One of the most significant taxes in any country and a major source of funding for the state budget is the import and export tax. Therefore, businesses must understand what import and export tax is and who is obligated to pay it.
The legal system of Vietnam is governed by a number of fundamental legal texts that specify import duty and export duty. However, neither import nor export duties have a clear meaning.
Import duty and export duty definitions vary based on the different perspectives, in particular:
Economic perspective: When organizations or individuals import or export goods through the border gate, they are required to pay import duty and export duty to the state budget.
Legal perspective: Import duty and export duty is emergent legal relations between tax collector (the state) and taxpayers (organizations and individuals). Both parties have rights and responsibilities in the collecting process of import duty and export duty (taxpayers must pay taxes to the State).
What is subjected to import and export duty in Vietnam?
Article 2 of the Law on Import Duty and Export Duty 2016 specifies the following import and export duty objects:
- Goods are imported or exported via a border gate or across the border of Vietnam.
- Goods exported from the domestic market into a non-tariff zone, goods imported from a non-tariff zone into the domestic market.
- Goods imported or exported on the spot and goods imported or exported by enterprises exercising their import, export, or distribution right.
The following objects are not liable to import duty or export duty:
- Goods in transit, border-gate transfer, or transshipment;
- Goods donated as humanitarian aid or non-refundable aid;
- Goods exported abroad from a non-tariff zone; goods imported from abroad into a non-tariff zone and used only in this non-tariff zone; goods brought from a non-tariff zone into another;
- Petroleum volumes are paid as royalties to the State upon export.
Who is subjected to import and export duty in Vietnam?
According to Article 3 of the Law on Import Duty and Export Duty, import duty and export duty payers include:
- Owners of imported or exported goods.
- Organizations entrusted to import or export goods.
- Persons on entry or exit who bring along imported or exported goods or send or receive goods via a border gate or across the border of Vietnam.
- Entities that are authorized to pay the duty, guarantee duty payment, or pay the duty, for duty payers, including:
- Customs clearance agents that are authorized by duty payers to pay import duty and export duty;
- Postal and international courier service providers that pay duty on behalf of duty payers;
- Credit institutions or other organizations operating under the Law on Credit Institutions that guarantee duty payment or pay duty for duty payers;
- Persons authorized by goods owners, in case goods are presents or gifts of individuals or are luggage shipped before or after their owners depart or leave the country;
- Branches that are authorized to pay duty on behalf of their enterprises;
- Other persons who are authorized to pay duty on behalf of duty payers in accordance with the law.
- Persons who buy and transport goods within duty-free quotas applicable to border residents but, instead of consuming such goods or using them for production, sell them in the domestic market, and foreign traders licensed to trade in imported or exported goods at border markets in accordance with the law.
- Persons whose imported or exported goods are not liable to duty or exempted from duty but then become dutiable due to a change in accordance with the law.
- Other cases as prescribed by law.