How long is the total period for applying safeguard duty in Vietnam?

What are cases of safeguard duty in Vietnam?

Based on the provisions of Clause 7, Article 4 of the Law on Export and Import Duties 2016 as follows:

Explanation of Terms

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

...

7. safeguard duty is a supplementary import tax applied in cases where excessive importation of goods into Vietnam causes serious damage or threatens to cause serious damage to the domestic industry or prevents the formation of domestic production.

Thus, based on the concept defined by law, it can be understood that the safeguard duty appears when goods are excessively imported into Vietnam, causing damage, threatening to cause serious damage, or hindering the formation of domestic industry. In such cases, the safeguard duty will emerge.

How long is the total period for applying safeguard duty in Vietnam? (Image from the Internet)

How long is the total period for applying safeguard duty in Vietnam?

Based on Article 14 of the Law on Export and Import Duties 2016, the following is specified:

Safeguard duty

1. Conditions for applying safeguard duty:

a) The quantity, volume, or value of imported goods increases suddenly, either absolutely or relatively, compared to the quantity, volume, or value of similar or directly competitive goods produced domestically;

b) The increase in quantity, volume, or value of imported goods as stipulated at point a of this clause causes or threatens to cause serious damage to the domestic industry producing similar goods or directly competitive goods or prevents the formation of the domestic industry.

2. Principles for applying safeguard duty:

a) safeguard duty shall be applied within the scope and to the extent necessary to prevent or limit serious damage to the domestic industry and create conditions for that industry to enhance its competitiveness;

b) The application of safeguard duty must be based on the investigation conclusion, except in cases of temporary safeguard duty application;

c) safeguard duty shall be applied on a non-discriminatory basis and irrespective of the origin of the goods.

3. The duration of applying safeguard duty shall not exceed 4 years, including the time of temporary safeguard duty application. The duration of applying safeguard duty may be extended for no more than an additional 6 years, provided there is still serious damage or the risk of serious damage to the domestic industry and evidence that the industry is adjusting to enhance competitiveness.

Thus, according to the above regulation, the maximum total duration for applying safeguard duty is 10 years (including extensions). However, extensions require the condition that there remains serious damage or the risk of severe damage to the domestic industry and evidence that the industry is adjusting to enhance competitiveness.

What are regulations on application of safeguard duty in Vietnam?

Based on Article 15 of the Law on Export and Import Duties 2016 as follows:

- The application, change, and abolition of anti-dumping tax, countervailing duty, and safeguard duty shall be carried out according to the provisions of this Law and the law on anti-dumping, the law on countervailing, and the law on safeguards.

- Based on the tax rate, quantity, or value of goods subject to anti-dumping tax, countervailing duty, safeguard duty, the customs declarant is responsible for declaring and paying tax in accordance with the law on tax management.

- The Ministry of Industry and Trade decides on the application of anti-dumping tax, countervailing duty, and safeguard duty.

- The Ministry of Finance regulates the declaration, collection, payment, and refund of anti-dumping tax, countervailing duty, safeguard duty.

- In case the interests of the Socialist Republic of Vietnam are harmed or violated, based on international treaties, the Government of Vietnam reports to the National Assembly to decide to apply other appropriate defensive tax measures.

How to calculate the safeguard duty payable on an fixed amount of tax in Vietnam?

The method of calculating safeguard duty is regulated in Article 39 of Circular 38/2015/TT-BTC amended by Clause 23, Article 1 of Circular 39/2018/TT-BTC as follows:

safeguard duty, Anti-Dumping Tax, Countervailing Duty

1. Basis for tax calculation:

a) The actual imported quantity of each item recorded in the customs declaration subject to safeguard duty, anti-dumping tax, countervailing duty;

b) The taxable value of each imported item subject to safeguard duty, anti-dumping tax, countervailing duty;

c) The tax rate for each item as regulated by the Ministry of Industry and Trade.

2. Method of tax calculation:

a) In case of calculation by percentage

safeguard duty payable, anti-dumping tax, or countervailing duty payable = Quantity of each actual imported item recorded in the customs declaration subject to safeguard duty, anti-dumping tax, or countervailing duty x Taxable value per unit of goods x Rate of safeguard duty, anti-dumping tax, or countervailing duty

b) In case of calculation by absolute tax rate

safeguard duty payable payable = Quantity of each actual imported item recorded in the customs declaration subject to safeguard duty *** x safeguard duty payable, anti-dumping tax, or countervailing duty payable per unit of goods***

3. The time for tax calculation follows the provisions in Article 35 of this Circular.

4. For imported goods subject to one of the import tax measures (safeguard duty, anti-dumping tax, countervailing duty), the special consumption tax value, and value-added tax must include safeguard duty, anti-dumping tax, countervailing duty.

...

Thus, according to the above regulation, the safeguard duty payable calculated on an fixed amount of tax will use the following formula:

safeguard duty payable payable = Quantity of each actual imported item recorded in the customs declaration subject to safeguard duty x safeguard duty payable, anti-dumping tax, countervailing duty payable per unit of goods.