NEW PREFERENTIAL EXPORT AND IMPORT TAXES WILL BE IMPLEMENTED FROM JULY 15, 2023 - OTIS LAWYERS

The Government has issued Decree No. 26/2023/NĐ-CP on export taxes, preferential import taxes, commodity lists and absolute tax rates, mixed taxes, and out-of-quota import taxes.

Decree No. 26/2023/NĐ-CP is accompanied by the following four appendices:

1- Appendix I - Export taxes according to the taxable commodity list.

2- Appendix II - Preferential import taxes according to the taxable commodity list.

3- Appendix III - A list of goods and absolute tax rates, mixed taxes for used cars with a seating capacity of 15 or less.

4- Appendix IV - A list of goods and tax rates for out-of-quota import taxes for goods subject to quota import taxes.

Export taxes and preferential import taxes according to the taxable commodity list

The decree regulates export taxes according to the taxable commodity list specified in Appendix I, which includes the commodity code (HS code), description of goods, and the prescribed export tax rates for each group of taxable goods. In case the exported goods are not listed in the export tax schedule, the customs declarant should use the corresponding 8-digit commodity code from the preferential import tax schedule specified in Section I of Appendix II accompanying this decree. In such cases, the customs declarant is not required to declare the tax rate on the export declaration.

The preferential import taxes according to the taxable commodity list specified in Appendix II accompanying this decree consist of:

Section I: Prescribing preferential import tax rates for 97 chapters within the list of goods exported or imported in Vietnam. The content includes: Part and Chapter names, Explanatory notes, Sub-group explanatory notes, Import tax schedule specifying the goods description, and the corresponding 8-digit commodity code from the list of goods exported or imported in Vietnam, and the prescribed preferential import tax rates for the taxable goods.

Section II: Regulating the list of goods and preferential import tax rates for certain goods under Chapter 98. The content includes: Explanatory notes, Classification methods, conditions, procedures for applying preferential import tax rates specified under Chapter 98, report on examination and settlement of using goods subject to preferential import tax rates specified under Chapter 98; List of goods and preferential import tax rates.

The preferential import tax rates for machinery and mechanical processing equipment

The preferential import tax rates for machinery and mechanical processing equipment belonging to product groups 84.54 to 84.63 are as follows:

1. Machinery and mechanical processing equipment that are not domestically produced are subject to a preferential import tax rate of 0%. The machinery and mechanical processing equipment mentioned in this provision are those not listed in the domestic machinery and equipment list produced according to the regulations of the Ministry of Planning and Investment.
2. Machinery and mechanical processing equipment not falling under the case specified in provision 1 are subject to preferential import tax rates according to the provisions in Section I of Appendix II of the preferential import tax schedule according to the taxable commodity list issued with this decree for product groups 84.54 to 84.63.

Import tax on used cars

The decree stipulates that used cars for transporting passengers with seating capacity of up to 9 seats and engine displacement not exceeding 1,000cc, belonging to product group 87.03, are subject to a specific tax rate specified in Appendix III issued with this decree.

Used cars for transporting passengers with seating capacity of up to 9 seats and engine displacement above 1,000cc, belonging to product group 87.03, and those with seating capacity from 10 to 15 seats, belonging to product group 87.02, are subject to a mixed tax rate specified in Appendix III issued with this decree.

Used cars for transporting passengers with seating capacity of 16 seats or more, belonging to product group 87.02, and used cars with engines for transporting goods with a designed total weight not exceeding 5 tons, belonging to product group 87.04 (except refrigerated trucks, waste collection trucks with waste compression apparatus, tankers, steel-bodied cargo trucks with value; cement tankers and sludge trucks with detachable lifting body), are subject to a preferential import tax rate of 150%.

Other types of used cars belonging to product groups 87.02, 87.03, 87.04 are subject to a tax rate 1.5 times higher than the preferential import tax rate for new cars of the same type and belonging to the same product group, as specified in Section I of Appendix II issued with this decree.

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