For the Company doing business of printed fabric export, in case that we export the fabrics to Vietnam to sew the shirts and they will send the finished goods (shirts) to our client in the Philippines, it will mention our name as the exporter on the bill of landing. We thought that for this case,  the sale is out of VAT scope, however, we would like to know that the purchase VAT related to buying such material (fabrics) and its export expense can claim the VAT or not?

Panwa: Yes, in the fact that the Company engage a company in Vietnam to sew the shirts, the Company have performed customs formalities for export fabric to Vietnam in order to sewing shirts and it show the Company’s name as exporter on the bill of loading and export entry, so, it is considered as the exporting and the Company is the exporter which obtained the right to pay VAT 0% according to the Revenue Code section no. 771/1(4) and 80/1(1). Therefore the purchase VAT as above inquiry can deduct from the sale VAT according to the Revenue Code section no. 82/3 and 82/4.

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