Customs settlement report norms: Detailed guidance for businesses in 2025

Understanding customs settlement report norms helps businesses control costs and improve operational efficiency. Let us dive into the important aspects in this detailed guide.

Overview of customs settlement report norms

Bill of Materials (BOM) is the actual amount of raw materials used to produce a unit of product. In the customs settlement report, this norm plays a particularly important role for each business. If there is a lack of norms, businesses will have difficulty controlling which materials are used for production, which materials are used for other purposes, and determine which are scrap and waste products. At the same time, the norm is the basis for enterprises to compare the actual import and export management results with the expected business plan.

The role of norms in cost management

From the perspective of a production cost manager (such as a director, chief accountant, or chief financial officer), the lack of specific norms means the loss of a “standard” for evaluating and a “basis” for approving production costs in accordance with the actual situation. This significantly reduces their financial management and advisory roles in the business.

Therefore, building raw material norms is a very important step in the settlement report. Errors in this process are often the main cause of material differences. Therefore, it is necessary to improve awareness and risk management capacity when setting norms for manufacturing enterprises.

Types of norms in customs settlement reports

Norms in customs settlement reports are very important for every business. Without norms, businesses may encounter the following risks:

It is impossible to control which materials are used for production and which are used for other purposes, and it is impossible to determine which are scrap and waste products.
There is no basis to compare the actual results with the business plan and import and export inventory management.
A production cost manager (such as a director, chief accountant, or chief financial officer) cannot properly assess or approve production costs.
This significantly reduces their financial management and advisory role in the business.

Basic norms of customs settlement reports

Here are the two basic types of norms in customs settlement reports:

Expected use norms: The amount of raw materials and supplies expected to be used for each product code, design diagram, production process, or sample diagram (if any).
Actual production norms: The actual amount of raw materials and supplies used to process or produce a unit of export products.

Misjudgments and potential risks when developing norms

Just a small error in determining the norms of customs settlement reports can seriously affect the reliability of financial information that enterprises declare to customs authorities.

Common misconceptions

Here are some common misconceptions that can reduce the success rate of customs settlement reports:

Given that the customs settlement report only needs actual data and does not need to pay attention to the level of loss.
Do not carefully monitor scrap and discarded products because they think that they do not have to make periodic declarations with customs authorities.
Do not carefully distinguish the sources of input materials.
Do not convert the code of materials or products according to the appropriate unit of calculation.
Periodic information is not synchronized between the import and export department and the accounting department – warehouse.
It does not care about the amount of raw materials shipped for other purposes.

Potential risks of wrong norms

The above misjudgments can lead to many risks for businesses, including:

The norm is higher than that of the same product.
The norm exceeds the amount of imported raw materials.
The norm does not match the product cost.
The difference between export revenue and export turnover.
The norms and quantities of finished products do not correspond to the declared quantities of exported raw materials.

All of these errors are caused by the business failing to reflect or reflect incomplete, untruthful and inaccurate information about the required figures, documents, documents and data. In this case, the customs office has the right to impose tax and sanction administrative violations in accordance with law.

Important regulations on customs settlement report norms

According to Clause 39, Article 1 of Circular 39/2018/TT-BTC amending Article 60 of Circular 38/2015/TT-BTC, there are a number of important regulations on norms that enterprises need to pay special attention to such as:

The customs declarant shall not have to declare the product norms to the customs offices, but must formulate the norms on the use of raw materials and supplies, the norms of consumables and the loss rate of each product code, in case the customs office inspects or requests explanation.
In the actual production process, if there is a change, organizations/individuals need to rebuild the norms accordingly and fully keep all papers, vouchers, documents, etc.
The customs declarant shall be responsible for the accuracy of the use norms, consumption norms and loss rates and only use the norms for the right purposes of processing and producing export goods.

Solutions to support businesses to prevent potential risks when building norms

In addition to understanding and preventing errors in customs settlement reports, managers need to ensure that data from relevant departments helps answer the following important questions:

Is the norm higher than the norm of the same product?
Does the norm exceed the amount of imported raw materials?
Are norms different from production costs?
What is the difference between export revenue and export turnover?
Do the norms and finished products correspond to the declared amount of exported raw materials?

Answering these questions helps businesses have an overview of the problems they are facing. As a result, businesses can effectively handle risks and avoid administrative sanctions or tax impositions.

1. Develop and manage a system of norms and rates of material loss

Every business wants to use materials efficiently, economically, and can be reused when needed. When developing norms and loss rates, businesses need to pay attention to the following:

1.1. Regarding norms of raw materials

Norms must be consistent with reality as prescribed in Article 55 of Circular 38/2015/TT-BTC. Enterprises need to keep hard copies of the norms for at least 5 years to provide sufficient documents when inspected by customs authorities.
The norms of the import-export sections must be consistent with those of the accounting sections. To ensure this, businesses need to develop a general standard table of data, units of calculation, symbols, commodity code names, HS codes, declaration methods and other relevant information.
When developing or approving norms, enterprises need to prepare an explanation of norms. This explanation includes information such as the production process, drawings, product samples, and import invoices. For example, garment businesses need to develop their own norms for each size (S, M, XL,…) because material norms can vary between sizes.

1.2. Regarding the rate of loss of raw materials

The loss rate depends on the actual production and may differ from 3%. For example, in some cases, the loss rate can be very high (for example, up to 500%).
The churn rate is the rate at which raw materials are regularly wasted during the production process, not due to unexpected incidents (e.g., stock breaks). Businesses need to agree with the accounting department to determine a fixed loss rate for each product. At the same time, it is necessary to clearly distinguish between scrap arising within the norm and scrap arising outside the norm so that it can be accounted for.
Businesses need to prepare explanations for this loss rate.

2. Monitoring and handling of scrap and discarded products

To track scrap and discarded products, businesses need to take the following steps:

2.1. Setting up a scrap tracking system

Identify tracking tools: Select tools to record information about scrap and scrap volumes. For example, use Excel spreadsheets or warehouse management software.
Determine what information to record: Decide what important information to record, including the type of scrap, volume, origin, and production or shipping process.
Periodic Data Recording: Record data on scrap and scrap products periodically. The frequency can be daily, weekly, or monthly, depending on the size of the business.
Data analysis: Use the recorded data to analyze trends and identify issues for improvement.
Reporting and evaluation: Create periodic reports and evaluate important metrics, such as recycling and reuse rates.
Make improvements: Based on analysis, take measures to reduce scrap, enhance reuse or recycling, and optimize processes.
Regular updates and reviews: Continuously update and evaluate the tracking process to ensure the highest efficiency.

2.2. How to dispose of scraps in the settlement report

Enterprises can rely on the percentage (%) of total imported raw materials to handle scrap and scrap as follows:

If the amount of scrap and discarded products does not exceed 3% of the total amount of imported raw materials, enterprises do not need to carry out customs procedures to change the purpose of use when consuming domestically. However, businesses still have to declare and pay taxes to domestic tax authorities.
If the amount of scrap and discarded products exceeds 3%, there are 3 ways to handle it:
- Selling: Enterprises need to make an official letter to apply for change of use purpose and open a customs declaration of type A42.
- Export: Enterprises use the B13 export type.
- Destruction: The enterprise needs to apply for a decision from the ordering party. This method is usually applied when the goods are no longer usable.

3. Good control of input materials

In manufacturing, there are 4 main factors that affect product quality: design, input materials, production process, and storage/transportation. Concrete:

Design: 25%
Input Materials: 50%
Production Process: 20%
Storage and transportation: 5% – 1%

Checking the input material is very important. Therefore, businesses need to consider the quality control of input materials as an important strategy to optimize profits and ensure product quality.

3.1. Measures to control input materials

Enterprises can take the following measures to control input materials:

Entrance Test:
- Choose the right raw materials and ask for a detailed description.
- Raw material quality control.
- Monitor and handle quality issues.
- Risk prevention with 4 sampling methods:
  - Cross-sampling method
  - Triangle sampling method
  - S-type sampling method
  - Hierarchical sampling method
Statistics and feedback:
- Quality data statistics.
- Report to relevant departments periodically (weekly, monthly).
Participate in process optimization:
- Propose improvements to the inspection process.
Objective and fair assessment:
- Avoid subjectivity when evaluating suppliers.
Respect the supplier:
- Balance between factors: quality, delivery time, cost, and efficiency.

4. Periodic synchronization of information between departments

Workflows are an important asset that helps businesses automate operations and reduce dependency on employees. In order to avoid conflicts between departments, especially between import-export, accounting, warehouse and production departments, it is very necessary to synchronize information periodically.

4.1. Steps to synchronize data

To synchronize information between departments, businesses can take the following steps:

Set up a data sync process:
- Develop a list of norms (including commodity names, HS codes, units of calculation,…).
- Develop data entry rules.
- Determine the responsibilities of each department.
- Develop a data review process.
Conversion of material and product codes:
- Accurately determine the unit of calculation.
- Perform unit conversion calculations.
- Update product codes and information.
- Check and confirm the accuracy of the data.
- Train employees on the redemption process.
Use integrated inventory management and accounting software:
- Automate communication between systems.
- Minimize errors in the data entry process.
Using barcodes and code management systems:
- Track products and materials in/out.
Continuous process testing and improvement:
- Optimize process performance.
- Improve data accuracy.
Build good relationships between departments:
- Ensure coordination, understanding, and mutual respect.

5. Ensuring compliance for materials used for other purposes

Businesses can use materials for a variety of purposes, such as trading, processing, or producing export goods. To avoid having to modify norms or waste time editing information, businesses need to:

Determine the intended use:
- Clearly define the intended use of the material (e.g., by-product manufacturing, maintenance, research and development, promotions, or recycling).
Classification and Recording of Use:
- Classify and record the amount of materials used for different purposes.
Adjustment of customs settlement reports:
- Adjust the report to accurately reflect the amount of materials used for each purpose.
Ensure transparency and complete documentation:
- Fully record information about the use of raw materials in the management system.
Periodic Inspections and Assessments:
- Perform tests and evaluate the performance of the process to optimize efficiency.

Taking these steps helps businesses manage and adjust norms correctly, thereby minimizing risks and errors.

In the context of international economic integration, effective management of customs settlement report norms is extremely important. This detailed guide will be a useful reference for your business.