Preferential Import and Export Tariffs for implementation of UKVFTA: boost trade and investment relations between two sides
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The preferential export tariff for the implementation of the UKVFTA includes 737 tax lines. Photo: ST |
Preferential export tariff includes 737 tax lines
The UKVFTA was signed in London, United Kingdom on December 29, 2020. On December 31, 2021, the Government issued Resolution No. 190/NQ-CP approving the temporary application of the agreement from January 1, 2021. On March 12, 2021, the Government issued Resolution No. 31/NQ-CP adopting the agreement. The commitments specified in the agreement inherit from Vietnam's commitments in the European Union - Vietnam Free Trade Agreement (EVFTA) since January 31, 2020.
In 2021, two-way trade between the two countries rose by 17.2% compared to 2020, of which exports from Vietnam to the UK grew 16.4% to US$5.8 billion; Vietnam's imports from the UK grew by 23.6%. By the end of 2022, Vietnam's exports to the UK increased 5.2% over the same period in 2021. Currently, the UK is one of Vietnam's largest and most important trading partners in the European market. |
On March 8, 2022, the Government issued Resolution No. 29/NQ-CP approving the ASEAN Harmonised Tariff Nomenclature 2022 (AHTN 2022). To be consistent with Vietnam's Nomenclature of exports and imports to carry out the AHTN 2022 and to continue to implement the import-export tax commitments in the UKVFTA, the Ministry of Finance has developed and submitted to the Government for signing Decree No. 117/2022/ND-CP dated December 30, 2022, promulgating the Preferential Export Tariff and the Special Preferential Import Tariff of Vietnam to implement the UKVFTA for the 2022- 2027 period.
Regarding the scope of governance, this Decree promulgates Vietnam's Preferential Export Tariff and Special Preferential Import Tariff for the implementation of the UKVFTA from 2022 to 2027 and conditions for enjoying preferential export tax rates and special preferential import tax rates under this agreement. Decree 117/2022/ND-CP inherits all the provisions of Decree No. 53/2021/ND-CP dated May 21, 2021. However, the new Decree also has some notable points.
The tax rates issued in the Decree are built on the principle of complying with commitments under Vietnam's tariff reduction roadmap in the UKVFTA and are applied for each year from 2022 to 2027. The Preferential Export Tariff to implement the UKVFTA includes 737 tax lines. Items not covered by this Preferential Export Tariff apply a 0% preferential export tax when exported to the United Kingdom of Great Britain and Northern Ireland.
To enjoy the preferential export tax rates, exported goods must have transport documents and import customs declarations or documents replacing import customs declarations showing that the destination is the territories of the member countries of UKVFTA, specified in the scope of the Decree. Within one year from the export declaration's registration date, the customs declarant shall submit a photocopy of the transport document and a photocopy of the import customs declaration and make additional declarations to enjoy preferential export tax rates under the UKVFTA. Beyond the above 1-year period, exported goods are not eligible for preferential export tax rates under the UKVFTA.
Special preferential import tariff has 11,478 tax lines
The preferential import tariff for implementing the UKVFTA includes 11,478 tax lines (including 11,356 tax lines at an 8-digit level and 122 tax lines at a 10-digit level). The special preferential import tax rates are applied for goods subject to tariff quotas in the following headings: 04.07 (poultry eggs), 17.01 (sugar), 24.01 (tobacco leaves) and 25.01 (salt).
Imported goods which are eligible for special preferential import tax rates under the UKVFTA must fully satisfy the conditions: to be listed in the Special Preferential Import Tariff issued together with the Decree; to be imported into Vietnam from the United Kingdom of Great Britain and Northern Ireland; to meet the regulations on origin of goods and have proof of origin according to the provisions of the UKVFTA.
Trade and legal disputes part of the game with UKVFTA |
Since the UKVFTA came into force and the Decree on the implementation of the agreement issued, Vietnam's exports to the UK have experienced positive growth even during the Covid-19 period. In 2023 and the coming years, the promulgation of the Decree to implement the UKVFTA for the new period will continue to facilitate and promote trade and investment relations between the two countries and further strengthen the relationship between the two parties.
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