UNIVERSITY OF ECONOMICS & LAW

SCHOOL OF FINANCE & BANKING

IMPORT & EXPORT TAX

Tax regulations in Vietnam

Taxation
OBJECTIVES

1 Overview of Vietnam tax system

2 Understand fundamentals of import & export tax

3 Be able to calculate import & export tax

4 Understand the effect of the economics to import & export tax

Import & Export Tax 2

CONTENT

INTRODUCTION TAXABLE
1 Vietnam tax system, Import & Export tax
features, documents …
5 PRICE tariff schedules & regulations
Incoterm,

DUTY-FREE TAX
2 QUOTASquotas and regulations for border
Duty-free 6 RATE
C/O, preferential rate, special preferential rate,
residents & luggage ordinary rate…
TAX TAX
3 EXEMPT
Import & export tax exempt cases as regulations 7 CALCULATION
Import & export tax calculation for normal &
specific duty
TAX EXERCISE
4 REFUND
Import & export tax refund cases as regulations 8 Practice exercises

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VIETNAM TAXES

Import & Export Tax 4

VIETNAM TAXES

IMPORT TAX EXCISE TAX VAT

Price before Price before Price before

import tax excise tax VAT tax

20% 30% 10%

Example: 100 USD 120 USD 156 USD 171.6 USD

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IMPORT & EXPORT TAX FEATURES
• Is a tariff, imposed on goods in transactions through the border gates
• Not on services (Foreign Contractor Tax)
• Objective of Import & Export tax:
1. Generate revenue for the Government
2. Protect domestic industry make imported products more expensive
• Is an indirect tax & reduce competition motivation
• Some countries removed the export duties to encourage export
• Documents: Import & export tax law XNK 45/2005/QH11 issued on 14/06/2005, Decree No.
19/2006/NĐ-CP, Decree No. 87/2010/NĐ-CP, Circular No. 07/2006/TT-BTM, Circular No. 38
/2015/TT-BTC, Circular No. 39/2015/TT-BTC

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DUTIABLE SUBJECTS
1. Goods permitted to be exported or imported across the border of Vietnam;

2. Goods from domestic market entered export processing zones and from duty-free zones to the
domestic market

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NON-DUTIABLE SUJECTS
1. Goods in transit or being transported to other countries across borders of Vietnam; goods
transited at border-gates of Vietnam as stipulated by the Government;
2. Humanitarian goods and non-refundable aids;
3. Goods exported abroad from duty-free zones; goods imported from abroad to duty-free zones
and only used in duty-free zones; and goods passed between duty- free zones;
4. Goods exported as oil subject to property tax as stipulated by the Government.

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WHO PAY THE TAX?
• Owners of the imported (exported) goods;
• Authorized organizations to export or import goods;
• Individuals who carry goods upon exit or entry; send or receive goods through Vietnam's border
gates or borders.
• Other organizations:
• Authorized custom procedure agents pay taxes on behalf of the taxpayers;
• International express mail services pay the taxes on behalf of the taxpayers;
• Credit institutions in the case of guaranteeing or paying tax on behalf of taxpayers.

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TAXES ON GOODS TRADED BY BORDER RESIDENTS & LUGGAGE
• Goods traded, exchanged by border residents within quotas are exempted from tax, and must pay
taxes on the excess.
• Many local authorities & Ministry of Industry & Trade have agreed to raise the duty-free quotas
for goods traded by border residents up to the value of 5 millions/individual/day instead of the
current regulation at 2 million/individual/day.

• For luggage cross the border: exempt tax within the quotas and must pay taxes on the excess.

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DUTY-FREE LUGGAGE QUOTAS
Items Quotas Note
1 Alcohol
- Alcohol of 22 degrees or more 1.5l Not applicable for individuals
- Alcohol below 22 degrees 2.0l under 18 years old
- Alcoholic beverages & beer 3.0l
2 Cigarette
- Cigarettes 400 units Not applicable for individuals
- Cigar 100 units under 18 years old
- Tobacco 50 gram
3 Tea & Coffee
Not applicable for individuals
- Tea 5kg
under 18 years old
- Coffee 3kg
4 Clothes & personal belongings Suitable number for trip purposes N/A
5 Others (not banned from import or Total value not over 5 million VND N/A
subject to conditional import)

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IMPORT & EXPORT TAX EXEMPT
1. Temporary imports and re-exports, temporary exports and re-imports for exhibitions and
promotions; machines, equipment and devices temporarily imported and re-exported or
temporarily exported and re-imported for use within a specified period of time (90 days);
2. Moveable assets as stipulated by the Government;
3. Exports and imports of organizations and individuals whose are eligible to enjoy diplomatic
immunities as stipulated by the Government in accordance with the provisions of international
treaties to which Vietnam is a signatory or a participant;
4. Goods imported for outward processing and re-exported or goods exported to foreign
individuals or organizations for inward processing and reimported in accordance with processing
contracts;

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IMPORT & EXPORT TAX EXEMPT
5. Exports and imports of individuals entered or leaved Vietnam within immunities stipulated by
the Government ;
6. Goods imported to form fixed assets by investors having projects funded by the Official
Development Assistant (ODA); by investors having projects under the list of preferential projects
7. Goods are imported to facilitate oil and gas activities, includes:
a. Equipment, machinery, spare parts, specialized means of transportation used for oil and gas
activities;
b. Materials for oil and gas activities can not be produced domestically;
8. Imported goods used directly for scientific research activities and technology development,
includes machinery, equipment, spare parts, materials, means of transportation which can not
be produced domestically yet; documents, scientific books;
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IMPORT & EXPORT TAX EXEMPT
9. Raw materials, materials, components imported for production of projects in sectors where
investment is especially encouraged or in regions with especially difficult socio-economic
conditions shall be exempted from import duty for duration of five years from the
commencement of production;
10. Goods are produced, processed, reprocessed and installed in the free duty zone without using
raw materials, components imported from foreign countries when imported into domestic
market; in case of using raw materials, components are imported from foreign countries, when
imported into domestic market must pay import duty levied on the scale of imported materials,
component in those goods;

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IMPORT & EXPORT TAX EXEMPT
11. Plant varieties and animal breeds imported for investment projects in the fields of agriculture,
forestry and fishery.
12. Shipbuilding manufacturers are exempted from export tax on exported ship products and
import tax for machines and equipment used to create fixed assets; transportation means
included in technological lines to create fixed assets; raw materials, supplies and semi-finished
products in service of shipbuilding, which cannot be domestically produced yet.
13. Raw materials and supplies directly use to produce software products, which cannot be
domestically produced yet

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IMPORT & EXPORT TAX EXEMPT
14. Machines, equipment and transportation means (except for under 24 seats cars and cars
designed to carry both people and goods equivalent to under 24 sears cars) temporarily
imported for re-export by foreign contractors to use in ODA projects in Vietnam is exempted
from import tax, and export tax upon re-export.
15. Other specific cases are prescribed by Prime Minister.

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IMPORT & EXPORT TAX REFUND
1. Imported goods already paid import duty, remained in a warehouse or at the port of entry and
are still under the supervision of the Custom authorities, to be re-exported;
2. Exported and imported goods already paid export and import duties but are not exported or
imported;
3. Goods already paid export or import duties but the amount of goods actually exported or
imported is smaller than that stated in the Custom declaration;
4. Goods are materials already paid import duty, imported for productions of exports;
5. Goods temporary imports for re-export already paid imported duty or temporary exports for
re-import already paid exported duty, except prescribed in this Law;
6. Exported goods already paid export duty but to be re-imported;

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IMPORT & EXPORT TAX REFUND
• Imported materials, already paid import duty, used for production, and export finished products.

Material stock-out Finished products

used for production exported
TAX = TAX x x
REFUND PAID
Material stock-in Finished products from
from importing imported materials

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IMPORT & EXPORT TAX REFUND
7. Imported goods already paid import duty but to be re-exported;
8. Goods, which are machine, equipment, tools, means of transportations of organizations and
individuals, temporarily imported for re-export for use in their investment projects,
constructions, installations, productions or others already paid import duty. Import tax refund
is calculated based on “use & store” period in Vietnam
9. Goods are temporarily imported for re-export or temporarily exported for re-import; goods are
imported on authorization of foreign party, already paid import/export duty (include imported
goods for re-export to duty-free zone)
10. Imported/exported goods, already paid import/export duty but subject to tax exempt later by
regulations of the government.

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IMPORT & EXPORT TAX REFUND
11. Imported/exported goods, already paid import/export taxes by mail or international express
organizations but can not delivery to the receivers and then being re-export/re-import or
destroy by the regulations of the government.

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IMPORT & EXPORT TAX REFUND – for “100% new” fixed asset

“use & store” period in Vietnam Import tax refundable

Below 6 months 90% import tax paid

From 6 months to 1 year 80% import tax paid
From 1 year to 2 years 70% import tax paid
From 2 years to 3 years 60% import tax paid
From 3 years to 5 years 50% import tax paid
From 5 years to 7 years 40% import tax paid
From 7 years to 9 years 30% import tax paid
From 9 years to 10 years 15% import tax paid
Above 10 years No refund

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IMPORT & EXPORT TAX REFUND – for “used” fixed asset

“use & store” period in Vietnam Import tax refundable

Below 6 months 60% import tax paid

From 6 months to 1 year 50% import tax paid
From 1 year to 2 years 40% import tax paid
From 2 years to 3 years 35% import tax paid
From 3 years to 5 years 30% import tax paid
Above 5 years No refund

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IMPORT & EXPORT TAX CALCULATION
• Tax payable amount: defined by taxable unit quantity, unit price, and tax rate.
• Unit quantity as indicated in the customs declaration, contract, and custom inspection. The unit
amount might be differed from contract must double check with customs declaration and
custom inspection.
• Unit price: according to the contract (if any), payment vouchers by banks.
• Currency for tax paying is Vietnamese Dong, as specified in circular No. 39/2015/TT-BTC
• Exchange rate apply for tax calculation: average exchange rate on the interbank market
(Published on Nhan Dan newspaper by the state bank). Other kinds of foreign currency
must be cross-converted by VND/USD

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INCOTERM 2020 (from 01/01/2020)
• Group E: EXW (Ex Works) (recently deleted) • Group D
• Group F • DAT (Delivered at Terminal)
• FCA (Free Carrier) • DAP (Delivered at Place)
• FOB (Free on Board) • DDP (Delivered Duty paid) (recently deleted)
• FAS (Free Along Side) (recently deleted) • DTP (Delivered at Terminal Paid) (recently added)
• Group C • DPP (Delivered at Place Paid) (recently added)
• CIF (Cost Insurance and Freight)
• CFR (Cost and Freight)
• CNI (Cost and Insurance) (recently added)
• CPT (Carriage paid to)
• CIP (Carriage and Insurance paid to)

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IMPORT & EXPORT TAXABLE PRICE
• For export: use FOB price – which is the actual selling price paid by the buyer at the exported
border gate, not include freight (F) and insurance (I) costs between custom gates.
• For import: shall be the actual settlement price the buyer has to pay up to the first port of entry.
Mostly apply CIF/C&F(CFR) price at the imported custom gate.

CIF price = FOB price + Insurance + Freight

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TARIFF SCHEDULES & RATES
• Based on the international conventions to standardize the items code and descriptions
(Harmonized Commodity Description and Coding System) – commonly called “HS code”

Chapter Heading Subheading Item

HS Code 01 04 20 10

Live Animals Live sheep & goats Goats Purebred breeding animals
• Specific tax rates for each HS code
• The National Assembly Standing Committee issues the tariff brackets for each item group.
• The Minister of Finance could adjust the tax rates within the tariff brackets as management and
intervention demands.

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HS CODE

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Basis of setting import & export tax rates
• Import and export tax rates are the tool of regulation:
• Reduce tax rates when it is necessary to increase the import or export volume
• Increase tax rates (together with anti-smuggling regulations) reduce the import or export volume
• To increase the state budget revenue, the government might increase the import tax rates for
goods with large import turnover or high profits.
• Implementation of trade and tariff agreements, tariff reduction agreements with world trade
organizations
• Stabilizing prices and ensuring goods circulation

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IMPORT & EXPORT TAX RATE
• For exports: duty rate for each goods is prescribed in the export tariff schedule.
• For import: duty rates include preferential duty rate, special preferential duty rate and ordinary
duty rate, as follows:
• The preferential import tax rates shall apply to goods imported from countries, which have agreements
on most favored nation treatment in their trade relations with Vietnam.
• The special preferential import tax rates shall apply to goods imported from countries, which have
agreements with Vietnam on the special preferential treatments on import duty.
• The ordinary import tax rates: shall apply to goods imported from countries or groups of countries,
which do not have agreements as above.

Ordinary import tax rate

= Preferential import tax rate
× 1.5

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C/O (Certificate of Origin)
• Certificate of Origin is: “a documentary proof issued by an organization of a country or a territory
of exportation of a goods on the basis of relevant regulations and requirements on origin, clearly
identifying the origin of such goods”.
• Form A granted to Vietnam’s products exported to countries and territories which sanction the general
tariff preferences for Vietnam;
• Form B granted to Vietnam’s exported products in other cases.
• Form D granted to Vietnam’s products exported to countries in Common Effective Preferences Tariff.
• Form T granted to Vietnam’s handmade textile products exported to the EU;
• Form O granted to Vietnam’s exported coffee products to countries within World Coffee Organization;
• Form X granted to Vietnam’s exported coffee products to countries without World Coffee Organization;

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C/O (Certificate of Origin)

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Condition to get C/O
• Pure domestically goods with 100% materials from manufacturing countries
• Non-pure domestically goods: raw materials, production materials used domestically and
imported. To be granted a C/O, it must meet the product localization rate of the manufacturing
country. This ratio is determined by countries and territories. For example, G7 countries set a
minimum domestic percentage of 50%.

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IMPORT & EXPORT TAX CALCULATION

Normal import & export duty calculation

TAX PAYABLE
= TAXABLE VALUE
× TAX
RATE

Unit quantity
× Unit price

In case the goods subject to specific duties (importing used cars)

TAX = UNIT × SPECIFIC DUTY

PAYABLE QUANTITY LEVEL

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