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Export processing enterprises must meet inspection and supervision conditions before April 25

10:13 | 25/04/2022

VCN - In order to avoid problems related to the application of tax policies on free tax zone (FTZ) after the effective date of Decree 18/2021 of the Government (April 25, 2022) for export processing enterprises (EPEs), the Customs is actively urging enterprises to meet the requirements on conditions.

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Illustrative Photo: Internet
Illustrative Photo: Internet

Disadvantages of tax policies

To implement the provisions of Clause 10, Article 1 of Decree 18/2021, the General Department of Customs has directed local Customs Departments to review the inspection and supervision conditions of EPEs in their areas; urge enterprises that have not yet made a notice of satisfaction of inspection and supervision conditions as prescribed (notice form No. 25, Annex VII of Decree 18/2021), explain to them about preferential tariff policies after April 25, 2022; and complete the inspection and report results before April 25, 2022.

Regarding the application of tax policy, the General Department of Customs has provided specific information on tax policies for cases failing to meet the inspection and supervision conditions.

In Clause 10 of Article 1 of Decree 18/2021 on addition of Article 28a: Conditions for customs supervision and inspection and application for tax policies on exporting processing enterprises (EPE) that are free trade zones (FTZ). Accordingly, conditions for customs supervision and inspection of an EPE that is a FTZ include hard fences that separate the EPE from the outside; gates/doors that are the only ways for goods to enter and leave the EPE.

There are surveillance cameras at the entrances and exits where goods are stored throughout the day (24/7, including days off and holidays); images recorded by these cameras shall be transmitted to the supervisory customs authority of the EPE and retained at the EPE for at least 12 months.

The Director of the General Department of Customs shall prescribe the format of surveillance camera data to be exchanged between customs authorities and EPEs mentioned in Point b of this Clause.

There is software for management of duty-free goods of the EPE serving preparation of reports on receipt, discharge, inventory and use of imports required by customs laws.

Decree 18/2021 also stipulates procedures for inspecting and confirming fulfillment of conditions for customs supervision and inspection EPEs and investors in EPE projects.

Clause 5, Article 28a of Decree 18/2021 stipulates that Within a year from the effective date of this Decree, the EPE shall fulfill the conditions for customs supervision and inspection specified in Clause 1 of this Article.

After such conditions are fulfilled, the EPE shall send a notification (Form No. 25 in Appendix VII hereof) to its supervisory branch of Customs.

If the EPE fails to submit the notification Form No. 25 in Appendix VII hereof within a year from the effective date of this Decree or fails to fulfill the conditions for customs supervision and inspection specified in Clause 10 of Article 1 of this Article, it will not be eligible for FTZ tax policies from the expiration date of this 1-year time limit.

In case the EPE fulfills the conditions for customs supervision and inspection and submits the notification to the customs branch of the inspection and the customs branch issues the confirmation of fulfillment of the conditions for customs supervision and inspection specified in Clause 10 of Article 1 of Decree 18/2021, the EPE shall be eligible for FTZ tax policies from the day on which the confirmation is issued.

Urge businesses to meet conditions

In order to avoid problems related to the application of FTZ tax policies after the effective date of Decree 18/2021/ND-CP of the Government (April 25, 2022) for export processing enterprises (EPEs), the Customs is actively urging enterprises to meet the requirements on conditions.

For EPEs that have not yet made a notification of fulfillment of the conditions for customs inspection and supervision, the customs authority shall work with them at their headquarters to find out the reasons that the EPEs has not yet notified the fulfillment of the conditions for customs inspection and supervision as prescribed; assess the ability of EPEs that meet or not meet the conditions for customs inspection and supervision as prescribed in Clause 10, Article 1 of Decree 18/2021; and expect time to fulfill the conditions; and make a record certified by the EPEs.

For EPEs that have made a notification of fulfillment of the conditions for customs inspection and supervision, and the customs authority has checked and confirmed that they have not yet met the conditions, the customs shall assess their ability to meet or fail to meet the conditions for customs inspection and supervision before April 25, 2022.

At the same time, the customs shall urge EPEs to continue to meet conditions for customs inspection and supervision and confirmation according to regulations before April 25, 2022.

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For EPEs that have made a notification of fulfillment of the conditions for customs inspection and supervision, the Customs authority shall urgently inspect and confirm the conditions before April 25, 2022.

By N.Linh/ Huyen Trang