From February 18, 2025, shall imports under 1 million VND sent via express delivery be not entitled to tax-exempt in Vietnam?

From February 18, 2025, shall imports under 1 million VND sent via express delivery be not entitled to tax-exempt in Vietnam?

Based on Article 1 and Article 2 of Decision 01/2025/QD-TTg regarding the complete repeal of Decision 78/2010/QD-TTg as follows:

Repeal of Entire Decision

Repeal the entire Decision No. 78/2010/QD-TTg dated November 30, 2010, by the Prime Minister of the Government of Vietnam regarding the value of imports sent via express delivery services exempt from taxes.

Implementation Provisions

1. This Decision shall take effect from February 18, 2025.

2. Ministers, heads of ministerial-level agencies, heads of agencies under the Government of Vietnam, Chairmen of the People's Committees of provinces and centrally-run cities, and related units are responsible for the implementation of this Decision.

Additionally, according to Article 1 of Decision 78/2010/QD-TTg by the Prime Minister of the Government of Vietnam, on the value of imports sent via express delivery services exempt from VAT, imports under 1 million VND sent via express delivery were exempt from import duty and VAT (at the import stage).

Thus, as soon as Decision 01/2025/QD-TTg takes effect, it will also mean the termination of implementation effect for Decision 78/2010/QD-TTg from 2010. Therefore, imports under 1 million VND sent via express delivery will officially stop being exempt from import duty and VAT (at the import stage) from February 18, 2025.

Which entities are import duty payers in Vietnam?

According to Article 3 of the Law on Export and import duties 2016 stipulating import duty payers as follows:

- Owners of exported and imports.

- Organizations entrusted with exporting and importing.

- Persons exiting and entering the country with exported and imports, sending or receiving goods through Vietnam's border gates and borders.

- Individuals authorized, guaranteed, and paying tax on behalf of the taxpayers, including:

+ Customs procedure agents in cases authorized by taxpayers to pay export and import dutyes;

+ Enterprises providing postal services, international express delivery services in cases of paying tax on behalf of taxpayers;

+ Credit institutions or other organizations operating under the Law on Credit Institutions in cases of guaranteeing and paying taxes on behalf of taxpayers;

+ Individuals authorized by goods owners in cases of goods being gifts or presents of individuals; luggage sent before or after the trip of exit and entry persons;

+ Branches of enterprises authorized to pay taxes on behalf of enterprises;

+ Other individuals authorized to pay taxes on behalf of taxpayers as per legal regulations.

- Individuals purchasing and transporting goods within the tax exemption limits of border residents but not using them for production or consumption and selling them in the domestic market, and foreign traders permitted to conduct trading of exported and imports at border markets as per legal regulations.

- Persons with exported and imports that are non-taxable or tax-exempt but later change status and become taxable as per legal regulations.

- Other cases as prescribed by law.

What are the deadlines for import duty payment in Vietnam?

According to Article 9 of the Law on Export and import duties 2016 governing the deadlines for paying import duty as follows:

- imports subject to tax must pay tax before clearance or release of goods according to the Customs Law, except for cases stipulated in Clause 2, Article 9 of the Law on Export and import duties 2016.

If the tax amount is guaranteed by a credit institution, the goods will be cleared or released but late payment interest must be paid as regulated by the Tax Management Law from the clearance or release date until the tax is paid. The maximum guarantee period is 30 days from the customs declaration registration date.

If guaranteed by a credit institution but the guarantee period expires without the taxpayer paying the tax and late payment interest, the guarantor is responsible for paying the full tax and late payment interest on behalf of the taxpayer.

- Taxpayers entitled to priority policies under the Customs Law can pay tax for customs declarations already cleared or released during the month no later than the tenth day of the following month. If this deadline is exceeded, the taxpayer must pay the full owed tax and late payment interest as stipulated by the Tax Management Law.

What are the bases for calculating import duty on goods using the direct method in Vietnam?

According to Article 5 of the Law on Export and import duties 2016 concerning the bases for calculating import duty on goods using the direct method, specific tax method, or mixed tax method as follows:

(1) import duty amount is determined based on the taxable value and the percentage (%) tax rate of each item at the time of tax calculation.

(2) import duty rates include preferential tax rates, special preferential tax rates, and ordinary tax rates, applied as follows:

- Preferential tax rates apply to imports from countries, groups of countries, or territories granted most-favored-nation treatment in trade relations with Vietnam; goods from duty-free zones imported into the domestic market meeting origin conditions from countries, groups of countries, or territories granted most-favored-nation treatment in trade relations with Vietnam;

- Special preferential tax rates apply to imports from countries, groups of countries, or territories with special preferential agreements on import duty in trade relations with Vietnam; goods from duty-free zones imported into the domestic market meeting origin conditions from countries, groups of countries, or territories with special preferential agreements on import duty in trade relations with Vietnam;

- Ordinary tax rates apply to imports not falling under the cases outlined in section (2), ordinary tax rates are set at 150% of the preferential rate for each corresponding item. In cases where the preferential rate is 0%, the Prime Minister of the Government of Vietnam shall base decisions on Article 10 of the Law on Export and import duties 2016 to decide on the application of ordinary tax rates.