Based on product characteristics and product manufacturing process to determine exported products as natural resources and minerals processed or not yet processed into other products, declaration shall be made according to regulations.

In the course of business, Hong Thuy Import Export Trading Co., Ltd has the item of Duc Quyet Private Enterprise with respect to 2.6mm copper wire for export, subject to 0% VAT rate. The company has sent the Hung Yen Tax Department a VAT refund dossier, including: A request for refund of state budget revenues, made according to form No. 01 / ĐNHT enclosed with Circular No. 156/2013 / TT-BTC dated November 6. 2013 of the Ministry of Finance; the Commitment.

However, the Company received Notice No. 5503 / TB-CT dated November 1, 2017 of the Tax Department of Hung Yen Province regarding the application for export tax refund. At the same time, the Tax Department of Hung Yen Province issued an Official Letter No. 5483 / CT-KK & KTT dated November 1, 2017 to the General Department of Taxation regarding the VAT refund, including problems regarding the VAT policy mechanism applicable to exported goods of Hong Thuy Import Export Trading Co., Ltd.

While waiting for the authorities' documents to guide how to solve the problems in VAT refund, the company has sent a written request to Duc Quyet Private Company to calculate the proportion of mineral resources, but the Duc Quyet Company asserted. The main material to produce 2.6mm copper wire sold to the Company 100% is scrap copper; The characteristic of this product is that a product that has been processed into another product but another used product is burned and discarded, so it is impossible to identify copper scrap as a resource - mineral.

Hong Thuy Import Export Trading Co., Ltd. asked the authorities to answer, according to the Law on Minerals and the Law on Environment, is copper scrap a natural resource - mineral? Copper scrap recovered and classified from burnt products and discarded as the main material for the refining production process, the remaining copper can be used for domestic production and sale and for sale to other enterprises. For export (with a closed production process at the workshop), is it considered a resource - mineral to calculate the ratio of the value of natural resources, minerals and energy costs to the production cost of the product? according to the provisions of Point C, Section 1, Article 1 of the Circular No. 130/2016 / TT-BTC dated August 12, 2016 of the Ministry of Finance?

Up to now, the deadline for suspending VAT refund of Hong Thuy Import - Export Trading Co., Ltd. is too long (third quarter, fourth quarter of 2017). Currently, Hung Yen Department of Taxation is still waiting for the response of the General Department of Taxation to remove difficulties in terms of mechanisms and policies related to VAT refund as prescribed in Decree No. 100/2016 / ND - CP; Circular 130/2016 / TT-BTC dated 12/8/2016 of the Ministry of Finance. This has seriously affected the financial situation, causing difficulties for production and business activities of the Company.

Through the receiving and responding system to the businesses'srecommendations, the Hong Thuy Import Export Trading Co., Ltd suggested to soon remove the above problems.

Regarding this issue The General Department of Taxation responded as follows:

Clause 1, Article 1 of Law 106/2016 / QH13 dated April 6, 2016 amending and supplementing a number of articles of the Law on VAT, the Law on Special Consumption Tax and the Law on Tax Administration stipulates that the object is not taxable:

“23. Exported products are natural resources and minerals that have not yet been processed into other products; Export products are goods processed from natural resources, minerals with a total value of resources and minerals plus energy costs accounting for 51% of the product cost or more ”.

In Clause 1, Article 1 of the Government's Decree No. 146/2017 / ND-CP dated December 15, 2017 amending and supplementing a number of articles of Decree No. 100/2016 / ND-CP dated July 1, 2016 and Decree Decree No. 12/2015 / ND-CP dated February 12, 2015 of the Government stipulating the subjects that is not subject to tax:

“1. Clause 11 Article 3 is amended and supplemented as follows:

“11. Exported products are natural resources and minerals that have not yet been processed into other products.

Exported products are goods processed directly from main raw materials which are natural resources and minerals with the total value of natural resources and minerals plus energy costs accounting for 51% or more of the production cost of the product minus in the following cases:

... - Exported products are processed from raw materials other than natural resources, minerals (natural resources, minerals processed into other products) purchased for processing by the business establishment or hired by another establishment. turned into an export product, this export product is subject to the value added tax rate of 0% if it meets the conditions specified at Point c, Clause 2, Article 12 of the Law on Value-Added Tax ... ".

In Article 1 of the Finance Ministry's Circular No. 25/2018 / TT-BTC dated March 16, 2018, amending and supplementing Clause 23, Article 4 of Circular No. 219/2013 / TT-BTC dated December 31, 2013 of the Ministry of Finance. (as amended and supplemented under Circular No. 130/2016 / TT-BTC dated August 12, 2016 of the Ministry of Finance) as follows:

“23. Exported products are natural resources and minerals that have not yet been processed into other products.

Exported products are goods processed directly from main raw materials which are natural resources and minerals with the total value of natural resources and minerals plus energy costs accounting for 51% or more of the production cost of the product. Except for some cases as prescribed in Clause 1 Article 1 of Decree No. 146/2017 / ND-CP.

... c) If the company does not export but sells it to another company for export, the company purchasing these goods for export must declare VAT as the same product exported directly by the manufacturing enterprise. .

d) The Tax Departments of the provinces and cities shall coordinate with specialized state management agencies in the localities according to the functions and tasks of each agency to guide companies engaged in export production and business activities. Products from natural resources, minerals based on product characteristics and product manufacturing process to determine exported products as natural resources, minerals processed or unprocessed into other products for declaration according to the law.

In case an business declares a product that has been processed into another product but the manufacturing process has insufficient grounds to identify another product, the Department of Taxation shall report to the General Department of Taxation for coordination with other Ministries and regulatory agencies shall base themselves on the companies' production process of export products to determine that the exported products are natural resources and minerals that have not yet been processed into other products or have been processed into other products in accordance with the law ".

Based on the above provisions, the Hung Yen Department of Taxation is requested to coordinate with specialized state management agencies in the area according to the functions and tasks of each agency to determine the exported products of the limited company. Hong Thuy Import and Export Trading is processed from raw materials which are processed or unprocessed mineral resources into other products to guide the Company to declare according to regulations.