On 18 September 2020, the Government issued Decree No. 111/2020/ND-CP on Vietnam’s Preferential Export Tariffs and Special Preferential Import Tariffs for the implementation of Vietnam’s commitments on opening the market for goods under the Free Trade Agreement between the Socialist Republic of Vietnam and the European Union (“EVFTA“) for the period 2020 – 2022 (“Decree No. 111“).
In more detail
Decree No. 111 stipulates the Preferential Export Tariffs and the Special Preferential Import Tariffs levied by Vietnam to implement the EVFTA Agreement and the eligibility conditions to enjoy such tariffs.
With regard to customs declarations of eligible exports and imports made from 1 August 2020 until the effective date of Decree No. 111, which is on 18 September 2020, overpaid duties shall be handled by the customs authority in accordance with the law on tax administration. Decree No. 111 also applies to goods exported from Vietnam to the United Kingdom and Northern Ireland as well as goods imported into Vietnam from the UK and Northern Ireland during the period from 1 August 2020 to 31 December 2020.
Under the EVFTA Agreement, Vietnam commits to abolishing import duties on 48.5% of tariff lines, equivalent to 64.5% of EU exports, as soon as the Agreement comes into effect. After seven years, Vietnam will abolish 91.8% of tariff lines equivalent to 97.1% of export turnover from the EU. After 10 years, these amounts will increase to 98.3% of tariff lines and 99.8% of EU export turnover. About 1.7% of the remaining EU tariff lines are subject to the tariff phase-out schedule of more than 10 years or the tariff rate quotas as set forth under Vietnam’s WTO commitments.
For export duties, Vietnam reserves the right to impose export duties on 526 tariff lines, including important products such as crude oil and coal (except coking coal). For tariff lines with relatively high export tariff rates, Vietnam commits to reducing these rates to 20% in five years or less (with 10% applied to manganese ore). For other products, Vietnam commits to eliminating export duties within no more than 16 years.