Incentives for export processing enterprises to enjoy in Vietnam

by Anh Việt

Dear lawyer, my husband is currently working as a director for a shrimp processing business for export. My husband had an accident a month ago and is currently hospitalized. The accountant of his company has sent me the tax payable, as far as I know, the export processing business has incentives according to the provisions of the law. So about the matter Incentives for export processing enterprises to enjoy in Vietnam” Let’s find out with LSX in the article below.

Legal grounds

  • Circular No. 39/2018/TT-BTC
  • Circular No. 219/2013/TT-BTC

What is an export processing enterprise?

Export processing enterprises (English name is: Export Processing Enterprise) are enterprises specializing in the production of goods and production for export to other countries. These enterprises are located in industrial parks and export processing zones to ensure that they do not affect the daily life of people in residential areas.

If the enterprise is not located in the economic zone, it must be separated from the outside areas according to the provisions of law. The products after being manufactured will be 100% exported to foreign countries and must be fully declared to the customs office.

Regulations on export processing enterprises

Based on Decree No. 114/2015/ND-CP amending and supplementing Article 21 of Decree No. 29/2008/ND-CP and Decree No. 164/2013/ND-CP stipulating a number of articles on export processing enterprises. as follows:

• There are separate regulations for each customs area and non-tariff zone for export processing enterprises, except for the non-tariff zone in the border gate economic zone.

• Export processing enterprises located in export processing zones have fences, high walls, entrance and exit gates, meeting the inspection and supervision of customs authorities and some other relevant agencies.

• Export processing enterprises licensed to carry out activities related to trading in Vietnam must have separate accounting books that record related costs and revenues from such purchases. These trading products need to be kept separate from the export goods area or a branch can be established outside the export processing zone to carry out trading.

• Export processing enterprises may liquidate their assets into the Vietnamese market according to the provisions of the Investment and Trade Law. The liquidation of assets does not apply the policy on management of imported and exported goods, except for goods that are required to be managed according to standards and conditions, managed by permits or which have not been subject to specialized inspection.

• Export processing enterprises may purchase food, foodstuffs, stationery, construction materials or other necessary items to serve the construction and maintenance of operations in the enterprise, daily activities of officials and employees. in the export processing zone.

• Officials/employees working in export processing zones when bringing foreign exchange from Vietnam into the industrial zone and vice versa do not need to declare customs.

Incentives for export processing enterprises to enjoy in Vietnam

Separate regulations on incentives of export processing enterprises

Pursuant to the provisions of Article 30 of Decree 82/2018/ND-CP, export processing enterprises are entitled to special incentives compared to other enterprises in industrial parks and economic zones such as:

Article 30. Specific regulations applicable to export processing zones and export processing enterprises

1. Export processing zones and export processing enterprises may apply regulations for separate customs areas and non-tariff zones, except for separate regulations applicable to non-tariff zones within border gate economic zones. Export processing enterprises are specified in the Investment Registration Certificate or in the document of the competent investment registration agency in case the procedures for issuance of the Investment Registration Certificate are not required. The investment registration authority is responsible for consulting the competent customs authority on the possibility of satisfying the conditions for customs inspection and supervision before issuing the Investment Registration Certificate or certifying it in writing to the investor. Investors.

2. In an industrial park, there may be industrial subdivisions for export processing enterprises. Export processing zones, export processing enterprises or industrial zones for export processing enterprises are separated from the outside territory by a fence system, with gates and doors, ensuring conditions for inspection and control by customs authorities and relevant functional agencies in accordance with regulations applicable to non-tariff zones, and the law on export and import taxes.

3. Export processing enterprises may purchase construction materials, stationery, food, foodstuffs and consumer goods from inland Vietnam to construct works and serve the operation of their office apparatus and daily activities officers and employees working at the enterprise. Export processing enterprises and sellers to export processing enterprises may choose to carry out or not carry out export and import procedures for building materials, stationery, food, foodstuffs and consumer goods from inland Vietnam.

4. Customs procedures, customs inspection and supervision for exported and imported goods of export processing zones and export processing enterprises shall comply with the law on customs.

5. The goods exchange relationship between export processing zones, export processing enterprises and other areas in the territory of Vietnam, not non-tariff zones, is an export and import relationship, except for the cases specified. in Clause 3 of this Article and the cases in which customs procedures are not carried out shall be prescribed by the Ministry of Finance.

Export processing enterprises may sell into the domestic market their liquidated assets and goods according to the provisions of the law on investment and trade. At the time of sale or liquidation to the domestic market, no policy on management of exported or imported goods shall apply, unless the goods are subject to management according to conditions, standards, and specialized inspection has not yet been carried out. import; goods under the management of a license must be approved in writing by the import licensing agency.

6. Officials and employees working in export processing zones and export processing enterprises when bringing foreign exchange from inland Vietnam into export processing zones, export processing enterprises and vice versa are not required to make customs declarations.

7. When an export processing enterprise is permitted to conduct business in goods trading and activities directly related to the purchase and sale of goods in Vietnam, it must open a separate accounting book to record revenues and expenses related to such activities. goods trading activities in Vietnam and arrange a goods storage area separate from the goods storage area in service of production activities of export processing enterprises or establish a separate branch outside the export processing enterprise, export processing zones to carry out this activity.

8. A branch of an export processing enterprise may apply the mechanism applicable to an export processing enterprise specified in this Article if it meets the conditions in Clause 2 of this Article, is established in an export processing zone, an industrial park, economic zones and accounting depends on export processing enterprises.

Tax incentives for export processing enterprises

Incentives on corporate income tax

Pursuant to the provisions of Clause 4, Article 19 of Circular 78/2014/TT-BTC, export processing enterprises are entitled to the tax rate of 17% from January 1, 2016, when the export processing enterprises implement investment projects. new in socio-economic difficult areas in the Appendix promulgated together with Decree 218/2013/ND-CP, now Appendix II to Decree 118/2014/ND-CP (Article 66 Decree 118/2014) /ND-CP). And the export processing enterprise itself is also an enterprise in the difficult socio-economic area as prescribed in Section 55, Appendix II issued together with Decree 118/2015/ND-CP.

At the same time, export processing enterprises are also entitled to a 2-year tax exemption and a 50% reduction of payable tax amounts for the next 4 years for incomes from the implementation of new investment projects specified in Clause 4, Article 19 of Circular No. 78/ 2014/TT-BTC as above (Article 6 of Circular 151/2014/TT-BTC).

Preferential land use fee

Export processing enterprises are exempted from land rent for 7 years (point b, clause 3, Article 19 of Decree 46/2014/ND-CP).

Preferential import and export tax

Pursuant to Point c, Clause 4, Article 2 of the 2016 Law on Import Tax and Export Tax, Goods exported from non-tariff zones to foreign countries; goods imported from abroad into non-tariff zones and used only in non-tariff zones; Goods moved from one non-tariff area to another are not subject to tax.

Export processing enterprises are located in non-tariff zones, so they will not be subject to import and export tax in the above cases.

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Frequently asked questions

Do export processing enterprises have to pay import tax?

If the importing enterprise is an export processing enterprise: according to regulations, goods imported into a non-tariff zone but must be exported abroad or goods exported into a non-tariff zone for use in a non-tariff zone may be import tax refund and no export tax. Therefore, in this case, the export processing enterprise will not be subject to import tax.
If the importing enterprise is a domestic enterprise, when imported goods and raw materials must pay import tax, when exporting goods to the export processing enterprise, they do not have to pay tax and receive a refund of the paid import tax amount.

What is the tax policy for export processing enterprises?

Tax policies of export processing enterprises are applied according to the provisions of export tax and import tax, specifically as follows:
In the case of export processing enterprises processing for domestic enterprises Import tax: When the export processing enterprises receive processing for domestic enterprises, the tax is not included in the customs value of products after processing but on the value of the products. of supplies and raw materials that the enterprise has used for processing. In case a processing enterprise produces manufactured or processed goods without using raw materials and components imported from abroad, the domestic enterprise tax will not be collected. Conversely, if processed products are manufactured from raw materials and components imported from abroad, domestic enterprises must pay import tax according to the Law on Import Tax and Export Tax.

What are the cases that do not apply the 0% tax rate for export processing enterprises?

Offshore reinsurance; technology transfer, transfer of intellectual property rights abroad; capital transfer, credit extension, securities investment abroad; derivative financial services; postal and telecommunications services going abroad (including postal and telecommunications services provided to organizations and individuals in non-tariff zones; provision of mobile phone scratch cards with codes and codes) prices sent abroad or brought into the non-tariff zone); exported products are exploited natural resources and minerals that have not been processed into other products; goods and services provided to individuals without business registration in the free trade zone, except for other cases as prescribed by the Prime Minister;
Petrol and oil sold for cars by business establishments in the free trade zone purchased inland;
Cars sold to organizations and individuals in non-tariff zones;
– Services provided by business establishments to organizations and individuals in non-tariff zones

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