Export processing zones in Vietnam with many special tax incentives bring favorable conditions for enterprises to develop and reduce business costs. Understanding the export processing industrial park and special incentives will help businesses choose the right business address.
1. What is an export processing zone?
An export processing zone is an industrial park that concentrates on production activities of export products/services, with defined geographical boundaries established by the Government or permitted by the Government.
An industrial park is an area with a defined geographical boundary, specializing in the production of general industrial goods/services, including domestic production and export. Thus, the industrial park has a broader meaning and the export processing zone is just one type in the industrial park.
2. Some export processing zones in Vietnam
Within the framework of this article, we will introduce some export processing zones in Vietnam as well as the main businesses in export processing zones. From there, it helps readers have a better overview of the export processing industrial park.
| Manufacturing area | Address | Business |
| Tan Thuan Export Processing Zone | District 7, TP. Ho Chi Minh | High-tech, electronics, textiles, packaging…. |
| Linh Trung Export Processing Zone I | Thu Duc District, City. Ho Chi Minh | Garment, footwear, electronics, food… |
| Linh Trung Export Processing Zone II | Thu Duc District, City. Ho Chi Minh | Foodstuffs, machinery processing, electronics, mold manufacturing…. |
3. Tax incentives of export processing zones
Enterprises operating in export processing zones receive many tax incentives. These incentives have been clearly stated in the legal documents. Specifically:
Incentives on corporate income tax
According to Clause 4, Article 19 of Circular 78/2014/TT-BTC, enterprises in export processing zones will enjoy corporate income tax incentives such as:
- The preferential corporate income tax rate is 17% from January 1, 2016 when enterprises carry out new investment projects in difficult socio-economic areas.
- Tax exemption for 2 years and 50% reduction of tax payable for the next 4 years with income from new investment projects.
Preferential land use fee
According to Clause 3, Article 19 of Decree 46/2014/ND-CP , enterprises operating in export processing zones will be exempted from land rent for 7 years.
Import and export tax incentives
Pursuant to Clause 4, Article 2 of the 2016 Law on Import and Export Taxes , goods exported from the non-tariff zone to other countries, goods imported from abroad into the free trade zone and used only in the free trade zone. tariffs, goods from one non-tariff zone to another will not be subject to tax.
0% VAT incentive
Tax rate of 0%: applied to exported goods and services; construction and installation activities in non-tariff zones; international transport; goods and services are not subject to VAT upon export, except for cases where the 0% tax rate guided in Clause 3 of this Article is not applied.
Exported goods and services are goods and services sold or supplied to organizations and individuals abroad and consumed outside of Vietnam; selling and supplying to organizations and individuals in non-tariff zones; goods and services provided to foreign customers in accordance with law.
Export processing zones in Vietnam are making a great contribution to promoting economic integration in our country. Together with tax incentives, businesses will have many favorable conditions to develop and expand their business and bring the Vietnamese economy closer to the world economy.
