In response to inquiries of local customs offices and enterprises about value-added tax (VAT) on animal feeds being farm produce, the Ministry of Finance recently issued an Official Letter to the Ministry of Agriculture and Rural Development, expressing its opinion that imported or home-made cultivation products which remain unprocessed or have undergone ordinary processing for use as animal feeds or materials for production of animal feeds would be eligible for exemption from VAT under Clause 1, Article 5 of the VAT Law.
This adheres to the principle that imported farm produce, which are unprocessed farm produce eligible for VAT exemption and may concurrently be used as materials for production of animal feeds subject to the VAT rate of 5%, may enjoy a more preferential tax rate (tax exemption).
This also conforms to the WTO accession commitment on non-discrimination between home-made and imported goods, including farm produce. Imported farm produce is therefore free from VAT like farm produce made and sold domestically.
Importers that have paid VAT in the stage of importation may declare paid VAT amounts and get VAT refund.-
