Non-tariff zones and export processing zones are areas where businesses operating in the area enjoy many tax incentives. So is an export processing zone considered a non-tariff zone? The following article will help you understand more about these two economic zones of interest.
1. Definition of non-tariff zones and export processing zones
According to Clause 1, Article 4 of the 2016 Import and Export Tax Law, “ Non-tariff zone is an economic area located within the territory of Vietnam, established in accordance with law, with a defined geographical boundary. , separated from the outside area by a hard fence, ensuring conditions for customs inspection, supervision and control activities of customs authorities and relevant agencies for exported and imported goods exports and means and passengers on exit and entry; the relationship of buying, selling and exchanging goods between the non-tariff zone and the outside is an import-export relationship .
An export processing zone is an industrial park that concentrates on production activities for export products/services, with defined geographical boundaries established by the Government or permitted by the Government.
Also in Clause 20, Article 4 of Circular 219/2013/TT-BTC, it stipulates as follows: “ Non-tariff zones include: export processing zones, export processing enterprises, tax-suspension warehouses, tax-suspension zones, bonded warehouses and zones. Special commercial economic zones, commercial-industrial zones and other economic zones are established and enjoy tax incentives like non-tariff zones under the Prime Minister’s Decision. The relationship of buying, selling and exchanging goods between these zones and the outside world is an import and export relationship .
Thus, export processing zones are considered as non-tariff zones. In other words, a non-tariff zone is a broad concept that includes export processing zones. The export processing zone is only a small part of the non-tariff zone.
2. Comparison of export processing zones and non-tariff zones
To have a more specific view of export processing zones and non-tariff zones, please follow the following comparison table:
| Comparative Criteria | Manufacturing area | Non-tariff zone |
| Establishment goal | To focus on production activities of goods/services for export. | Helping agencies involved in import and export activities easily carry out inspection and supervision work. |
| Geographical boundary properties | Having a defined geographical boundary established or authorized by the Government. | Having a defined geographical boundary, separated from the outside area by a hard fence |
| Tax incentives | – The VAT rate of 0% is applied to goods and services in export processing zones. – Enterprise income tax exemption for 2 years and 50% reduction for the next 4 years. | – For goods in the non-tariff zone, the VAT rate of 0% is applicable for each specific case. |
Thus, a non-tariff zone and an export processing zone have been established under the approval of the Government to concentrate import/export activities, ensuring a defined geographical boundary for agencies and departments to easily inspect and supervise the activities of enterprises. At the same time, the tariff zones and export processing zones have many tax incentives to help businesses optimize costs.
Nam Dinh Vu – a potential non-tariff area and tax incentives for businessesThe establishment of a non-tariff zone and an export processing zone contributes greatly to the promotion of an export-oriented economy. Along with many tax incentives, helping businesses in non-tariff zones or export processing zones have many conditions to improve competitiveness in the market, focusing all resources to increase export turnover to the market. Vietnamese.
