Thousands of goods will enter Vietnam with 0% tax thanks to ACFTA

The Government has just announced a list of goods that will enjoy special preferential taxes under the ASEAN-China Trade in Goods Agreement (ACFTA).

ACFTA member countries are China, Philippines, Thailand, Singapore, Myanmar, Malaysia, Laos, Indonesia, Cambodia, Brunei.

According to the commitment when joining ACFTA, Vietnam committed to eliminating tariffs on 90% of tax lines within 10 years, flexibly until the final roadmap in 2018. Vietnam committed to cutting the remaining tax lines from 5% to 50% by the end of the roadmap in 2020.

Meanwhile, China committed to eliminating tariffs on 95% of tariff lines by 2011. China committed to cutting the remaining sensitive tariff lines by 5% to 50% by the end of the roadmap in 2018.

Thousands of goods will enter Vietnam with 0% tax thanks to ACFTA

To enjoy special tax incentives, goods from countries must have a certificate of origin (C/O) as prescribed by the Ministry of Industry and Trade. Accordingly, thousands of goods originating from ACFTA countries will be subject to a 0% tax rate when exported to Vietnam and vice versa.

According to statistics from the General Department of Customs, the import turnover of goods from China in the first 9 months of this year reached 35.9 billion USD. Major imported goods are plastic products, fabrics of all kinds, textile and garment materials, iron and steel, computers, telephones of all kinds, electric wires and cables, vegetables, animal feed, confectionery, animal fats and oils, etc.

Among these, there are many items in the preferential tax schedule and are subject to 0% tax. Thus, with the reduction and elimination of many tax lines, it is forecasted that the trade turnover between Vietnam - China and ASEAN - China will increase sharply.

Specifically, the list of items with tax elimination and tax reduction under ACFTA commitments is as follows:

In terms of agriculture, live animals such as buffalo, cows, pigs, live horses, sheep, goats, chickens, ducks, geese, etc. used for breeding. All types of buffalo, beef, pork, fish (except fish fillets) and many other types of frozen seafood such as shrimp, crab, etc. are exempt from tax.

In addition, there are dairy products, poultry eggs, honey and ivory, shells, horns, claws, corals, and beetles.

Potatoes, root vegetables, tomatoes, onions, garlic, leeks, cabbage, cauliflower, kohlrabi, kale, lettuce, carrots, turnips, beans, asparagus, eggplant, celery, mushrooms, peppers, spinach, squash, corn, cucumbers, sliced ​​cassava, sweet potatoes.

Fruit trees include almonds, coconuts, walnuts, pistachios, macadamia nuts, bananas, dates, pineapples, avocados, guavas, mangoes, mangosteens, oranges, tangerines, lemons, grapefruits, watermelons, apples, pears, quinces, apricots, peaches, cherries, plums, raspberries, strawberries, durians, persimmons, blueberries, longans, lychees, rambutans, rambutans, jackfruit, tamarinds, etc.

Coffee, tea, spices, ginger, saffron, corn (except for roasted rice which is taxed at 5%), rice, brown rice (except for Thai Hom Mali rice which is taxed at 20%), wheat flour, other cereals… are all taxed at 0%.

Edible oil from peanuts and palm oil, sunflower seeds, coconut oil, cakes, and preparations from vegetables and fruits. Beverages, alcohol, carbonated water (except beer, wine, and fermented alcohol with a 5% tax), animal feed for poultry and pigs are subject to a 5% tax until 2018, when it will be reduced to 0%.

Organic surface-active agents (except soaps), surface-active preparations, washing and cleaning preparations. Pigments, toothpaste, paints, rubber, textiles, wood and wood products, paper, textiles, cotton, synthetic fibers, clothing, nuclear reactors, steam turbines and other steam turbines.

Compression-ignition piston internal combustion engines have a tax rate of 0-20%. Dishwashers, machines for cleaning or drying bottles or other containers, packaging machines, machines for filling aerated beverages, mechanical equipment, cranes, forklifts, agricultural and forestry machines, harvesting machines, threshing machines, milk processing machines, presses, weaving machines, washing machines, machine tools... have a tax rate of 0%.

Railway locomotives, passenger cars, railway maintenance vehicles, and tractors are all exempt from tax (except crawler tractors).

For cars, the tax schedule is significantly different. Accordingly, cars with 30 or more people used in airports are taxed at 20% until 2018. Passenger cars designed from 6-18 tons are taxed at 50% in 2018.

Automobiles and other motor vehicles designed primarily to carry people for golf, small racing cars, and sports cars are taxed at 5% and will be reduced to 0% in 2018. Cranes, drills, rescue vehicles, concrete mixers, road cleaners, and septic tank cleaners are taxed at 0% immediately. Other vehicles are taxed at 50% in 2018.

Motorcycles of all types are taxed at 45%, however some specialized types will be reduced to 0% in 2018. Meanwhile, aircraft, spacecraft, ships, boats, fishing boats, yachts or medical materials are immediately taxed at 0%.

According to VnEconomy