Uni 01-10-2018 - Guidance on tax policy for exported defected goods

Official letter 2711/CT-TTHT dated 04/09/2018 of Bac Ninh Tax Department of tax policy for exported defected goods:

In case the company signs the goods supply contract with the customer, due to the particularity of the production process of the buyer, the buyer must produce the new product to detect the defective goods so it is impossible to recover and return the damaged goods. Seller. The two sides make documents to determine the number of irrecoverable error, the seller to compensate for the damaged goods to the buyer as agreed in the signed contract. Upon the delivery of goods for compensation, the seller must make invoices and declare, calculate and pay VAT as for the sale of goods; The consignee declare and deduct VAT as prescribed. Expenses for goods exported to the seller, after deducting the goods value, shall be liable to organizations and individuals that have to compensate (if any), the remainder shall be accounted into the deductible expenses when determining the EIT-liable income.