Import and export taxes (“Import and Export Taxes”)

"Import and Export Taxes" are indirect taxes levied on goods permitted to be imported and exported across Vietnam's borders.

1. Tax rates (Import and export taxes)

Export and import tax rates (Export and Import Taxes) change frequently. Therefore, businesses should regularly update themselves with the latest tax rates.

Import tax rates are divided into three categories: normal tax rates, preferential tax rates, and special preferential tax rates.

• Preferential tariff rates are applied to goods imported from countries that have Most Favored Nation (MFN, also known as Normal Trade Relations) status with Vietnam. MFN tariff rates are consistent with Vietnam's commitments to the WTO and are applied to goods imported from other WTO member countries.
• Special preferential tax rates apply to imported goods originating from countries, groups of countries, or territories that grant most-favored-nation treatment in trade relations with Vietnam under free trade area or customs union arrangements, or to facilitate border trade, and other special preferential cases.

To qualify for preferential or special preferential tax rates, imported goods must have a valid Certificate of Origin (C/O). Goods without a C/O or originating from countries not eligible for preferential import tax rates will be subject to the normal tax rate (the MFN rate plus 50%).

• The normal tariff rate applies to imported goods originating from countries, groups of countries, or territories that do not grant most-favored-nation treatment and do not provide special import tariff preferences to Vietnam. The normal tariff rate is uniformly applied at 150% of the preferential tariff rate for each corresponding item as stipulated in the Preferential Import Tariff Schedule.

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2. How to calculate taxes

In principle, Vietnam adheres to the WTO Agreement on Valuation with certain adjustments. The dutiable value of imported goods is usually based on the transaction value (i.e., the price paid or payable for the imported goods, and in some specific cases, adjustments will be made regarding taxable and non-taxable factors). If the transaction value is not accepted, other methods for calculating customs value will be used.

In addition to import duties, some imported products are also subject to excise tax and environmental protection tax. Imported goods will also be subject to value-added tax (VAT) (except in cases where they are exempt from VAT under VAT law).

3. Tax exemption

Imported goods for projects in sectors/regions encouraged for investment and certain other cases are exempt from import tax.

Some goods are exempt from import tax as follows:

• Machinery, equipment, specialized transport vehicles, and construction materials (not yet produced domestically) imported to create fixed assets for investment incentive projects;
• Machinery, equipment, specialized transport vehicles, raw materials (not yet produced domestically), medical equipment, and office equipment imported to serve oil and gas operations;
• Imported raw materials, supplies, and components for processing export products; imported finished products to be attached to processed products;
• Imported raw materials, supplies, and components for the production of goods for export;
• Goods manufactured, processed, recycled, or assembled in a free trade zone that do not use raw materials or components imported from abroad are not eligible for import into the domestic market.
• Raw materials, supplies, and components that cannot be produced domestically are imported for the production of certain investment incentive projects;
• Goods temporarily imported and re-exported, or temporarily exported and re-imported, for warranty, repair, or replacement purposes.

4. Tax refund

Import duties paid may be refunded in certain circumstances, including:

• Goods for which import duties have been paid but were not actually imported;
• Imported raw materials that have not been used in production must be re-exported to the foreign consignor, re-exported to a third country, or sold into a free trade zone;
• Businesses import raw materials and supplies to produce goods for domestic consumption, then find an export market and use these materials and supplies to produce goods for export, thus exporting the products.

5. Export tax

Only a few items are subject to export tax, mainly natural resources such as sand, chalk, marble, granite, ore, crude oil, forest products, and metal scrap, etc. The tax rate ranges from 0% to 40%. The export tax is calculated based on the FOB (Free on Board) price, which is the selling price of the goods at the port of departure as stated in the contract, excluding freight and insurance costs.

6. Check

Customs authorities may conduct post-clearance inspections at their offices or at the taxpayer's premises. These inspections typically focus on issues such as HS code classification, customs valuation, compliance with import/export duty exemption policies for export/processing cases, and certificates of origin.