Liquidation of Fixed Assets of Enterprise Processing Export ( EPEs ) in Vietnam

1. Definition of  fixed assets?

Pursuant to Clause 1, Article 3 of Circular 45/2013/TT-BTC, fixed assets must satisfy all three criteria:

-It is certain to gain economic benefit in the future from the use of such asset;

-Having the utilization time of over 01 year.

– Primary price of assets must be determined reliably, and is valued at 30,000,000 (thirty million) dong or more.

2. Liquidation conditions:

Pursuant to Article 79 in Circular no.38/2015/TT-BTC amended by Clause 55 Article 1 of Circular 39/2018/TT-BTC:

An EPE may liquidate the following imports: machines and equipment, vehicles, raw materials, supplies and other imports under its ownership by means of export, sale, donation or destruction in Vietnam.

3. Cases and forms of liquidation

3.1. Fixed assets imported under investment projects

– Import source: Imported from abroad

– Policy of tax:

+ Exemption from import tax according to Clause 7 Article 103 of Circular 38/2015/TT-BTC;

+ Subject to VAT according to Article 2 of Circular 219/2013/TT-BTC.

3.1.1. Exporting abroad/Selling to EPEs:

* Dossier include:

– A written request for liquidation;

– Sale contract;

– Origin import declaration;

– Depreciation table (if any);

– Damaged inspection record (if any).

* Procedure:

– Carry out procedures for change of use purposes and declare according to the provisions of Point b, Clause 2, Article 21 of Circular 38/2015/TT-BTC as amended by Clause 10, Article 1 of Circular 39/2018/TT-BTC.

– Open declaration form B13- Export imported goods:

+ Taxable value according to Point b, Clause 2, Article 17 of Circular 39/2015/TT-BTC supplemented by Clause 9 Article 1 of Circular 60/2019/TT-BTC;

+ Not subject to export tax according to the Export Tariff; + VAT rate of 0% according to Clause 1, Article 9 of Circular 219/2013/TT-BTC

3.1.2. Selling, giving or donating in Vietnam:

* Dossier include:

– A written request for liquidation;

– Sale contract;

– Origin import declaration;

– Depreciation table (if any);

– Damaged inspection record (if any).

* Procedure:

+ Follow the instructions at Point c.3 Clause 3 Article 85 of Circular 38/2015/TT-BTC, accordingly, enterprises carry out procedures to change the use purpose according to Article 21 of Circular 38/2015/TT-BTC amended by Clause 10, Article 1 of Circular 39/2018/TT-BTC.

+ Open declaration form A42- Transfer to other domestic consumption

~ Pay taxes: Import, other (if any);

~VAT payment: If previously applied for refund (after the end of the investment project);

~ Tax policy, commodity management policy at the time of A42 declaration (except for the case of the product management policy has been implemented at the time of initial import);

~ Taxable value according to Point b, Clause 2, Article 17 of Circular 39/2015/TT-BTC supplemented by Clause 9 Article 1 of Circular 60/2019/TT-BTC; This value is based on the actual payment of the purchase and sale contract between the two parties. Customs authorities only base on documents for comparison and inspection. Enterprises do not need to use an appraisal agency to determine the residual value of fixed assets;

+ If sold to an enterprise eligible for import tax exemption, the tax-free goods must be deducted from the tax-free goods monitoring sheet already issued by the transferor;

+ When destroying, enterprises are responsible for complying with regulations of environmental management agencies.

3.2. Fixed assets imported by type of investment and paying tax:

– Import source: Imported from foreign countries/EPZs

– Policy of tax:

+ Subject to import tax according to Article 2 of Decree 134/2016/NĐ-CP;

+ Subject to VAT according to Article 2 of Circular 219/2013/TT-BTC.

3.2.1. Exporting abroad/Selling to EPEs:

* Dossier include:

– A written request for liquidation;

– Sale contract;

– Origin import declaration;

– Depreciation table (if any);

– Damaged inspection record (if any).

* Procedure:

– No need to change the use purpose;

–  Open the declaration according to type B13- Export of imported goods:

+ Taxable value according to Point b, Clause 2, Article 17 of Circular 39/2015/TT-BTC supplemented by Clause 9 Article 1 of Circular 60/2019/TT-BTC;

+ Not subject to export tax according to the Export Tariff;

+ VAT rate of 0% according to Clause 1, Article 9 of Circular 219/2013/TT-BTC.

3.2.2. Selling, giving or donating in Vietnam:

– There is no need to carry out procedures to change the purpose of use;

– No need to open declarations;

– Issue VAT invoices  and pay tax with domestic tax authorities.

3.3. Fixed assets purchased locally:

– Origin: Assets buy from domestic enterprises, do not have to open customs declarations.

– Tax policy: Subject to VAT according to Article 2 of Circular 219/2013/TT-BTC.

3.3.1. Exporting abroad/Selling to EPEs:

* Dossier include:

– A written request for liquidation;

– Sale contract;

– VAT invoice for purchase of domestic fixed assets;

– Depreciation table (if any);

– Damaged inspection record (if any).

* Procedure:

– No need to change the use purpose;

– Open declaration form B11- Export for business:

+ Taxable value according to Point b, Clause 2, Article 17 of Circular 39/2015/TT-BTC supplemented by Clause 9 Article 1 of Circular 60/2019/TT-BTC;

+ Not subject to export tax according to the Export Tariff;

+ VAT rate of 0% according to Clause 1, Article 9 of Circular 219/2013/TT-BTC.

3.3.2. Sell, give, give, donate in Vietnam market:

– There is no need to carry out procedures to change the purpose of use;

– No need to open declarations;

– Issue VAT invoices and declare and pay tax with domestic tax authorities.

The article is for reference only. Please contact us via email if you have any question.

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