Customs officials of Hanoi Customs Department at work. Photo: N.Linh

Mitsubishi Pencil Vietnam Co., Ltd. raised the issue: The company is an export processing enterprise, before exporting products, the semi-finished products must go through a processing stage. The company hires foreign traders to perform processing contracts, then imports finished products and exports under type E42. The company asked whether company has to register in advance consumption under processing contracts to the Customs or not? When making a final settlement report, the company must declare the actual norm as the norm for making exported products, including: the norm for producing semi-finished products before processing and the norm after processing or the company has to declare the norms separately in each part?

Responding to these questions, Hanoi Customs Department requested the company to see the provisions in Article 39 of Decree 69/2018/ND-CP on processing contracts, accordingly, the processing contract must be made in writing or in another form with equivalent legal value according to the provisions of the Commercial Law and must include at least 10 clauses. This includes content on norms for using raw materials, auxiliary materials, supplies, norms for consumable supplies and the rate of material loss in processing. The company is responsible for notifying the processing contract, reprocessing contract, processing contract appendix, and reprocessing contract appendix to the Customs authority in accordance with customs law.

In case an export processing enterprise outsources processing abroad, it must submit a final settlement report according to Article 69a of Circular 38/2015/TT-BTC, amended and supplemented in Clause 47, Article 1 of Circular 39/2018/TT-BTC.

Regarding the issue of management of raw materials and supplies that are not subject to tax or tax exemption, Thang Long Tobacco One Member Company Limited asked the question: Because the company uses two management systems, the codes of raw materials, supplies, and products vary between accounting, warehouse, and import-export units. In this case, how should the company declare the codes to the Customs authority and how to store them to prove to the Customs authority if there is a post-customs clearance audit?

Regarding this issue, Hanoi Customs Department said, based on Clause 39, Article 1 of Circular 39/2018/TT-BTC amending and supplementing Circular 38/2015/TT-BTC: " If the trader uses codes other than those specified in the customs declaration, there must be a conversion table, which will be presented to the customs upon inspection or request; therefore, the company needs to research and comply with regulations. In addition, the codes of raw materials and supplies are declared by the company. When presenting to the Customs authority, the company is responsible for creating and converting the code from the code stated on the customs declaration, import-export code, warehouse code and accounting code. The company needs to create conversion tables and track codes consistently between units.

In addition, some businesses raised the question of buying and selling between export processing enterprises. When carrying out export and import procedures, do they use sales invoices or warehouse delivery notes cum inland transportation to complete customs procedures?

Responding to the above question, Hanoi Customs Department said, based on the provisions in Clause 2, Article 8, Decree 123/2020/ND-CP of the Government: Sales invoice is an invoice which may be used by the following organizations and individuals: a) Organizations or individuals that declare and calculate VAT by employing direct method for the following activities:

- Domestic sale of goods or provision of services;

- Provision of international transport services;

- Export of goods to free trade zones and other cases considered as export of goods;

- Export of goods or provision of services in a foreign market.

b) Organizations or individuals in free trade zones that sell goods or provide services to the domestic market, sell goods or provide services to other organizations/individuals in free trade zones, or sell goods or provide services to a foreign market. In such cases, invoices must bear the phrase “Dành cho tổ chức, cá nhân trong khu phi thuế quan” ("For organizations/individuals in free trade zones”).

Pursuant to the provisions of Clause 1, Article 9 of Decree 123/2020/ND-CP, “Invoices for sale of goods (including the sale of state-owned property, property confiscated and put into state fund, and the sale of national reserve goods) shall be issued when the right to own or use goods is transferred to buyers, whether the payment of the invoiced amount is made or not”.

Removing obstacles for export processing enterprises

In addition, based on the guidance of the General Department of Customs on the use of documents replacing sales invoices of export processing enterprises, if at the time of carrying out customs procedures for on-site import and export goods of an export processing enterprises to another export processing enterprise according to the provisions of Clause 58, Article 1 of Circular 39/2018/TT-BTC, the customs declarant has not issued a sales invoice because the transfer of ownership or use rights has not been completed, a delivery note cum internal transportation will be submitted to replace a sales invoice.