What is the method of calculating fixed duty on imports and exports in Vietnam?

What is the method of calculating fixed duty on imports and exports in Vietnam?

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

Explanation of terms

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

1. Non-tariff zone is an economic area within the territory of Vietnam, established according to the provisions of law, having defined geographical boundaries, separated from the outside area by a solid fence, ensuring conditions for customs inspection, supervision, and control of imports and exports and means, passengers on entry and exit; the relationship of buying and selling, exchanging goods between the non-tariff zone and the outside is an export-import relationship.

2. Composite tax calculation method is the simultaneous application of the percentage-based tax calculation method and the fixed duty calculation method.

3. Percentage-based tax calculation method is the determination of tax based on a percentage (%) of the taxable value of imports and exports.

4. fixed duty calculation method is the imposition of a certain amount of tax on a unit of imports and exports.

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Thus, according to the regulations, the fixed duty calculation method for imports and exports is the imposition of a certain amount of tax on a unit of imports and exports.

What is the method of calculating fixed duty on imports and exports in Vietnam? (Image from the Internet)

What is the summary of cases exempted from import and export duties in Vietnam?

Based on the provisions in Article 16 of the Law on Export and Import Duties 2016 as follows:

- imports and exports of foreign organizations and individuals entitled to privileges and immunities in Vietnam within limits appropriate to international agreements to which the Socialist Republic of Vietnam is a member; goods within the tax-free allowance of outbound, inbound passengers; goods imported to be sold at duty-free shops.

- Movable assets, gifts within limits from foreign organizations, individuals to Vietnamese organizations, individuals or vice versa.

Movable assets, gifts exceeding the tax-free allowance must pay tax on the excess, except where the receiving unit is a state budget-funded agency or institution and has been approved by the competent authority or for humanitarian, charitable purposes.

- Goods bought, exchanged across the borders by border residents within the List of goods and within limits to serve the production and consumption of border residents.

In cases where goods within limits are collected, transported but not used for the production, consumption of border residents and export, import trade of foreign traders allowed to do business at border markets, tax must be paid.

- Goods exempted from export and import tax under international treaties to which the Socialist Republic of Vietnam is a member.

- Goods with value or tax payable below the minimum limit.

- Raw materials, supplies, components imported for processing export products; complete products imported for integration into processed products; processed export products.

Processed export products made from local raw materials subject to export tax are not exempted from tax on the value of local raw materials used in the export product.

Goods exported for processing and then re-imported are exempted from export and import tax on the value of exported raw materials used in the processed product.

For goods exported for processing and then re-imported that are natural resources, minerals, products with a total value of resources, minerals plus energy costs accounting for 51% of the product cost or more, tax shall not be exempted.

- Raw materials, supplies, components imported to produce export goods.

- Goods manufactured, processed, recycled, assembled in the non-tariff zone not using imported raw materials, components from abroad when imported into the domestic market.

- Goods temporarily imported, re-exported or temporarily exported, re-imported within a specified period, including:

+ Goods temporarily imported, re-exported, temporarily exported, re-imported to organize or participate in fairs, exhibitions, product introductions, sports, cultural, art events or other events; machinery, equipment temporarily imported, re-exported for testing, research, product development; machinery, equipment, professional tools temporarily imported, re-exported, temporarily exported, re-imported for a certain period or to serve processing for foreign traders, except for machinery, equipment, tools, vehicles of organizations, individuals permitted to temporarily import, re-export to perform investment projects, construct buildings, install works, serve production;

+ Machinery, equipment, components, spare parts temporarily imported for replacement, repair of foreign ships, aircraft or temporarily exported for replacement, repair of Vietnamese ships, aircraft abroad; goods temporarily imported, re-exported to supply for foreign ships, aircraft anchored at Vietnamese ports;

+ Goods temporarily imported, re-exported or temporarily exported, re-imported for warranty, repair, replacement;

+ Rotating vehicles under the method of temporary import, re-export or temporary export, re-import for containing imports and exports;

+ Business goods temporarily imported, re-exported within the temporary import, re-export period (including extension period) guaranteed by a credit institution or a deposit equivalent to the import tax amount of temporarily imported, re-exported goods.

- Goods not for commercial purposes in the following cases: samples; photos, films, models replacing samples; small quantity advertising materials.

- Imported goods to create fixed assets for investment projects entitled to investment incentives as stipulated by the law on investment, including:

+ Machinery, equipment; components, details, spare parts for assembling or using synchronously with machinery, equipment; raw materials, supplies used to produce machinery, equipment or to produce components, details, spare parts of machinery, equipment

;+ Specialized transportation means in the technological line used directly for the production activity of the project;

+ Construction materials not yet produced domestically.

Import tax exemption for imported goods stipulated in this clause applies to both new investment projects and expansion investment projects.

- Plant varieties; animal breeds; fertilizers, plant protection drugs not produced domestically, essential for import according to the regulations of the competent state management agency.

- Raw materials, supplies, components not produced domestically imported to produce projects in the list of particularly incentivized investment sectors or in locations with particularly difficult socio-economic conditions according to the law on investment, high-tech enterprises, science and technology enterprises, science and technology organizations are exempted from import tax within 05 years from the production commencement.

Import tax exemption stipulated in this clause does not apply to mineral exploitation investment projects; projects producing products where the total value of resources, minerals plus energy costs account for 51% or more of the production cost; projects producing, trading goods, services subject to special consumption tax.

- Raw materials, supplies, components not produced domestically imported for the production, assembly of prioritized research and development medical equipment projects are exempted from import tax within 05 years from the production commencement.

- Imported goods to serve petroleum activities, including:

+ Machinery, equipment, spare parts, specialized transportation means necessary for petroleum activities, including temporary import, re-export;

+ Components, details, spare parts for assembling or using synchronously with machinery, equipment; raw materials, supplies used to produce machinery, equipment or to produce components, details, spare parts of machinery, equipment necessary for petroleum activities;

+ Supplies necessary for petroleum activities not yet produced domestically.

- Projects, shipyards in the list of incentivized investment sectors according to the law on investment are exempted from tax for:

+ Imported goods to create fixed assets of shipyards, including: machinery, equipment; components, details, spare parts for assembling or using synchronously with machinery, equipment; raw materials, supplies used to produce machinery, equipment or to produce components, details, spare parts of machinery, equipment; transportation means in the technological line serving directly for ship building activities; construction materials not yet produced domestically;

+ Imported goods are machinery, equipment, raw materials, supplies, components, semi-finished products not yet produced domestically serving shipbuilding;

+ Exported vessels.

- Machinery, equipment, raw materials, supplies, components, parts, spare parts imported for money printing, minting activities.

- Imported goods are raw materials, supplies, components not produced domestically serving directly for producing information technology products, digital content, software.

- Exported, imported goods to protect the environment, including:

+ Imported specialized machinery, equipment, means, tools, supplies not produced domestically to collect, transport, process, treat waste water, waste, exhaust gas, environmental monitoring and analysis; produce renewable energy; treat environmental pollution, respond to, treat environmental incidents;

+ Exported products produced from recycling, waste treatment activities.

- Imported specialized goods not produced domestically serving directly for education.

- Imported goods are machinery, equipment, spare parts, supplies specialized not produced domestically, scientific publications, specialized books serving directly for scientific research, technology development, technology incubation, enterprise incubation of science and technology, technology innovation activities.

- Imported specialized goods serving directly for national defense, security, in which specialized transport means must be of the type not produced domestically.

- Exported, imported goods to ensure social security, overcome consequences of natural disasters, disasters, epidemics, and other special cases.

What are regulations on  import and export duty reduction in Vietnam?

Based on the provisions in Article 18 of the Law on Export and Import Duties 2016 as follows:

- imports and exports under customs supervision if damaged, lost, certified by competent authorities, organizations, shall be eligible for tax reduction.

The tax reduction corresponds to the actual loss ratio of the goods.

In case the exported, imported goods are entirely damaged, lost, tax shall not be payable.

- Tax reduction procedures shall follow the provisions of the law on tax administration.