Import Taxes in Vietnam: Everything you need to know

Imports are a crucial part of Vietnam's economy as it allows businesses to get materials and components that are not available locally. Vietnam enables foreign investors to establish completely foreign-owned import companies. However, before you set up an import-oriented business in Vietnam, it is crucial to understand the import fee structure.

Like any other country in the world, Vietnam also has import taxes to protect local businesses and industries. Not paying these import taxes can result in penalties and regulatory issues. The import tax rates for importing goods in Vietnam vary significantly from country to country.

On top of the import tax rates, Vietnam has additional import tariffs that you must calculate when importing goods. So, to ensure how much import tax you have to pay in Vietnam, you must know what import tax rate applies to your goods. On top of that, you also have to make sure you understand what additional tariffs apply to your goods to stay compliant.

Unless you have a Vietnamese tax expert keeping track of various import taxes, it can be challenging to calculate your tax dues accurately. That is where Zora Consulting comes in with our tax experts, who can assist with calculating import taxes and fees per Vietnam's import tax standards. That said, if you are interested in learning more about import taxes and fees in Vietnam, we suggest you keep reading until the end.

What is the import tax rate in Vietnam?

As mentioned earlier, knowing the correct import tax rate is essential to calculating your payable import taxes.

Since Vietnam has trade contracts with different nations, the import tax varies depending on the country the goods are being imported from. Here are the three types of import tax rates that are applicable in Vietnam:

Preferential import tax rate: The preferential import tax rate applies to countries with a Most Favoured Nation status in Vietnam. Goods from these countries into Vietnam can be cleared at a lower tax rate since these nations enjoy a Most Favoured Nation status.

Special preferential tariff rates: Countries with a Free Trade Agreement with Vietnam can send goods to Vietnam at a special preferential tariff. ASEAN countries are among the nations that can benefit from these tariff rates.

Ordinary tariff rates: Countries that don't fall into the categories mentioned above get ordinary tariff rates when sending goods to Vietnam. The ordinary import tax is 70% higher than the preferential rates.

Other taxes applicable to imports in Vietnam

Apart from the import tax, additional items may apply to imported items in Vietnam. Remember that these taxes are on top of the import tax you must pay when importing goods. With that said, here are the additional taxes applicable to imported goods in Vietnam:

Value Added Tax (VAT): Value-added tax applies to certain goods, and depending upon the nature of the goods, the VAT rate can be 0%, 5%, or 10% of the good's value.

Vietnamese law exempts certain essential goods that can't be produced in Vietnam from the VAT tax.

Environmental Protection Tax: Vietnam greatly emphasises environmental protection, and the environmental protection tax is an example of its commitment. This tax applies to goods that may harm the environment, wildlife or human health.

So, if you import goods such as coal, gasoline, or plastic into Vietnam, you must pay the environmental protection tax.

Special Consumption Tax: Special consumption tax is a form of luxury tax that applies to the import of special items. Non-essential goods such as alcohol and tobacco-based products are most commonly taxed under the special consumption tax. However, suppose you are importing vehicles with less than 24 seat capacity, motorcycles with an engine larger than 125cm3, air conditioners, aeroplanes, casino items, golf, and petroleum goods. In that case, they may be subject to a special consumption tax.

How do you calculate the import tax in Vietnam?

Calculating the import tax involves multiplying the imported good's value with all the different taxes it is subject to. The formula for calculating the import tax in Vietnam is

Import tax = tax rate x (value of imported goods + VAT (if applicable) + SCT (if applicable) + EPT (if applicable)).

The important part of calculating the import tax for an item in Vietnam is knowing which taxes are applicable to that item. That is where a local tax expert can help you identify the applicable taxes as well as the correct tax rates to ensure accurate calculations.

What do you need in order to import goods into Vietnam?

We have mentioned at the start of the article that you must have a registered business in Vietnam in order to import goods in Vietnam. However, there are some additional requirements that must be met. Here are all the requirements for importing goods into Vietnam:

Have a valid business license: A business license can be obtained once you formally register your business in Vietnam. It is one of the most basic requirements for importing most goods.

Have an import/export code: The Vietnamese government issues a dedicated import/export code to businesses to identify goods. You can register for this code to legally import goods into Vietnam.

Have a valid import license: You must have a valid import license to import goods into Vietnam. However, certain goods can be imported without an import license.

Before you can import the goods, you must pay all the taxes to the General Department of Taxation. Timely import tax payment is essential for hassle-free customs clearance when your goods reach the juridictions of the country.

Conclusion

Foreign business owners often find it difficult to navigate the complex import taxes and fee structures of Vietnam. That is where Zora Consulting can help make sure you can keep your imports compliant with the Vietnamese import regulations by assisting with timely import tax payments.

We can also help you save up on import taxes by availing tax exemptions that may be applicable to the type of goods you want to import.