Are goods recycled in free trade zoneswithout using imported raw materials exempt from import and export duties when imported into the Vietnamese market?

Are goods recycled in free trade zoneswithout using imported raw materials exempt from import and export duties when imported into the Vietnamese market?

Pursuant to Article 16 of the Law on Export and Import Duties 2016, the regulation states as follows:

Tax Exemption

1. Exported and imported goods of foreign organizations and individuals enjoying preferential rights or immunity in Vietnam within the appropriate limits according to international treaties to which the Socialist Republic of Vietnam is a member; goods within the duty-free luggage allowance of departing and arriving passengers; imported goods for sale at duty-free shops.

2. Movable assets, gifts, and presents within the limits set by foreign organizations and individuals to Vietnamese organizations and individuals or vice versa.

Movable assets, gifts, and presents exceeding the duty-free limit are subject to tax on the excess, except in cases where the receiving entity is a state-funded agency or organization and is allowed to receive by authorized agencies, or in cases for humanitarian or charitable purposes.

3. Goods traded or exchanged across borders by border residents within the list of goods and the limits set for production and consumption by border residents.

In cases where goods are purchased and transported within the limits but not used for production and consumption by border residents and goods exported and imported by foreign traders allowed to trade in border markets, duties must be paid.

4. Goods exempt from export and import duties as per international treaties to which the Socialist Republic of Vietnam is a member.

5. Goods with a value or taxable amount below the minimum level.

6. Raw materials, supplies, components imported for processing export products; finished products imported for attachment to processed products; processed exported products.

Processed exported products made from domestic raw materials and supplies subject to export tax shall not be exempt from tax for the value of the domestic materials and supplies forming part of the exported product.

Goods exported for processing and then imported are exempt from export and import duties Pursuant to the value of the exported materials constituting the processed product. In the case of goods exported for processing and then imported, which are resources, minerals, or products with the total value of resources and minerals plus energy costs accounting for 51% or more of the product cost, tax exemption is not applicable.

7. Raw materials, supplies, components imported for producing export goods.

8. Goods produced, processed, recycled, or assembled in a free trade zone not using imported raw materials or components from abroad when imported into the domestic market.

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Therefore, according to the above regulation, recycled goods in free trade zones, which do not use imported raw materials when imported into the domestic market are exempt from import and export duties.

Are goods recycled in free trade zoneswithout using imported raw materials exempt from import and export duties when imported into the Vietnamese market? (Image from the Internet)

Does the free trade zone supervise vehicles in addition to goods in Vietnam?

According to Clause 1, Article 4 of the Law on Export and Import Duties 2016, the free trade zone is defined as follows:

Definitions

In this Law, the following terms are understood as follows:

1. A free trade zone is an economic area located within the territory of Vietnam, established according to legal provisions, with defined geographical boundaries, separated from external areas by solid barriers, ensuring conditions for inspection, supervision, and customs control of export, import goods and vehicles*, passengers exiting and entering. The trade relationship between the free trade zone and external areas is regarded as export and import relations.*

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Therefore, according to the above regulation, activities in the free trade zone not only include supervision of goods but also vehicles and passengers exiting and entering.

Are goods moved from one free trade zone to another subject to import and export duties in Vietnam?

According to Article 2 of the Law on Export and Import Duties 2016, the regulation states as follows:

Taxable objects

1. Goods exported, imported through Vietnamese border checkpoints.

2. Goods exported from the domestic market into free trade zones, goods imported from free trade zones into the domestic market.

3. Goods exported, imported on the spot and goods exported, imported by enterprises exercising the right to export, import, and distribution.

4. The subject to export and import duties does not apply to the following cases:

a) Goods in transit, transshipment, trans-shipping;

b) Humanitarian aid goods, non-refundable aid goods;

c) Goods exported from a free trade zone abroad; goods imported from abroad into a free trade zone and used only within the free trade zone; goods transferred from one free trade zone to another;

d) The quantity of crude oil used to pay natural resource tax to the State when exported.

5. The Government of Vietnam details this Article.

Therefore, according to the above regulation, goods transferred from one free trade zone to another are not subject to import and export duties.