In customs clearance procedures, Certificate of Origin (Certificate of Original) is a very important document to identify the origin of goods and determine the tax rate.
* CO form E in case of commercial invoice is issued by a third party *
In customs clearance procedures, Certificate of Origin (Certificate of Original) is a very important document to identify the origin of goods and determine the tax rate.
With imported shipments originating in China, imported from China or other Asian member countries, CO form E is even more important, helping businesses benefit greatly from the reduction of import taxes. However, in fact, there are many cases where CO form E is rejected by Vietnam Customs because it is invalid. In the content of this article, Seawind only focuses on the most common and misleading case, which is CO form E when a third party appears in the import document, which we call CO form E in 3-party sale and purchase
General example: A signs the purchase contract of B. B assigns C to be the exporter and delivers the goods directly to A.
Regarding the issue of invoices issued by a third party, Circular 12/2019 / TT-BTC stipulates:
“Article 33. Invoice issued by a third party
The customs authority of the importing Member State accepts Form E C / O in the event of a commercial invoice issued by a company headquartered in a third country or by an exporter of the ACFTA Member State. on behalf of that company, provided the goods meet the rules of origin requirements in the ACFTA. The invoice issued by a third party may be an invoice from an ACFTA Member State or from a country other than an ACFTA Member State. The first invoice number or the third-party invoice number is indicated in Box 10 of the C / O form E. The exporter and consignee must be based in the ACFTA Member States and the third-party invoice Attached with the C / O form E when presented to the customs authorities of the importing Member State ”
It is necessary to clarify the concepts of a third party and a third country (people here are only individuals or organizations).
Invoices under international practice are issued by the seller to the buyer to claim payment. If the invoice is issued by someone other than the seller, there must be documents showing that or included in the sales contract.
“Exporter represents that company”, means the exporter representing a company located in a third country.
“Third country” is the country / territory issuing the invoice which is not the exporting / importing country / territory. And this exporter must be located in the member countries of the agreement.
A “3rd party invoice” is an invoice issued by a company headquartered in a third country or by an exporter representing that company.
“Shipper”: according to international maritime laws and maritime laws of many countries, shipper is the individual / organization that transports the goods.
“Exporter“: is the exporter
In Official Letter No. 1610 / XNK-XXHH of the Ministry of Industry and Trade, there is a clear explanation: there is no regulation that the consignor’s name on the bill of lading must match the name of the exporter, nor does it require that the consignor must have a head office at the parties to the agreement. Therefore, different cases of Shipper and Exporter do not affect the validity of CO form E.
Some examples of CO form E in case of invoice issued by 3rd party.
TH1: A (VN) buys goods B (Taiwan), B assigns C (China) to be the exporter representing B to export goods from China. B or C has its name on the bill of lading, C has its name on CO form E
In this case, B’s invoice or C’s invoice are accepted. Because if it is an invoice of B, this is the case where the invoice is issued by a company headquartered in the third country. If it is an invoice from C, it is the case that the invoice is issued by the representative exporter. for B.
In the same case, but B is based in China, CO form E is not valid even if the invoice is issued by any party. Since B is not a third country company, C is also not suitable (although C is still a representative exporter for B).
In this case, there are many, and many shipments under contract with A, invoices and vouchers in the name of B. Of course, CO form E is still accepted (because HQ does not know there is A in this transaction). However, when the test or the inspector finds out, it leads to CO form E being rejected and tax arrears.
TH2: A (VN) buys B (China). B has its name on all the documents, except bill is under the name C (china). In this case, CO form E is valid because the agreement does not stipulate that the exporter must have the same name as the shipper.
Also in this example, but B has its name on all the documents, except for CO form E where C:
Thus, B is a seller and shipper. And C is the exporter. This is often referred to as the authorized CO form E. The reason is that the CO form E cannot be registered (not eligible to register according to the Chinese regulations), so it has to hire C to process CO form E. Obviously, B is not a company with headquarters. The company is located in the third country, and C is also not the export agent of the Company based in the third country. Therefore, the CO form E in this case is not valid. Many people still believe that if proving C is the manufacturer, the CO form E is still valid.
But whoever C is, it still does not meet the conditions of Article 33 of Circular 12/2019 / TT-BTC.
TH3: A (Vietnam) buys goods from B (Vietnam), B designates C (china) as the shipper. Invocie is issued by B. C is named on CO form E, Bill … In this case, CO form E is also not accepted, because B is not a company with headquarters in the third country. a fairly common case that businesses often encounter.