On January 5, 2020, The Government has issued Decree No. 07/2020/ND-CP on Vietnam’s Special Preferential Import Tariffs for the Implementation of the ASEAN-Hong Kong (China) Free Trade Agreement (AHKFTA) in the period of 2019-2022.
Contents of Decree No. 07/2020/ND-CP
This decree takes effect in February 20, 2020, which includes the provisions on the Special Preferential Import Tariff (AHKFTA) and the conditions for imported goods to be applied this tax. Specifically, imported goods subject to the AHKFTA tax rate must fully meet the following conditions:
- Listed in the Special Preferential Import Tariff promulgated together with this Decree;
- Being imported from countries which are members of the AHKFTA;
- Being transported directly from the exporting country in accordance with provisions of the AHKFTA agreement and the regulations of the Ministry of Industry and Trade;
- Meeting the rules of origin and obtaining the certificate of origin (C/O) of the AHK form in accordance with provisions of the AHKFTA agreement and the regulations of the Ministry of Industry and Trade.
In particular, ‘‘imported goods are transported directly from the exporting country’’ means goods transferred between two member countries or intermediaries through many member countries or through 01 non-member country of AHKFTA.
In case, goods transported through many member countries or through 01 non-member country, the conditions must be met as follow:
- Transited goods are necessary due to geographical reasons or transport requirements;
- Not participating in commercial transactions, not consuming in that country;
- No other stage of processing other than unloading and reloading or necessary processes to preserve the goods in good condition.
In addition, issued together with this Decree are Appendices on the content about converting the AHKFTA tariff from AHTN 2012 to AHTN 2017 and Impact assessment report of this Decree.
For customs declarations of imported goods registered from June 11, 2019 to the days before February 20, 2020, if all the conditions for enjoying the special preferential import tax are met as prescribed in this Decree and if the tax has been paid at a higher rate, the customs authority will handle the overpaid amount in accordance with the law on tax management.
The meaning and impact of Decree No. 07/2020/ND-CP
Decree No. 07/2020/ND-CP issued with the purpose of implementing the AHKFTA Agreement and still ensuring the consistency in the Vietnamese legal system as well as compatibility with other international treaties in which Vietnam is a member.
It is clear that Vietnam has demonstrated its cooperative efforts in fulfilling its commitment on import duties in the AHKFTA Agreement through the issuance of Decree No. 07/2020/ND-CP. The Decree, effective in February 20, 2020, will contribute to speed up the flow of trade, investment and production between Vietnam and Hong Kong. The tax cuts on imported goods from AHKFTA members contribute to the diversification of imported goods, which initially bring positive effects to the development of Vietnam economy, attract more investors from Hong Kong as well as ASEAN countries into Vietnam. This is an opportunity for Vietnam to gain deeper access to regional and international markets.
Photo: Vaft.edu.vn & Ven.vn