On September 13th, 2023, Binh Dinh Tax Department issued Official Letter No. 3162/CTBDI-TTHT, according to which:
In case according to the contract, the Company delivers export goods to a foreign customer (Company A) that do not meet the required quality standards, the Company must compensate Company A with the “compensation value” minus on the value of payment, so the actual amount on the bank payment voucher is smaller than the amount according to the Invoice and VAT invoice. To meet the conditions for deduction and refund of input tax on exported goods, in which:
- The company shall make the written price reduction agreement clearly explains the reason for price reduction adjustment due to poor quality goods with Company A.
- The company issues a VAT invoice to adjust the selling price of exported goods due to poor quality goods. Based on the adjusted invoice, minutes, or agreement between the two parties, payment documents via bank, the Company declares, adjusts export revenue reduction according to regulations.
- “Compensation value” in this case is not related to foreign contractor tax, based on documents related to the subject who accounts revenue deduction.
