Export tax, import tax
Import and export goods on the spot are still subject to export tax and import tax. The conditions and methods of tax calculation for these goods are similar to those for ordinary exports and imports. Therefore, conditions for enjoying preferential tax rates still apply to on-spot export and import goods if they comply with the provisions of the Export Tax and Import Tax Law and Decree 156/2017 / ND-CP ( ATIGA- Form D).
Corporate income tax
Enterprises supplying goods in the form of on-spot import and export (except for goods processing for foreign organizations and individuals) are calculated at the rate of 1% of enterprise income tax calculated on taxable revenue.
* Enjoying 0% tax
Value-added tax rate applicable to on-spot import and export goods is 0%.
Conditions for enjoying the tax rate of 0% for exported goods:
– Having a contract on sale or processing of export goods; entrusted export contract;
– Having vouchers of payment for exported goods via banks and other documents as prescribed by law;
– Having a customs declaration as prescribed in Clause 2, Article 16 of Circular 219/2013 / TT-BTC;
* Deduction and refund of input VAT
Enterprises that have on-the-spot exported goods may deduct and refund input VAT.
On-site export acts are regarded as exports according to the provisions of law. Conditions for deduction and refund of input VAT in some cases where goods are regarded as exports are on-spot export goods in accordance with law, there are the following documents:
– Contract of goods sale or purchase or processing contract with designation of delivery in Vietnam;
– The customs declaration of on-spot export / import goods for which customs procedures have been completed;
– The value-added invoice or export invoice clearly stating the name of the foreign buyer, the name of the accepting enterprise and the place of delivery in Vietnam;
– Goods sold to foreign traders but delivered in Vietnam must be paid via banks in freely convertible foreign currencies. Bank transfer receipts must comply with Clause 3 Article 16 of Circular 219/2013 / TT-BTC. If the on-spot importer authorizes the payment to the exporter on the spot, the payment currency must comply with the law on foreign exchange.
– On-spot export goods of foreign-invested enterprises must comply with the provisions of their investment licenses.
Therefore, if on-spot export goods do not meet all the prescribed procedures and dossiers, they must calculate and pay VAT like domestically consumed goods. For enterprises providing export services, if failing to meet the conditions of payment via banks or being regarded as payment via banks, the 0% VAT rate is not applicable, the output VAT is not need to calculate but input tax will not be deducted.
Foreign Contractor Tax
This type of tax applies to foreign organizations and individuals that supply goods in Vietnam in the form of on-spot import and export and earn income in Vietnam on the basis of contracts signed between organizations, individuals and Vietnamese businesses.
Vietnamese enterprises that carry out on-spot import and export are taxpayers on behalf of foreign organizations and individuals when such foreign organizations and individuals fail to meet the following conditions: permanent residence in Vietnam, The duration of business in Vietnam under a contractor / subcontractor contract is 183 days or more from the effective date of the contract and application of the Vietnamese accounting regime or granted tax registration / tax identification number .
Enterprises having imported goods on the spot shall deduct value-added tax and enterprise income tax by the direct method (percentage method on turnover) before making payment to foreign contractors/ Foreign subcontractors.
Example: Enterprise X in a foreign country signs a contract to buy cloth from Vietnamese enterprise A, and appoints Enterprise A to deliver it to Vietnamese company B (in the form of on-spot import and export as prescribed by law). Enterprise X earns income in Vietnam on the basis of a contract signed between enterprise X and enterprise B (enterprise X sells cloth to enterprise B).
In this case, Enterprise X is the subject of application of current regulation and Enterprise B is responsible for declaring, deducting and paying tax on behalf of Enterprise X.