Question:
Our company distributes products for a foreign Supplier (importing goods from the foreign Supplier to sell to domestic customers). During our business operations, we encountered some products that do not meet customer preferences or are defective, so our company exported these products back to the foreign Supplier. When exporting the goods back to the foreign Supplier, our company had an export contract, an export declaration, and an export VAT invoice.
In this case, can our company claim a VAT deduction for the input VAT on the goods exported back to the foreign Supplier as described above? What is the tax policy regarding VAT deduction for imported goods subsequently exported back to the foreign principal? In the case of exporting goods back to the foreign Supplier, is there a contractor tax to be paid?
Answer:
-Based on the Article 7 of Circular No. 150/2013/TT-BTC dated October 29, 2013, issued by the Ministry of Finance, which guides the establishment, management, and implementation of the VAT refund fund.
-Based on Circular No. 119/2014/TT-BTC dated August 25, 2014, issued by the Ministry of Finance, amending Circulars No. 156/2013/TT-BTC, 111/2013/TT-BTC, 219/2013/TT-BTC, 08/2013/TT-BTC, 85/2011/TT-BTC, 39/2014/TT-BTC, and 78/2014/TT-BTC for the purpose of simplifying administrative procedures related to taxes.
-Based on Article 49 of Circular No. 38/2015/TT-BTC dated March 25, 2015, issued by the Ministry of Finance, which regulates customs procedures, customs inspection and supervision, export tax, import tax, and tax management for exported and imported goods.
=> In the case where the company imports goods from a foreign Supplier for sale in the domestic market and later exports some of these goods back to the foreign Supplier due to reasons such as customer preferences or product defects, the company is not eligible for a VAT deduction. The VAT amount paid during the importation process for the goods that are re-exported is considered an overpaid VAT. The company should proceed with the VAT refund procedure at the Customs authorities as stipulated in Article 49 of Circular No. 38/2015/TT-BTC issued by the Ministry of Finance.
