article 3).
To whom must Customs and Tax authorities report the results of inspections for the finalization of import duties according to the domestic production ratio?
They must report the results of inspections for the finalization of import duties according to the domestic production ratio to the Ministry of Finance (Article 4).
Toàn văn
LETTER
OF THE MINISTRY OF FINANCE NO. 2865TC/TCT DATED MARCH 28, 2003
ON THE SETTLEMENT OF TAXES AT DOMESTIC CONTENT RATES FOR
PRODUCTS AND PARTS IN THE MECHANICAL-ELECTRICAL-ELECTRONICS INDUSTRY
Dear: Tax Departments, Customs Departments of provinces and centrally governed cities
To resolve difficulties for businesses and ensure compliance with tax policies on domestic content rates to prevent revenue loss for the State budget, the Ministry of Finance guides the implementation of tax settlement at domestic content rates for products and parts in the mechanical-electrical-electronics industry as follows:
1. The local Customs Departments shall collect import taxes at domestic content rates for products and parts in the mechanical-electrical-electronics industry and settle taxes for importing businesses according to the provisions set out in Circular No. 176/1998/TTLT-BTC-BCN-TCHQ dated December 25, 1998 and Circular No. 120/2000/TTLT-BTC-BCN-TCHQ dated December 25, 2000 issued jointly by the Ministry of Finance, the Ministry of Industry, and the General Department of Customs.
2. In cases where businesses fail to submit settlement reports certified by independent auditing agencies as stipulated in Joint Circulars No. 176/1998/TTLT-BTC-BCN-TCHQ and No. 120/2000/TTLT-BTC-BCN-TCHQ, they will not be eligible for import tax rates based on domestic content rates for subsequent import shipments and will be subject to back payment of import taxes according to the applicable rates specified in the Import Tariff and current regulations.
3. For businesses that have submitted settlement reports certified by independent auditing agencies as required, the tax authorities responsible for managing the business and the Customs Departments where the business has registered for component imports under the domestic content tax policy shall implement specific points as follows:
a. Where the import tax rate at the domestic content rate in the business's settlement report does not change or changes to a higher rate than the rate applied according to the registered domestic content rate (confirmed by the Ministry of Industry), the Customs Department shall calculate and collect import taxes at the actual domestic content rate achieved and apply the actual import tax rate for the next fiscal year according to the provisions of Joint Circulars No. 176/1998/TTLT-BTC-BCN-TCHQ and No. 120/2000/TTLT-BTC-BCN-TCHQ.
b. Where the domestic content rate of products and parts in the business's settlement report is higher than the registered domestic content rate (confirmed by the Ministry of Industry), leading to a lower import tax rate being applied compared to the rate applied according to the registered domestic content rate, but the business did not increase components, parts, or units for domestic production in the fiscal year compared to the registration, then detailed checks of records and documents must be conducted, and if necessary, coordination with other local tax authorities to inspect domestic suppliers before processing refunds or applying the domestic content rate for the following year based on the settled domestic content rate and inspection results.
Based on the list of businesses registered to implement the domestic content tax policy and the business's settlement report (certified by an independent auditing agency), the tax authority shall coordinate with the local Customs Department where the business is headquartered (if there is no Customs Department at the headquarters location, the tax authority shall organize inspections) to inspect component suppliers, check records and documents between domestic suppliers and manufacturing businesses, compare import documents, domestic content registration documents, to determine the actual domestic content rate achieved for each product and part produced and assembled by the business as the basis for calculating actual taxes due and processing back payments or refunds.
c. Where only simple assembly or use of auxiliary products for production and assembly is involved, but the declared domestic content rate confirmed by the Ministry of Industry is higher than the lowest domestic content rate framework, the Customs Department shall conduct detailed inspections and apply the import tax rate corresponding to the lowest domestic content rate according to the provisions of Point 4.3, Section II of Circular No. 120/2000/TTLT-BTC-BCN-TCHQ.
4. Organization and Implementation of Settlement and Inspection of Settlement:
- Upon receipt of this guidance, it is requested that the local Customs Departments immediately implement settlements according to current regulations on the domestic content tax policy and the above guidance.
For cases requiring inspections, local Customs Departments shall prepare lists of businesses along with requests and send them to the local tax authorities responsible for managing the businesses (along with import documents as required and the business's settlement report) for the tax authorities to organize inspections.
- After completing the inspection of tax settlements, local tax authorities must report to the Ministry of Finance (General Department of Taxation) on the inspection results (including the number of businesses, items settled, actual domestic content rates achieved, taxes due for back payment or refund for each business, and the number of businesses that have not completed settlements).
It is requested that the Director-General of the General Department of Taxation and the Director-General of the General Department of Customs instruct the provincial and city Customs and Tax Departments to implement tax settlements for products in the mechanical-electrical-electronics industry according to the guidance provided in this document. During the settlement process, if any difficulties arise, it is requested that the relevant units promptly report to the Ministry of Finance for timely guidance.
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