Conditions for Preferential Import and Export Tariffs Under The EVFTA Agreement (17-12-2020)

On September 18, 2020, the Government issued Decree 111/2020/ ND-CP on Vietnam's Preferential Export Tariffs and Special Preferential Import Tariffs for the implementation of the EVFTA Agreement period 2020 - 2022 aims to implement Vietnam's commitments in order to open markets under the EVFTA Agreement.
Conditions for Preferential Import and Export Tariffs Under The EVFTA Agreement

Accordingly, the Decree stipulates the Preferential Export Tariffs, the Special Preferential Import Tariffs of Vietnam to implement the EVFTA Agreement and the conditions for preferential export tax rates and special preferential import tax rates under this Agreement. For customs declarations of export and import goods registered from August 1, 2020 to before the effective date of this Decree, if all regulations are met to receive preferential export or special preferential import tax is paid in this Decree and the tax has been paid at a higher tax rate, the overpaid tax shall be handled by the customs authority in accordance with the law on tax administration. This Decree also applies to exported goods from Vietnam to the United Kingdom and Northern Ireland and imported into Vietnam from the United Kingdom during the period from August 1, 2020 to December 31, 2020.

Specifically, imported and exported products must satisfy the following conditions in order to receive the preferential tax rates:

For exported products from Vietnam and imported into the territories under the EVFTA Agreement, including:

Member territories of the European Union are shown in Appendix III to Decree 111.

United Kingdom and Northern Ireland (only applicable to exported products from Vietnam during the period from August 1 to December 31, 2020).

There is a transport document (copy) showing the destination is the above territories.

There is the import customs declaration of the export consignment of Vietnamese origin imported into the above-mentioned territories (copy and translation into English or Vietnamese in case the used language on the declaration isn’t English).

For imported products into Vietnam, it is included in the special preferential import tariff specified in Appendix II to Decree 111.

The products are imported into Vietnam from European Union member territories specified in Annex III; United Kingdom and Northern Ireland (only applicable to goods imported into Vietnam during the period from August 1 to December 31, 2020).

The products are meet the requirements of origin of goods and had proof of origin in accordance with the provisions of the EVFTA Agreement.

This Decree takes effect from September 18, 2020.

Under the EVFTA Agreement, Vietnam commits to abolish import duties on 48.5% of tariff lines, equivalent to 64.5% of EU exports as soon as the Agreement comes into effect. Then, after 7 years, 91.8% of tariff lines equivalent to 97.1% of export turnover from the EU were abolished by Vietnam. After 10 years, this elimination corresponds to 98.3% of tariff lines and 99.8% of EU export turnover. About 1.7% of the remaining EU tariff lines, Vietnam applies the tariff elimination schedule of more than 10 years or applies TRQ under WTO commitments.

With regard to exports, Vietnam and the EU committed to not impose export tax on products when they are exported from the territory of one party to the other. However, Vietnam has reserved the right to apply taxes to 526 tariff lines, including important products such as crude oil, coal (except coal for coking). For tariff lines with relatively high current export tax rates, Vietnam has committed to a ceiling export tax of 20% for a maximum period of 5 years (only Mang-gan has a ceiling tax of 10%). For other products, Vietnam commits to eliminate export tax according to a maximum schedule of 1 year.

Commitment to Reduce Export Tax for Seafood Products

As soon as the EVFTA Agreement comes into effect, nearly 50% of the tariff lines applied to Vietnamese seafood products have the base tax rate of 0-22%, of which most taxes are high from 6-22% is reduced to 0% (about 840 tariff lines). About 50% of the remaining tax lines with the base tax rate of 5.5-26% will be returned to 0% after 3 to 7 years. For canned tuna and fish balls, the EU gives Vietnam the tariff quotas of 11,500 tons and 500 tons, respectively.

In addition, most frozen squid and octopus’s products have a basic tax rate of 6-8%, will be reduced to 0%, other products such as surimi will be reduced from 14.2% to 0%, fish chess from 7.5% to 0%.

For frozen shrimp and black tiger shrimp (HS 03061792), tax will be reduced from the basic rate of 20% to 0% as soon as the agreement comes into effect. Other shrimp products follow the 3-5-year roadmap, only for processed shrimp, the 7-year tax reduction schedule. For Cat fish, the tax reduction schedule is 3 years, the smoked fish has a 7-year roadmap. Frozen tuna products are entitled to a tax reduction of 0% immediately, except for frozen tuna loin (loin) which needs a 7-year roadmap and canned tuna product has 0% tax quota of 11,500 tons.

Le Mai (theo

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