CIT: Frustrated because exports are taxed like market goods

Processed products for export are equated with preliminary processed goods, and enterprises are subject to an unreasonably high tax rate.

Many enterprises (enterprises) processing agricultural and aquatic products said that: Agricultural and aquatic products have to invest in very expensive technology and undergo many stages of processing, preservation, packaging … to increase increase in value and then export. But the paradox is that these products still have to pay the same tax as the processed and processed goods.

This causes great difficulties and damages to the business community in the context that they are fighting hard with the COVID-19 epidemic.

Processed goods equate to selling in the market

Recently, many seafood companies have reported problems with corporate income tax (CIT) related to the implementation of Circular 26/2015 and Circular 96/2015 of the Ministry of Finance. In which, the most unreasonable thing is that processed seafood products for export are subject to tax like raw and preliminary processed products.

Mr. Nguyen Van Dao, General Director of Go Dang Joint Stock Company, said that the company currently has to pay corporate income tax at 20% / year, while should be entitled to a preferential tax of only 10% -15% / year. . This means that the company is subject to high or even double corporate income tax.

“The reason is that our processed seafood products are considered as processed products. For example, from a catfish to be processed into a fish fillet, seasoning with delicious spices to consumers, just fried, steamed for instant food, but it is considered too unprocessed. We do export products, but only consider goods sold in the market, so we have to review ”- Mr. Dao is annoyed.

General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP) Truong Dinh Hoe also said that the application of the 20% CIT rate on seafood products is preliminary processing when in fact most of the products are Processing is causing many shortcomings and inconsistent with reality. Because at present, the processing activities of seafood companies include three types: Processing from fresh products for export; Processed from fresh products into ripe products and processed from ingredients with mixed spices and additives to produce value-added goods.

However, when tax finalization or inspection and examination of seafood processing companies, the products of all three types of processing above are not recognized by the tax authorities as processed products, but only preliminary. processing. This shortcoming makes the current tax payment rate of seafood companies are all 20% / year, not true to the processing nature of the industry ”- Mr. Hoe shared.

The problems of corporate income tax cause difficulties and losses for many seafood processing enterprises. Photo: Q.HUY

Doesn’t match with reality

According to VASEP, almost all processed seafood products that are completely packaged and sold directly in foreign supermarkets cannot be called preliminary processing. It is not advisable to equate a large-scale seafood processing factory, applying high technology with a simple seafood preliminary processing plant like cutting the head of shrimp and fish, and chilling it.

“Regulations on preliminary processing and processing in tax documents are inconsistent with the reality of the seafood processing industry; not in accordance with the provisions of the Law on Food Safety and the Prime Minister’s Decision No. 27/2018 on the promulgation of the economic system of Vietnam ”- VASEP representative emphasized.

Not only the fisheries sector, many exported agricultural products such as fruits, cashew nuts … also share the same fate. Mr. Nguyen Duc Thanh, former President of the Vietnam Cashew Association (Vinacas), General Director of Tan An Export Food Processing Co., Ltd., said: Currently many processed products for export are still considered. It is a primary product, not considered processed.

“We have to invest in machinery to process high value-added products such as salted cashews, fried cashews, and snacks for export. But still being subjected to tax like unprocessed goods is unreasonable ”- Mr. Thanh said.

It is necessary to adjust the concept of processed goods

Mr. Nguyen Dinh Tung, General Director of Vina T&T Group, specializing in fruit export, said that the concept between preliminary processing and processing is currently very vague. Therefore, the authorities need to listen to suggestions from the business community in the direction of expanding the concept of processing.

For example, for commodities from harvest to export, they still do not change much, only washed, packed and then exported, it is preliminary processing. When items such as fruit brought to the factory have been through many stages including preservation, packaging, irradiation, and hot steam treatment, they should be put into processed products. Can not be equated with each other to apply taxes, causing damage to the business.

“For example, for items such as coconut, durian to peel, split, then through many stages of preservation and cold treatment … to be exported, it should be considered processing” – Mr. Tung suggested.

Agreeing, Mr. Nguyen Van Thanh suggested that the concept of processed goods should be clarified according to the added value that enterprises create. For the preliminary processing, the CIT rate must be paid 20%, while for processed goods, the preferential CIT rate should be applied.

The Vietnam Association of Seafood Exporters and Producers also recommends that it be allowed to process from fresh products that have been frozen to -18 degrees Celsius, from fresh products into ripe products, processed from raw products. Whether mixing spices and additives to produce value-added goods … is considered a processing activity. These products must enjoy CIT incentives according to Circular No. 96/2015 of the Ministry of Finance, which means CIT rate of 10% -15% is allowed.

Quang Huy
Source: Law on Online Newspaper