When goods are imported into Vietnam and are subject to tax, they will be subject to 01 of 03 tax rates including: preferential tax rate, special preferential tax rate, and ordinary tax rate. So what is the difference between these three tax rates and how to apply them in any case will make the amount of tax to be paid less? The following article would like to answer the above questions as follows:
Pursuant to the provisions of Clause 3, Article 5 of the 2016 Import and Export Tax Law:
1) Preferential tax rates:
Applies to goods:
– Imports originating from countries, groups of countries or territories that have applied most-favored nation (MFN) treatment in trade relations with Vietnam;
(Currently, over 172 countries have MFN agreements with Vietnam, see the list of MFN countries in Official Letter 8678/TCHQ-TXNK dated September 9, 2016)
– Goods imported from a non-tariff zone into the domestic market that satisfy the conditions of origin from a country, group of countries or territories implementing MFN in trade relations with Vietnam.
2) Special preferential tax rates:
Applies to goods:
– Imports originate from countries, groups of countries or territories that have agreements on special preferential treatment for import tax in commercial relations with Vietnam;
That is, goods imported from countries or regions that have signed bilateral or multilateral trade agreements with each other will enjoy special preferential import tax.
Example: ACFTA (ASEAN – CHINA); ATIGA (ASEAN – VIETNAM); AANZFTA (ASEAN – AUSTRALIA – NIUDILAN); AIFTA (ASEAN – INDIA); VJEPA (VIETNAM – JAPAN); AJCEP (ASEAN – JAPAN); AKFTA (ASEAN – KOREA); VKFTA (VIETNAM – KOREA); VCFTA (VIETNAM – CHILE).
Goods imported from a non-tariff zone into the domestic market that satisfy the conditions of origin come from a country, group of countries or territory that has a special agreement on preferential import tax in trade relations with Vietnam.
3) Regular tax rate:
– Applicable to imported goods that do not fall into cases 1 and 2 above.
+ The normal tax rate is set at 150% of the preferential tax rate of each respective item.
Imported goods are not included in the List of Common Import Tariffs in the Appendix issued together with Decision 45/2017/QD-TTg and are not subject to preferential tax rates or Special preferential tax rates in cases 1 and 2 above shall apply the normal tax rate equal to 150% of the preferential import tax rate of each respective item specified in Appendix II to Decree No. 125/ 2017/ND-CP.
+ In case the preferential tax rate is 0%, the Prime Minister shall base on the provisions of Article 10 of the Law on Import Tax and Export Tax 2016 to decide the application of the normal tax rate.
List (commodity description and 8-digit code) of items with preferential import tax rate of 0% specified in Section I, Section II, Appendix II of Decree No. 125/2017/ND-CP .
Note:
– There will be imported goods that both enjoy preferential tax rates and enjoy special preferential tax rates, to enjoy the lower tax rate depends on which C/O the enterprise chooses for. appropriate (for example, should choose C/O Form AJ or VJ, C/O Form AK or AJ…).
