When is the ordinary import duty rate applied in Vietnam?

When is the ordinary import duty rate applied in Vietnam?

According to Clause 3, Article 5 of the 2016 Law on Export and Import Duties, the provisions are as follows:

Basis for calculating export and import duties for goods applying the tax calculation method based on percentage rates

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

2. The export tax rate is specifically stipulated for each item in the export tariff.

In cases where goods are exported to a country, group of countries, or territory with agreed preferential export tax rates in trade relations with Vietnam, the agreements shall apply.

3. Import tax rates for goods include preferential rates, special preferential rates, general rates, and are applied as follows:

a) Preferential rates apply to imports originating from countries, groups of countries, or territories that grant the most-favored-nation treatment in trade relations with Vietnam; goods imported from non-tariff zones into the domestic market meet the origin requirements from countries, groups of countries, or territories that grant the most-favored-nation treatment in trade relations with Vietnam;

b) Special preferential rates apply to imports originating from countries, groups of countries, or territories with special preferential agreements on import duties in trade relations with Vietnam; goods imported from non-tariff zones into the domestic market meet the origin requirements from countries, groups of countries, or territories with special preferential agreements on import duties in trade relations with Vietnam;

c) General rates apply to imports not falling under the cases specified in points a and b of this clause. The general rate is set at 150% of the preferential rate for each corresponding item. In cases where the preferential rate is 0%, the Prime Minister of Vietnam shall base on the provisions of Article 10 of this Law to decide on the application of the general rate.

According to the above regulation, the general import tax rate is applied to imports not falling under the cases specified in points a and b, Clause 3, Article 5 of the 2016 Law on Export and Import Duties as follows:

- Preferential rates apply to imports originating from countries, groups of countries, or territories that grant the most-favored-nation treatment in trade relations with Vietnam; goods imported from non-tariff zones into the domestic market meet the origin requirements from countries, groups of countries, or territories that grant the most-favored-nation treatment in trade relations with Vietnam;

- Special preferential rates apply to imports originating from countries, groups of countries, or territories with special preferential agreements on import duties in trade relations with Vietnam; goods imported from non-tariff zones into the domestic market meet the origin requirements from countries, groups of countries, or territories with special preferential agreements on import duties in trade relations with Vietnam.

What are the contents of the ordinary import duty rate tariff for imports in Vietnam?

Based on Clause 1, Article 3 of Decision 15/2023/QD-TTg stipulating the ordinary import duty rate tariff for imports as follows:

Application of the standard tax rates for imports

1. The ordinary import duty rate tariff for imports issued with this Decision includes:

a) The list (description of goods and 8-digit code) of items with a preferential import tax rate of 0% as stipulated in Sections I and II, Appendix II of Decree No. 26/2023/ND-CP dated May 31, 2023, of the Government of Vietnam stipulating the Export Tariff, Preferential Import Tariff, List of goods and absolute tax rates, mixed duties, and import tax outside the tariff quotas.

b) The standard tax rates stipulated for each item in the ordinary import duty rate tariff for imports stipulated in the Appendix issued with this Decision.

2. imports not named in the List of the ordinary import duty rate tariff in the Appendix issued with this Decision and not covered by preferential or special preferential tax rates as stipulated in points a, b, Clause 3, Article 5 of the Law on Export and Import Duties dated April 6, 2016, shall apply the standard tax rate of 150% of the corresponding preferential import tax rate specified in Appendix II, Decree No. 26/2023/ND-CP, dated May 31, 2023, of the Government of Vietnam.

Thus, according to the above regulations, the ordinary import duty rate tariff for imports includes the following contents:

- The list (description of goods and 8-digit code) of items with a preferential import tax rate of 0% as stipulated in Sections I and II, Appendix II of Decree No. 26/2023/ND-CP dated May 31, 2023 of the Government of Vietnam stipulating the Export Tariff, Preferential Import Tariff, List of goods and absolute tax rates, mixed duties, and import tax outside the tariff quotas.

- The standard tax rates stipulated for each item in the ordinary import duty rate tariff for imports stipulated in the Appendix issued with Decision 15/2023/QD-TTg

What are rules for imposition of tariff schedules and duty rates in Vietnam?

According to Article 10 of the 2016 Law on Export and Import Duties, the following rules must be ensured for imposition of tariff schedules and duty rates:

- Encourage the importation of raw materials and supplies, prioritizing those that the domestic market has not met; focus on developing high-tech and core technologies, saving energy, and protecting the environment.

- Align with the State's socio-economic development orientation and commitments on export and import duties in international treaties of which the Socialist Republic of Vietnam is a member.

- Contribute to the stabilization of the market and the State's budget revenues.

- Be simple, transparent, and facilitate taxpayers and the reform of administrative tax procedures.

- Uniformly apply tax rates to goods with the same nature, structure, use, similar technical features; import tax rates gradually decrease from finished products to raw materials; export tax rates gradually increase from finished products to raw materials.