Will the exemption of import duty for low-value goods cease in 2025 in Vietnam? How to determine taxable prices for imported goods in Vietnam?

Will the exemption of import duty for low-value goods cease in 2025 in Vietnam?

According to Section 8 of Resolution 174/2024/QH15 (effective from January 14, 2025), the National Assembly mentioned the immediate termination of the value-added tax exemption regulation in Decision 78/2010/QD-TTg by the Prime Minister of the Government of Vietnam. This serves as a legal basis for tax authorities to manage and collect taxes from foreign e-commerce platforms selling goods to Vietnam.

According to Article 1 of Decision 78/2010/QD-TTg, the provisions are as follows:

- Imported goods sent via express delivery services with a value of 1 million VND or less are exempt from import duty and value-added tax.

- Imported goods sent via express delivery services with a value exceeding 1 million VND must pay import duty and value-added tax according to the law.

Therefore, based on the above regulations, from the effective date of Resolution 174/2024/QH15 (January 14, 2025), the exemption of import duty for low-value goods (below 1 million VND) sent via express delivery will cease.

Will the exemption of import duty for low-value goods cease in 2025 in Vietnam? (Image from Internet)

How to determine taxable prices for imported goods in Vietnam?

According to Article 7 of Circular 219/2013/TT-BTC, the regulations are as follows:

Tax Value

1. For goods and services sold by manufacturing, business establishments, the selling price without VAT is used. For goods and services subject to special consumption tax, the selling price includes special consumption tax but excludes VAT.

For goods subject to environmental protection tax, the selling price includes environmental protection tax but excludes value-added tax; goods subject to both special consumption tax and environmental protection tax use the selling price including both special consumption tax and environmental protection tax but excluding VAT.

2. For imported goods, the taxable prices includes the customs value plus (+) import duty (if any), plus (+) special consumption tax (if any), plus (+) environmental protection tax (if any). The customs value is determined according to regulations on import duty valuation.

In cases where imported goods are exempt or receive tax reductions, the VAT valuation is the customs value plus (+) the import duties calculated according to the payable rate after exemptions or reductions.

3. For products, goods, services (whether purchased or self-manufactured by the business) used for exchange, gifting, donation, remuneration, the taxable VAT value is the value of similar or equivalent goods and services at the time these activities occur.

Example 22: Company A produces electric fans, and uses 50 fans for exchange with Company B for steel, the selling price (exclusive of tax) is 400,000 VND per unit. The VAT taxable value is 50 x 400,000 VND = 20,000,000 VND.

Exclusively, gifts or invitations (stated on the invitation as free of charge) to art performances, fashion shows, beauty pageants, and sports competitions permitted by competent state authorities are assigned a tax value of zero (0). The performing arts organization is responsible for determining and accounting for the number and list of organizations and individuals receiving invitations before the event. If there is fraudulent conduct charging for invitations, legal action will be taken under tax management law.

Example 23: Joint Stock Company X is authorized to organize the “Miss Vietnam 20xx” pageant, aside from printing tickets for sale to spectators, printed complimentary invitations were distributed to some invitees. When declaring VAT, the taxable value for these invitations is set at zero (0). If tax authorities discover Company X charging for such invitations, it will be penalized under tax management law.

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Therefore, the taxable prices for imported goods is the customs value plus (+) import duties (if any), plus (+) special consumption tax (if any), plus (+) environmental protection tax (if any). The customs value is determined according to rules on import duty valuation.

Are imported components for manufacturing export goods exempt from import duty in Vietnam?

According to Clause 10, Article 16 of the Law on Export and import duties 2016, the provisions are as follows:

Tax Exemption

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7. Raw materials, supplies, and components imported for manufacturing exported goods.

8. Goods manufactured, processed, recycled, or assembled in non-tariff zones not using imported materials or components when imported into the domestic market.

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Thus, imported components used for manufacturing export goods are subject to import duty exemption.