Guidelines on Investment Incentives for Export Processing Enterprises

Based on the guidance in Official Letter No. 2192/TCHQ-GSQL dated May 20, 2024, from the General Department of Customs on investment incentives for export processing enterprise projects.

1. Application of Investment Incentives and Tax Policies for Export Processing Enterprises

According to Clause 3, Article 26 of Decree No. 35/2022/ND-CP dated May 28, 2022, export processing enterprises (EPEs) enjoy investment incentives and tax policies applicable to non-tariff zones from the time the investment objective of establishing the EPE is recorded in the Investment Registration Certificate, the Adjusted Investment Registration Certificate, or the Export Processing Enterprise Registration Certificate issued by the competent investment registration authority. After completing construction, EPEs must be confirmed by the competent authority to meet customs inspection and supervision conditions according to export and import tax laws before officially commencing operations. If an EPE fails to meet these conditions, it will not be eligible for the tax policies applicable to non-tariff zones. The inspection, confirmation, and completion of customs inspection and supervision conditions for EPEs are carried out following the provisions of the export and import tax laws.

Based on Clause 2, Article 2 of the Export and Import Tax Law No. 107/2016/QH13, goods exported from the domestic market to non-tariff zones, and goods imported from non-tariff zones into the domestic market are subject to tax.

According to Point c, Clause 4, Article 2 of the Export and Import Tax Law No. 107/2016/QH13, goods exported from non-tariff zones to foreign countries; goods imported from foreign countries into non-tariff zones and only used within non-tariff zones; and goods transferred between non-tariff zones are not subject to tax.

Clause 1, Article 4 of the Export and Import Tax Law No. 107/2016/QH13 defines non-tariff zones as economic areas within Vietnam's territory, established according to legal provisions, with defined geographical boundaries, separated from external areas by solid fences, ensuring conditions for customs inspection, supervision, and control of export, import goods, and means of transport, passengers on exit and entry. The trade relations between non-tariff zones and external areas are considered export-import relations.

Customs inspection, supervision conditions, and the application of tax policies for EPEs as non-tariff zones are implemented according to Article 28a of Decree No. 134/2016/ND-CP dated September 1, 2016, supplemented by Clause 10, Article 1 of Decree No. 18/2021/ND-CP dated March 11, 2021.

Thus, based on the aforementioned regulations, the application of investment incentives and tax policies for EPEs is recorded in the Investment Registration Certificate, the Adjusted Investment Registration Certificate, or the Export Processing Enterprise Registration Certificate issued by the competent investment registration authority. Once these documents are issued, customs authorities will conduct inspections and confirm compliance with customs inspection and supervision conditions as stipulated in Article 28a of Decree No. 134/2016/ND-CP, supplemented by Clause 10, Article 1 of Decree No. 18/2021/ND-CP.

2. Leasing Space for Warehousing Goods of Export Processing Enterprises

According to Clause 10, Article 26 of Decree No. 35/2022/ND-CP dated May 28, 2022, if there is insufficient space within the export processing zone, industrial park, or economic zone to arrange warehouses for goods storage for EPE activities, EPEs are allowed to lease space outside the industrial park or economic zone to store goods if the conditions in Clause 2 of this Article are met. The off-site warehouse can be used from the date it is confirmed by the competent customs authority to meet customs inspection and supervision conditions according to tax laws and customs laws.

Thus, EPEs can lease space outside the industrial park or economic zone for warehousing goods if they meet the customs inspection and supervision conditions and are confirmed by the customs authority.

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