Decree guiding the implementation of the Law on Export and Import Tax is being drafted by the Ministry of Finance. The Ministry of Finance is also expediting the completion of the draft before the effective date of the Law on Export and Import Tax on September 01, 2016. The draft Decree supplements some subjects eligible for tax exemption and tax refund.
Article table of contents
Draft Decree guiding the Law on Export and Import Taxes (Draft Decree) discusses the taxable entities specified in Article 2 of the Decree and Article 2 of the 2016 Law on Export and Import Taxes, whereby taxable entities include:
- Goods exported and imported through Vietnam's border gates and borders- Goods exported from the domestic market into export processing enterprises, export processing zones, bonded warehouses, supervised warehouses, and other non-tariff zones- Goods imported from export processing enterprises, export processing zones, bonded warehouses, supervised warehouses, and other non-tariff zones- Goods exported and imported on the spot as specified in Clause 3, Article 2 of the Law on Export and Import Taxes carried out in accordance with Decree 08/2015/ND-CP dated January 21, 2015.- Goods imported and exported by export processing enterprises to exercise the right of export, import, and distribution.
In cases where the Most Favored Nation (MFN) tax rate of an item stipulated in the Export Tariff, Preferential Import Tariff is lower than the special preferential tax rate stipulated in the Special Preferential Export and Import Tariff, the applied tax rate is the MFN tax rate.
Taxpayers are entitled to a refund of overpaid taxes in accordance with the laws on tax administration if they have paid import taxes at a special preferential tax rate higher than the MFN tax rate.
Additionally, the Draft Decree also proposes tax exemption regulations for "goods of foreign organizations and individuals enjoying preferential privileges and immunities." The agencies enjoying preferential privileges and immunities are specified in Clause 1, Article 16 of the 2016 Law on Export and Import Taxes.
The tax exemption for goods exempted from duty is listed in the specific catalog attached in Appendix 1 of the Decree. Additionally, diplomatic missions, consular offices, and representative offices of international organizations within the United Nations system can import duty-free necessary goods for their official use on the principle of reciprocity or international practice. The kind and quantity of duty-free imported goods shall be confirmed by the Ministry of Foreign Affairs.
With regard to personal luggage of individuals exiting or entering, the Decree proposes the following tax exemption limits for each import:
- Alcohol over 20 degrees: 1.5 liters or alcohol under 20 degrees: 2.0 liters or alcoholic beverages, beer: 3.0 liters (Exceeding the limit must be taxed in accordance with regulations).- Cigarettes: 200 sticks or loose tobacco: 250 grams or cigars: 20 sticks;- Personal belongings in quantities suitable to the purpose of the trip;- Other items excluding alcohol, beer, alcoholic beverages, cigarettes, cigars, and items not listed as prohibited imports valued at no more than 10,000,000 VND in customs value.
For processed goods, temporary import and re-export goods, the Draft Decree still specifies tax exemption: "Goods exported for processing, and processed products imported under processing contracts are exempt from export and import taxes as specified in Clause 6, Article 16 of the Law on Export and Import Taxes”.
Export and import tax reduction specified in Clause 1, Article 32 of the Draft Decree: "Goods being exported or imported under customs supervision in accordance with the 2014 Customs Law and related guiding documents, if damaged or lost due to objective reasons, shall be eligible for tax reduction in accordance with Clause 1, Article 18 of the Law on Export and Import Taxes."
Details of the Draft Decree here.
