New provisions on EPE model

Accordingly, while in the past it had been required to establish a company (Non EPE) first and then such company could be converted into an EPE, subject to satisfaction of technical requirements and various verifications by the competent authorities, the legal procedure for the new establishment of an EPE is now clearly provided, and the investor is only required to provide the written commitment on their capacity to satisfy the relevant conditions on customs, taxes perspectives.

  

Furthermore, the procedure to convert from Non EPE to EPE seems less complicated than with the Decree 82/2018/ND-CP, now providing a straightforward procedure for the conversion. Accordingly, after establishment of the company (Non EPE), the company can submit an application dossier to the licensing authorities for conversion into EPE with the written commitment on satisfaction of conditions relating to inspection, supervision of the Customs Authority in accordance with the law on import, export taxes.  

  

In the past, there were tax risks during the transition time from non-EPE status to EPE as the EPE treatment has not been accepted by customs authority until approval through customs authority after conducting a site inspection. This cumbersome provision has now been removed, with the new regulations allowing for the EPE treatment to be accepted by the customs authority for customs duty exemption purposes as of the date on which the EPE is registered through Investment Registration Certificate.

  

Due caution is recommended

However, due to the still fresh issuance of the Decree 35, a preliminary discussion with the licensing authority is highly recommended to seek their view and interpretation on the implementation of this new regulation on case-by-case basis.