Vietnam is implementing commitments on preferential export and special preferential import taxes within the framework of the 15 Free Trade Agreements (FTAs) and two bilateral trade agreements (BTAs) with a coverage of more than 80% of Vietnam's import turnover. Participation in FTAs/BTAs creates a great driving force for Vietnam's import-export turnover growth.

Adhere to the tariff remission scheme

Ms. Nguyen Phuong Linh, Head of the Multilateral Cooperation Department, Department of International Cooperation (Ministry of Finance), stated at the workshop on the theme "Effective implementation of Vietnam's preferential export tax and special preferential import tax commitments to implement FTAs" held on May 18, 2023, that they continue to implement the commitment of preferential export tax and preferential import tax in FTAs/BTA. At the same time, to achieve consistency with the List of export and import goods of Vietnam, implement the ASEAN Harmonised Tariff Nomenclature (AHTN) 2022 (effective from December 30, 2022), and fulfill Vietnam's commitment to import tax in the next phase, the Ministry of Finance has submitted to the Government to promulgate 17 Decrees on Vietnam's preferential export and special preferential import tariffs within the framework of FTAs and BTAs during the period 2022 - 2027 ( effective from December 30, 2022) to replace Decrees for the period 2018 - 2022. It accordingly ensures uniformity in the system of legal documents on taxes and customs in accordance with international commitments.

According to Ms. Nguyen Phuong Linh, the contents of the above Decrees basically inherit all of the provisions of the Decrees promulgating Vietnam's preferential export tariffs and special preferential import tariffs to implement FTAs/BTAs in the previous period (2018 - 2022) to ensure policy stability while also complying with the tax remission scheme committed in these agreements. The Decrees are consistent with the Party's lines, guidelines, policies, constitutionality, and legality. They also ensure legal system unity, and they are compatible with international treaties to which Vietnam is a signatory.

Conditions for application of special preferential import tax rates

Ms. Nguyen Phuong Linh stated in the introduction to the above 17 Decrees that the conditions for applying the special preferential import tax rate include items in the special preferential import tariff; imported into Vietnam from the agreement's member countries; meeting the regulations on the origin of goods (including regulations on direct transportation); and have certificates of origin of goods under the agreement's provisions.

Regarding the conditions for applying preferential export tax, they include goods imported into the territory of the countries following the provisions of the agreement (for countries that have ratified the agreement); (photocopied) transport documents showing the destination within the territory of the member countries under the regulations; and import customs declarations or documents replacing the customs declaration of the shipment exported from the country as stipulated by the laws.

Ms. Linh also noted that if the documents are not in Vietnamese or English, the customs declarant must translate them into Vietnamese or English and be responsible for the content of the translation.

Tariff commitment transformation

According to the Department of International Cooperation’s representatives, the Decrees have transformed tariff commitments in agreements to match the list of exported and imported goods based on AHTN 2022, which changes some tariff lines following AHTN, with the range expanding from 10,813 lines of 10 numbers (AHTN 2017) to 11,414 tax lines (AHTN 2022). Furthermore, to maintain the separation of tariff lines at the level of ten countries, the number of tariff lines at level ten was reduced to 497 (down 124 lines from the previous version).

Of the 15 FTAs promulgating the tariff scheme in this period, four FTAs have completed the tariff remission scheme: ATIGA (2018), ASEAN - China (2020), ASEAN - Korea (2021), ASEAN - Australia - New Zealand (2022), towards the completion of the scheme with Japan, India, and the Eurasian Economic Union.

The Decrees supplement the scope of preferential treatment accorded to many countries that have ratified existing international agreements, including Peru, Ceuta, and Melila. Simultaneously, they complete and adjust some contents to increase legal clarity and avoid implementation obstacles, such as regulations on giving preferential treatment to non-tariff areas, and regulations on preferential treatment conditions.

Representatives of the Ministry of Finance further informed that Decree 129/2022/ND-CP dated December 30, 2022, is the first decree regulating the special preferential import tax of the RCEP Agreement. In Vietnam's RCEP tax commitments, different tax rates are applied to different partners with their sensitive items. In comparison to the FTAs Vietnam has signed, this is new content that helps ensure the effective implementation of the RCEP Agreement's target of discriminatory tax treatment among member countries (ASEAN, China, Korea, Japan, Australia, and New Zealand).

Guidance on the applicable RCEP tariff rates varies among the Annexes to the Tariff in Article 6 of the Decree to internalize the provisions of Article 2.6 of the RCEP Agreement to address issues related to rules of origin of goods if a member country applies different import tariff commitments to others within the framework of the RCEP Agreement./.

Source: Thời báo tài chính Việt Nam