Chapter VI
GOODS PROCESSING INVOLVING FOREIGN ELEMENTS
Section 1. PROCESSING OF GOODS FOR FOREIGN TRADERS
Article 28. Traders undertaking processing of goods for foreign traders
Except the cases specified in Article 36 of this Decree, Vietnamese traders, including those with foreign investment in Vietnam, may undertake processing of goods for foreign traders, except goods on the list of goods banned or suspended from import and goods on the list of goods banned or suspended from export. For goods to be imported or exported under permits, traders may sign contracts only after obtaining permits of the Ministry of Industry and Trade.
Article 29. Processing contracts
A processing contract must be made in writing or in another form of equivalent legal validity in accordance with the Commercial Law and must include at least the following clauses and terms:
1. Names and addresses of the contracting parties and the direct processor.
2. Names and quantities of products to be processed.
3. Processing price.
4. Payment time limit and mode.
5. List, quantities and values of imported raw materials, auxiliary materials and supplies and home-made raw materials, auxiliary materials and supplies (if any) for processing; use norms of raw materials, auxiliary materials and supplies; norms of supplies consumption and wastage rates of raw materials in processing.
6. List and value of machinery and equipment (if any) hired, borrowed or donated for processing.
7. Measures to treat waste materials, scraps and faulty products and principles of disposal of hired or borrowed machinery and equipment and unused raw materials, auxiliary materials and supplies after the termination of the processing contract.
8. Place and time of goods delivery.
9. Trademarks and appellations of origin of goods.
10. Validity duration of the contract.
Article 30. Use and consumption norms and wastage rates of raw materials, auxiliary materials and supplies
1. Use and consumption norms and wastage rates of raw materials, auxiliary materials and supplies may be agreed upon by the parties in processing contracts, taking into account norms and wastage rates established in relevant production and processing sectors of Vietnam at the time of signing such contracts.
2. At-law representatives of traders directly undertaking the processing shall take responsibility before law for using imported raw materials, auxiliary materials and supplies for proper processing purposes and the accuracy of use and consumption norms and wastage rates of raw and auxiliary materials for processing.
Article 31. Lease, borrowing and importation of machinery and equipment of principals for the performance of processing contracts
Processors may rent or borrow machinery and equipment of principals for the performance of processing contracts. The lease, borrowing or donation of machinery and equipment must be agreed upon in processing contracts.
Article 32. Rights and obligations of principals and processors
1. Principals:
a/ To deliver all or part of raw materials and supplies for the processing as agreed upon in processing contracts;
b/ To receive back all processed products; machinery and equipment rent or borrowed by processors; raw materials, auxiliary materials, supplies and scraps after the liquidation of processing contracts, except when they are permitted to be exported on the spot, destroyed or donated under this Decree;
c/ To send experts to Vietnam to provide technical guidance on production and inspect the quality of processed products as agreed upon in processing contracts;
d/ To take responsibility for the right to use trademarks and appellations of origin of goods;
dd/ To strictly observe relevant Vietnamese laws on processing activities and terms and clauses of signed processing contracts;
e/ To export on the spot processed products; leased or lent machinery and equipment; unused raw materials, auxiliary materials and supplies; faulty products and scraps under written agreements of involved parties in accordance with current regulations on goods import and export management, and perform tax and other financial obligations as prescribed by law.
2. Processors:
a/ To enjoy exemption from import duty on machinery, equipment, raw materials, auxiliary materials and supplies temporarily imported within prescribed norms and wastage rates for the performance of processing contracts; to enjoy exemption from export duty on processed products;
b/ To hire other traders to conduct processing;
c/ To be supplied with part or the whole of raw materials, auxiliary materials and supplies for processing as agreed upon in processing contracts; and to pay export duty in accordance with the Law on Import Duty and Export Duty for quantities of domestically purchased raw materials, auxiliary materials and supplies;
d/ To receive remunerations from principals in the form of processed products, except products on the list of goods banned or suspended from import. Products on the list of imports subject to permits or goods subject to specialized management permits must comply with regulations on grant of permits and specialized management;
dd/ To observe the Vietnamese law on processing activities, export, import and domestic manufacture of goods, and terms and clauses of signed processing contracts;
e/ To carry out procedures for on-the-spot export of processed goods; leased or borrowed machinery and equipment; unused raw materials, auxiliary materials and supplies; faulty products and scraps as authorized by principals.
3. Conditions for the on-the-spot export of processed products; leased and borrowed machinery and equipment; unused raw materials, auxiliary materials and supplies; and faulty products and scraps specified at Point e, Clause 1 and Point e, Clause 2 of this Article are prescribed as follows:
a/ Strictly complying with regulations on import and export management, taxes and other financial obligations prescribed by law;
b/ Having sale and purchase contracts signed between foreign traders or their lawful authorized persons and importing traders.
Article 33. Intermediary processing
Traders may undertake intermediary processing, whereby:
1. Processed products under a processing contract are used as raw materials for another processing contract in Vietnam.
2. Processed products under the first-stage processing contract are delivered under the principal’s designation to traders under the next-stage processing contract.
Article 34. Liquidation and settlement of processing contracts
1. Upon the termination of a processing contract or when a processing contract ceases to be effective, the contracting parties shall liquidate the processing contract and carry out the procedures for settling the contract with customs offices.
The Ministry of Finance shall guide procedures for settlement of processing contracts by processors with customs offices.
2. The bases for liquidation of a processing contract are the quantity of imported raw materials, auxiliary materials and supplies and the quantity of exported products according to the use norms of raw materials, auxiliary materials and supplies, consumption norms of supplies, and wastage rates as agreed in the processing contract.
The bases for settlement of a processing contract are the quantity of imported raw materials, auxiliary materials and supplies, the quantity of re-exported raw materials, auxiliary materials and supplies, and the quantity of exported products according to the use norms of raw materials, auxiliary materials and supplies, consumption norms of supplies, and wastage rates conformable with the practical performance of the contract.
3. Machinery and equipment leased or borrowed under the contract; unused raw materials, auxiliary materials and supplies, faulty products and scraps must be disposed of as agreed upon in the processing contract and in accordance with Vietnamese law.
4. The destruction of waste materials, faulty products and scraps (if any) may be effected only after obtaining written approval of provincial-level Natural Resources and Environment Departments, and is subject to customs supervision. If destruction is not permitted in Vietnam, they must be re-exported as designated by principals.
5. The donation of machinery, equipment, raw materials, auxiliary materials, supplies, scraps and faulty products is provided for as follows:
a/ The principal shall make a written document on the donation;
b/ The donation recipient shall carry out import procedures according to current import regulations; pay import duty and other taxes (if any), and make property registration according to current regulations;
c/ Scraps and faulty products within the use norms and wastage rates and on the list of scraps permitted for import are not required to go through customs procedures, are exempted from import duty but liable to value-added tax and enterprise income tax.
Article 35. Customs procedures
The Ministry of Finance shall guide customs procedures and financial obligations for processed goods for export, and supervise the import and export related to processing contracts.
Article 36. Other forms of processing
1. The processing, reprocessing or repair of machinery and equipment for foreigners on the list of goods banned from import or export may be conducted only if the following conditions are satisfied:
a/ It has a plan and measures to treat waste materials and scraps of the processing and prevent environmental pollution approved by the provincial-level Natural Resources and Environment Department;
b/ All products and goods are re-exported overseas and may not be sold in Vietnam;
c/ Permission of a line ministry according to the responsibility assignment specified in Appendix I to this Decree is obtained.
2. Based on the responsibility assignment specified in Appendix I to this Decree, line ministries and ministerial-level agencies shall specifically guide these forms of processing.
Section 2. ORDERING OF OVERSEAS PROCESSING OF GOODS
Article 37. General provisions
1. Traders may order overseas processing of goods which are permitted to be circulated in the Vietnamese market for business purposes as prescribed by law.
2. The exportation of machinery, equipment, raw materials, auxiliary materials and supplies for processing and the importation of processed products must comply with regulations on import and export management.
3. Contracts on overseas processing of goods and customs procedures applicable to the import and export of processed goods must comply with Articles 29 and 35 of this Decree.
Article 38. Rights and obligations of traders ordering overseas processing of goods
1. To temporarily export machinery, equipment, raw materials, auxiliary materials and supplies, to transfer through border gates machinery, equipment, raw materials, auxiliary materials and supplies from a third country to the processor for the performance of the processing contract.
2. To re-import processed products. Upon the termination of a processing contract, to re-import machinery, equipment and unused raw materials, auxiliary materials and supplies.
3. To sell processed products and machinery, equipment, raw materials, auxiliary materials and supplies already exported for the performance of the processing contract on the market of the country where the processing is conducted or on another market, and pay taxes according to current regulations.
4. To be exempted from import duty and export duty on machinery, equipment, raw materials, auxiliary materials and supplies which are temporarily exported and re-imported; if not re-importing them, to pay export duty in accordance with the Law on Import Duty and Export Duty.
5. To send experts and technical workers to test and inspect processed products before acceptance.
6. To take responsibility for the right to use trademarks and appellations of origin of goods.
7. The Ministry of Finance shall guide the performance of tax obligations for processed goods imported for domestic consumption.
Tìm kiếm
Nghị định 187/2013/NĐ-CP (Bản Word)
Nghị định 187/2013/NĐ-CP (Bản Pdf)