💼 [NEW GUIDANCE] VAT DECLARATION & PAYMENT FOR EXPORT PROCESSING ENTERPRISES (EPEs)
Export Processing Enterprises (EPEs) often wonder:
Do we have to declare Value-Added Tax (VAT)? And in which cases?
The Hung Yen Tax Department has provided clear and official guidance as follows:
✅ 1. When EPEs are NOT required to declare VAT
- ✔ EPEs are NOT required to declare or pay VAT for processing/manufacturing activities for export.
👉 These are considered non-tariff zone activities, and therefore not subject to VAT declaration.
✅ 2. When EPEs MUST declare and pay VAT
EPEs must declare VAT when they engage in any business activities outside the scope of export processing.
Examples include:
- • Purchasing goods from the domestic market for export (right to export).
- • Importing goods and selling them into the domestic market (right to import).
- • Other commercial transactions not considered export processing activities.
📌 3. Conditions for VAT declaration on non-export activities
🔹 Separate accounting
EPEs must separately record:
- Goods – revenue – expenses for export processing activities
- Goods – revenue – expenses for non-export activities
🔹 Tax registration with the domestic tax authority
To declare VAT for non-export activities, EPEs must register for tax with the competent local tax office.
🔹 Separate storage areas
Storage areas for export-processing goods must be clearly separated from areas used for
other business activities (sales into the domestic market, import/export rights…).
📅 4. VAT declaration period
🔸 Monthly declaration
Under Point a, Clause 1, Article 8 of Decree 126/2020/ND-CP,
monthly VAT declaration is the default requirement for EPEs.
🔸 Quarterly declaration
If the EPE’s total revenue in the preceding year ≤ VND 50 billion,
it is eligible to declare VAT quarterly
(Point a, Clause 1, Article 9 of Decree 126/2020/ND-CP).
🧾 5. Invoice usage
- • Under the credit method → use VAT invoices.
- • Under the direct method → use sales invoices.
- • When selling into the domestic market or non-tariff zones, invoices must state:
👉 “For organizations and individuals in non-tariff zones.”
🎯 SUMMARY – EPEs DECLARE VAT ONLY WHEN:
- ✔ They conduct commercial activities beyond export processing.
- ✔ They perform separate accounting and have proper tax registration.
- ✔ They apply the correct monthly or quarterly declaration period.
- ✔ They use the correct invoice type according to their VAT method.
📩 Need MBA Audit to review your EPE vs. non-EPE model, separate accounting, or import–export–inventory documentation?
We are always ready to support your business. 💚
