Tax exempted for goods in border economic zones

August 27, 2014 | 08:58

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The Ministry of Finance has issued a circular to realize PM Nguyen Tan Dung’s decision on financial regulations to border economic zones (BEZ), in which many types of goods and services are exempted from value added tax (VAT) and excise tax.

Accordingly, Vietnamese individuals and foreigners, who directly work, conduct and make profit from production and business in BEZ, can have their income tax reduced by half.

VAT-exempted items include goods and services which are produced and consumed within BEZ’s non-tariff zones; those which are traded between BEZ’s non-tariff zones or those which are imported and consumed within the zones, except for those regulated to pay VAT when being imported.

Goods and services from BEZ’s non-tariff zones, which are consumed outside BEZ or within the country, will be charged with VAT.

The circular regulates goods exempted from excise tax, including exported goods from BEZ’s non-tariff zones and those which are produced and consumed within BEZ’s non-tariff areas, except for buses with less than 24 seats and goods produced and consumed in the non-tariff zones which are not segregated by solid fences from outside territory.

Goods, which are traded between BEZ’s non-tariff areas, except for above-mentioned items, are also exempted from excise tax.

The selling of duty-free goods to tourists in BEZ’s non-tariff areas must be in accordance with PM Dung’s Decisions on operation of different BEZs. A person can buy duty-free goods with total bills not exceeding VND1 million per day and bring them into the country.

If the bills exceed VND1 million/person/day, the tourists have to follow custom procedures and pay import tax and VAT for the added goods.

The circular is set to become effective from October 1, 2014.

VGP

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