Liquidation of imported goods of investment project

The General Department of Customs issued letter no. 4041/TCHQ-TXNK dated June 19, 2019 responding the Official Letter No. 636 / HQĐT-TCTTr dated April 19, 2019 of the Customs Department of Dong Thap province about reporting difficulties when liquidating imported duty-free goods to create fixed assets in the form of production and trade.

In this regard, the General Department of Customs has the following opinions:

1. According to the provisions of Clause 5, Article 25 of Decree No. 08/2015 / ND-CP dated January 21, 2015, now is Clause 12 Article 1 of Decree 59/2018 / ND-CP dated April 20, 2018 of the Government: “If exports or imports are classified as regulated entities required to pay export and import taxes, excise duties, value-added taxes, environmental taxes, or of which export and import taxes are exempted or the tax rate and flat-rate duty are imposed according to the tariff quota, and the cargos are customs released or cleared but then subject to changes in entities that are not required to pay taxes or in purposes for which exports and imports are exempted from paying taxes; exports and imports are taxed for flat-rate duty or at the rate that conforms to the tariff quota; imports are raw materials used for processing or manufacturing exports and temporarily imported—re-exported products that have been released or cleared but then their use purpose has changed for domestic consumption, new customs declarations shall be submitted instead. Policies on management of exports and imports; and policies on taxes levied on exports and imports shall be implemented at the time when new customs declarations are registered, except cases where all of polices on management of exports and imports have been fully implemented at the time when the initial customs declaration is registered.”.

– According to the provisions at points b, c and d, Clause 1, Article 21 of Circular 38/2015 / TT-BTC of March 25, 2015 (now Clause 10, Article 1 of Circular 39/2019 / TT-BTC of April 20, 2018) Regulations on the principle of implementing declaration of change of domestic use and consumption purposes:

“b) Domestic sale or repurposing of goods that have undergone export or import procedures is only permitted after the declarant has completed customs procedures for the new customs declaration;

c) If the export or import license is required, a written permission by the licensing authority is also required for domestic sale or repurposing of the goods if it is subject to licensing by law;

d) In case of domestic sale or repurposing of exports or imports, the taxpayer shall declare and pay taxes and fines (if any) as prescribed.

– According to the provisions of Point b, Clause 2, Article 21 of Circular 38/2015 / TT-BTC (now Clause 10, Article 1 of Circular 39/2019 / TT-BTC) stipulates the responsibilities of customs declarants. Fully declare and pay tax according to the new customs declaration, write the old customs declaration number, the new purpose or domestic sale of goods instead of re-export in “Notes” section of the electronic customs declaration or paper customs declaration.

If goods are re-exported or transferred to an entity that is exempt from tax or non-dutiable, the taxpayer must declare as prescribed and shall not pay tax.

If the customs authority or another competent authority finds that goods are repurposed or sold domestically repurposed but the taxpayer fails to voluntarily declare and pay tax, the taxpayer shall incur tax according to the initial customs declaration of imports and incur penalties according to applicable regulations. The taxpayer is responsible for fully paying tax arrears, late payment interest, and fines (if any) according to the customs authority’s decision.”

– According to the provisions at Point b, Clause 3, Article 85 of Circular 38/2015 / TT-BTC Procedures for liquidating, repurposing goods shall be followed at the customs authority where the list of duty-free imports or the declaration of imports is registered (if registration of the list of duty-free imports is not required);”.

– According to the provisions in points c1 and c2, Clause 3, Article 85 of Circular 38/2015 / TT-BTC, stipulating procedures for liquidation and change of use purposes:

c.1) The enterprise or Liquidation Board shall send the customs authority where the declaration of duty-free imports was registered the reasons for liquidation or repurposing, names, codes, symbols, quantity, and exempt tax of goods, the number and date of the corresponding declaration;

c.2) In case of export, the enterprise shall opens a declaration of exports that suits the purpose;”

Based on the above provisions, if enterprises import duty-free goods to create fixed assets but then change their use purposes, they must declare new customs declarations according to Article 21 of Circular 38. / 2015 / TT-BTC is amended and supplemented in Clause 10 Article 1 of Circular 39/2018 / TT-BTC. Policies for managing export and import goods; tax policy for export and import goods implemented at the time of registration of new customs declarations, except for cases where the export and import goods management policies have been fully implemented at the time of registration of initial declarations.if  goods are repurposed or sold domestically repurposed but the taxpayer fails to voluntarily declare and pay tax, the taxpayer shall incur tax according to the initial customs declaration of imports and incur penalties according to applicable regulations. The taxpayer is responsible for fully paying tax arrears, late payment interest, and fines (if any) according to the customs authority’s decision.

Regarding the type of declaration form, it shall comply with the guidance in Official Letter No. 2765 / TCHQ-GSQL dated April 1, 2015 of the General Department of Customs.

2. According to the contents of the report in Official Letter No. 636 / HQĐT-TCTTr dated April 19, 2019 of the Customs Department of Dong Thap province, compare with the provisions on the procedure specified at Point c, Clause 3, Article 85 of Circular 38/2015 / TT-BTC, enterprises that commit violations are lacking documents (“documents clearly stating the reasons for liquidation or change of use purposes”) when carrying out administrative procedures. Therefore, it is recommended that the Customs Department of Dong Thap province check the records, accounting books and vouchers at the enterprise to determine whether Cargill Vietnam Co., Ltd. has or has not exported goods such as registering declarations according to regulations. specified in Item c.2, Point c, Clause 3, Article 85 of Circular 38/2015 / TT-BTC. In case the goods have been exported according to the registered declaration form, there is no sanctioning basis. In case of inspection, determine whether the company has “acts of using goods that are not subject to tax, tax exemption, considering tax exemption for wrong purposes without declaring the conversion of use purposes with customs authorities according to the law”, then sanctioned under the provisions of Point g, Clause 1, Article 13 of Decree No. 127/2013 / ND-CP dated October 15, 2013, which was amended and supplemented in Decree No. 45/2016 / ND-CP of May 26, 2016 2016 Government..

The General Department of Customs  informs the Customs Department of Dong Thap province for knowledge.

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