Vietnam News Brief: Import Tariffs, Business Fees, and Industrial Liquor Production
Vietnam Cuts Imports Taxes Under Free Trade Agreement with the Eurasian Economic Union
The Vietnamese government has issued a decree to cut import taxes for the 2016-18 period under the free trade agreement between Vietnam and the Eurasian Union (EAEU). The reductions will be implemented in the following three stages and result in import taxes on 4,959 tariff lines being dropped to zero:
- Stage 1 – Runs from October 5 to December 31, 2016
- Stage 2 – Runs from January 1, 2017 to December 31, 2017
- Stage 3 – Runs from January 2018 to December 31, 2018
Goods that will benefit include input material for production, like textile, garments, leather, footwear and plastic as well as key export products such as shoes, garments, seafood, electronic products, tea, coffee, vegetables, rubber, milk, steel, chemical products and machinery and equipment. The Vietnam-EAEU FTA came into effect on October 5 and bodes well for Vietnamese industries. Vietnam remains a key exporter to the EU; seafood exports in 2015 reached US$1.2 billion worth of fish products – 46 percent of which consisted of shrimp.
New Business Fee Structure Effective from January 2017
Vietnamese Authorities have released Decree No 13/2016 which stipulates that companies dealing in production and business activities with a charter capital of more than US$444,000 must pay a business fee of US$134 (VND 3 million) per year. The new regulation will take effect on January 1, 2017. For branches and representative offices of companies, the annual fee will be US$45 (VND 1 million). In addition, individuals and businesses involved in production and business activities that generate annual revenue of more than US$22,385 (VND 500 million) must pay a fee of US$45 per year, while those with annual revenue of US$13,431 (VND 300 million) to US$22,385 will have to pay US$22 (VND 500,000 per year).
However, individuals or households in irregular production and businesses activities or those producing salt will be exempt from paying fees. Other groups that are exempt include, businesses cultivating and catching seafood, or providing fishery logistics and services, press agencies and cooperatives dealing in agricultural production services.
Draft Decree on Industrial liquor Production
The Ministry of Industry and Trade has come up with a draft decree on conditions for licensing industrial production of liquor, and covering the rights and obligations of such producers. As per the draft, licensed businesses would be required to be legally established and have a liquor production plan with an approved master plan on development of the beer-liquor industry. Businesses will also be required to have the machinery, equipment and technologies needed to meet the planned production scale, and use all legal labels, and have technicians suitable for liquor production.
In addition, companies will be required to ensure food safety, environment protection, fire prevention and health requirements for workers directly in liquor production. The ministry would be responsible for issuing and renewing license for businesses with an annual output of three million liters or more. For those producing less, provincial level industry and trade departments would approve licenses. Licenses will be valid for 15 years. Such businesses will also be able to distribute liquor to wholesale stores or retail or export without having to apply for licenses.
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