Tax concerns regarding to temporary import and re-export of goods
On May 8th, 2020, General Department of Customs issued Official Letter No. 3005/TCHQ-TXNK providing guidance on tax concerns in case of extension of deadline for temporary import and re-export equipment and supplies tenanting from overseas.
The following concerns need to be noted when Company leases machineries, equipment, spare parts and means of transportation serving for petroleum operations, including cases of temporary importation and re-exportation:
1. Import duty
- Not subject to import duty in accordance with point a clause 15 Article 16 of the Law on Export and Import duties No. 107/2016/QH13. A notification of the duty-free list is required for goods eligible for import tax exemption complying with Article 30 of Decree 134/2016/NĐ-CP. In other words, such imported goods shall fail to satisfy the conditions for eligibility for import duty exemption in case of without the duty-free list.
- Regarding imported goods which are not subject to import duty exemption in accordance with point a clause 9 Article 16 of Law on Export and Import duties No. 107/2016/QH13, Company is required to make declaration and payment of import duty. It is noted that the assessable price for import duty is the rental price as prescribed in clause 9 Article 17 Circular No. 39/2015/TT-BTC, modified and supplemented in clause 9 Article 1 Circular No. 60/2019/TT-BTC.
2. Value added tax (“VAT”)
- Not be required to declare VAT according to the provisions in clause 20 Article 4 Circular No. 219/2013/TT-BTC.
3. Additional tax declaration and deadline of tax payment
- If Company carried out the temporary import procedures and paid import duty, then requested an extension of time limit for temporary importation, the period of temporary importation is followed in accordance with the provisions of clause 5 Article 50 Decree No. 08/2015/NĐ-CP dated 21/01/2015, amended and supplemented in clause 23 Article 1 Decree No. 59/2018/NĐ-CP dated 20/4/2018.
- The tax payable increasing due to extension of the time limit for temporary import and deferral of tax payment is implemented according to Article 106 of tax Administration Law No. 78/2006/QH13, amended and supplemented in clause 32 Article 1 of Law No. 21/2012/QH13, Article 3 Law No. 106/2016/QH13.