Question: If the company import metal material for production and then export scrap and metal waste for outsourcing, will the company pay export tax in this case?
if Enterprises that import raw metal materials for the production , when exporting the scrap collected during the production process for outsourcing overseas, it must pay export tax (regardless of the source of the scrap domestically or imported).
Following relating regulation for above conclusion:
Pursuant to Clause 1, Article 2 of the Law on Import Tax and Export Tax No. 107/2016 / QH13 specifying that goods exported and imported through Vietnam’s border gates or borders are taxable.
Pursuant to Clause 6, Article 16 of the Law on Import Tax and Export Tax No. 107/2016 / QH13: “
Goods exported for processing and then imported are exempt from export duty and import duty on the value of exported raw materials incorporated into the processed products. Goods exported for processing and then imported that are natural resources, minerals, or products whose the total value of natural resources or minerals plus energy costs makes up at least 51% of the product price shall be taxed.
Pursuant to the provisions at Point a, Clause 1, Article 11 of Decree No. 134/2016 / ND-CP dated September 1, 2016: “
Where goods exported for processing are natural resources, minerals or products in which the value of natural resources or minerals plus (+) energy cost makes up at least 51% of the product price and the goods are subject to export duties (except scraps produced during the manufacture or processing of the imports for export), duty exemption shall not be granted. “
Pursuant to the provisions at Point d, Clause 1, Article 11 of Decree 134/2016 / ND-CP, then: “When products that are processed overseas are imported into Vietnam, import duties on the value of raw materials, supplies and components incorporated into the processed products shall be exempt; the remaining value of the products shall be dutiable at the import duty rates applied to processed imports.
According to the guidance in Official Dispatch No. 11081 / BTC-TCHQ dated August 18, 2017 of the Ministry of Finance: “Enterprises that export metal scrap for processing shall comply with the provisions at Point a, Clause 1. Article 11 of Decree No. 134/2016 / ND-CP, accordingly, scrap and metal waste subject to export tax, it shall not be exempt from export tax. “
Source: Refer to letter no.1188 / TCHQ-TXNK Regarding tax on aluminum scrap exported for processing