Businesses Must Declare VAT for Sales Returns on Exported Goods
When businesses export goods and re-import them, they must use the “G7 Domestic Goods Re-import” declaration form. If the re-import is due to a sales return, the “Tax Payment Method” field should be marked with “55.” The sales return amount should be calculated based on the exchange rate applied when the goods were originally exported at a zero-tax rate. Businesses must prepare a “Sales Return or Allowance Certificate,” attached with supporting documents for the re-import, and declare the zero-tax rate sales return in the reporting period(month) when the sales return occurred. However, if the re-imported goods are returned for reprocessing and subsequently will be re-exported, the “Tax Payment Method” field should be marked with “99,” and no VAT declaration is required for either the return or the re-export.
In addition, the Customs Administration of the Ministry of Finance announced on December 10, 2024, a new tax payment method code “5S” (Re-import of Goods to the U.S. Due to Statutory Reasons). For businesses re-importing goods originally exported to the U.S., the “Tax Payment Method” field on the import declaration should be marked with “5S,” and the “Other Declaration Items” field should specify the reason for the re-import. Businesses should follow the aforementioned procedures based on whether the re-import is classified as a sales return.
