Tiếng Việt
中文 (中国)Branch of export processing enterprise established to operate is a legal issue that should be reviewed carefully before taking action in practice. This article is structured by ANT Legal in a practical and accessible way, helping individuals and businesses understand the main issues, common risks and appropriate solutions.
Does a branch of an export processing enterprise established to buy and sell goods have to pay value-added tax?
Value added tax for branches of export processing enterprises is specified in Clause 6 Article 3 Circular 219/2013/TT-BTC as follows:
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Taxpayers
VAT taxpayers are organizations and individuals that produce and trade goods and services subject to VAT in Vietnam, regardless of industry, form, or business organization (hereinafter referred to as business establishments) and organizations and individuals that import goods and purchase services from abroad subject to VAT (hereinafter referred to as importers) including includes:
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6. Branches of export processing enterprises are established to purchase and sell goods and activities directly related to the purchase and sale of goods in Vietnam according to the provisions of law on industrial parks, export processing zones and economic zones.
Accordingly, for branches of export processing enterprises established to purchase and sell goods and activities directly related to the purchase and sale of goods in Vietnam according to the provisions of law on industrial parks, export processing zones and economic zones, value added tax must be paid.
Thus, according to the case you shared, your company’s branch must declare and pay value added tax according to regulations.
Can branches of export processing enterprises apply the mechanism for export processing enterprises?
Branches of export processing enterprises are specified in Clause 7 Article 26 Decree 35/2022/ND-CP as follows:
Special regulations apply to export processing zones and export processing enterprises
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2. In industrial parks, there may be industrial subdivisions for export processing enterprises. Export processing zones, export processing enterprises, and industrial subdivisions for export processing enterprises are separated from the outside territory by a fence system, with gates and doors, ensuring conditions for inspection, supervision, and control by customs authorities and relevant authorities according to regulations applicable to non-tariff zones prescribed in the law on export tax and import tax.
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7. Export processing enterprises are allowed to establish branches according to the provisions of investment law and enterprise law to carry out export processing activities. Branches of export processing enterprises may apply the mechanism for export processing enterprises specified in this Article if they carry out export processing activities in export processing zones, industrial parks, and economic zones and meet the conditions in Clause 2 of this Article.
8. In industrial parks and economic zones, there are export processing enterprises and the mechanism for export processing enterprises is applied if they meet the conditions specified in Clause 2 of this Article.
Thus, according to regulations, branches of export processing enterprises can apply the mechanism for export processing enterprises if they carry out export processing activities in export processing zones, industrial parks, and economic zones and meet the conditions in Clause 2, Article 26 above.
Do export processing enterprises with only export activities need to submit a value-added tax declaration?
In case an export processing enterprise only has export activities, it is specified in Clause 3 Article 7 Decree 126/2020/ND-CP as follows:
Tax declaration documents
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3. Taxpayers are not required to submit tax declaration documents in the following cases:
a) Taxpayers only have activities and businesses that are not subject to tax according to the provisions of tax law for each type of tax.
b) Individuals with tax-exempt income according to the provisions of law on personal income tax and the provisions of Point b, Clause 2, Article 79 of the Law on Tax Administration, except for individuals receiving inheritance designs and gifts of real estate; real estate transfer.
c) Export processing enterprises that only engage in export activities are not required to submit value-added tax declaration documents.
d) Taxpayers temporarily suspend operations and business according to the provisions of Article 4 of this Decree.
d) The taxpayer submits an application to deactivate the tax code, except in cases of termination of operations, termination of contracts, or reorganization of the enterprise according to the provisions of Clause 4, Article 44 of the Law on Tax Administration.
Thus, according to regulations, in case an export processing enterprise only has export activities, it does not need to submit a value-added tax declaration.
Note on Applying Current Legal Regulations
This article belongs to the Business & M&A group and is presented for reference purposes, helping readers understand the legal issue at an overview level before preparing a dossier or carrying out a transaction.
Legal regulations may vary depending on the timing, locality, type of dossier and specific circumstances. If you need to determine the exact legal basis applicable to your case, you should contact ANT Legal’s lawyers at 0966.475.966 for review and advice before proceeding.
Common Legal Risks to Note
- Applying legal instruments that have been amended, supplemented or replaced.
- Preparing an incomplete set of documents, materials or necessary evidence.
- Misunderstanding the conditions, procedure, timeline or competent authority.
- Signing, submitting a dossier or carrying out a transaction before fully assessing legal risks.
How Can ANT Legal Support You?
ANT Legal can review the specific circumstances, examine the dossier, identify the applicable legal basis, advise on an appropriate handling plan and represent clients in working with individuals, organizations or competent authorities where necessary.
For prompt advice, you may contact a lawyer at 0966.475.966.
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Practical points to review
For the topic “Does a branch of an export processing enterprise established to buy and sell goods have to pay value-added tax?”, readers should compare the legal rule with the actual documents, parties involved, timeline and evidence before choosing a course of action.
- Identify the legal relationship, signing authority and documents creating rights or obligations.
- Check deadlines, notices, payment records, approvals and evidence that may affect the legal position.
- Assess whether negotiation, document correction, complaint, arbitration, court proceedings or another route is suitable.
Documents to prepare
- Contracts, annexes, decisions, notices, emails, messages, payment records and handover/acceptance minutes where relevant.
- Enterprise, asset, license or identity documents connected to the matter.
- A short timeline of key events and the outcome expected from the review.
When to seek legal advice
If the matter has high value, strict deadlines, multiple parties, unclear evidence or potential dispute risk, consider discussing the file with ANT Legal before signing, responding or filing a claim.
Related service: ANT Legal services. You may also contact ANT Legal through the official website.
This content is for general reference only and does not replace legal advice for a specific file. A service relationship is formed only after scope and fees are agreed.
