Circular No. 90 TC/TCT supplements Circular No. 47 TC/TCT dated June 1, 1994, guiding the examination for tax exemption and refund of import and export taxes for foreign-invested enterprises.

CIRCULAR

OF THE MINISTRY OF FINANCE

Supplementary Circular No. 47/TC-TCT dated June 1, 1994, guiding the examination of tax exemptions for import and export for enterprises with foreign investment capital

To implement the examination of tax exemptions and refunds for export and import taxes for enterprises with foreign investment capital in Vietnam as stipulated in Circular No. 47 TC/TCT dated June 1, 1994, issued by the Ministry of Finance, based on the opinions of the State Committee for Cooperation and Investment, the Ministry of Finance supplements and provides further details on certain points in the aforementioned Circular No. 47 TC/TCT as follows:

1. Economic and Technical Justification Conditions: The Ministry of Finance bases its examination on the initial economic and technical justification submitted to the Ministry of Finance during project appraisal. The investor does not need to submit the approved economic and technical justification to the Ministry of Finance when applying for specific tax exemption procedures for each consignment. In cases where projects have supplementary or adjusted economic and technical justifications, the State Committee for Cooperation and Investment shall send the additional economic and technical justification confirmation to the Ministry of Finance and the Ministry of Trade to serve as the basis for tax exemption procedures.

2. Production and Business Equipment: These are small tools and equipment for labor, special-purpose fixtures for production; packaging materials, plastic containers for recycling, which are necessary for the operation of new enterprises starting production with construction investment capital and included in the approved economic and technical justification of the project for the first tax exemption according to Point 1, Article 76 of Decree No. 18/CP dated April 16, 1993, and Article 13 of Decree No. 54/CP dated August 28, 1993, issued by the Government. The quantity and/or value of imported goods eligible for tax exemption for this category are determined in the project's economic and technical justification and have been permitted for import by the Ministry of Trade.

3. Goods imported as raw materials for producing export products are further specified as follows:

a) For production and business establishments engaged in assembly operations, they are entitled to a refund of import duties on raw materials, spare parts, and components, according to the registered unit product quota.

Example 1: In the case of importing automobile components to assemble complete vehicles for export, the specific raw materials eligible for duty refunds include:

Sets of automobile components.

Accessories including tool kits, tires, and spare parts.

Materials:

Paint for bodywork (if imported in CKD-1 form).

Steel sheets and nails (if imported in CKD-2 form).

b) For production establishments engaged in processing, they are only entitled to a refund of import duties on raw materials directly involved in the production process that constitute the physical entity of the product, excluding tools, spare parts, and auxiliary materials that do not form part of the physical entity of the exported product.

Example 2: In the case of importing raw materials for garment production for export, the specific raw materials eligible for duty refunds include:

Primary materials: fabric.

Auxiliary materials: thread, buttons, zippers, pins, labels, tags, elastic bands, and packaging materials for individual products.

Example 3: In the case of importing raw materials and supplies for food production (pickled cucumber in jars) for export, the specific raw materials and supplies eligible for duty refunds include:

Raw Materials and Supplies:

Tin-coated steel sheets.

Vinegar solution.

Aroma chemicals.

Labels and tags.

4. Consumption quotas for raw materials and supplies used as the basis for calculating tax refunds for exported goods are established by the exporting enterprise and registered with the tax authority and provincial customs office. If discrepancies between registered consumption quotas and actual production are discovered due to fraudulent activities, penalties and tax arrears will be imposed according to the Law./.

4. The raw material and consumable usage standards serving as the basis for calculating export tax refunds for the quantity of exported goods shall be self-established by enterprises producing exported goods and registered with the tax authority and the Customs of the province or city. In cases where the registered standards do not match actual production conditions and fraudulent activities are discovered, taxes will be recovered and penalties imposed according to the Law./.