Procedure for tax declaration and payment for scrap, waste products of export products changing into domestic consumption

General Department of Customs issued letter no. 4344/TCHQ-TXNK dated 01 July 2019 regarding instructing Customs Departments of provinces and cities to make procedures for tax declaration and payment for scrap and defective products of export goods for sale and domestic consumption.

Content follows:

In the process of implementing Circular No. 39/2018 / TT-BTC of April 20, 2018 of the Ministry of Finance, the General Department of Customs receives question and problems regarding the procedures for tax declaration and payment for scrap and defective products of export goods for sale and domestic consumption. In this regard, the General Department of Customs has the following opinions:

Pursuant to the provisions of Clause 49, Article 1 of Circular No. 39/2018 / TT-BTC of April 20, 2018 of the Ministry of Finance amending and supplementing Article No. 71 of Circular No. 38/2015 / TT-BTC dated March 25 / 2015 of the Ministry of Finance, the discarded materials and defective products produced during export production and domestic consumption are exempt from import tax but it must be declared and paid value added tax and special consumption tax special, environmental protection tax (if any) and sent to the customs office through the system according to the information norms specified in Form No. 04 Appendix IIa issued together with this Circular. In case of a paper file, the customs declarer complies with Form No. 06 / BKKTT / TXNK Appendix VI issued with this Circular. In order to agree on the implementation process, the General Department of Customs provides the following guidance:

1) For scraps and defective products

a.Procedures for declaration

Scraps and defective products obtained in the process of producing export goods for domestic sale and consumption shall be exempt from import tax but it must be declared and paid value added tax, special consumption tax and environmental protection tax. (if any) for customs authorities.

Procedures for declaration of discarded materials and defective products obtained during the process of producing export goods for domestic sale and consumption shall be carried out as follows:

– In the case of electronic documents, enterprises shall make declaration according to form No. 04 Appendix IIa issued together with Circular No. 39/2018 / TT-BTC.

In case of dossiers for declaration in paper form,  enterprises shall make declaration according to form 06 / BKKTT / TXNK appendix VI issued together with Circular No. 39/2018 / TT-BTC.

Enterprises shall make declaration each time before issuing invoices for domestic sale or monthly declaration by synthesizing discarded materials and defective products already domestically consumed in the month to declare and pay taxes No later than day no.10 of the next month. Enterprises do not have to declare customs declarations to change their use purposes. The time limit for payment of value added tax, special consumption tax and environmental protection tax (if any) is the time limit for the customs offices to receive the lists.

– In case of declaring form 06 / BKKTT / TXNK appendix VI issued together with Circular No. 39/2018 / TT-BTC, customs office shall open monitoring books and issue numbers to the lists similar to procedure of declaration of paper.

– The name of the scrap, scrap declared on the list according to the actual name of the goods sold (for example, rags, fish heads, fish bones …).

– The unit of calculation on the declaration sheet must match the calculation unit stated in the sale invoice (for example: kg …).

– The number on the declaration sheet must be accurate with the actual quantity of discarded materials and defective products sold.

The unit price on the declaration sheet is selling price excluding VAT. In case the enterprise declares on a monthly basis by synthesizing the data already sold in the month, the price declared on the list shall be submitted to the customs office from the selling price with VAT and then excluding VAT at the stage of selling.  The price declared on the list must be submitted to the customs office according to the following formula:

– The inspection of scraps and defective products shall be conducted in the process of checking the use of raw materials and supplies or checking the settlement reports prescribed in Articles 40 and 41 of Decree No. 08/2015 / ND -CP on January 21, 2015 of the Government (amended and supplemented in Clause 18, Article 1 of Decree No. 59/2018 / ND-CP dated April 25, 2018 of the Government).

Upon receiving reports on the settlement of the customs offices, the inspection shall be conducted, in case of detecting signs of law violation, including violations related to the handling of discarded materials and defective products, the Customs sub-department is responsible for synthesizing data with relevant documents and documents (if any) to provide information to the Post-clearance Inspection Department or the Post-clearance Inspection Department (for Customs Departments having a post-customs clearance inspection office as a basis for conducting post-clearance inspection at taxpayers’ offices.

b. Paying taxes on scrap and defective products:

– Tax payment account: State budget collection account – 7111.

– The customs office pays money: is the customs office where the tax calculation list arises.

– State Treasury: At the State Treasury where the customs office generates a tax calculation declaration sheet, it opens an account at the Treasury.

– Regarding the number and date on the tax calculation list: In case of being carried out on the electronic file, the taxpayer shall pay tax according to the information prescribed in form No. 04 appendix IIa issued together with Circular 39 / 2018 / TT-BTC.

In case of application on paper documents: Based on the information on the list of enterprises declared according to form 06 / BKKTT / TXNK appendix VI issued together with Circular No. 38/2015 / TT-BTC, amended and supplemented in Appendix III, issued together with Circular No. 39/2018 / TT-BTC, the customs office shall issue number and code for the list same as  procedure of paper declarations, specifically:

+ 96 is the common number of common declarations for the use of lists;

+ YY is the last two digits of the year with the voucher of the payable tax amount;

+ AAAA is customs unit code;

+ XXXX is the serial number of the voucher with the payable tax amount on the list (issued by the customs office).

– Economic content (budget index) is implemented as follows:

+ VAT: Subsection 1702

+ Special consumption tax: Subsection 1751

+ Environmental protection tax: Sub-section 20

2) For waste

In complying with the provisions of Article 71 of Circular 38/2015 / TT-BTC, amended and supplemented in Clause 50, Article 1 of Circular 39/2018 / TT-BTC for the handling of waste ,  individual and  organizations follow in accordance with the law on environmental protection. The individual and organization is responsible for detailing the information related to waste disposal, presenting it to the customs office when checking.

This Official Letter replaces the content guiding at the ordinal number 11 about Summary of the problems issued together with Official Dispatch No. 4787 / TCHQ-TXNK dated August 15, 2018, Point b, Clause 2 of the ordinal number 01 Summary table problems issued together with Official Letter No. 5914 / TCHQ-TXNK dated October 9, 2018 of the General Department of Customs.

The General Department of Customs announces to the Customs Departments of provinces and cities to know and implement. 

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