Exemption of duties on goods exported for processing and processed imports in Vietnam

Pursuant to Article 11 of Decree 134/2016/ND-CP as amended by Clause 5, Article 1, Point b, Clause 20, Article 1 of Decree 18/2021/ND-CP providing for exemption of duties on goods exported for processing and processed imports in Vietnam are as follows:

1. Goods exported for processing and processed imports under processing contracts exempt from export and import duties specified in Clause 6 Article 16 of the Law on Export and import duties comprise:

a) Raw materials, supplies and components for export.

Export duties shall be charged on the value or quantity of raw materials, supplies and components corresponding to the quantity of processed products that are not re-imported at the duty rates applied to such raw materials, supplies and components.

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.

Products in which the value of natural resources or minerals plus (+) energy cost makes up less than 51% of the product price shall be determined in accordance with Decree No. 100/2016/ND-CP dated July 01, 2016 on guidelines for the Law on amendments to the Law on Value-added tax, the Law on special excise duty, the Law on Tax administration and the Government’s Decree No. 146/2017/ND-CP;

2. Basis for determination of eligibility for duty exemption:

a) The taxpayer has a processing contract specified in Decree No. 187/2013/ND-CP.

b) Exported raw materials, supplies and components are used for processing or manufacture of the imported products.

The value or quantity of raw materials, supplies and components exempt from duty is the actual value or quantity of raw materials, supplies and components used for manufacture of the processed products that are imported in reality and is determined when making a statement of raw materials, supplies and components imported for processing imports in accordance with customs laws.

The taxpayer shall truthfully declare the value or quantity of raw materials, supplies and components that are used for manufacture of the processed products that are imported in reality and is granted duty exemption while following customs procedures.

3. Procedures for granting duty exemption are specified in Article 31 of this Decree.

The taxpayer shall write on the customs declaration the number and date of the processing contract, number and date of the notification to the customs authority of exported products in which the value of natural resources or minerals plus (+) energy cost makes up less than 51% of the product price.

Best Regards!