On 1 September 2016, Vietnam’s new Law on Import and Export Tariffs (“New Tax Law”) entered into force. The New Tax Law shows efforts of the Vietnamese law makers towards harmonising the domestic legal framework with obligations under the free trade agreements signed between Vietnam and other parties.

FTA

Under the New Tax Law, the following goods are added to those entitled to tariff exemption:

  • Imported goods of small value (minimum taxable value to be stipulated by the Government)
  • Imported non-commercial goods which are samples, photos or videos of samples, advertising publications in low quantities
  • Goods that Vietnam has not had the capacity to manufacture including:
  1. Seeds, livestock breeds, fertilizers, pesticide products which need to be imported in accordance with the procedure of the competent authority,
  2. Materials, accessories for the manufacture and assembly of medical devices for prioritized research and manufacture (5 years from commencement of manufacture),
  3. Goods imported for environmental protection purposes,
  4. Goods imported for direct service to education.

On the other hand, the New Tax Law removes a number cases that were entitled to tariff exemption under the old law, specifically:

  • Goods imported to form fixed asset of ODA funded projects,
  • Equipment imported for the first time for incentivized investment projects in hotels, office buildings, apartments for lease, accommodation, gold yards, commercial centers, amusement parks, etc.,
  • Vehicles to be used for transportation of workers/employees.

The New Tax Law also stipulates that goods exported from non-tariff zones to the domestic market shall  be entitled to special preferential import tariffs if they meet the origin requirements. New regulations on anti-dumping duty, anti-subsidy and safeguard duty are also stipulated in more detail. Accordingly, the application of those duties must be based on inspection conclusions and the prevailing regulations. Anti-dumping duty and anti-subsidy duty will apply for five years from the date upon which the duty application decision is made and can be extended. Meanwhile, safeguard duty will apply for four years including the temporary application period and an extension of six years can be applied subsequently.

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