Issues related to re-processing as below:
- A re-processing company performed re - processing for processing company (who have processing contract with overseas) but was fined for penalties becauce they did not report the processing to customs before.
- The re - processing was entrusted to an EPE company, but issues were raised due to the equipment was deliveried in the factory before customs permission.
So, we are pleased to provide related laws for your reference to avoid doing wrong customs regulations about re-processing and do not get penalties. Below are Official Dispatch No. 2687/TCHQ-TXNKrelated to customs regulations about re-processing:
1. Goods imported for further processing and processed exports(Article 10 of Decree No. 134/2016/ND-CP, which is amended by Clause 4 Article 1 of Decree No. 18/2021/ND-CP)
a, Hiring domestic processors
Before assigning raw materials, supplies, equipment to the processor, the party that signs the processing contract with the foreign trader shall send a notification of the processing contract, contract appendices, processing facility to its supervisory Sub-department of Customs in accordance with customs laws (Article 56 and Article 62 of Circular No. 38/2015/TT-BTC, which are amended by Clause 36 and Clause 41 Article 1 of Circular No. 39/2018/TT-BTC).
-> Processing Company must inform to customs about re-processing contract, Apendix processing contract, processing facility to Customs.
b, Hiring processors in free trade zones (FTZ) or foreign countries
The domestic enterprise must submit the notification of manufacturing facility, processing contract, settlement report, export, import declarations. Also, the “số quản lý nội bộ doanh nghiệp” (“enterprise identification number”) shall be “#&GCPTQ” on the declaration of export of raw materials and supplies to the EPE and on the declaration of import of products processed by the EPE.
-> Processing Company must register re - processing contract and open CD when sending material and received product.
2. Goods imported for manufacture of exports(Article 12 of Decree No. 134/2016/ND-CP, which is amended by Clause 6 Article 1 of Decree No. 18/2021/ND-CP)
a, Hiring domestic processors
The taxpayer shall submit the notification of the third party’s manufacturing facility, the manufacture/processing report to the customs authority and settle the use of duty-free imports in accordance with customs laws.
-> Must report to customs re-processing contract, Apendix processing contract, processing facility to Customs.
b, Hiring processors in FTZs or foreign countries
Customs procedures shall be carried out in accordance with Point b Clause 2 Section I of this Official Dispatch.
-> Company must register re - processing contract and open CD when sending material and received product.
Summary
1. Re-processing need make notification to customs about contract, processing facility of who do re-processing only. Don't need make termination report.
2. EPE - EPE: No need open CD, also no need inform to customs. Just keep history delivery and Customs Audit can check later.