Developing instructions to remove problems for export processing enterprises

	Expedition to verify violations related to 266 rolls of cloth materials
	Shortcomings in implementation of procedures to convert from ordinary enterprises to export processing enterprises
	Conditions of customs inspection and supervision when establishing export processing enterprises

Professional activities at Vinh Phuc Customs Branch. Photo: N.Linh

Recognizing comments of enterprises

Speaking at anonline conference withenterprises about the draft Decree amending Decree 134/2016 / ND-CP related to criteria and conditions in the procedures for granting investment registration certificates to export processing enterprises, held by the General Department of Customs, Ms. DinhThi Cham, the representative of Thang Long Industrial Park Company Limited, saidmost export processing enterprises and investors face many barriersduring the implementation of the provisions of Decree 82/2018 / ND-CP.

Currently, enterprises who have been granted the investment registration certificate but have not been certified foreligibility for customs inspection and supervision by the customs agency shall not allowed to apply tax policy to the non-tariff area. Therefore, when enterprises import goods during the factory construction phase, they still have to declare and pay VAT and import duties.

Some companies such as: Yusen Logistics Co., Ltd, Deloitte Company and Dento Vietnam Co., Ltd also said that when the construction is completed and meets conditions of a non-tariff zone, the export processing enterprises are also not eligible for refunds of paid import tax and VAT during project construction because they are not eligible for import tax refunds under the provisions of Tax Law No. 107/2016 / QH13 and VAT refund because these projects are not invested by domestic enterprises but export processing enterprises, they are not subject to VAT in accordance with the VAT law.

Enterprises propose to soon have specific instructions and regulations on procedures, criteria and conditions to facilitate enterprises in investing in Vietnam and to amend Decree 82/2018 / ND-CP according to the direction of abolishing the condition on consulting the customs agency at the licensing phase for export processing enterprises. Instead, the investment management agency can grant the certificate of investment registration and allow enterprises to apply the regulations of export processing enterprises based on enterprises’ production and export investment plans and commitments.

Export processing enterprises will be responsible for implementing the requirements specified in legal documents on customs and import-export tax applicable to the non-tariff zone and export processing enterprises. State agencies will apply the "post-inspection” mechanism to inspect the implementation and eligibility for the conditions of export processing enterprises and will apply the sanctioning mechanism for the violations.

Regarding recent difficulties and problems, the representative of the Ministry of Planning and Investment proposed to soon add regulations on conditions for customs inspection and supervision for export processing enterprises to enjoy policies of the non-tariff area.

Recognizing the comments of enterprises and representatives of competent agencies, Deputy Director of the General Department of Customs LuuManhTuong said that, according to the provisions of Clause 1, Article 30 of Decree 82/2018 / ND-CP, the Customs agency must comment on the eligibility for the conditionof customs inspection and supervision before the investment registration agency grants an investment registration certificate or a written confirmation to the investor. However, thelaw on import and export duties and customs law have not stipulated the conditions to determine the non-tariff area, leading to a lack of grounds for the customs agency to confirm the eligibility for the condition of customs inspection and supervision for enterprises that are applying for investment registration certificates according to the provisions of Clause 1, Article 30 of Decree No. 82/2018 / ND-CP.

With this regulation, the Customs agency also raised issuesabout the lack of legal grounds to confirm the eligibility for the condition of customs inspection and supervision for enterprises that have not completed aproject or are currently carrying out aproject. Therefore, to deal with these arising problems when Decree 82/2018 / ND-CP and Decree 08/2015 / ND-CP have not yet been amended, the General Department of Customs has reported to the Ministry of Finance and received approval for adding this regulation to the draft Decree amending Decree 134/2016 / ND-CP to remove problems arising for both Customs and enterprises.

Problems should be removed soon

To support and remove difficulties and problems for enterprises in general and export processing enterprises in particular, along with issuing mechanisms and policies to support and invest in infrastructure construction, the representative of the Policy Department Tax under the Ministry of Finance continues to recognizecomments of enterprises and quickly amend, supplement and guide the implementation of regulations towards improvingconditions for export processing enterprises.

The representative said that after receiving commentsfromenterprises, the Ministry of Finance (General Department of Customs) issued a document No. 3778 / TCHQ-GSQL dated June 9, 2020 on the condition of customs inspection and supervision for enterprises whose investment projects have finished the construction phase and are ready to be put into production with the proposal for establishment as export processing enterprises or enterprises that have demand for transforming into export processing enterprises.

This is considered a good sign, helping enterprises overcome difficulties to complete the construction of factories, facilities and prepare to go into operation.

To seriously handle this problem for enterprises, the Ministry of Finance (General Department of Customs) has been working with management agencies to review and develop regulations to include in the draft Decree amending Decree 134/2016 / ND-towards clearly specifying conditions for customs inspection and supervision for export processing enterprises to enjoy the policy of the non-tariff area. At the same time, there must be a specific regulation on the time to respond when the investment registration agency consults the customs agency about the eligibility for the condition of customs inspection and supervision before granting the investment registration certificate or a written confirmation according to the provisions of Clause 1, Article 30 of the Government's Decree No. 82/2018 / ND-CP dated May 22, 2018.

Along with that, the customs agency shall specify that enterprises are entitled to the tax policy for the non-tariff area from the time they are granted the investment registration certificate or a written confirmation by the investment registration agency, which stipulates that enterprises are export processing enterprises, unless enterprises do not meet the conditions for customs inspection and supervision as prescribed.