Is countervailing duty an import tax in Vietnam?

Is countervailing duty an import tax in Vietnam?

According to the definition of countervailing duty stipulated in Clause 6 Article 4 of the Law on Export and Import Duties 2016 as follows:

Countervailing duty is an additional import tax applied in cases where imported subsidized goods cause or threaten to cause significant damage to domestic production, or impede the establishment of new domestic production.

Therefore, according to the above regulation, countervailing duty is an additional import tax.

Are subsidized goods imported into Vietnam subject to countervailing duty?

Based on Article 13 of the Law on Export and Import Duties 2016 which stipulates as follows:

Countervailing duty

1. Conditions for applying countervailing duty:

a) Imported goods are determined to be subsidized according to the law;

b) Imported goods cause or threaten to cause significant damage to domestic production or impede the establishment of new domestic production.

2. Principles for applying countervailing duty:

a) Countervailing duty is applied only to the necessary and reasonable extent to prevent or limit significant damage to domestic production;

b) The application of countervailing duty is carried out after investigation and based on the conclusion of the investigation as prescribed by law;

c) Countervailing duty is applied to subsidized goods imported into Vietnam;

d) The application of countervailing duty must not harm domestic socio-economic interests.

3. The duration for applying countervailing duty is not more than 5 years from the date the application decision takes effect. In necessary cases, the decision to apply countervailing duty can be extended.

Thus, according to the above regulation, countervailing duty is applied to subsidized goods imported into Vietnam.

Additionally, the calculation of countervailing duty on imported goods is carried out according to the provisions in Article 39 of Circular 38/2015/TT-BTC (amended by Clause 23 Article 1 of Circular 39/2018/TT-BTC). The countervailing duty on imported goods is calculated based on the following grounds:

- The actual number of units of each item imported as stated in the customs declaration subject to countervailing duty;- The dutiable value of each imported item subject to countervailing duty;- The tax rate for each item regulated by the Ministry of Industry and Trade.

Formula for calculating countervailing duty on imported goods:

(1) For percentage-based calculation

(2) For absolute tax calculation:

*Note: For imported goods subject to countervailing duty, the dutiable value for excise tax and value-added tax must include the countervailing duty.

Is countervailing duty an import tax in Vietnam? (Image from the Internet)

What are regulations on the application of countervailing duty in Vietnam?

According to Article 15 of the Law on Export and Import Duties 2016 stipulates the application of countervailing duty as follows:

- The application, change, and abolition of antidumping duty, countervailing duty, and safeguard duty are carried out in accordance with this Law and the laws on antidumping, countervailing, and safeguard.

- Based on the tax rate, quantity, or value of goods subject to antidumping duty, countervailing duty, and safeguard duty, the customs declarant is responsible for declaring and paying taxes according to the provisions of the law on tax administration.

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

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

- In cases where the interests of the Socialist Republic of Vietnam are harmed or violated, based on international agreements, the Government of Vietnam reports to the National Assembly to decide on the application of other fitting protective tax measures.

Vietnam: When is countervailing duty on imported goods calculated?

According to the provisions in Article 35 of Circular 38/2015/TT-BTC, it is stipulated as follows:

Time of calculation of tax, exchange rates for export and import goods

1. The time of calculation of export tax, import tax, safeguard duty, antidumping duty, countervailing duty (within the effective period of the application decision of the Minister of Industry and Trade) is the date of registration of the customs declaration. Export tax and import tax are calculated based on the tax rate, dutiable value, and exchange rate at the time of calculation.

In case the taxpayer declares and calculates tax on a paper customs declaration before the date of registration of the customs declaration, but the exchange rate is different from the one applied at the time of registration of the customs declaration, the customs authority shall recalculate the payable tax based on the exchange rate applied at the time of registration of the customs declaration.

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Thus, the time of calculation of countervailing duty on imported goods (within the effective period of the application decision of the Minister of Industry and Trade) is the date of registration of the customs declaration.

*Note: In cases where the taxpayer declares and calculates tax on a paper customs declaration before the date of registration of the customs declaration, but the exchange rate is different from the one applied at the time of registration, the customs authority shall recalculate the payable tax according to the exchange rate applied at the time of registration.