Are goods traded in the export processing zones liable for excise tax?
The export processing zone is considered a “micro foreign country” Goods that are traded in the export processing zones are considered as exported goods, accordingly, domestic goods in the export processing zones are not excise tax-reliable objectives.
In particulars, according to Clause 20, Article 4, Circular No. 219/2013/TT-BYC: “Non-tariff zones include: Export processing zones, export processing enterprises, tax-suspension warehouses, tax-suspension zones, bonded warehouses, special trade and economic zones, trade and industrial zones and other economic zones established and enjoying tax incentives like non-tariff zones under the Prime Minister’s decisions. Goods purchase, sale and exchange relations between these zones and outside areas are import and export relations…”
The export processing zones are considered as the non-tariff zone and the relationship of trading goods and services are considered as the relationship of exporting goods and service.
Compared with the provisions prescribed at Clause 1, Article 3, Law on Excise Tax No. 27/2008/QH12, Goods that are directly exported by producers or processors, or which are sold or entrusted by these producers or processors to other business establishments for export are not subject to excise tax”
At the same time, according to Clause 6, Article 3, Decree No. 108/2015/ND-CP: “Goods imported from foreign countries into non-tariff areas, goods sold from the inland into and used only in non-tariff areas, and goods purchased and sold between a non-tariff area and another, except: Goods brought into areas entitled to the application of regulations on residential non-tariff areas without solid fences, and under 24-seat passenger cars...”
From the above provisions, domestic goods in the export processing zones are not excised tax-reliable objectives.
Moreover,taxable objects of excise tax are specified in Clause 1, Article 2, Law on Excise tax 2008 which is amended and supplemented in 2014, and Article 2, Decree No. 108/2015/ND-CP.