Notes for enterprises to be entitled to benefits from tax policies under EVFTA

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Mr. Nguyen Quoc Toan, Deputy Head of Import and Export Duties Division under HCM City Customs Department introduced tax policies at the dialogue on October 6. Photo: D.N

Guiding to handle overpaid amount

Shipments exported from Vietnam to the EU and imported from the EU to Vietnam with customs declarations registered from August 1, 2020 (effective date of the EVFTA), if the documents of the shipments meet conditions described inDecree No. 111/2020/ND-CP dated September 18, 2020, Decree No. 31/2018/ND-CP on rules of origin and Preferential Export Tariffs and Special Preferential Import Tariffs of Vietnam for the implementation of EVFTA for the 2020-2022 period, Circulars issued by the Ministry of Finance and Ministry of Industry and Trade, customs branches shall handle the overpaid amount according to the law on tax administration in a timely fashion to meet requests of the business community as committed bythe Director of HCM City Customs Department.

Under the above instruction, for declarations registered from August 1, 2020, customs branches under HCM City Customs Department shall refund the overpaid tax amount. The procedures for refund of the overpaid tax amount comes under Clause 64 and 65 of Article 1, Circular No. 39/2018/TT-BTC dated April 20, 2018 of the Ministry of Finance (Form no. 27/CVDNHNT/TXNK).

Any problems arising during the implementation of the EVFTA should be reported to the leaders of HCM City Customs Department for timely guidance.

According to HCM City Customs Department, under the EVFTA Vietnam is committed to abolishing 91.8% of tariff lines within seven years from the effective date of the EVFTA, equivalent to 97.1% export turnover of the EU to Vietnam.

Within ten years from the effective date of the EVFTA, Vietnam is committed to abolishing 98.3% of tariff lines, equivalent to 99.8% of export turnover from the EU to Vietnam.

Notable challenges

The EVFTA opens up great opportunities for Vietnamese enterprises but also poses challenges because the EU is a fastidious market with high requirements on product quality, food safety, labeling, and environment.

Therefore, despite tariff preferences, Vietnamese goods must improve quality to pass this barrier. Exports to the EU must comply with rules of origin, HCM City Customs Department said.

Conditions to be entitled to preferential export tariffs:Certificate of origin is under Circular No. 11/2020/TT-BTC of the Ministry of Industry and Trade and the transport document (copy) states the destination as countries in the EU; the United Kingdom of Great Britain and Northern Ireland.

Imported Customs declaration is issued by the EU; United Kingdom of Great Britain and Northern Ireland (copy and translated version if the language in declaration is not English).

Tax declaration and payment is performed under MFN tariff rate (Decree No. 57/2020/ND-CP dated May 25, 2020).

Within one year from the registration date of the export declaration, if the enterprise submits full documents and vouchers, the customs agency shall handle the overpaid tax amount.

Conditions to be entitled to preferential import tariffs: Goods in the heading 04.07 (eggs); heading 17.01 (sugar); heading 24.01 (tobacco leaf) and heading 25.01 (salt) apply tariff quotas described by the Ministry of Industry and Trade.

Imported goods from the EU to Vietnam must be specified in the Tariffs. Product lines with symbol “*” are goods imported from the EU that do not enjoy special preferential tariffs under the EVFTA such as CKD motor vehicles (8702.30.10).

Imported shipments from the EU member states to Vietnam must meet conditions of rules of origin under the EVFTA (Circular No. 11/2020/Tt-BTC dated June 15, 2020 of the Ministry of Industry and Trade).

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Especially, goods exported from Vietnam to the United Kingdom of Great Britain and Northern Ireland; and goods imported from the United Kingdom of Great Britain and Northern Ireland to Vietnam only apply EVFTA tariffs in accordance with Decree No. 111/2020/ND-CP from August 1, 2020 till the end of December 31, 2020.