Many Vietnamese shrimp products exported to the EU enjoy 0% tax

According to the commitment, after the EU - Vietnam Free Trade Agreement (EVFTA) takes effect on January 1, 2018, Vietnamese goods, including shrimp, will enjoy special preferential taxes.

According to the Vietnam Association of Seafood Exporters and Producers, the EU will mainly import frozen raw shrimp and processed shrimp from Vietnam as soon as the EVFTA comes into effect, and export tax will be reduced to 0%.

Specifically, raw shrimp products with HS code 03061100 (iced green lobster; frozen HOSO, DP tiger shrimp; fresh frozen PD iron shrimp; iced green lobster; frozen whole, split, shelled mantis shrimp...) to the EU will be reduced to 0% from the current level of 12.5%.

Tax on shrimp products with HS code 03061710 (frozen PD black tiger shrimp, frozen whole HOSO black tiger shrimp, headless and shelled black tiger shrimp, fresh frozen black tiger shrimp, frozen meat black tiger shrimp, fresh frozen HLSO black tiger shrimp, IQF frozen black tiger shrimp, frozen meat white tiger shrimp...) reduced to 0% (currently 20%).

Opportunity for Vietnamese enterprises when many shrimp products exported to the EU enjoy 0% tax from 2018.

For processed shrimp products, shrimp HS code 16052110 (shrimp paste) from the current level of 20% will be adjusted to 0% after 7 years from the effective date of the Agreement; shrimp HS code 16052190 (other shrimp) from 20% to 0% after 7 years from the effective date of the Agreement.

Currently, the GSP tax rate that the EU gives to Vietnam for frozen raw shrimp (HS 030617) is 4.2%; frozen processed shrimp (HS 160521) is 7%. However, Vietnamese products must meet the EU's origin standards to enjoy this tax rate. Vietnam has an advantage over its two competitors, Thailand and China, because these two countries do not enjoy the EU's GSP.

The EU accounts for about 30.6% of the total value of shrimp imports worldwide. Shrimp imports into the EU range from 6-8 billion USD per year. The EU is a notable import market for Vietnamese shrimp in the first 11 months of 2017 with high growth and strong import demand.

Vietnam's shrimp export value to the EU is currently quite positive because EU consumers prefer convenient value-added seafood products and increase imports to serve the needs of year-end festivals.

In the first 11 months of this year, the EU has become the largest import market for Vietnamese shrimp, accounting for 22.2% of the total value of Vietnamese shrimp exports to markets. During this period, Vietnamese shrimp exports to the EU reached 780.2 million USD; an increase of 42.4% compared to the same period in 2016.

According to experts' recommendations, during the EVFTA ratification process, businesses need to proactively grasp the commitments of Vietnam and its partners to have appropriate export plans.

The EU is one of the markets with many strict technical regulations with the aim of best protecting human health, protecting the environment, sustainable development... Enterprises also need to meet the requirements of market access. Especially when the FTA comes into effect with tax and market access opportunities, but if they do not meet technical standards, Vietnamese goods will not be able to enter the EU despite the FTA advantages.

According to Ho Chi Minh City Law Newspaper