Special preferential import tax policies taking effect from 2018
Special preferential import tax policies taking effect from 2018
The Vietnamese government has just issued ten decrees to implement Vietnam’s special preferential import tax commitments made in its free trade agreements with various partners.
There are some outstanding features in the 2018 special preferential import tax. The decrees outline the special preferential import tax rates Vietnam will provide its different partners and include detailed tables naming the eligible goods categories.
Accordingly, listed goods imported and directly transported from partner countries and meeting the origin of goods requirements (holding a certificate of origin issued by the partner country and Vietnam will be applied reduced import tax (or even exemption) as specified in the relevant trade agreement and decrees.
The ten decrees are effective from January 1, 2018 and are applicable in the 2018-2022 period, with decrees 155 and 160 being applicable during 2018-2023.
Specifically, up to 2018, as many as 5,535 tax lines have been removed under the VN-EAEUFTA, focusing on goods which are input materials for export and production, such as textile and garment materials, leather footwear, electronic components, and plastic materials.
3,720 tax lines under are going to be removed, including milk, chemicals, paper, iron and steel, machines and devices, among others.
Pursuant to AIFTA, 59 per cent of tax lines will be cut in 2018 (equivalent to 5,668 lines) focusing on processed meat, fishery products, vegetables, and fruits.
According to Pham Tuan Anh, deputy director general of International Cooperation Department at the Ministry of Finance, these changes promote the development and innovation of science-technology and reaching international standards.
Evaluating the effects of the tax cuts, Pham Tuan Anh confirmed: “It will have a remarkable impact on the price of goods this year, decreasing state budget revenue. However, almost all FTAs are in the final stages of implementation and the value reduction is not as much as before, so the impacts will not be as sharp.”
