EPE, toll processing and export production are often grouped together because all three may involve imported inputs, manufacturing in Viet Nam and exported outputs. Legally, however, they are not concepts at the same level. An EPE is an enterprise conducting export-processing activities; its operating area must satisfy separation, customs inspection and supervision conditions, and non-tariff-zone tax treatment applies only after customs confirms those conditions. Toll processing is a manufacturing relationship governed by a processing contract, while export production is a model in which the enterprise organises its own inputs, production and export sales. Selecting customs treatment merely because a factory is located in an export processing zone or because goods are “for export” can affect declaration purpose, duty treatment, ownership of inputs, norms, inventory, finalisation reporting and scrap disposal. This article uses electronic components, machined parts and engineering plastics to explain the documents, workflow and control points that should be locked before filing.

QUICK FACTS

EPE is an export-processing status; non-tariff treatment depends on confirmed conditions

Not every EPE declaration is the same. Transactions with foreign parties, other EPEs and the domestic market must be classified by actual goods flow, purpose and supervision conditions.

Processing is driven by contract and the principal’s ownership

Inputs, machinery, products and scrap must be controlled under the processing contract, annexes, actual norms and agreed disposal method.

Export production is driven by the enterprise’s own production and sales

The enterprise generally procures or owns the inputs, bears commercial risk and must prove that imported inputs were actually used in exported products.

All three require lifecycle data control

Production facilities, warehouses, inputs, norms, outputs, subcontracting, scrap and finalisation data must form an audit trail from import declaration to export declaration.

Illustration for Customs procedures for EPEs, toll processing and export production in Viet Nam — Illustration of the logistics topic, document or operation discussed in the article.

Prepared as a B2B logistics reference | Legal review updated to 20 July 2026.

SCOPE OF APPLICATION

This article applies to enterprises importing electronic components, machined parts, engineering plastics, semi-finished goods and auxiliary materials for assembly, toll processing or export production. It covers EPEs, Vietnamese processors for foreign principals and export-production enterprises.

It should not be applied mechanically to food, pharmaceuticals, hazardous chemicals, imported scrap, defence goods or products subject to separate sector licences. Customs filing for such goods must be combined with the applicable product-control regime.

KEY TERMS

Term	Operational meaning	Role
EPE – Export Processing Enterprise	An enterprise conducting export-processing activities in an export processing zone, industrial park or economic zone. Its area must be separated, have controlled gates/entrances and satisfy customs inspection and supervision conditions; non-tariff-zone tax treatment applies only after confirmation.	Determines domestic-market treatment, supervision conditions and related tax treatment.
Toll processing	A processor performs one or more manufacturing stages for remuneration under a contract; ownership of inputs and outputs follows the agreement with the principal.	Locks the contract, norms, receipt/return of inputs and products, machinery and excess-material treatment.
Export production	An enterprise imports inputs, manufactures goods and exports the finished products on its own commercial account.	Requires proof linking imported inputs, production, stock and exported outputs.
Production facility notification	Information on production sites and storage places for inputs, machinery and products.	Provides the baseline for customs management and verification of actual production capacity.
Actual norm	The actual quantity of input used to produce one unit of output, including reasonable loss.	Connects imports, production, work in progress, exports, inventory and finalisation reporting.
Finalisation report	Periodic reconciliation of receipts, issues and balances of inputs and products.	Matches customs data to accounting, warehouse and production records; unresolved gaps may trigger explanation, audit or tax assessment.
Subcontracting	Outsourcing part or all of a production stage to another facility under legal and contractual conditions.	Requires control of site, transfers, losses, outputs returned and data responsibility.

SUBSTANCE AND OPERATING MECHANISM

1. EPE IS AN EXPORT-PROCESSING STATUS, NOT ONE FIXED CUSTOMS REGIME CODE

EPE describes an enterprise conducting export-processing activities and an operating area subject to customs inspection and supervision once the statutory conditions are met. An EPE may manufacture its own goods, accept processing work, subcontract operations or transact with other parties within permitted scope. Each declaration must therefore be based on the actual transaction, direction, purpose and responsible party—not merely on the EPE label.

2. PROCESSING IS CONTRACT-DRIVEN

Key questions are who owns or supplies the inputs, who specifies the output, whether the Vietnamese enterprise earns processing fees or a trading margin, who controls loaned machinery and how excess inputs and scrap will be treated.

3. EXPORT PRODUCTION IS INPUT–OUTPUT DRIVEN

The enterprise must demonstrate that imported inputs entered genuine production and formed exported products. Warehouse, accounting and production systems should connect the import declaration to material code, work order, norm, finished-goods code and export declaration.

4. TAX RELIEF DEPENDS ON MANAGEMENT CONDITIONS

Duty exemption or non-tax treatment continues only when the correct beneficiary, purpose, documentation, facilities, inventory data and exported output are proven. Domestic sale, change of purpose, destruction, donation or unexplained loss must be addressed before goods leave the original regime.

EPE – PROCESSING – EXPORT PRODUCTION COMPARISON

Criterion	EPE	Toll processing	Export production	Control point
Legal substance	Enterprise conducting export-processing activities; its area must satisfy customs inspection and supervision conditions. Non-tariff-zone tax treatment does not arise from the EPE label alone.	Manufacturing relationship for processing remuneration.	Enterprise procures inputs, manufactures and sells exports.	Do not treat the three concepts as the same classification level.
Input ownership	Depends on the individual transaction and contract.	Commonly belongs to the foreign principal or follows the processing agreement.	Commonly belongs to the export producer.	Contract, invoice, payment and stock ledger must tell the same story.
Main revenue	Permitted manufacturing/trading activities of the EPE.	Processing fee and agreed recoveries.	Revenue from export sale of finished goods.	Accounting must separate processing fees from goods sales.
Domestic-market relation	Treated as import/export in principle, subject to statutory exceptions.	Domestic materials or local handling may be used under contract and applicable rules.	Domestic and imported inputs may both be used for export production.	Do not move goods domestically on an internal slip alone.
Core documents	Investment/registration records, EPE status, supervision conditions and site layout.	Processing contract, annexes, material/product/machinery lists and disposal terms.	Production plan, BOM/norms, export orders and facility records.	Lock before the first inbound shipment.
Post-clearance focus	Supervised boundary, domestic transactions, purpose and inventory.	Inputs received/returned, fees, outputs, machinery, subcontracting and excess materials.	Imported inputs, exported outputs, losses, inventory and genuine production.	Audit trail must span warehouse, accounting, production and customs.
Tax risk	Failure to meet supervision conditions or improper domestic release.	Failure to prove use under the processing contract or improper disposal.	Failure to prove that imported inputs formed exported goods.	May lead to recovery, assessment, late-payment interest and penalties depending on conduct.

DOCUMENTS AND DATA TO CHECK

Data group	EPE	Toll processing	Export production	Owner
Status and facility	EPE file, boundary/gates, storage areas, surveillance and relevant confirmations.	Production-site and warehouse information, machinery and processing location.	Production-site and warehouse information, lines and capacity.	Legal + Customs + Factory
Contracts	Sales/movement contracts by counterparty.	Processing contract, annexes, fee, ownership and excess-material treatment.	Input purchase contracts and export sales orders/contracts.	Sales/Procurement + Accounting
Goods master	Material code, technical description, HS, UOM, model/part number.	Lists of inputs, outputs, scrap and loaned machinery.	Lists of materials, semi-finished goods, finished goods and consumables.	Technical + Warehouse + Customs
Norms and production	According to the EPE’s actual operating model.	Norm by product/contract and processing stage.	Actual norm by product code, BOM version and work order.	Technical + Production
Warehouse and accounts	Receipts/issues/balances by customs status, location and purpose.	Separate control of principal-owned inputs, outputs and machinery.	Separate imported duty-free inputs, domestic inputs, finished goods and WIP.	Warehouse + Accounting
Declarations and transport	Declarations for each transaction direction; transport and gate records.	Input/output/machinery declarations and subcontract-transfer evidence.	Input-import and product-export declarations plus delivery evidence.	Operations + Customs
Exceptions	Domestic sale, machinery disposal, change of purpose and destruction.	Excess inputs, rejects, scrap, machinery return/transfer.	Scrap, destruction, domestic sale, returned exports or re-import.	Compliance + Accounting + Customs

PROCESS / HOW TO APPLY

Step	Input	Required action	Output	Lead
1. Identify the model	Contract, ownership, money flow, production purpose and output.	Classify EPE, processing or export production by substance; document cases where an EPE also processes or self-manufactures.	Model-selection memo and declaration flow.	Compliance + Sales
2. Review status and facility	Investment/registration, site, warehouse, layout and machinery.	Verify that EPE conditions have been confirmed by customs, or that production/storage-site information has been handled as required; lock subcontracting locations and any site changes before goods movement occurs.	Approved facility file.	Legal + Factory
3. Standardise master data	Material/output lists, HS, UOM and BOM.	Create consistent codes across ERP, warehouse, accounting, contracts and customs.	Version-controlled master data.	Technical + IT/ERP
4. Lock contract and norms	Processing contract or export-production plan, samples and process flow.	Define ownership, actual norms, losses, by-products and disposal of excess materials.	Approved contract/norm file.	Technical + Accounting
5. File by substance	Commercial invoice, packing list, transport and sector permits.	Select the regime code from the code list effective on filing date; do not choose solely from the EPE label or goods name.	Correct import/export declaration.	Customs + Operations
6. Control production and stock	Receipts, issues, work orders and inter-site transfers.	Track lot/item/customs status; control subcontracting, movement and losses.	Traceable warehouse-production log.	Warehouse + Production
7. Resolve exceptions before movement	Domestic-sale, destruction, change-of-purpose, return and scrap request.	Review product policy, declaration, tax and approval before goods leave the original regime.	Valid exception file.	Compliance + Accounting
8. Reconcile and finalise	Declarations, warehouse, accounting, norms, output and WIP.	Reconcile input–output–inventory data periodically and explain variances. For activities within the amended Article 60 scope, use the applicable system-data method or fiscal-year finalisation-report method.	Finalisation report and complete audit trail.	Accounting + Customs + Factory

FINALISATION-REPORTING NOTE: Under Circular 121/2025/TT-BTC, organisations or individuals within Article 60 may choose either: (i) providing warehouse input–output data for materials and products from the enterprise management system to the customs system; or (ii) submitting a fiscal-year finalisation report. The selected method does not remove the duty to retain, reconcile and produce warehouse, accounting and production data when requested.

RISKS AND COMMON ERRORS

1. USING “EPE” AS A UNIVERSAL DECLARATION CODE

The EPE status does not determine one single regime. Asset imports, self-production inputs, processing inputs, domestic purchases and domestic disposals can require different treatment.

2. PROCESSING CONTRACT BUT TRADING MONEY FLOW

If invoices, payment, ownership and revenue conflict with the processing contract, reviewers may question transaction substance, customs value, tax and use of inputs.

3. NORMS EXIST ONLY IN A SPREADSHEET

Norms must reflect actual production and link to BOMs, work orders, scrap, output and WIP. A norm without technical evidence creates finalisation risk.

4. SUBCONTRACT TRANSFERS TREATED AS ORDINARY STOCK MOVEMENT

The site, transfer evidence, quantity, stage, losses and returned output must be controlled. Missing traceability may mean the enterprise cannot prove permitted use.

5. DOMESTIC SALE OR DISPOSAL FIRST, DOCUMENTS LATER

This may trigger supplementary declarations, tax, product-policy review and penalties. Approval and customs treatment should be locked before warehouse or EPE-gate release.

6. FINALISATION REPORT DOES NOT MATCH ACCOUNTING AND STOCK

UOM, item mapping, cut-off, WIP, scrap and amended/cancelled declarations commonly create large gaps. Reconcile periodically rather than waiting until fiscal year-end.

LEGAL BASIS AND OFFICIAL SOURCES

Instrument	Issuer	Effective/application	Role	Review note
Customs Law No. 54/2014/QH13 / Law No. 90/2025/QH15	National Assembly	Customs Law effective 1 January 2015; Law 90 effective 1 July 2025	Framework for declaration, inspection, supervision and post-clearance audit; Law 90 amends parts of the Customs Law and the Law on Export and Import Duties.	Read the amended law in force on the declaration date.
Decree No. 167/2025/ND-CP	Government	Effective 15 August 2025	Amends Decree 08/2015 on customs procedures, inspection and supervision.	Use together with Circular 121/2025/TT-BTC for operating detail.
Circular No. 121/2025/TT-BTC	Ministry of Finance	Effective 1 February 2026	Amends rules on production/storage sites, processing and export-production management, and system-data/finalisation-reporting methods.	Check transition rules, fiscal year and the method selected by the enterprise.
Decree No. 35/2022/ND-CP	Government	Effective 15 July 2022	Sets EPE separation, controlled gate/entrance and customs confirmation requirements.	Non-tariff-zone tax treatment applies only after EPE conditions are confirmed.
Law on Export and Import Duties No. 107/2016/QH13 / Law No. 90/2025/QH15	National Assembly	Law 107 effective 1 September 2016; Law 90 effective 1 July 2025	Basis for duty exemption for processing, export production and non-tariff-zone goods when conditions are met.	Exemption depends on beneficiary, use and supporting evidence.
Decree No. 134/2016/ND-CP / Decree No. 18/2021/ND-CP	Government	Apply through the amended instrument chain	Detailed duty-exemption rules and treatment of inputs, products and change of use for processing, export production and non-tariff zones.	Do not treat Decree 182/2025 as the core source for all EPE/processing/export-production matters; its amendments are limited and must be read provision by provision.
Law on Tax Administration No. 108/2025/QH15 / Decree No. 252/2026/ND-CP / Circular No. 86/2026/TT-BTC	National Assembly / Government / Ministry of Finance	Applicable from 1 July 2026 within each instrument’s scope	Current tax-administration framework for exports and imports, including supplementary declaration, inspection, assessment and tax obligations.	Relevant where input–output variances, change of use or deficient evidence affect duty conditions.

Sources reviewed to 20 July 2026. For a live file, verify consolidated texts, transitional clauses and legal status on the event date.

FREQUENTLY ASKED QUESTIONS

Does every EPE automatically file the same finalisation-report form?

No conclusion should be based on the EPE label alone. Determine whether the actual activity falls within the Article 60 input–output management scope and whether the enterprise uses the system-data method or the fiscal-year finalisation-report method under Circular 121/2025/TT-BTC.

What is the main difference between processing and export production?

Processing is driven by the contract and the foreign principal’s ownership/control; export production is driven by the enterprise’s own procurement, production and export sale.

Does an EPE purchase from a domestic company require customs declarations?

The EPE–domestic relationship is generally treated as import/export, subject to statutory exceptions. The parties should lock the declaration responsibility before delivery.

Can multiple part numbers use one material code?

Only where technical description, HS, UOM, control characteristics and traceability remain intact. Over-broad aggregation can distort norms and finalisation.

How should scrap and rejects sold domestically be handled?

Distinguish scrap, rejects, defective products and excess inputs; review sales conditions, product policy, tax, declaration and destruction/sale evidence before domestic release.

Are EPE, processing and export-production regime codes fixed?

Do not memorise one code per model. The code depends on direction, purpose, parties and the code table effective on filing date.

APPLICATION NOTE: This article is not a file-specific legal conclusion. Regime selection, duty exemption, finalisation-reporting method and excess-material treatment depend on contracts, ownership, production sites, confirmed EPE conditions, warehouse–accounting–production data, product policy and the law effective on the transaction date.

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