Công văn 1501/TCHQ-GSQL

To: Customs Departments of provinces and cities.

Pursuant to the Law on Customs, guiding documents on the Law on Customs, administration methods and customs procedures for purposes of processes, manufacturing for export and basic export processing are simplified maximally to facilitate the import and export activities of enterprises. However, during the implementation process, customs authorities and enterprises encounter difficulties in implementation according to the new administration methods for those purposes, especially preparation, receipt and processing of annual statements of the use of materials/supplies by fiscal years. For the concentrated implementation, the General Department of Customs requests Customs Departments of provinces or cities to raise the awareness of affiliated Sub-department of Customs which supervise entities processing, manufacturing for export, export processing of some following regulations:

1.  The purposes subject to submission of annual statements prescribed in Article 60 of Circular No. 38/2015/TT-BTC:

- Processing;

- Manufacturing for export without request for tax refund/tax cancellation, except for the case prescribed in Official Dispatch No. 16120/BTC-TCHQ dated November 1, 2015 of the General Department of Customs;

- Export processing enterprises (including processing and manufacturing for export).

2. The figures on the form No. 15/BCQT-NVL/GSQL issued together with Circular No. 38/2015/TT-BTC:

Request Customs Departments of provinces and cities to provide guidelines for enterprises in order for they to implement Article 60 of Circular No. 38/2015/TT-BTC Point 7 of Official Dispatch No. 18195/BTC-TCHQ dated December 8, 2015 of the Ministry of Finance; Point 1.b Official Dispatch No. 1171/TCHQ-GSQL dated February 17, 2016 of the General Department of Customs. In addition, the General Department of Customs provides additional guidelines as follows:

2.1) For processing:

- Instruct enterprises to make logbooks of materials, supplies and finished products in accordance with Clauses 152 and 155 prescribed in Circular No. 200/2014/TT-BTC and Decision No. 48/2006/QĐ-BTC With regard to enterprises supervising processing operation by value, they shall prepare annual statements in accordance with guidelines prescribed in Point 2.2 herewith.

- If the internal control system of an enterprise monitor goods by quantity, rather than by value, the figures by quantity given by such system may be extracted for making the statement. The form of statement is the form No. 15/BCQT-NVL/GSQL in which the amount (of money) shall be replaced with the quantity according to every type of materials/supplies.

2.2) For manufacturing for export:

With respect to the figures of statement which are recorded in the accounts 152 and 155 of accounting book system shall contain the total value of purchase, sale, and inventory of materials, supplies, and finished products in the reporting period; and other relevant accounts (such as 151, 154, 621, 631, 632, etc.), the enterprises must present all accounting documents and provide explanation when the customs authority carries out an inspection at the enterprise’s premises.

With respect to figures specified in form No. 15/BCQT-NVL/GSQL:

a) For imported materials/supplies:

The figures of materials/supplies imported for manufacturing of exported goods arising in a period include:

- Value of opening balance (column 4) is total value of closing inventory balance of materials/supplies until the end of the fiscal year transferred from the previous period;

- Value of purchase in the period (column 5) is total value of materials/supplies purchased in the period, including:  Imports from abroad, imports from free trade zone, imports from Vietnamese manufacturers appointed by foreign traders, imports from other intermediate processing contracts; imports from inland (applicable to export processing enterprises), etc., which are extracted from the account 152.

- Value of sale in the period (column 6) is total value of materials/supplies sold in the period, including: sales for manufacturing, sales for re-processing under orders, sales to inland after changes of use purposes, return of materials/supplies etc., which are extracted from the account 152.

The value of materials/supplies in the statement is the original price of materials/supplies, including: prices in the invoices (customs declaration sheets), import duty, special excise duty, VAT on imported goods, environment protection tax payable (if any), expenses incurred from transport, material handling, storage, classification, insurance, etc. of materials/supplies from the place of purchase to the warehouses of enterprises, remuneration for purchase employees, expenses incurred from independent department of purchase and other expenses directly incurred from the purchase of materials/supplies and allowed natural losses (if any).

In case the VAT on imported goods is deducted, the value of the purchased materials/supplies shall be recorded according to the price exclusive of VAT. In case the VAT on imported goods is not deducted, the value of the purchased materials/supplies shall be recorded according to the price inclusive of VAT.

b) For finished products derived from imported materials/supplies:

Figures of finished products manufactured for export include:

- Value of opening balance (column 4) is total value of closing inventory balance of finished goods until the end of the fiscal year transferred from the previous period;

- Value of purchase in the period (column 5) is total value of finished goods derived from imported materials/supplies in the period (including finished goods received from re-processing that are extracted from the account 155;

- Value of sale in the period (column 6) is total value of finished goods sold in the period, including: Exports to abroad, exports to free trade zone, exports to Vietnamese manufacturers appointed by foreign traders, exports to other intermediate processing contracts; exports to inland after changes of use purposes that are extracted from the account 155.

Notes:

Customs Departments of provinces and cities must instruct enterprises to combine figures from 3 departments below: (1) inventory management, (2) accounting and (3) export and import together to present final figures in the statement that conformable with the accounting vouchers and books under the enterprise’s monitoring, to avoid different and inaccurate figures between them leading the enterprise waste time to provide explanation for them as required. When a statement is prepared, the enterprise need not to convert semi-finished products (from account 154 or a similar account) into materials/supplies to present in the statement.

3. Submitting and receiving annual statements:

Currently, the fiscal year applicable to enterprises operated under Vietnamese law system ends on the following dates: December 31, March 31, June 31 and September 31. Each Customs Departments of province or city is required to direct affiliated customs units to know specific begin date and end date of fiscal of each enterprise under its supervision to provide guidance and expedite them to submit statement on time as prescribed in Clause 1 Article 60 of Circular No. 38/2015/TT-BTC.

The submission and verification of statement shall comply with Article 21 in terms of procedures for customs procedures applicable to exported goods and imported goods issued together with Decision No. 1966/QĐ-TCHQ (hereinafter referred to as Decision No. 1966/QĐ-TCHQ) If there is no supporting system for receiving annual statements of the use of materials/supplies by fiscal years, each Customs Departments of province or city is required to instruct enterprises to written submit annual statements (hardcopies) at a Sub-department of Customs where the procedures for import of materials/supplies are followed or a supervisory Sub-department of Customs of export processing enterprises prescribed in Clause 2 Article 60 of Circular No. 38/2015/TT-BTC Each enterprise, submitting the statement, is not required to provide any additional document.

Each Sub-department of Customs receiving annual statements shall make a record of the submission of annual statements by fiscal year to expedite or take actions against enterprises that fail to submit or submit annual statements late than the prescribed deadline.

4. Processing of annual statements:

a) Cases in which the statement is examined:

Pursuant to Article 41 of Decree No. 08/2015/NĐ-CP Clause 5 Article 60 of Circular No. 38/2015/TT-BTC each Sub-department of Customs which receives annual statements shall classify enterprises subject to examination methods as prescribed. Cases in which the statement is examined:

a1) The entity submits the first statement;

a2) The figures on statement are unusually different from the system of customs authorities;

a3) An inspection is carried out at the taxpayer’s premises after the decision on tax refund or tax cancellation;

a4) The statement is examined on the basis of risk management, assessment of conformity with law of the taxpayer.

Annual statements of preferred enterprises shall be examined in accordance with regulations of the Ministry of Finance on application of preferential policies to export and import procedures.

b) Methods of examination of annual statements:

The annual statements shall be examined as prescribed in Article 59 of Circular No. 38/2015/TT-BTC; the forms of examination decision and examination conclusion shall be similar with the forms used in post-customs clearance inspections.

Customs units are required to provide training courses in inspection, audit and accounting for customs officials to satisfy requirements of the new administration method.

5. Implementation of Part III of Decision No. 1966/QĐ-TCHQ:

Each Customs Departments of province or city is required to comply with Article 16 through Article 12 of Decision No. 1966/QĐ-TCHQ Point 1 of Official Dispatch No. 1171/TCHQ-GSQL dated February 17 of the General Department of Customs.

The observance, collection, analysis of information and assessment of the conformity with law of enterprises shall be carried out regularly and continuously; in addition, the General Department of Customs shall provide additional guidelines for collection and analysis of details about enterprises in accordance with Article 17 of Decision No. 1966/QĐ-TCHQ as follows:

5.1) Collection of details about an enterprise:

a) Identity:

- Business type (foreign investment (export processing enterprise), state-owned enterprise, private enterprise, cooperatives, private households, etc.);

- Name of legal representative of the enterprise, nationality;

- Total legal capital, charter capital;

- Lines of the business specified in business certificate or investment license;

- Addresses of headquarters, branches; number and addresses of manufacturing facilities;

b) Operation:

- Operation date;

- Production capacity (quantity of machinery and equipment, quantity of employees, production capacity by month/quarter/year);

- Export and/or import products;

- Total import and/or declaration sheets by year;

- Total export and/or import turnover by year;

- Export and/or import market.

c) Conformity with law:

- Conformity with law on customs; the law on taxation: Violation frequency, violation severity; ranking, etc.;

- Conformity with other laws (penal code, civil code, administrative law, etc.).

d) Other information sources, etc.

5.2) Analysis, evaluation of information, and ranking of enterprise:

According to collected information from different sources, the official in charge must analyze, evaluate and determine whether an enterprise posing high risks and include it in annual inspection plan.

5.3) Periodically, in accordance with Point 1.b.2 Article 21 of Decision No. 1966/QĐ-TCHQ each Customs Departments of province or city shall send a list of enterprises whose annual statements are subject to examination to the General Department of Customs (Department of Supervision and Administration) for approval.

Difficulties that arise during the implementation of this Official Dispatch should be reported to the General Department of Customs for consideration./.