The representative of the General Department of Customs said that it had received 16 opinions from Government members agreeing with the amendment of Decree 100. Since it took effect on July 1, 2016, products of many...
On the morning of November 27, at the Dialogue Conference on tax and customs policies and administrative procedures in 2017, Mr. Vu Ngoc Anh, Deputy Director General of the General Department of Customs, said that he had submitted to the Government to amend and supplement this content in Decree 100 to remove obstacles for businesses.
According to the provisions of Decree 100/2016/ND-CP effective from July 1, 2016, exported products are unprocessed mineral resources; goods processed from mineral resources plus energy costs accounting for 51% or more of the product's production cost are not subject to a 0% tax rate when exported.
Many opinions from businesses were sent to representatives of the General Department of Taxation and the General Department of Customs at the Conference on November 27
Many opinions from businesses were sent to representatives of the General Department of Taxation and the General Department of Customs at the Conference on November 27
This regulation shows the view of not encouraging the export of unprocessed resources. However, the implementation encountered difficulties when determining the rate of 51% and there are many products processed from resources and minerals but in the process, they are processed into other products before becoming export products.
In response to opinions on this issue at the Conference, the representative of the General Department of Customs admitted that this is not a problem of just a few businesses. A typical example he cited is the export of cement products, which are ground from clinker, which is a different product processed from stone and gypsum.
"We have received 16 comments from Government members agreeing with this amendment. The agency is continuing to explain it for signing and promulgation," said Mr. Ngoc Anh.
According to him, the draft amendment to this Decree is expected to have 2 exceptions to apply 0% export tax, including export products similar to the case of cement.
In addition, the Draft also stipulates that direct and indirect costs will not include transportation costs from the mining site to the processing site. Mr. Ngoc Anh cited an example that the cost of transporting a block of stone from the stone yard can be equivalent to or greater than the purchase price of this block of stone. Therefore, the cost of mineral resources will not include transportation costs.
Previously, since Decree 100/2016/ND-CP took effect from July 1, 2016, the cement export industry has been affected. In 2016, Vietnam exported about 14.7 million tons of cement and clinker, reaching a value of 561 million USD. Compared to 2015, the export volume of cement and clinker in 2016 decreased by 7.1% and the value decreased by 16%. According to one calculation, the export cost of domestic cement enterprises increased by about 4.5 USD/ton of clinker and 7.5 USD/ton of cement. "Exported products processed directly from main raw materials with a total value of mineral resources plus energy costs accounting for 51% or more of the production cost of the product processed from natural resources and minerals when exported are not subject to VAT except for two cases:
First, exported products processed from mineral resources directly exploited by the business establishment or purchased for processing or hired another facility for processing, which in the processing process has become another product and then continue to be processed into export products, which can be closed or in stages, are subject to 0% if they meet Article c 2 of the Law on VAT (with actual export contracts, payment via bank).
Second, business products processed from main raw materials other than mineral resources purchased by the business establishment for processing or hired another facility for processing into export products, then the exported products are subject to 0% tax."
Mr. Vu Ngoc Anh quoted the Draft Amendment Decree 100 at the Dialogue Conference.