Accordingly, in case an EPE meets the regulations provided for non - tariff zone (according to Clause 1 Article 4 of the Law on import and export duties), the goods imported for use within the EPE shall be exempt from import duty and value added tax.
Accordingly, in case an enterprise is established in a high-tech park (rather than an export processing zone, industrial park or economic zone) and not specializing in manufacturing products for export (its export rate is about 75%), it fails to meet the conditions to transform into an EPE.
Accordingly, in case an EPE meets the regulations provided for non-tariff zones (according to Clause 1 Article 4 of the Law on import and export duties), its imports shall be exempt from import duty.
However, if the EPE fails to meet the regulations provided for non-tariff zones, its imports shall not be exempt from duty under the aforesaid provision but they shall be subject to regulations of law on investment.
Currently, industrial parks belong to areas with socio-economic disadvantages (Point 55 Annex II issued together with Decree No. 118/2015/ND-CP). Accordingly, if the EPE is located in an industrial park, it shall be exempt from duty on goods imported to form fixed assets according to Clause 11 Article 16 of the Law on import and export duties.
Customs procedures shall be carried out according to Clause 51 Article 1 of Circular No. 39/2018/TT-BTC. In which, it should note that, customs procedures must be carried out at the customs branch managing the EPE and right after the goods are granted the customs clearance, they must be immediately transported to the EPE. In addition, after 30 days from the day on which the contract is completed, the EPE and the contractor have to send a report on quantity of imports to the EPE’s supervisory customs authority.
Goods imported for construction of factories, offices of the EPE shall be exempt from import duty according to Clause 4 Article 2 of Law No. 107/2016/QH13 and shall be also exempt from VAT if the contractor also belongs to a non-tariff zone (Clause 20 Article 4 of Circular No. 219/2013/TT-BTC).
In case the contractor is a domestic enterprise, it is required to declare and pay VAT upon the importation. Upon the exportation, it is entitled to apply 0% VAT and entitled to declare for tax deduction, tax refund according to Article 2 of Circular No. 25/2018/TT-BTC.
According to the General Department of Vietnam Custom’s opinions, the aforesaid regulations do not require EPEs to store goods traded under the import, export and distribution rights in separate warehouses with their own doors. It is only required to allocate separate areas in order to store such goods separately from other goods.
When the financial leasing contract terminates, if the EPE receives the transfer of ownership of the leased assets after it pays all the rents under the regulations in the contract (the EPE re-purchases the financial-leasing assets according to a nominal value), the Company must not declare, calculate and pay VAT on the revenue from this activity.
However, it should note that, according to Clause 3 Article 9 of Circular No. 219/2013/TT-BTC, the sale of cars to EPEs is not entitled to apply 0% VAT. As the result, upon transferring cars to the EPE under the financial leasing contract, the Company has to declare and pay VAT.
Accordingly, in case a company provides the service of holding meetings, seminars for an export processing enterprise (EPE) but locations for holding the meetings, seminars are outside the EPE, the company shall not be entitled to apply 0% VAT but has to apply 10% VAT.
If the Company has made invoice and applied incorrect VAT rate, the parties have to make a record specifying errors and make a corrective invoice according to the prescribed tax rate.