In case goods are raw materials imported for production and processing of exports not under contracts signed with foreign parties, enterprises shall have to pay value added tax.

The Ministry of Finance has just issued a written reply to a number of business associations on the refund of value added tax on raw materials and goods imported for production and processing of exports.
Accordingly, providing guidance on value-added tax policy, the Ministry of Finance said that according to Clause 20, Article 5 of the Law on Value-Added Tax, raw materials are imported for production and processing of exported goods according to Export production and processing contracts signed with foreign parties shall not be subject to value added tax.
Pursuant to the provisions of the Law on Value-Added Tax, the Law on Special Consumption Tax and the Law on Tax Administration, the Ministry of Finance believes that the case of raw materials and goods imported for production or processing of exports is not in case of imported goods then exported, because these imported raw materials and goods were no longer kept as they were when they were exported.
Regarding the settlement of value-added tax refund, the Ministry of Finance said that the handling of tax, late payment interest, and overpaid fines will be refunded according to regulations. Overpaid value-added tax amounts are handled concurrently with import tax (if any).
Therefore, the Ministry of Finance guides cases where goods are raw materials, supplies and components imported for production and processing of exported goods under export or production contracts signed with foreign parties. When paying value added tax at the import stage, the paid value added tax amount shall be determined as the overpaid tax amount and the customs office shall refund the tax according to regulations.
In addition, in case goods are raw materials, supplies and components imported for the production and processing of exports not under processing contracts signed with foreign parties (not subject to price tax) In accordance with Clause 20, Article 5 of the Law on Value-Added Tax, when importing enterprises, enterprises must declare and pay tax according to regulations. When exporting, they shall be subject to the value-added tax rate of 0%. , tax agencies shall refund value added tax on exported goods according to regulations.
The handling of tax refund is checked by the customs office and the tax agency's actual file to perform tax refund in accordance with regulations.

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