1. Special preferential tariffs for the implementation of the ASEAN-Korea Free Trade Agreement (AKFTA) for the period of 2023 – 2027
The Government of Vietnam has just issued Decree No. 81/2024/ND-CP. Attached to this Decree is Vietnam’s Special Preferential Import Tariff, implementing the ASEAN and Korea Trade Agreement (AKFTA) in the period of 2023 – 2027. This tariff is effective from July 4, 2024.
The new AKFTA tariff stipulates a 0% tariff rate applicable to many types of goods such as: live animals; meat and edible offal.
Meanwhile, the tax rate of 5% applies to certain types of mineral fertilizers or chemical fertilizers, containing phosphate (phosphate fertilizers), cosmetics or preparations for makeup, and skin care products (except pharmaceuticals), including sunscreen or sunscreen preparations; Preparations for nails or pedicure.
In addition, Decree 81/2024/ND-CP also supplements the “List of goods subject to special preferential tax rates outside Vietnam’s quota, implementing the AKFTA agreement for the period of 2023 – 2027″. Accordingly, goods exceeding Vietnam’s tariff quota will also be subject to special preferential tax rates if they are on this list. In case goods exceed the tariff quota but do not fall into this list , the tax rate in Decree No. 26/2023/ND-CP shall be applied.
(Imports subject to tariff quotas include items of heading 04.07, 17.01, 24.01, 25.01. The list of goods and tariff quotas will be updated annually in accordance with the Government’s regulations).
For goods within the tariff quota, the tax rate is applied based on the “Special preferential import tariff for the implementation of the AKFTA Agreement for the period of 2023 – 2027” mentioned above.
Enterprises that have paid import tax higher than the preferential tax rate in this Decree No. 81/2024/ND-CP will be refunded. This applies to import declarations registered from November 28, 2023 to before July 4, 2024.
Source: Decree No.81/2024/ND-CP
2. List of items under the management of the Ministry of Industry and Trade
On July 1, 2024, the Ministry of Industry and Trade issued Decision No. 1725/QD-BCT regulating the “List of items subject to energy efficiency inspection and energy labeling”.
Accordingly, goods belonging to groups (according to HS codes) and in accordance with the detailed description in the Appendix to Decision No. 1725/QD-BCT will need to be checked for energy efficiency and labeled when exporting – importing into Vietnam. Specifically, groups of goods to note include:
- Heading 8539: Fluorescent lamps, fluorescent bulbs
- Heading 8504.10: Ballasts for Catapults or Ejection Tubes
- Heading 8418: Refrigerators, Freezers, Commercial Freezers
- Heading 8516.60.10: Rice Cooker
- Heading 8414.51: Electric Fans
- Heading 8528.72: Computer monitors, television sets
- Heading 8516.10: Water heaters with reserves
- Heading 8415.10.20: Air Conditioners
- Heading 8450: Household Washing Machines
- Heading 8539.52: LEDs
- Heading 8443: Printers, photocopiers
- Heading 8471: Desktop Computers
- Heading 8501: Electric motors
- Heading 8402: Industrial Boilers
- Heading 8504: Transformers
This Decision will replace Appendix III of Decision No. 1182/QD-BTC dated April 06, 2021 on the “List of goods subject to energy efficiency inspection” under the management responsibility of the Ministry of Industry and Trade.
Source: Decision No.1725/QD-BCT
3. Administrative procedures related to refurbished goods
From June 20, 2024, refurbished goods businesses can carry out administrative procedures according to the guidance in Decision No.1625/QD-BCT of the Ministry of Industry and Trade. The procedures include:
- Issue a Refurbishment Code
- Renewal of Refurbishment Code
- Amendment and supplementation of information of enterprises that have been granted refurbished codes
- Issuance of a Certificate of eligibility as refurbished goods
- Revocation of refurbishment codes at the request of enterprises granted refurbishment codes
This Decision is issued to implement Decree No. 66/2024/ND-CP on management of import of refurbished goods under the EVFTA and UKVFTA agreements.
Source: Decision No.1625/QD-BCT
4. The right to export imported goods (without further processing) of FDI enterprises
On July 29, 2024, the GDC issued Official Letter No. 1238/GSQL-GQ2 to answer questions about export and import rights of FDI enterprises. The GDC opinions on this issue are as follows:
Regarding Import Rights:
In case the FDI enterprise has been licensed to exercise the right to import (according to Decree 09/2018/ND-CP), when importing goods, the type code A41 – Business import of the enterprise exercising the right to import.
Regarding Export Rights:
FDI enterprises that import goods and then export the same goods abroad or into non-tariff zones (goods in their original state, without further processing shall do the following:
In case the goods meet the conditions for export tax exemption or import tax refund, use the code B13 – Export of imported goods.
The export declaration should note “Goods subject to export tax exemption and import tax refund as prescribed”.
In case the enterprise does not wish to complete the procedures for export tax exemption or import tax refund, use the code B11 – Export for business.
The export declaration should note “This declaration is not used to carry out procedures for non-collection of export tax and refund of import tax”.
Notably, the General Department of Customs also gave an opinion on this case in Official Letter No. 1214/QSQL-GQ2 dated July 22, 2022: in case an FDI enterprise imports goods and then exports the same goods (not yet through the processing and processing process), it falls under the temporary import – re-export. Therefore, FDI enterprises are not entitled to conduct this activity.
(Clause 2, Article 13 of Decree No. 69/2018/ND-CP)
Source: Official Letter No.1238/QSQL-GQ2
5. Instructions for customs procedures on changing the purpose of use from duty-free imported goods to liquidation sales for domestic enterprises
To address this issue, the GDC recently issued Official Letter No. 3701/TCHQ-TXNK on July 31, 2024.
Firstly, the GDC affirms that duty-free imported goods that have cleared customs but later change their purpose of use must have a new customs declaration made.
The procedure is implemented according to Article 21 of Circular 38/2015/TT-BTC on “Declaration for Changing Purpose of Use and Domestic Consumption”. Accordingly, enterprises must clearly state the original import declaration number and the form of change in purpose of use or domestic consumption. This should be done in the “Notes” section if it is an electronic declaration or the “Other Notes” section if it is a paper declaration.
Exception: If five years have passed since the time of importation and the enterprise changes the purpose of use to domestic consumption, there is no need to provide the old declaration number.
Regarding the declaration of customs value, if the imported goods have been used and are not subject to tax, or are exempt from tax, and later change the purpose of use to domestic consumption, the customs value is the declared value determined based on the actual selling price (as indicated in the liquidation sale contract).
If the Customs Authority has grounds to determine that the declared value is not appropriate, it will reassess the customs value to align with the actual condition of the goods.
Source: Official Letter No.3701/TCHQ-TXNK
6. Tax refund for goods imported for production and business but put into export production
Goods imported for production and/or business for which import tax has been paid but put into the production of export goods, and then these products have been exported abroad or into non-tariff zones shall be eligible for import tax refund.
It should be noted that taxpayers must declare on the export declaration that the exported products are manufactured from goods previously imported by enterprises for production and business.
To be eligible for a tax refund, businesses also need to meet the following conditions:
Enterprises having establishments producing export goods in the territory of Vietnam; have the right to own or use machinery and equipment suitable for the production of exported goods from imported raw materials.
Export products are subject to customs clearance according to the type of export production (E62).
Enterprises directly or entrust the import of raw materials and export of products.
The value of import tax refund is calculated based on the value or quantity of raw materials actually used to produce export goods.
(Article 36 of Decree No. 134/2016/ND-CP)
Source: Official Letter No.3695/TCHQ-TXNK
7. Vietnam Decides to Investigate Anti-Dumping of Imported Hot-Rolled Steel from India and China (Case No. AD20)
On July 26, 2024, the Ministry of Industry and Trade issued Decision No. 1985/QD-BCT regarding the investigation of the application of anti-dumping measures (AD) on certain hot-rolled steel products originating from the Republic of India and the People’s Republic of China.
The decision to investigate was based on a request from Vietnamese manufacturing companies, represented by Hoa Phat Dung Quat Steel Joint Stock Company and Hung Nghiep Formosa Steel Co., Ltd. The dossier alleges that hot-rolled steel manufacturers from India and China are dumping these products into the Vietnamese market, causing damage to the domestic steel manufacturing industry.
Description of the Investigated Goods
Hot-rolled steel, alloyed or non-alloyed
Not processed beyond hot rolling
Thickness from 1.2 mm to 25.4 mm
Width not exceeding 1,880 mm
Rust-removed or not rust-removed
Uncoated or non-plated
Oiled or non-oiled
Carbon content below 0.6% by weight
HS Codes within the Scope of the Investigation Include:
7208.25.00, 7208.26.00, 7208.27.19, 7208.27.99, 7208.36.00, 7208.37.00, 7208.38.00, 7208.39.20, 7208.39.40, 7208.39.90, 7208.51.00, 7208.52.00, 7208.53.00, 7208.54.90, 7208.90.90, 7211.14.15, 7211.14.16, 7211.14.19, 7211.19.13, 7211.19.19, 7211.90.12, 7211.90.19, 7225.30.90, 7225.99.90, 7226.91.10, 7226.91.90, 7226.99.19, 7226.99.99
Investigation Period to Determine Dumping Behavior:
01 year: from July 1, 2023 to June 30, 2024.
Investigation Period to Assess Damage:
3 years: from July 1, 2021, to June 30, 2024.
After initiating the investigation, the Investigating Authority will conduct inspections and verify the information to complete the official investigation conclusion on the case. According to Article 70 of the Law on Foreign Trade Management, the investigation will conclude within 12 months from the date of the investigation decision, with the possibility of extension to 18 months in special cases.
Currently, the requesting parties propose the application of anti-dumping duties on hot-rolled steel products at a rate of 22.27% for India and 27.83% for China.
Source: Decision No.1985/QD-BCT
Official information from the case will be continuously updated in the customs newsletter of UNI CUSTOMS CONSULTING. We invite businesses to stay informed!