On-site export is a form of exporting goods chosen by many enterprises in Vietnam with many benefits such as reducing risks in transporting and delivering goods, saving costs whilst still contributing to Vietnam’s export turnover.
1. What types of goods does an on-site export apply to?
Normally, when mentioning the term export, people tend to think of moving goods out of the border gate. However, on-site export is a form in which goods do not go through the border gate but take place right on the territory of Vietnam when the legal conditions are met.
Not all goods are subject to an on-site export. According to Circular 35/2015/TT-BTC, on-site export goods include:
- Processed products; rented or borrowed machinery and equipment; surplus raw materials and supplies; scrap and waste products under processing contracts with export traders that have signed sales contracts with foreign traders or legally authorized persons of foreign traders;
- Goods traded between domestic enterprises and export processing enterprises or enterprises in non-tariff zones;
- Goods purchased and sold between Vietnamese enterprises, foreign organizations and individuals that are not present in Vietnam and are chosen by foreign traders to deliver and receive goods with enterprises in Vietnam.
Thus, besides classifying the type of goods, Vietnamese Law also stipulates accompanying conditions to identify on-site exported goods. Note that an exporting enterprise in Vietnam includes domestic enterprises and foreign invested enterprises.
2. Customs procedures
Similar to the procedure of exporting goods through border gates, when doing on-site exports, enterprises must also make customs declarations.
For export enterprises
- Declare information on the export customs declaration together with transportation declaration, clearly stating in the box “Destination for tax-covered transportation” the location code of the Customs Branch carrying out import customs procedures and the box The criteria “Internal management enterprise number” on the export declaration must be declared as follows: XKTC or in the “Other records” box on the customs declaration;
- Commercial invoice or document of equivalent value if the buyer must pay the seller;
- List of forest products for exported raw wood according to the Ministry of Agriculture and Rural Development regulations;
- Export license or export permit from a competent authority;
- Certificate of specialized inspection (if any);
- Documents proving that organizations and individuals are eligible to export goods according to Investment Law provisions;
- Entrustment contract.
The exporting enterprise will notify the completion of export customs procedures so that the importer can carry out the import procedures; and delivering the goods to the importer.
Finally, the exporting enterprise receives information on the on-site import declaration that has completed customs procedures from the on-site importer to carry out further procedures.
Importing enterprises are responsible for
- Declare import customs declaration information within the prescribed time limit, clearly stating the corresponding on-site export customs declaration number in the “Internal management enterprise number” box as follows: #&NKTC#& number corresponding on-site export customs declaration or in the “Other records” box on the paper customs declaration.
- Carry out procedures for importing goods according to regulations.
- Immediately after completing the on-site import procedures, notify the on-site exporter of the completion of the procedures to carry out the next procedures.
- Goods can only be put into production and consumed after they have been cleared through customs.
Note that in the case of goods being traded between domestic enterprises and export processing enterprises or enterprises in non-tariff zones, customs declarants use value-added invoices or sales invoices according to the regulations of the Ministry of Finance instead of a commercial invoice.
Customs declaration must be made within a maximum period of 30 days from the date of delivery of goods. Customs declarants can register on-site export and import goods declarations at a convenient Customs Branch; Tax policies, export and import goods management policies are implemented after customs declaration registration.
Customs authorities only check documents related to the delivery of goods (no actual checking). For each delivery, the exporter and importer must have documents proving the delivery of goods (such as commercial invoices, VAT invoices or sales invoices, warehouse delivery records and internal transportation bills, etc.) which they are responsible for keeping at the enterprise and presenting when the customs authority conducts an inspection.
3. Incentives for on-site exports
According to the provisions of Circular 219/2013/TT-BTC, on-site exported goods enjoy a Value Added Tax rate of 0%.
Besides value added tax, exported goods and services are also governed by the provisions of the Law on Import and Export Tax.
Thus, on-site export is a special form of export, only applicable to goods that meet specific conditions. With the benefits of saving costs, minimizing risks that may arise and enjoying a 0% VAT rate, this form is chosen by many enterprises. In addition, on-site export is not limited to the type of business or capital contribution ratio.