Export-processing enterprises within Tan Thuan Export Processing Zone (EPZ), which purchase any domestic goods for direct export will enjoy a favourable zero per cent export tax and value added tax (VAT), following a Government decision.
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| Production of industrial sewing machines in Japan’s Juki Company in the Tan Thuan Export Processing Zone |
Export-processing enterprises within Tan Thuan Export Processing Zone (EPZ), which purchase any domestic goods for direct export will enjoy a favourable zero per cent export tax and value added tax (VAT), following a Government decision.
Sanctioned by the Finance Deputy Minister Truong Chi Trung on September 7, document No. 75/2005/TT-BTC guides Tan Thuan EPZ-based enterprises, who are attempting to expand their business activities, to carry out tax policy, customs and tax procedures.
The finance ministry expects the new move to warm up export activities of EP enterprises. Under the document, domestic enterprises who sell goods to EP enterprises for direct export purposes are still required to complete customs procedures in Tan Thuan EPZ, but aren’t required to pay VAT.
Domestic-made goods which are stored or packaged or processed in Tan Thuan EPZ for export are also exempt from VAT.
Import items stored, packaged or processed in Tan Thuan EPZ for the domestic market will be exempt from import tax and VAT. However, domestic enterprises who import goods from Tan Thuan EPZ to local markets are asked to declare import tax, VAT and special consumption tax in accordance with the current regulations imposed on import goods.
The corporate tax of 15 per cent will be imposed on domestic-made goods for direct export not going through Tan Thuan EPZ; domestic-made items stored, packaged or processed in Tan Thuan EPZ for export; import goods exported to a third country; and other export services.
The 28 per cent corporate tax is imposed on imported goods that are stored, packaged or processed in Tan Thuan EPZ for the domestic market.
The previous Government decree regulated that EPZ-made goods will not be imposed with dues of special consumption tax and VAT as well as other various kinds of taxes on the domestic market.
However, some EPZs enterprises co-ordinated with outside businesses to manufacture products for domestic consumption. These enterprises used the Government’s favourable conditions to earn illicit profits.
(Source: VNS)
