SPECIAL PREFERENTIAL TAX
1. What is preferential import tax?
Preferential tax rates are tax rates applied to certain items and are usually lower than normal tax rates. An import tax applied at preferential tax rates, applied to imported goods originating from countries, groups of countries or territories that implement most-favored nation treatment in trade relations with Vietnam. , goods from the non-tariff zone imported into the domestic market meet the conditions of origin from a country, group of countries or territory that implements most-favored nation treatment in trade relations with Vietnam.
Preferential tax rates will depend on what the goods are and where the goods come from, thereby providing a basis for assessing preferential import tax rates.
Based on export tax and import tax laws In 2016, preferential tax rates apply to imported goods originating from countries, groups of countries or territories that implement best-in-class treatment in trade relations with Vietnam; Goods from the non-tariff zone imported into the domestic market meet the conditions of origin from a country, group of countries or territory that implements most-favored nation treatment in trade relations with Vietnam. Thus, in order to apply special preferential tax rates, it is necessary to meet the two basic conditions above.
Most favored nation treatment, also known as MFN, in trade relations between countries around the world through trade agreements. Currently, there are 172 countries that have MFN agreements with Vietnam and you can refer to the list of countries that have trade relations with Vietnam at Official dispatch 8678/TCHQ-TXNK September 9, 2016.
2. Compare preferential import taxes, normal tax rates, and special preferential tax rates.
All three types of preferential import taxes, special preferential tax rates or regular tax rates belong to the group of import taxes that businesses are obliged to declare and fulfill their responsibility to pay taxes to the state. So what are the characteristics of preferential import taxes, special preferential tax rates and regular tax rates?
Preferential import tax: this tax applies to goods on the list of preferential tax incentives for countries implementing MFN in trade relations with Vietnam.
Special preferential import tax is a tax applied to goods imported from countries under free trade agreements signed bilaterally or multilaterally with each other. Eg ACFTA (ASEAN - China), ATIGA (ASEAN - Vietnam), VJEPA (Japan - Vietnam) ... Goods from the non-tariff zone imported into the domestic market meet the conditions of origin from a country, group of countries or territory that has a special preferential agreement on import tax in trade relations with Vietnam.
Normal tax rates are applied to imported goods that are not on the list of preferential tax rates and special preferential tax rates. Apply the normal tax rate equal to 150% special preferential tax rate if the goods are outside the list of normal tax rates according to government regulations. In case the preferential tax rate is equal to 0%, the Prime Minister shall base on the provisions in Article 10 of this Law. Law on export tax and import tax 2016 to decide on the application of normal tax rates.
3. Tax rate schedule applies to preferential import taxes.
Pursuant to: Appendix II of Decree 122/2016/ND-CP
According to the provisions in Appendix II of Decree 122/2016/ND-CP Regulations on preferential import tariffs according to the list of taxable goods include:
Section I of preferential import tax rates applies to 97 chapters according to the list of Vietnamese export and import goods. Content includes Section name, chapter, section notes, chapter notes, list of import tariffs including description of goods (item group name and item name), 08-digit product code according to the list of exported goods , imported from Vietnam, preferential import tax rates prescribed for taxable goods.
In case the list of Vietnamese exported and imported goods is amended or supplemented, the customs declarant shall declare a description; Commodity codes according to the revised and supplemented list of exported and imported goods and application of tax rates of the amended and supplemented commodity codes.
Section II of Chapter 98 regulates product codes and preferential import tax rates for a number of product groups and items.
In general, in Appendix II of Decree 122/2016/ND-CP Regulations on export tariffs, preferential import tariffs, list of goods and absolute tax rates, mixed taxes, import taxes outside tariff quotas have clearly and specifically stipulated product codes. and what is the tax rate of each code?
4. How to calculate import tax.
For each type of tax, different calculation methods will be applied. So how can we calculate import tax?
Formula for calculating import tax
Import tax = VAT x TS
in there:
TGTT = Goods price + international shipping fee according to delivery conditions + additional amounts to be added
TS depends on the HS code to check the tax rate, or goods with preferential C/O will have the tax rate of goods with C/O applied.
