Vietnam’s new policies on import and export in effect from September of 2016

1. New preferential export-import tariffs applied as from 01 September 2016

Vietnam Government issued Decree No.122/2016/ND-CP promulgating preferential export-import tariffs, list of goods, absolute tariff, mixed tariff, out-of-quota tariff.

Accordingly, fertilizer products under headings 31.01, 31.02, 31.03, 31.04, 31.05 shall be applied at the following export tax rate:

– If the value of natural resources and minerals plus energy costs account for 51 % of the goods or more, applicable tax rate is 5%.

– Those other than the above-mentioned fertilizers products, tax rate will be applied on the basis of the export tariff specified in Appendix I attached to this Decree.

The new Decree also stipulates a number of petrochemical commodities which now enjoy preferential import tax rates according to the schedule: tax rate of 1% from 01 September 2016 to 31 December 2016 and tax rate of 3% as from 01 January 2017, which is provided in Section I of Appendix II attached to the Decree.

Besides, the Decree stipulates preferential import tax rates for some commodities according to WTO commitments for 2017, 2018 and 2019 onwards.

Decree No.122/2016/ND-CP comes into effect as from 01 September 2016.

2. Ordinary tax rate applied to imported goods

The Prime Minister has issued Decision No.36/2016/QD-TTg prescribing normal tax rate for imported goods. Accordingly:

– The ordinary tax rate is applied respectively to each specific item listed in the ordinary tax rate nomenclature attached to this Decision; or

– The ordinary tax rate equal to 150% of the preferential import tariff of each corresponding items in Annex II of Decree No. 122/2016 /ND-CP shall be applied to:

+ Imported goods which are not included in the list of normal import tariff attached to this Decision;

+ Imported goods which are not in the case of imported goods that are enjoying preferential tax rates or special preferential tax rate under Point a and b, Clause 3, Article 5 of the Law on export and import tax 2016.

The Decision No. 36/2016/QD-TTg takes effect from 01 September 2016.

3. New guidelines for import, export duty

The General Department of Vietnam Customs issued Official Letter No. 8600/TCHQ-TXNK regarding the application of import duty rates in accordance with the Law on import duty, export duty (IEDL). In particular:

– In case of imported goods stipulated in Point a, Clause 3, Article 5 of IEDL, preferential tax rates shall be applied respectively to each specific item listed in Section I, II, III, Appendix II of Decree No.122/2016/ND-CP.

– In case of imported goods stipulated in Point b, Clause 3, Article 5 of IEDL, special preferential duty rates shall be applied in accordance with the special preferential tax rate nomenclature attached to the Decrees implementing free trade agreements.

– In case of imported goods stipulated in Point c, Clause 3, Article 5 of IEDL (other than the above – mentioned cases), common tax rates shall be applied as follows:

+ For goods listed in the Appendix attached to Decision No. 36/2016/QD-TTg, the common duty of 5% shall be applied

+ Others shall be imposed a tax rate equal to 150% of respective tax rate prescribed in Section I, II, III,  Appendix II of Decree No.122/2016/ND-CP.

Official Letter No. 8600/TCHQ-TXNK is promulgated on 07 September 2016.

4. Requirement on notifying the quality of imported goods within 3 days

Joint Circular No. 110/2016/TTLT-BTC-BKHCN, guiding the cooperation in quality control and customs clearance of imported goods comes into force on 01 September 2016.

Accordingly, goods quality control agency shall:

– Check and notify the quality control results of the shipments with valid documents within 03 days as from the receipt date of conformity assessment results.

– Upload quality control results on National One-Stop-Shop Portal; or in case of no connection with National One-Stop-Shop Portal, send them via fax or in image file formats to customs offices for clearance of goods.

– If result notification cannot be sent to customs offices directly, then sending to declarer to submit to customs offices for customs clearance.

5. Conditions to be applied with AIFTA rate

Vietnam Government issued Decree No.126/2016/ND-CP on Vietnam Special Preferential Import Tariff to implement ASEAN – India Free Trade Agreement for the period 2016 – 2018 (AIFTA rate)

According to the Decree, goods eligible for AIFTA rate must meet the following conditions:

+ Belonging to special preferential import tariff attached to this Decree;

+ Be imported into Vietnam from member countries of AIFTA;

+ Be transported directly from the exporting country (AIFTA member) as prescribed by the Ministry of Industry and Trade

+ Meet the regulations on the origin of goods in AIFTA and have certificate of origin (C/O) according to “AI form” prescribed by the Ministry of Industry and Trade.

The import tariff nomenclature clearly indicates HS codes, names and description of goods on the basis of Vietnam import and export classification nomenclature which is categorized under 8-digit codes or 10-digit codes.

The Decree takes effect from 01 September 2016 and replaces Circular No.69/2014/TT-BTC.

6. Special preferential import tariff for goods imported from Japan

Vietnam Government issued Decree No. 125/2016/ND-CP on Viet Nam special preferential import tariff to implement Viet Nam – Japan Economic Partnership Agreement for the period 2016 – 2019.

Accordingly, the goods to be applied with this preferential import tariff (VJEPA rate) must meet the following conditions:

– Belonging to the special preferential import tariff nomenclature attached to the Decree;

– Being imported from Japan and Viet Nam;

– Being directly transported from Japan to Viet Nam as stipulated by the Ministry of Industry and Trade (MOIT);

– Satisfying regulations on origin in the Viet Nam-Japan Economic Partnership Agreement and having C/O form JV as provided by the MOIT.

Moreover, in the light of the Decree, goods from Viet Nam duty-free zones (including processed cargos) imported into the domestic market would benefit from the VJEPA rates if:

– Belonging to the special preferential import tariff nomenclature attached to the Decree;

– having C/O form JV as stipulated by the MOIT.

This Decree comes into effect from 01 September 2016 and replaces Circular No. 25/2015/TT-BTC.

7. Preferential import tariffs for goods imported from Laos

On 01 September 2016, Vietnamese Government issued Decree No. 124/2016/ND-CP, regulating special preferential import tariffs to implement Bilateral Trade Agreement between Vietnam and Laos. Details are as follows:

Imported goods originating from Laos on the list of goods specified in Annex I of this Decree shall enjoy an import tax rate of 50% of ATIGA (ASEAN Trade in Goods Agreement) rate

If the tax rates specified in ATIGA are higher than those specified in the preferential import tax (MFN), the tax rate of 50% specified in the preferential import tax (MFN) shall be applied.

Goods which enjoy special preferential import tariffs must meet the following conditions:

+ Be imported and transported directly from Laos into Vietnam.

+ Comply with current regulations on  origin applicable to goods entitled to preferential tariffs between Vietnam and Laos, and have a certificate of origin form S (C/O form S) issued by the competent authorities of Laos.

This Decree takes effect from 01 September 2016 to 03 October 2020.