Vietnam Import Tax

Vietnam, a rapidly developing nation in Southeast Asia, has become a vital player in global trade and commerce. With its dynamic manufacturing sector, rich natural resources, and growing consumer market, Vietnam is an attractive destination for international trade. As part of its integration into the global economy, Vietnam has developed a comprehensive customs and tariff system to regulate imports and protect domestic industries while fulfilling its international trade obligations. Import tariffs in Vietnam vary depending on the type of goods being brought into the country, the trade agreements in place, and special provisions for certain countries or products.

Customs Tariff Structure of Vietnam

Vietnam’s tariff system is regulated under the Ministry of Finance and aligns with the international Harmonized System (HS) Code, which classifies goods into broad categories. Import duties are typically applied as a percentage of the value of the goods being imported, although some products may be taxed based on quantity, weight, or other factors. Import tariffs in Vietnam have been gradually reduced as the country has entered various free trade agreements (FTAs), but there are still significant differences depending on product categories and countries of origin.

Harmonized System (HS) Code Classification

The Vietnamese customs system uses the HS Code, which categorizes products into chapters based on their type. Import duties depend on the classification of each product and whether Vietnam has negotiated favorable tariffs under any specific trade agreement. Vietnam is also a member of several regional and international economic organizations, such as the ASEAN Economic Community (AEC) and the World Trade Organization (WTO), which influence its tariff structure.

General Import Duties

Vietnam has a flexible tariff system with a wide range of duties based on product categories, which can be broken down into the following broad classifications:

• Agricultural Products: 10% – 30%
  • Agricultural products such as grains, fruits, vegetables, and livestock products face moderate to high tariffs to protect local agriculture and food production.
• Machinery and Equipment: 0% – 15%
  • Industrial machinery, equipment, and technological goods typically face low duties, especially for essential equipment used in manufacturing and infrastructure projects.
• Automobiles and Vehicles: 10% – 50%
  • Imported automobiles, particularly luxury vehicles, face higher duties. However, vehicles manufactured in ASEAN countries may be eligible for reduced tariffs due to regional agreements.
• Textiles and Apparel: 10% – 30%
  • Textile products and apparel imported into Vietnam are subject to varying duties, with local textile industries receiving some protection through tariffs on imported finished goods.
• Chemicals and Pharmaceuticals: 5% – 20%
  • Pharmaceuticals and chemicals, especially those used in health care and manufacturing, have relatively low import duties. Some medical products may be exempt from duties under specific conditions.
• Electronics and Consumer Goods: 5% – 20%
  • Consumer electronics, such as mobile phones, computers, and home appliances, face moderate tariffs. The government has been encouraging domestic production of certain electronics, resulting in duties on imported finished goods.

Special Import Duties for Certain Products from Special Countries

Vietnam’s import duties may vary depending on the country of origin, based on the agreements Vietnam has signed with specific nations or regions. In particular, preferential tariffs may apply to imports from certain countries with which Vietnam has free trade agreements (FTAs).

• ASEAN Countries: Vietnam is a member of the ASEAN Free Trade Area (AFTA), which allows for preferential tariffs on products imported from other ASEAN nations. Tariffs on many products, such as agricultural goods and machinery, are significantly reduced or eliminated entirely under the ASEAN Trade in Goods Agreement (ATIGA).
• China: China is Vietnam’s largest trading partner, and imports from China benefit from lower tariffs due to the China-ASEAN FTA. Many products, including electronics, machinery, and textiles, have reduced tariffs when imported from China.
• European Union (EU): The EU-Vietnam Free Trade Agreement (EVFTA), which came into effect in 2020, grants preferential tariffs on a wide range of products. Goods from the EU, such as industrial machinery, chemicals, and agricultural products, may benefit from lower duties under this agreement.
• South Korea: The Vietnam-South Korea FTA (VKFTA) also offers reduced duties on products from South Korea. Electronics, automobiles, and consumer goods imported from South Korea typically have preferential tariff rates.
• United States: While Vietnam and the United States do not have a bilateral FTA, Vietnam’s participation in the World Trade Organization (WTO) ensures that tariffs on U.S. imports are generally aligned with WTO commitments. Some high-tech products from the U.S., such as pharmaceuticals and machinery, may face lower duties.

Exemptions and Special Regimes

Vietnam offers certain exemptions and special regimes for specific categories of products or under certain circumstances:

• Diplomatic Imports: Goods imported by foreign diplomatic missions and international organizations are generally exempt from import duties.
• Goods for Investment Projects: Imports of machinery and equipment for new investment projects are often exempt from tariffs or taxed at reduced rates, particularly in sectors such as infrastructure development, technology, and renewable energy.
• Raw Materials for Domestic Production: Raw materials imported for local manufacturing may be eligible for tariff reductions or exemptions, especially if they are used in the production of export goods.

Tariff Rates by Product Category

1. Agricultural Products

Agricultural products are critical to Vietnam’s economy, both for domestic consumption and export. The government has implemented import tariffs on many agricultural products to protect local producers from foreign competition.

• Rice: 0% – 10%
  • Rice, a staple food in Vietnam, is subject to minimal tariffs, but there may be quotas or safeguards in place to protect domestic production.
• Meat and Meat Products: 15% – 25%
  • Meat products, including beef, pork, and poultry, are subject to moderate tariffs to safeguard the domestic livestock industry.
• Fresh Fruits and Vegetables: 10% – 30%
  • Fresh fruits and vegetables, particularly tropical fruits, are subject to high tariffs to protect local farmers. However, products from ASEAN countries may benefit from preferential rates.

2. Machinery and Industrial Equipment

Vietnam’s manufacturing sector is rapidly growing, and the importation of machinery and equipment is essential for the country’s industrialization.

• Industrial Machinery: 0% – 5%
  • Imports of heavy machinery and industrial equipment for manufacturing or construction projects are typically subject to low or zero tariffs to promote economic growth.
• Construction Equipment: 5% – 15%
  • Construction machinery, including cranes, excavators, and bulldozers, may face moderate tariffs, depending on the type and use.

3. Automobiles and Vehicles

Automobile imports into Vietnam are subject to higher tariffs, especially luxury vehicles and cars that are not produced locally.

• Passenger Cars: 30% – 50%
  • Luxury vehicles and passenger cars from countries outside of ASEAN often face the highest tariffs.
• Motorcycles: 10% – 20%
  • Motorcycles, particularly higher-end models, have moderate import duties, while motorcycles from ASEAN countries benefit from lower tariffs.

4. Textiles, Apparel, and Footwear

Vietnam is one of the largest textile and garment exporters in the world, and the government uses tariffs on imported textiles and apparel to protect the domestic industry.

• Clothing: 10% – 20%
  • Imported clothing, especially non-ASEAN products, faces moderate to high tariffs, though preferential treatment is available for ASEAN-made goods.
• Footwear: 15% – 25%
  • Shoes and other footwear face higher duties, especially non-ASEAN imports. Domestic manufacturers benefit from tariff protection.

5. Electronics and Consumer Goods

Vietnam has a growing electronics manufacturing industry, which influences tariff policies on consumer electronics and electrical appliances.

• Mobile Phones and Computers: 5% – 10%
  • These items have relatively low tariffs, but they may face higher taxes for luxury or premium models.
• Home Appliances: 10% – 20%
  • Larger home appliances, such as refrigerators and washing machines, are subject to moderate tariffs.

Country Facts

• Country’s Formal Name: Socialist Republic of Vietnam
• Capital: Hanoi
• Largest Cities:
  • Hanoi (Capital)
  • Ho Chi Minh City (Saigon)
  • Hai Phong
• Per Capita Income: Approximately $3,800 USD (2023 estimate)
• Population: 99.5 million (2023 estimate)
• Official Language: Vietnamese
• Currency: Vietnamese Dong (VND)
• Location: Southeast Asia, bordered by China to the north, Laos and Cambodia to the west, and the South China Sea to the east.

Geography, Economy, and Major Industries

Geography

Vietnam is located on the eastern edge of the Indochinese Peninsula, bordered by China to the north, Laos and Cambodia to the west, and the South China Sea to the east. The country has a long coastline, stretching over 3,000 kilometers, and is characterized by diverse landscapes, including mountains, dense forests, and fertile river deltas. The Mekong Delta in the south is particularly important for agricultural production, while the Red River Delta in the north is the political and economic hub of the country.