Vietnam Customs Policy Update: Decree 18 on processing / manufacturing enterprises related import taxes

Thursday, 16 September 2021

Thursday, 16 September 2021

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09:45am - 11:00am , 16 Sep 2021

In addition to COVID-19, Decree 18/2021/ND-CP (“Decree 18”) is one of the hot topics amongst multinational enterprises (“MNE”) in Vietnam.

Decree 18, which was released in March 2021 and become effective starting 25 April 2021, clarifies the provisions in Decree 134. Decree 18 covers the aspects as follows:

  1. It supplements new incentives for sub-processing activities of export manufacturing.
  2. It provides new duty treatments applicable to on-the-spot imports and exports of processing enterprises and manufacturing enterprises.
  3. It clarifies the regulations related to scraps and defective goods (or "NG goods" in local terms) under processing for export model and manufacturing for export model.
  4. It clarifies the conditions and administrative procedures in relation to the Export Processing Enterprise ("EPE") status.

Please note that there have been extensive concerns about on-the-spot importation of goods and its duty treatments provided in Decree 18. It is said that such a trade policy would inevitably compromise the competitiveness of the export manufacturing enterprises in Vietnam.

Before Vietnam government further clarifies the provisions in Decree 18, what would be impacts on MNEs in Vietnam and what measures should these companies take to mitigate the negative impacts? How the companies could apply for a refund of the taxes wrongly imposed previously? For MNEs which are planning to invest in Vietnam in near future, how should they understand and implement the provisions in relation to EPE status? We shall discuss them in detail during the event.

Should you have any queries, please contact Phoebe Tsang at +852 3927 5624. 

Lachlan Wolfers
Global Head of Indirect Taxes and Global Head of Data for Tax & Legal
KPMG China

Richard Lin
Supply Chain (Customs, Indirect Tax, Incentives and Transformation)
KPMG China

Le, Thanh Binh
Integrated International Tax
KPMG Vietnam

Hoang, Thi Lan Anh
Integrated International Tax
KPMG Vietnam

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