Guidance on Declaration, Payment of Import Tax, and Customs Procedures for the Liquidation of Assets of Export Processing Enterprises
Do export processing enterprises have to pay import tax when importing goods as fixed assets?
According to Point c, Clause 4, Article 2 of the Law on Export and Import Tax 2016, it is stipulated as follows:
Taxable Objects
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4. Taxable objects on export and import taxes do not apply in the following cases:
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c) Goods exported from the non-tariff zone to abroad; goods imported from abroad into the non-tariff zone and used only within the non-tariff zone; goods transferred from one non-tariff zone to another;
Simultaneously, according to Clause 1, Article 4 of the Law on Export and Import Tax 2016, a non-tariff zone is explained as follows:
Explanation of Terms
In this Law, the terms below are understood as follows:
1. Non-tariff zones are economic zones within the territory of Vietnam, established according to legal regulations, with specific geographic boundaries, separated from outside areas by solid fences, ensuring conditions for the customs agency and other relevant authorities to conduct checks, supervision, and control over exported and imported goods, vehicles, and passengers on entry and exit; the purchasing and exchange relation between the non-tariff zones and outside areas is an export-import relation.
Moreover, based on Clause 3, Article 26 of Decree 35/2022/ND-CP, specific regulations applicable to export processing zones and export processing enterprises are stipulated as follows:
Specific regulations applicable to export processing zones and export processing enterprises
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3. Export processing enterprises are entitled to investment incentives and tax policies for non-tariff zones from the time the investment objective of establishing the export processing enterprise is recorded in the investment registration certificate, adjusted investment registration certificate, or the export processing enterprise registration confirmation of the competent investment registration agency. After completing the construction process, the export processing enterprise must be certified by the competent customs authority to meet the conditions for customs inspection and supervision according to the law on export and import tax before officially going into operation. If the export processing enterprise is not certified to meet the conditions for customs inspection and supervision, it shall not enjoy the tax policies applied to non-tariff zones. The inspection, certification, and completion of conditions for customs inspection and supervision of export processing enterprises shall be carried out according to the law on export and import tax.
Official Dispatch 4067/TCHQ-TXNK in 2022, the General Department of Customs provides the following guidance:
- For assets in the office interior construction package: It is suggested that companies base on the technical design documents of the contractors and related documents to declare and pay taxes. As for materials consumed during the construction process (paint, glue, tape...), no declaration or tax payment is required.
Guidance on declaration, payment of import tax, and customs procedures for the liquidation of assets of export processing enterprises? (Image from Internet)
Do export processing enterprises that have fully implemented tax policies and import goods management policies need to perform customs procedures?
Based on Point c, Clause 4, Article 26 of Decree 35/2022/ND-CP, it is stipulated as follows:
Specific regulations applicable to export processing zones and export processing enterprises
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4. The relation of goods exchange between export processing enterprises and other areas within the territory of Vietnam, not being non-tariff zones, is an export-import relation except for the cases stipulated at point c of this clause and cases not requiring customs procedures according to the law on customs, as follows:
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c) Export processing enterprises are permitted to sell and liquidate used assets and goods to the domestic market following the provisions of the investment law and other relevant laws. At the time of selling, liquidating into the domestic market, the export-import goods management policies are not applied, except for goods under the management of conditions, standards, specialized inspection that were not performed during the initial import; goods managed by permits must have the import licensing authority's written consent.
In Official Dispatch 4067/TCHQ-TXNK in 2022, the General Department of Customs provides guidance on this issue as follows:
- For goods and equipment purchased domestically (not performing customs procedures) or goods of import origin but having fully implemented tax policies, import goods management policies according to regulations like import goods not enjoying special policies for export processing enterprises at the initial declaration registration: When transacting, liquidating these goods with domestic enterprises, export processing enterprises are not required to perform customs procedures.
Guidance on procedures when export processing enterprises liquidate goods
In Official Dispatch 4067/TCHQ-TXNK in 2022, the General Department of Customs provides guidance on this issue as follows:
Based on Clause 5, Article 25 of Decree 08/2015/ND-CP dated January 21, 2015, amended and supplemented at Clause 12, Article 1 of Decree 59/2018/ND-CP dated April 20, 2018, of the Government of Vietnam, it is stipulated that for goods subject to tax exemption but later changed in usage or transferred for domestic consumption, new customs declarations must be made. Export and import goods management policies; tax policies for export and import goods are implemented at the time of new declaration registration unless the goods had already complied with export and import goods management policies at the initial declaration registration.
Based on Article 74 of Circular 38/2015/TT-BTC dated March 25, 2015, amended and supplemented at Clause 50, Article 1 of Circular 39/2018/TT-BTC dated April 20, 2018, of the Ministry of Finance, general provisions for export and import goods of export processing enterprises are specified.
Based on Article 79 of Circular 38/2015/TT-BTC dated March 25, 2015, amended and supplemented at Clause 55, Article 1 of Circular 39/2018/TT-BTC dated April 20, 2018, export processing enterprises are allowed to choose the form of changing the purpose of use or conduct in-place import and export procedures when liquidating goods.
- For imported-origin goods and equipment applying tax policies and goods management policies for export processing enterprises: Liquidation procedures should be carried out according to Article 79 of Circular 38/2015/TT-BTC, export processing enterprises can choose to change the purpose of use or perform in-place import-export procedures when liquidating goods. If export processing enterprises select the in-place import-export procedure according to Article 86 of Circular 38/2015/TT-BTC, they should perform in-place export procedures; domestic enterprises should perform in-place import procedures and pay taxes as regulated. At the time of performing in-place export and import procedures, export-import goods management policies do not apply unless goods are subject to management by conditions, standards, specialized inspections that were not performed initially during import; goods managed by permits must have the import licensing authority's written consent.
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