New Law on Import and Export Duties can promote trade between foreign countries and Vietnam
On 1st September 2016, Decree No. 134/2016/ND-CP came into force, replacing the Government's Decree No. 87/2010/ND-CP dated August 13, 2010.The former Decree bring an important implementation in the field of import and export, promoting trading between foreign countries and Vietnam.
Firstly, Decree No. 134/2016/ND-CP clearly lists different cases where there is the exemption of duties. For instance:
-Article 5 grants the duty exemption to goods of foreign entities enjoying diplomatic immunity and privileges, declaring numerous particular cases eligible for duty exemption (i.e. representative offices of non-UN System organizations and their members are exempt from import duties under international treaties to which Vietnam is a signatory; the representative offices of non-governmental organizations and their members are exempt from import duties under agreements between them and Vietnam’s Government);
- Article 10 establishes the exemption of duties on goods imported for further processing and processed exports (i.e. goods imported as samples that are not traded or used; machinery and equipment imported for processing under a processing contract);
- Article 11 defines the exemption of duties on goods exported for processing and processed imports (i.e. raw materials, supplies and components for export; goods exported as samples that are not traded or used);
- Article 12 specifies in detail those goods imported for manufacture of domestic exports that are exempt from duties (i.e. raw materials, supplies -including those for manufacture of packages of exports- components, semi-finished products imported incorporated into the exports or used during the manufacture of exports without being incorporated into the exports);
- Article 15 sets 5-year exemption from import duties on those raw materials, supplies and components that cannot be domestically manufactured and are imported to serve manufacturing activities of investment projects in the fields eligible for special investment incentives or located in extremely disadvantaged areas specified by investment laws, hi-tech enterprises, science and technology enterprises and science and technology organizations;
Related: Asia Business Consulting’s Tax Advisory Services
Moreover, the implementation regulated by Decree No. 134/2016/ND-CP is significant because it contains the basis for the determination of eligibility for duty exemption and what the application of duty exemption consists of.
Secondly, Decree No. 134/2016/ND-CP expands the field of export and import duty reduction.
Article 32 of the aforementioned Decree regulates what the application for duty reduction consists of and the power to grant duty reduction, describing in detail the procedures to request duty reduction. Therefore, rights of customers turn out to be reinforced.
Thirdly, the detailed articles, introduced by Decree No. 134/2016/ND-CP , with regard to refund of export and import duties are notable.
From Article 33 to Article 37, Decree No. 134/2016/ND-CP lists the different cases in which tax refund is eligible and Article 37 sets the minimum refundable amount” for refund of import duty or export duty in case of no imports or exports and refund of overpaid export or import duty(Clause 2 of Article 37).
In brief, Decree No. 134/2016/ND-CP constitutes an important improvement in the field of export and import duty: the implementation introduced by this Decree can promote trade between foreign countries and Vietnam, a country where the market is booming. By the enforcement of the regulations in this field, investments in Vietnam result more attractive.
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