On April 29th, 2021, Bac Ninh Tax Department issued Official Letter No. 757/CTBNI-TTHT, thereby:
In case that Company enters an export contract for providing goods with a foreign counterpart (Foreign party), and the Company has received all payment for the above goods. After that, during the product utilization, the foreign party detects defective, unqualified, unusable products, and all of them are exterminated abroad, and the Company simultaneously refunds for the paid goods. Then the Company will base on the Export contract and other agreements to determine whether this is the monetary compensation for the Foreign company or not (incur from the foreign party’s damages for defective, unqualified, unusable products and has to be exterminated abroad), and the foreign party must make FCT payment for the received monetary compensation and the Company will be accountable for making FCT declaration and payment for the foreign party.
On the other hand, if the Company has to refund the foreign party and not bear any legal liability with the faulty goods, the above payment will not be subjected to FCT contribution.
