Accounting instructions, formulas and calculation of Export Tax

This article will help you understand: What is export tax? Regulations on subjects, accounting methods, calculation formulas, tax payment deadlines and the latest export tax schedule…

I. What is export tax?

Export tax is a tax collected on the value of goods exported from the domestic market to foreign countries or into duty-free zones.

II. Subjects subject to and not subject to export tax

1. Subjects subject to export tax

• Goods exported through Vietnam’s border gates and borders to foreign countries;
• Goods exported to duty free zones;
• Goods exported on the spot;
• Export goods of enterprises exercising export rights.

2. Objects not subject to export tax

• Goods in transit, transshipment, and transshipment through Vietnam’s border gates;
• Goods used for humanitarian aid and non-refundable aid (not of a business nature);
• Goods exported from duty-free zones to foreign countries and vice versa, from one duty-free zone to another;
• The oil and gas portion is used to pay resource tax to the State Budget when exported.

III. Time for calculating export tax and deadline for paying export tax

1. Time to calculate export tax

• Is the time when the owner of exported goods or the export consignment organization registers the customs declaration;
• The time for registering a customs declaration is after the goods are gathered at the location notified by the customs declarant and at least 4 hours before the means of transport leaves the country for normal transport. In case of export by express delivery, at least 2 hours before.

2. Deadline for payment of export tax

The deadline for paying export tax is after registering the customs declaration and before customs clearance, which means that businesses must pay export tax before goods can be cleared and exported. 

However, the price of export goods is not always clear, there will be some special cases as follows:

• Goods need to be identified and appraised to determine the amount of tax payable: Taxpayers shall make provisional payment according to the declared amount. After the appraisal results are available: 
  • If the amount declared by the taxpayer is lower than the amount of tax payable, within 5 working days from the date of receipt of the request, the taxpayer must pay the remaining tax;
  • If the amount declared by the taxpayer is higher than the amount of tax payable, that is, the excess payment will be offset against the next tax payments or procedures will be followed to receive a tax refund according to regulations. 
• Goods without official price at customs declaration registration point: Similar to the case of goods that need to be identified and appraised to determine the amount of tax payable.

Note: If you have not paid export tax but want the goods to be cleared through customs, you must have a credit institution guarantee the tax payable, the maximum guarantee period is 30 days from the date of customs declaration registration, after the guarantee period expires and you have not paid the tax, the credit institution accepting the guarantee will have to pay the tax on your behalf. However, the unpaid tax amount will be subject to a late payment fee of 0.03%/day according to Clause 2, Article 59 of the Tax Administration Law No. 38/2019/QH14, the number of days of late payment is calculated from the date of customs clearance to the date of tax payment.

This is quite unique compared to other taxes because you are not allowed to owe taxes unless you are guaranteed by a credit institution.

 See more: How to register and pay taxes electronically.

IV. Regulations on export tax rates

Export tax rates are specified for each group of goods in the Export Tax Schedule according to the list of taxable goods groups and export tax rate brackets for each group of taxable goods.

If goods are exported to countries that have preferential tax agreements with Vietnam, the preferential tax rate will be applied according to the agreement between Vietnam and the country importing the goods.

FREE DOWNLOAD: Export tariff schedule.

V. Instructions on accounting, tax calculation and export tax exchange rate

1. Formula for calculating export tax

There are 3 methods of calculating export tax prescribed for different types of goods, specifically:

1.1. Percentage tax calculation method

Based on the goods, the tax rate applied is the corresponding percentage multiplied by the taxable value determined by the unit price and quantity of goods, specifically according to the formula:

In there:

>> The value per unit of exported goods is the selling price of goods at FOB – Free On Board price, calculated at the export gate, excluding international insurance fee (I) and transportation fee (F);

>> Tax rates as percentages of each item are specified in detail in the Export Tariff (refer to Law No. 107/2016/QH13)

1.2. Absolute tax calculation method

It is a method of determining the amount of tax payable on a unit of exported goods at the time of tax calculation. The formula for calculating export tax is specified as follows:

 

1.3. Mixed tax calculation method

This is a method that simultaneously applies the percentage tax calculation method and the absolute tax calculation method. The formula for calculating the export tax payable is as follows:

 

2. Exchange rate for calculating export tax

According to Clause 3, Article 21 of Decree 08/2015/ND-CP and Clause 2, Article 35 of Circular 38/2015/TT-BTC regulating customs procedures, import and export taxes, and tax management for import and export goods: The tax calculation exchange rate is the buying exchange rate at the end of the day by transfer from the Head Office – Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) on Thursday of the week (i.e. every Friday) of the previous week. If that day is a holiday, the previous day (i.e. the fifth day of the week) will be taken.

For example: Today is Friday, November 26, 2021, the 5th day of the week, the exchange rate at the end of this day will be applied by the General Department of Customs to customs declarations in the following week (declarations from November 29, 2021 to December 3, 2021).

3. How to account for export tax

When there is an official customs declaration of exported goods, the enterprise determines the revenue and the amount of export tax payable to account for:

Debit account 131 – Total value of goods that the buyer must pay;

Credit account 511 – Revenue from exporting goods;

Credit account 3333 – Export tax payable.

When paying export tax to the State Budget, enterprises account for:

Debit account 3333 – Export tax payable;

Credit account 1111, 1121 – Cash, Bank deposits.

VI. Cases of export tax exemption

In addition to having to pay export tax, there are still some special cases that are exempt from export tax as follows:

1. Tax-free export goods in accordance with international treaties to which Vietnam is a member;
2. Assets that are gifts or presents within the permitted limit between foreign organizations or individuals and Vietnamese organizations or individuals. In case they exceed the permitted limit, export tax on the excess amount must be paid;
3. Goods bought, sold and exchanged across the border to serve the production and consumption purposes of people in border areas;
4. Goods whose value or tax amount is too low and below the minimum level;
5. Goods exported for processing and then re-imported, i.e. temporary export and re-import;
6. Goods not intended for commercial purposes such as samples, models, advertising publications in insignificant quantities;
7. Export goods to protect the environment, ensure social security, overcome natural disasters, epidemics and some special cases.

VII. Note cases that occur when paying for exported goods

Similar to domestic trade, export activities also have different payment scenarios including:

• Case 1: Collect money first, export later;
• Case 2: Export first, collect money later;
• Case 3: Collect a part of the payment in advance;
• Case 4: Collect money at the time of export.

For example:

On December 10, 2021, Company A exported a shipment of 2 containers of pure copper to Company B in China and completed the export procedures. The total value of the export contract is 30,000 USD (the transfer purchase exchange rate is 22,860). Determine the revenue and account for the above shipment.

➜ Case 1: Collect money first, export later:

On December 8, 2021, company B transferred payment to company A of 30,000 USD, the transfer buying rate on December 8, 2021 was 22,840

• On December 8, 2021, Company B paid

Debit 112: 685,200,000 (30,000 x 22,840) – Exchange rate at the time of advance receipt

There are 131: 685,200,000

• On December 10, 2021, company A exported

Debit 131: 685,200,000 (30,000 x 22,840) – Exchange rate at the time of advance receipt

There are 511: 685,200,000

In this case, the exchange rate at the time of receipt and export is used when receiving money.

➜ Case 2: Export first, collect money later:

On December 15, 2021, company B transferred payment to company A in the amount of 30,000 USD (the transfer buying rate on December 15, 2021 was 22,900

• On December 10, 2021, company A exported

Debit 131: 685,800,000 (30,000 x 22,860) – Exchange rate at the time of export

There are 511: 685,800,000

• On December 15, 2021, company B transferred money

Debit 112: 687,000,000 – Exchange rate on the date of payment receipt

Yes 131: 685,800,000 – Exchange rate at the date of export

Have 515: 1,200,000 – Exchange rate profit

➜ Case 3: Collect a portion of the payment in advance

On December 8, 2021, company B paid company A the amount of 15,000 USD (the transfer rate on the transaction date was 22,840)

• On December 8, 2021, Company B paid

Debit 112: 342,600,000 (30,000 x 22,840) – Exchange rate at the time of advance receipt

There are 131: 342,600,000 

• On December 10, 2021, company A exported

Debit 131: 342,600,000 (15,000 x 22,840) – Exchange rate at the time of advance receipt, only calculated for the portion of revenue received in advance

There are 511: 342,600,000

Debit 131: 342,900,000 (15,000 x 22,860) – Exchange rate at the time of export, recording the remaining revenue received

There are 511: 342,900,000

• On December 15, 2021, Company B paid the remaining 15,000 USD

Debit 112: 343,500,000 (15000 x 22,900) – Exchange rate on the day payment is received

There are 131: 342,900,000

There are 515: 600,000

➜ Case 4: Collect money at the time of export

• On December 10, 2021, company A exported, and at the same time company B paid company A 30,000 USD.

Debt 131: 685,800,000

There are 511: 685,800,000

Debt 112: 685,800,000

There are 131: 685,800,000

 Reference: How to calculate import tax.

VIII. Some frequently asked questions about export tax