AMENDMENTS TO EXPORT AND IMPORT TAX LAW: MORE ADVANTAGES FOR BUSINESSES

At the same time, to comply with the tax reduction commitments in the framework of export taxes under several Free Trade Agreements (FTAs), such as TPP and Vietnam- EU Trade Agreement, the amendment also stipulates: " Goods exported to countries, groups of countries or territories with preferential tax agreement in trade relations with Vietnam comply with these agreements." Thus, the provisions of the Tax Law (as amended) is sorted clearly in line with the trend of the international integration and the commitments relating to export duty to create conditions for the implementation of tariff commitments in which Vietnam is participating.
 
Additional provisions on tax rates

The Import and Export Tax Law (as amended) adds provisions on the tax rates applied to goods imported from non-tariff zones into the domestic market on the principle

of goods to meet the conditions of origin shall apply tariffs interest corresponding to that origin. Specifically, the preferential tax rates are applicable to the imported

goods originating from the countries or groups of countries or territories that made most favoured nation treatment in trade relations with Vietnam, or goods from non-

tariff areas imports into the domestic market to meet the rules of origin from the country, groups of countries or territories that made most favoured nation treatment in

trade relations with Vietnam. The special preferential tax rates are applicable to imported goods originating from the countries or groups of countries or territories that

have special agreements on preferential import tariffs in trade relations with Vietnam or goods from the zone import tariff on the domestic market to meet the rules of

origin from the country, groups of countries or territories that have special agreements on preferential import tariffs in trade relations with Vietnam.
 
Besides, the tax regulations are generally amended and supplemented. The current law provisions regulate that the ordinary tax does not exceed 70 per cent of the

preferential tax rate of each corresponding item specified by the Government. Point c, Clause 3, Article 6 of the Law (as amended) regulates that the ordinary tax rates

applicable to goods imported under the circumstances that are not applied to the preferential rates or the special preferential rates above are defined by 150 per cent

compared to the preferential tax rate of each category, respectively.
 
Not specified export tax brackets

Article 12 of the Law on Export and Import Tax regulated that the National Assembly Standing Committee promulgated the Export Tariff according to the list of taxable

commodity groups and the duty rate bracket for each commodity group, preferential import tariff groups by category taxable goods and preferential tax bracket for each

commodity group, including minimum and maximum levels (hereinafter referred to as the Table frame).
 
The provisions of the tax bracket, including a minimum (floor) and maximum (ceiling) as last time have promoted positive effects and this is an important basis for the

Prime Minister, Ministry of Finance to issue the export tariffs and preferential import tax rates for each item and respond proactively and timely before the price

fluctuations of the world market, which contributes to stabilising the market prices in the country and in accordance with the specific characteristics of the Tariff.

However, since 2007 when joining the WTO, Vietnam has been committed to 100 per cent of tariff lines at the time of entry and must cut annual commitments under the

road map. At the present, this roadmap has been basically completed. Therefore, the provisions of the maximum ceiling import tax brackets as the current reality do not

make sense. Besides, the floor (minimum) import tariffs also reveal inadequacies so the construction of the floor (minimum) import tax brackets as the current is not

suitable. To overcome, the Law (as amended) and list of the taxable commodity groups are not defined as import and export tax brackets but rather by the minimum

regulations for certain groups of taxable export goods.

Source: VCCI