5 cases of duty refund for import duty and export duty

A duty refund is the return of duty that is collected by authorized agencies from enterprises because the revenue is more than the payable tax amount or is not applicable to the payable objectives. Here are the cases of duty refund.

Clause 1, Article 19, Law on Import duty and export duty 2016 prescribes the cases in which duty shall be refunded as follows:

(1) A duty payer has already paid an import duty or export duty but does not import or export goods or imports or exports goods in a quantity less than the number of goods for which the duty has been paid;

(2)  A duty payer who has paid an export duty but then has to reimport the exported goods shall be refunded the export duty and not required to pay import duty.

(3) A duty payer who has paid an export duty but then has to reimport the exported goods shall be refunded the export duty and not required to pay import duty.

(4) A duty payer who has paid an import duty but then has to reexport the imported goods shall be refunded the import duty and not required to pay export duty;

(5) A duty payer has paid duty for machinery, equipment, tools, or vehicles of an organization or individual that is licensed to conduct temporary import for re-export, except in cases of hiring such machinery, equipment, tools, or vehicles for the implementation of investment projects, construction, and installation or production activities when they are reexported abroad or exported into a non-tariff zone

The refundable amount of import duty shall be determined on the basis of the residual value of the re-exported goods calculated based on the period of their use or stay in Vietnam.

If the goods no longer have any value, the paid import tax shall not be refunded. A refundable amount that is lower than the minimum level prescribed by the Government shall not be refunded.

Note:  Duty shall be refunded for goods in sections (1), and (2). (3) e if they have not yet been used or processed.

The above contents are prescribed in detail as follows:

1. Duty refund for exports to be re-imported

Clause 1, Article 33, Decree No. 34/2016/ND-CP prescribes that exports for which the export duty has been paid and which are re-imported are entitled to export duty refund and are not subject to import duty, comprising:

- Goods already exported which are re-imported to Vietnam;

- Exported goods sent by Vietnamese organizations or individuals to foreign organizations or individuals via the international post or express delivery service for which the export duty has been paid but which cannot be delivered to recipients and have to be re-imported.

A duty payer shall accurately and truthfully declare re-imported goods being previously exported goods in the customs declaration; and the contract number and date and the name of the purchaser of the goods, in case of having a goods purchase and sale contract.

The customs office shall examine the duty payer’s declaration and clearly write the examination result as a basis for the duty refund.

2. Duty refund for imports subject to re-export

Pursuant to Clause 1, Decree No. 134/2016/ND-CP, Imports for which the import duty has been paid and which have to be re-exported are entitled to import duty refund and are not subject to export duty, including:

-  Imported goods subject to re-export to foreign countries, including goods to be exported back to the goods owners, goods already imported to be exported to foreign countries, or goods exported to non-tariff areas for use therein.

Goods shall be re-exported by the initial importer or a party authorized or entrusted by the initial importer;

- Imports sent by organizations or individuals overseas to organizations or individuals in Vietnam via the international post or express delivery service for which the duty has been paid and which cannot be delivered to the recipients and are subject to re-export;

-  Imports for which the duty has been paid and which are sold to vehicles of foreign firms operating on international routes through Vietnam and to Vietnamese vehicles operating on international routes in accordance with regulations;

- Imports for which the import duty has been paid but which are stored in warehouses or storage yards of border gates, are under customs inspection, and are re-exported overseas.

Duty payers shall accurately and truthfully declare imports to be reexported in customs declarations; and contract numbers and dates and names of goods purchasers.

The customs office shall examine the duty payer’s declaration and clearly write the examination result as a basis for the duty refund. 

3. Duty refund for machinery, equipment, instruments, and transport vehicles of organizations and individuals permitted for temporary import for re-export

Clause 1, Article 35, Decree No. 134/2016/ND-CP prescribes that A duty payer shall declare and take responsibility before law for the rate of depreciation and distribution of the value of goods during the time of their use and storage in Vietnam in accordance with the law on accounting when requesting the customs office to refund duty as a basis for calculating the residual value of goods.

A duty payer shall accurately and truthfully declare imports to be re-exported in the customs declaration; and the contract number and date and name of the purchaser of the goods.

The customs office shall examine the duty payer’s declaration and clearly write the examination result as a basis for the duty refund.

4. Duty refund for goods imported for production and business after their products are exported

In accordance with Clauses 1, 2, 3, 4, Article 36, Decree No. 134/2016/ND-CP, duty refund for goods imported for production and business after their products are exported is prescribed as follows:

-  After the goods imported for production and business have been used for export production and their products are exported overseas or into non-tariff areas, the paid import duty for such goods shall be refunded.

-  Imports eligible for import duty refund include:

• Materials and supplies (including supplies for the production of packaging or for packaging of export products), imported components, and semi-finished products which directly constitute export products or are used in export production but are not directly transformed into goods;
• Imported complete products which are attached or assembled with export products or packed with export products into goods in complete sets;
• Imported components and parts for maintenance of export products.

- Grounds for identifying goods eligible for duty refund:

• Organizations or individuals producing export products have facilities producing exports in the territory of Vietnam; and have the right to own or use machinery and equipment at production facilities suitable to materials, supplies, and components imported for export production;
• The value or quantity of imported materials, supplies, and components eligible for duty refund is the value of the quantity of actually imported materials, supplies, and components used for the production of actually exported products
• Export products have gone through customs procedures applicable to export production;
• Organizations or individuals directly import goods and export products or entrust such import and export.
• Duty payers shall accurately and truthfully declare on customs declarations exports produced from imports.

- In case a type of materials, supplies, or components are imported for production of two or more types of products of which only one type is exported, the import duty corresponding to the part of materials, supplies, or components accordingly constituting the exported products against the total value of products turned out shall be refunded.

The total value of products turned out is the total value of exported products and the sale price of domestically sold products.  The value of exported products does not include the value of domestically purchased materials, supplies, and components constituting the export products.

The refundable import duty shall be calculated by the distribution method according to the following formula:

The value of export products is the quantity of actually exported products multiplied by (x) the taxed value of the export goods.

5. Duty refund in case duty payers have paid the import or export duty but have no goods imported or exported or have imported or exported goods in a quantity smaller than that for which the import or export duty has been paid; non-refund of minimal duty amounts

- If no goods are imported or exported or the quantity of imported or exported goods is smaller than that for which an import or export duty has been paid, the paid import or export duty corresponds to the goods which actually are not imported or exported or which have been imported or exported in a quantity smaller than that for which the import or export duty has been paid shall be refunded.

- In the cases eligible for import or export duty refund prescribed in Articles 33, 34, 35, 36, and 37 of this Decree, no refund shall be granted if the refundable duty amount is under VND 50,000 according to the customs declaration for duty refund procedures.

Customs offices shall neither receive duty refund dossiers nor refund the refundable duty amount specified in this Clause.

Here are 5 cases of duty refund for import duty and export duty.