SOUTH KOREA VS. VIETNAM
Similar
- VN and South Korea both mainly apply non-ad valorem tariffs on their imports.
Specifically, Viet Nam bound all of its tariff lines at ad-valorem rates, with the exception of
15 tariff lines applied to second-hand motor vehicles (HS 8703), which are bound at the
lower of a compound rate (150% + USD 15,000) or 200% ad valorem. For South Korea, over
99% of tariffs are levied at ad valorem duties with 129 different rates (88 ad valorem duties
and 41 alternate duties).
- Both Vietnam and South Korea are parties to the plurilateral Information Technology
Agreement, with zero duty on such goods applied.
- Both Vietnam and South Korea have a gap between the MFN applied rate and the final
bound rate (2.8% and 4.2% respectively), which indicates a level of uncertainty to these
governments’ tariff measures
- In response to Covid-19, during the COVID-19 pandemic, the South Korean government
temporarily removed import tariffs on personal protective equipment such as sanitary
products and surgical masks. Vietnam also temporarily eliminated applied MFN tariffs on
medical and certain personal protective equipment.
- Both Vietnam and South Korea take part in many regional and bilateral trade agreements,
which results in trade liberalization and the promotion of free trade between these 2
countries and the world.
Difference
Korea
VN
Tariff framework
Since January 2017, Korea has used the 2017
version of the Harmonized System of Tariff
Classification (HS), at present consisting of
12,242 10-digit lines (1 line fewer than in 2016).
Viet Nam's tariffs are established by the
Standing Committee of the National
Assembly in the form of statutory rates at
the 4-digit HS level, which constitute duty
bands within which the Government fixes
the applied duty rates.
Form of tariff
The general tariff schedule is in the form of
an Annex to the Customs Act.
The customs tariff is generally issued
annually in the form of an MOF circular.
Applied MFN rates
- The 2021 simple average (unweighted) MFN
decreased slightly to 13.9% for all goods,
60.4% for agricultural products and 6.3% for
non-agricultural goods (WTO definition).
- The highest average tariffs were levied on
the vegetable products and prepared food,
which indicates a higher concern for food
security and supplementary consumption
tax.
- The simple average applied MFN rate for
all goods is 11.9% in 2013; 18.1% for
agricultural goods; and 10.9% for
non-agricultural products (WTO
definition).
- The highest tariffs include: 135% for five
tariff lines concerning cigarettes (HS
2402.20 and 2402.90); 100% for two tariff
lines concerning certain tobacco products
such as cigars, cheroots, and cigarillos (HS
2402.10); and worn clothing and other
worn articles (HS 6309.00)
Tariff quotas
Korea levies tariff quotas based on two
classifications: agriculture and autonomous
tariff quota
- Agriculture tariff quotas: Korea applied
TRQs, under its multilateral agricultural
market access commitments, on 229 10-digit
tariff items in 2021.
- Tariff quotas continue to be administered
or allocated by 24 different organizations as
of 2021 including ministries, state trading
entities and various producer associations
- Mechanisms used for quota allocation
(depending on the product) include
auctioning, allocation to designated agency,
real demand allocation54, and a combination
thereof
- Autonomous tariff quotas: Korea grants
concessional tariffs using autonomous tariff
quotas, mainly for raw materials, inputs,
semi-processed goods, components, parts,
and machines
Vietnam mainly applies tariff quotas for
eggs, salt and tobacco
- Tariff quotas for eggs, refined and raw
sugar, and salt are decided by the Ministry
of Agriculture and Rural Development
(MARD). Tariff quotas for unmanufactured
tobacco are decided by the MOIT, which
announces annual import tariff quotas
and decides on methods for managing
imports of each commodity
- Quotas for salt are allocated to traders
that wish to use it for manufacture, as
confirmed by a competent regulatory
authority. Quotas for poultry eggs are
allocated to traders that wish to import
them. Quotas for refined and raw sugar
are allocated based on annual MOIT
guidelines in consultation with the MARD
and the MOF. Quotas for unmanufactured
tobacco are allocated to traders that have
been issued a license by the MOIT to
manufacture cigarettes using imported
unmanufactured tobacco.
- Viet Nam also has tariff quotas for
preferential imports of rice, paddy, and
unmanufactured tobacco from Cambodia
and Lao People's Democratic Republic in
accordance with bilateral memoranda
concluded in 2005 (Laos) and 2007
(Cambodia). In-quota volumes are subject
to 0% import duty.
Duty exemptions
In 2021, South Korea removed duties on
19.6% of all tariff lines, which is a marked
increase from 15.9% in 2016. Specifically,
100% of cotton imports and a majority of
machine and electronics imports are
duty-free, while food products and clothing
do not enjoy such preferential treatment. In
contrast, no MFN duty exemption was made
Under Article 16 of the Law, import duty
exemptions are extended to:
- Raw materials, supplies and components
imported for export production;
- Goods temporarily imported for
re-export;
- Certain goods and fixed assets imported
for projects entitled to investment
to coffee, tea, vegetable products or animal
products.
incentives; certain goods imported to
serve petroleum activities
- Imported goods related to information
and technology, the environment, and
education
- Certain goods, which are bought, sold,
or exchanged across the border by border
residents within allowable quotas
CHINA VS VIETNAM
SIMILARITY BETWEEN VN and China
- Apply the same framework of tariff which includes MFN, BoundTariff, Tariff quotas,
Preferential Rates, Tariff Exemption
- High tariff imposed on product such as tobacco, sugar
- Most popular kind of tariff is ad valorem
DIFFERENCES
Tariff framework:
VN: Viet Nam's tariffs are established by the Standing Committee of the National Assembly
in the form of statutory rates at the 4-digit HS level, which constitute duty bands within
which the Government fixes the applied duty rates.
China: consists of 8580 lines at the 8 digit level in 2017 Harmonized system.
China's tariff structure is composed of MFN tariff rates, "agreement tariff rates", special
preferential tariff rates, general tariff rates, and tariff quota rates
MFN Tariff:
+ China has much lower average MFN only 7.1 which is amount about half of that of VN
+ The amount of lines that carries specific rate is 34 whereas VN only have one exception
thấy use that kind of tariff which is for second hand motor vehicles
+ Highest tariff rate is 65% applicable to 20 tariff lines ( mainly wheat and cereal products)
in China while VN imposes stricter rates for cigarettes and tobacco which is up to 135% and
100% respectively. Some other goods that also pay a high rate of tariff are sensitive items
such as sugar, wines and spirits, motor vehicles. And it can be seen that in China only 57%
of tariff rate is imposed on tobacco which may imply thật VN has stricter restrictions on
these goods than China.
- Tariff quotas:
In China: Wheat (7 tariff lines), corn (5 lines), rice (14 lines), sugar (7 lines), wool and wool
top (9 lines), cotton (2 lines), chemical fertilizer (3 lines).
In VN: mainly about eggs, sugar and tobacco
Quotas for salt are allocated to traders that wish to use it for manufacture, as confirmed by
a competent regulatory authority. Quotas for poultry eggs are allocated to traders that
wish to import them. Quotas for refined and raw sugar are allocated based on annual MOIT
guidelines in consultation with the MARD and the MOF. Quotas for unmanufactured
tobacco are allocated to traders that have been issued a license by the MOIT to
manufacture cigarettes using imported unmanufactured tobacco.
Bound tariff:
China:Entry into the WTO, China bound 100 % of its tariff at ad valorem rates ranging from
0-65% for agriculture and from 0-50% for nón agricultural products
VN: Most tariff lines were initially bound in the 0%-40% range, with peaks in the initial
bound rates for "sensitive" items such as sugar (100%), wines and spirits (65%), tobacco
(80%-150%), and motor vehicles (100%).
Preferential:
VietNam
VN: tariff preferences under regional and bilateral preferential trade agreement to its
ASEAN partners, Australia and New Zealand, Chile, China, thể Eurasian Economic Union,
India, Japan, and the Republic of Korea
FOR China:
Preferential rates: PTAs (preferential trade agreement) and RTA (regional trade agreements)
made Hong Kong and Macao the lowest average tariff duties areas, ranging between 0.04%
and 6.6%.
Preferential tariff treatment to LDCs’ imports: As of Feb 2021, 41 LDCs enjoy 0 tariffs on 97%
of tariff lines from China.
- Tariff Exception:
VN:
Under Article 16 of the Law, import duty exemptions are extended to:
- raw materials, supplies and components imported for export production;
- goods temporarily imported for re-export;
- certain goods and fixed assets imported for projects entitled to investment incentives;
- certain goods imported to serve petroleum activities
- imported goods related to information and technology, the environment, and education
certain goods, which are bought, sold, or exchanged across the border by border residents
within allowable quotas
China:
- goods in a single consignment on which the duties are estimated to be less than CNY 50
- advertising material and samples of no commercial value
- goods donated by international organizations or foreign governments
- goods damaged prior to customs clearance fuels and provisions to be used by vessels
that are in transit in China
- goods imported for daily use valued less than CNY 8,000 a man a day. Tariff concessions
can apply to goods that are processed and exported within a specific period of time.
JAPAN VS VIETNAM
Both the tariff rate is determined using Harmonized System (HS) codes.
Vietnam
Formation
Japan
government fixes the applied tariff rates
temporary
tariff
measures
act
provides
for
temporary exemptions to allow adjustments for
the development of economy
MFN applied
tariff:
Viet Nam bound all of its tariff lines at ad
Japan has three distinct sets of rates - statutory
valorem rates and most tariff lines were
rates including both general and temporary rates;
Japan
generally
apply more
rates
initially bound in the 0%-40% range, with
general rates are set with a long-term perspective;
peaks in the initial bound rates for
temporary rates are used to modify general rates
"sensitive" items while
to meet policy needs or others; WTO bound rates:
Where the temporary, general or preferential rate
is above the WTO bound rate, the latter applies to
WTO Members; preferential rates (under the GSP
and RTAs)
agricultural
duties for agricultural goods lower than
duties for agricultural goods HIGHER than
goods
for non-agricultural products
non-agricultural products
High tariff
The highest tariffs include: five tariff lines
Simple average applied MFN tariffs are high for
concerning cigarettes;
footwear
two tariff lines
and
headgear,
prepared
for
foods,
concerning certain tobacco products such
vegetables, live animals, hides and skins, arms and
as cigars, cheroots, and cigarillos; and
ammunition, and textiles and clothing
worn clothing and other worn articles
non-ad
Only second-hand motor vehicles are
7.1% of Japan's tariff lines are non-ad valorem. Final
valorem
subject to applied non-ad valorem rates.
bound for non-ad valorem is higher than Vietnam’s.
Tariff rate quotas regulate imports of eggs,
Japan applies 18 tariff rate quotas, covering 101
sugar cane, tobacco, and salt.
tariff lines (japan applies more tariff rate quotas)
tariff
rate
quotas)
Vn has higher applied MFN rates than Japan (11.9% in 2020, up from 10.4% in 2013; japan 6.3% in
2019 up from 6.1% in FY2016)
The
difference
between
bound
and
applied MFN rates leaves some scope for
the overall gap between the simple averages of
MFN applied and bound rates remains minimal
thus conferring a high level of predictability
flexibility in Viet Nam's tariff policy
Exemptions
import duty exemptions are extended to:
raw materials, supplies and components
imported for export production; goods
temporarily
imported
for
re-export;
certain goods and fixed assets imported
for
projects
entitled
to
investment
incentives; certain goods imported to
serve petroleum activities; and imported
goods
related
technology,
the
to
information
and
environment,
and
There are two types of customs duty exemptions:
(i) a permanent system, as set out in the Customs
Tariff Law; and (ii) a temporary system, as set out
in the Temporary Tariff Measures Law
- provides for duty reductions/exemptions in
cases where the prices of imported daily
necessities have increased (to prevent price
increases of daily necessities, such as food and
clothing), to maintain stability in people's everyday
lives. customs duties may be reduced or exempted
on
imported raw materials
education. also extends to
certain goods, which are bought, sold, or
exchanged across the border by border
residents within
allowable quotas.
Thailand - Việt Nam
Similar:
Both countries have comparable tariff structures based on products and their origins. They
both protect the agricultural sector more than non-agricultural sectors when putting all
the pieces of the complex web of trade distortions together.
Difference
Tariff structure:
- In Thailand, Thailand's tariff applies the ASEAN Harmonized Tariff Nomenclature
(AHTN) consisting of 10,813 tariff lines (9,558 in 2015) at the HS eight-digit level
commodity classification code of AHTN that applies to all imports, i.e. imports from
ASEAN member countries and from any other countries, in the HS17 nomenclature
- In Vietnam. Viet Nam's tariffs are established by the Standing Committee of the
National Assembly in the form of statutory rates at the 4-digit HS level, which
constitute duty bands within which the Government fixes the applied duty rates
Thailan
1. Tariff bindings:
- Thailand bound 76.3% of its tariff lines at the
HS eight-digit level: 100% binding on
agricultural products (WTO definition), and
73% on non-agricultural products.
- The rates of tariff lines carrying ad valorem
rates range from zero to 226% (raw silk) for
agricultural products, and from zero to 80%
(motor vehicles) for non-agricultural
products.
2. Tariff quotas
- Tariff quotas are applied to 128 tariff lines, all
of which relate to 23 agricultural product
groups.
3. Applied tariff tax
- The simple average applied MFN tariff rate
rose from 13.4% in 2014 to 14.5% in 2020
- the number of tariff lines with a tariff rate of
80% increased from 106 in 2014 to 436 in 2020
- the average tariff rate on agricultural products
(32.7%) is much higher than that on
non-agricultural products
VN
1. Tariff bindings:
- Viet Nam commits to set binding for all tariff
lines (at the time of accession, there were
10,600 tariff lines, in compliance with HS
2002)
- The simple average applied MFN rate for all
goods is 11.9%, compared with 10.4% in 2013
(Table 3.1 and Chart 3.1); 18.1% for agricultural
goods; and 10.9% for non-agricultural
products (WTO definition).
2. Tariff quotas
- Viet Nam is applying measures to limit the
imported amount in the form of tariff quotas
(replacing the form of import permission) for
raw tobacco, poultry eggs, raw and refined
sugar and salt.
3. Applied tariff tax
- Viet Nam fully implemented its
tariff concessions in 2019; its final
bound rates average 14.7% for all goods.
Most tariff lines were initially bound in
the 0%-40% range, with peaks in the
initial bound rates for "sensitive" items
such as sugar (100%), wines and spirits
-
Overall, tariff protection is highest on fully
processed products, and lowest on
semi-processed products.
- In 2020, 30.4% of tariff lines are duty-free,
while 42.6% of applied tariff rates are below
10.0%, and 16.8% range from 10% to 30%
Sixty-two tariff lines (0.6%) carry ad valorem
tariff rates higher than 100%. The highest ad
valorem rates apply to: raw silk (226%); onion
seeds (218%); and cream not containing added
sugar (216%). All these are out-of-quota rates
4. Tariff exemption
- a)
Tariff reductions and exemptions for the
importation of machinery, equipment and
materials have been maintained.
- In accordance with the Customs Tariff
Decree B.E. 2530 (1987), goods exempted from
import duties include:
+ export articles being re-imported, with
a re-importation certificate
+ imported articles sent out of the
country for repairs, if re-imported with
a re-importation certificate
+
temporarily imported articles, to be
re-exported within six months
+ parts and accessories of aircraft or
vessels imported to be used for repair
or construction
+ fuel oil, lubricating oil and lubricants
used for the replenishment of aircraft
or vessels of a gross tonnage of more
than 500 tonnes.
5. Preferential tariff
Thailand provides tariff- and
quota-free access to practically all goods
originating in ASEAN partners under the
ASEAN Trade in Goods Agreement
(ATIGA).
(65%), tobacco (80%-150%), and motor
vehicles (100%). Viet Nam is a party to
the plurilateral Information Technology
Agreement, with zero duty on such
goods applied.
- The simple average applied MFN rate
for all goods is 11.9%, compared with
10.4% in 2013 18.1% for agricultural
goods; and 10.9% for non-agricultural
products (WTO definition).
4. Tariff exemption
- Viet Nam exempts various goods
from customs duties. Exemptions have
been granted pursuant to the Law on
Export Tax and Import Tax and Articles
10 and 12 of Decree No.
134/2016/ND-CP (guidelines for the
Law on Export Tax and Import Tax)
since their issuance on 20 Two kg of
paddy is considered equivalent to 1 kg
of rice on 1 September 2016
Under Article 16 of the Law, import
duty exemptions are extended to:
+ raw materials, supplies and
components imported for
export production;
+
goods temporarily imported for
re-export;
+
certain goods and fixed assets
imported for projects entitled to
investment incentives; certain
goods imported to serve
petroleum activities
+
imported goods related to
information and technology, the
environment, and education·
certain goods, which are bought,
sold, or exchanged across the
border by border residents
In addition, Thailand applies
preferential tariffs under the trade
agreements signed by ASEAN with
countries mentioned below, and under its
own bilateral trade agreements with
others.Thailand also grants preferences to
participants in the Global System of Trade
Preferences among Developing Countries
(GSTP). Under Thailand's bilateral and
regional free-trade agreements, the
degree of preference over MFN tariffs
varies. The simple average tariff under
ATIGA is 0%, with rates ranging from zero
to 5%.
within allowable quotas
- Under Article 18 of the Law, tax
reductions apply to imports (and
exports) that are damaged or lost under
customs supervision and the damage or
loss is verified by a competent
organization.
- Under Article 19, import duties are
refunded if:
+
a duty payer that has paid an
import duty has to re-export the
imported goods
+
a duty payer has paid a duty
for goods imported for
production or business activities
but later uses these goods for
export production and exports
such products
+ a duty payer has paid a duty for
certain machinery, equipment,
tools, or vehicles belonging to
an organization or individual
that is licensed to conduct
temporary import for re-export
5. Preferential tariff
- Viet Nam accords tariff preferences under
regional and bilateral preferential trade
agreements to its ASEAN partners, (Australia
and New Zealand, Chile, China, the Eurasian
Economic Union, India, Japan, and the
Republic of Korea)
EU - VIETNAM
I. Overview:
The integrated Tariff of the European Union (TARIC): a database incorporating tariffs,
nomenclatures, agricultural measures, trade defense instruments, prohibitions,
restrictions.
Trade remedies used in Vietnam include anti-dumping and safeguard measures. In
addition, in response to foreign trade remedy measures (as of June 2018, there were a total
of 107 cases of investigation and application of trade remedies by other countries against
exported goods). related to Vietnam), the Vietnamese Government has regularly directed
the monitoring and handling of cases.
In theory, nations can deploy a mix of tariff and non-tariff protective measures to protect
trade. It is a fact that trade policy has typically tended to be correlated with protectionism.
From a bigger viewpoint, the European single market appears to be open to itself and to
participants but not to the rest of the world, despite the fact that the majority of their trade
agreements are created at the member state level, such as import quotas
I.
SIMILARITIES
Vietnam and the EU both apply a common import tariff for goods of the other's origin when
imported into each other's territories. Basically, the import tax cuts under the EVFTA
Agreement are divided into the following groups:
- Group of immediate elimination of import tax: is a group of goods for which import tax
will be eliminated as soon as the EVFTA Agreement comes into effect;
- Group to eliminate import tax according to the roadmap: Import tax will be reduced to
0% (from the base tax rate) after a certain period of time (the roadmap). According to the
EVFTA Agreement, almost 100% of the tariff lines and import turnover of goods of the two
sides will be eliminated after a relatively short route. With the EU up to 7 years and with
Vietnam up to and 10 years. Particularly with some sensitive tax lines, Vietnam has achieved
a roadmap to eliminate import tax after 15 years;
- Group applying tariff quotas (TRQ): For this group of goods, import tax can only be
eliminated or reduced for a certain volume of goods (the quantity of goods within the
quota). With the import volume exceeding the quota in the schedule of commitments, the
applicable import tax rate will be higher, or not enjoy preferential treatment;
- Group of uncommitted goods: This is a group of goods that are not committed to
eliminating or reducing import taxes. The application of import tax shall be according to
the domestic regulations of each party.
III. DIFFERENCES
EU
VN
Form
The EU has established a Common Customs Tariff
(CCT) for the import of goods from external markets.
The customs tariff is generally issued
annually in the form of an MOF circular.
Price
applies
There have been no significant changes in the EU's
applicable tariff structure since the Last Assessment
and the tariff rates have remained virtually identical
(Table 3.3). For example, the average simple tax rate
generally remains at 6.3%, and most other taxes differ
only slightly due to statistical differences. The only
notable change is the slight increase in the number of
duty-free tariff lines. The applied MFN tariff rates are
generally the same or close to the bound WTO rates;
therefore, the EU does not have any significant
binding overhang.
- The simple average applied MFN rate
for all goods is 11.9% in 2013; 18.1% for
agricultural goods; and 10.9% for
non-agricultural products (WTO
definition).
- The highest tariffs include: 135% for
five tariff lines concerning cigarettes (HS
2402.20 and 2402.90); 100% for two tariff
lines concerning certain tobacco
products such as cigars, cheroots, and
cigarillos (HS 2402.10); and worn clothing
and other worn articles (HS 6309.00)
MFN
- If a country is not a party to a preferential trade
agreement, it must impose a Most
Favored Nation (MFN) Tariff on all of its trading
partners who are also WTO members.
- As a result, MFN rates are really the highest (most
onerous) tariffs that WTO members impose on one
another (Kaushik, 2016).
- From 2016 to 2019 the imposed tariff structure of
the EU has not significantly changed, and the rates
are still essentially the same (Appendix 1). For
instance, the overall simple average tariff remains at
6.3%, whereas the majority of others only vary
slightly because of statistical anomalies. The tiniest
increase in the number of duty-free tariff lines was
the only significant change. The MFN applicable rates
are typically the same as or very similar to the WTO
bound rates; as a result, there is no considerable
binding overhang for the EU.
In the EVFTA, Vietnam has reserved the
right to apply export tax on 526 tariff
lines, including important products such
as crude oil and coal (except coal for
coking and coking coal). For tax lines
with relatively high current export tax
rates, Vietnam commits to an export tax
ceiling of 20% for a maximum period of 5
years (only for manganese ore there is a
ceiling of 10%). With other products,
Vietnam commits to eliminate export tax
according to a maximum roadmap of 16
years.
Preferential One that is covered by a preferential trade agreement
Tariffs
is known as a preferential tariff. In essence, countries
agree to charge a rate that is lower than the MFN
rate. A customs union, such as the European
Community, has practically zero preferential tariff
rates on all goods. All parties concur to share the
Tariff preferences under regional and
bilateral preferential trade agreement to
its ASEAN partners, Australia and New
Zealand, Chile, China, thể Eurasian
advantages of reducing tariffs between them in these Economic Union, India, Japan, and the
agreements, which are reciprocal. A percentage
Republic of Korea
reduction from the MFN tariff is stated in several
agreements for members, but they are not necessarily
zero tariffs. As a result, preferences vary between
partners and agreements
- The European Union has several unilateral
preference initiatives available. One such program is
called Everything But Arms (EBA). To be more specific
about this
program, all imports of goods from least developed
countries (LDCs) into the EU are exempt from taxes
and quotas under the EBA scheme, with the
exception of arms and
ammunition. Here is the list of countries falling under
the EBA agreement in January 2019. Be noted that,
from a specific importing partner and for a specific
commodity, exporting nations may have access to
multiple separate preference scheme
Bound
Tariffs
Basically, the bound tariff is the highest MFN tariff
level applicable to a particular commodity line.
Countries make agreements regarding bound tariff
rates
rather than actual applied rates when they join the
WTO or when WTO members bargain tariff levels
with one another during trade rounds. Moreover, the
Bound Tariff is not always the rate that a WTO
member actually charges for the products of other
WTO members. As long as they don't go above their
bound levels, the changes of their tariffs
is flexible on a non-discriminatory basis
Tariff
quotas
According to the commitment, as soon as the
Agreement comes into effect, the EU will eliminate
import tax on 85.6% of tariff lines, equivalent to
70.3% of Vietnam's export turnover to the EU
Most tariff lines were initially bound in
the 0%-40% range, with peaks in the
initial bound rates for "sensitive" items
such as sugar (100%), wines and spirits
(65%), tobacco (80%-150%), and motor
vehicles (100%).
Vietnam mainly applies tariff quotas for
eggs, salt and tobacco
- Tariff quotas for eggs, refined and raw
sugar, and salt are decided by the
Ministry of Agriculture and Rural
Development (MARD). Tariff quotas for
The agricultural sector stands out in the tariff
unmanufactured tobacco are decided by
analysis, due to the significantly higher tax rates, the
wide range of tariffs, the use of non-pricing rates, and the MOIT, which announces annual
import tariff quotas and decides on
the use of tariff quotas. Nearly all tariffs above 20%
methods for managing imports of each
are in the agricultural sector. The highest taxes in
commodity
agriculture are concentrated in the animal and animal
products sectors, dairy, sugar and confectionery. The
dairy industry continues to be the industry with the
highest level of protection, with high tax rates, all of
which are non-taxable sectors by valuation and no
duty-free lines.
Duty
exemptions
For non-agricultural products, fish and fishery
products (11.8% on average) and clothing (11.6%) stand
out as the sectors with the highest levels of tariff
protection in the total average. average low is 4.2%
for non-agricultural products
- Quotas for salt are allocated to traders
that wish to use it for manufacture, as
confirmed by a competent regulatory
authority. Quotas for poultry eggs are
allocated to traders that wish to import
them. Quotas for refined and raw sugar
are allocated based on annual MOIT
guidelines in consultation with the MARD
and the MOF. Quotas for
unmanufactured tobacco are allocated to
traders that have been issued a license by
the MOIT to manufacture cigarettes
using imported unmanufactured tobacco.
- Viet Nam also has tariff quotas for
preferential imports of rice, paddy, and
unmanufactured tobacco from Cambodia
and Lao People's Democratic Republic in
accordance with bilateral memoranda
concluded in 2005 (Laos) and 2007
(Cambodia). In-quota volumes are subject
to 0% import duty.
Similar to the case with the MFN tariffs, the
accessibility for non-agricultural goods is greater
than for agricultural goods, with some partners
having 100% of non-agricultural goods exempt from
and with tariffs. simple average of non-agricultural
products below 1% in all modes except GSP. The
agricultural sector, on the other hand, has a simple
average tax rate of over 10% for many partners.
Overall, the proportion of duty-free flows has
increased since the Last Assessment, due to the
phased implementation of a number of agreements
and improved new agreements with certain partners,
for example: Iceland. At the same time, the simple
average tax rate is slightly reduced for many
agreements for similar reasons.
Under Article 16 of the Law, import duty
exemptions are extended to:
- Raw materials, supplies and
components imported for export
production;
- Goods temporarily imported for
re-export;
- Certain goods and fixed assets
imported for projects entitled to
investment incentives; certain goods
imported to serve petroleum activities
- Imported goods related to information
and technology, the environment, and
education
- Certain goods, which are bought, sold,
or exchanged across the border by
border residents within allowable quotas
INDIA VS VIETNAM
Vietnam
Tariff Framework
Applied MFN
Tariff Quotas
Viet Nam's tariffs are established by the
Standing Committee of the National Assembly
in the form of statutory rates at the 4-digit
HS level, which constitute duty bands within
which the Government fixes the applied duty
rates.
All tariffs are bound, and mostly in the
0%-40% range. The simple average applied
MFN rate for all goods was 11.9% in 2020, up
from 10.4% in 2013, mainly due to the change
from the HS12 to the HS17 nomenclature and
the splitting of several tariff lines. Only
second-hand motor vehicles are subject to
applied non-ad valorem rates. The highest
tariffs include 135% for five tariff lines
concerning cigarettes. In 2020, the average
bound rate was 14.7%. The simple average
applied MFN tariff was 18.1% for agricultural
products (WTO definition) and 10.9% for
non-agricultural products. The difference
between bound and applied MFN rates leaves
some scope for flexibility in Viet Nam's tariff
policy.
Tariff quota: mainly about eggs, sugar and
tobacco
India
The basic tariff structure remains
unchanged since 2015. However,
following the adoption of the GST in 2017,
the additional duties and special
additional duties previously added to the
basic tariff were removed.
In India, both no ad valorem and also ad
valorem pricing tax rates are used.
However, the vast majority of tax lines
(93.9%) are subject to value-based tax.
The non-tariff rate applies to 725 tariff
lines (6.1%) in total
The most common tariff rates continue
to be 10% (31.7% of all tariff lines) and
7.5% (24.4%). The highest rates, above
60%, apply to products such as alcoholic
beverages (150%), followed by animals
and their products; fruit, vegetables and
plants; coffee and tea; and certain motor
vehicles, all with tariffs of 100%.
India bound 75.3% of its Tariff Schedule.
It bound 100% of the tariff lines related
to agricultural products, at rates ranging
from 10% to 300%, and 71.7% of the
tariffs related to nonagricultural
products, in general at lower tariff rates,
ranging from 0% to 150%. The highest
bound rates apply to oil seeds, fats, oils
and their products.
India has MFN tariff rate quotas (TRQs)
for skimmed milk and some types of
cream, maize, and some oils. TRQs were
also negotiated under the preferential
agreements with Nepal and Sri Lanka. In
general, there are no imports under
TRQs.
Tariff exemptions
- Viet Nam exempts various goods from
customs duties. Under Article 16 of the Law,
import duty exemptions are extended to:
· raw materials, supplies and components
imported for export production;
·
goods temporarily imported for
re-export;
·
certain goods and fixed assets imported
for projects entitled to investment incentives;
certain goods imported to serve petroleum
activities
·
imported goods related to information
and technology, the environment, and
education
·
certain goods, which are bought, sold, or
exchanged across the border by border
residents within allowable quotas
India continues to maintain a series of
tariff concessions or exemptions issued
in the public interest in order to reduce
essential imports cost and increase
domestic value added.
Tariff incentives are also available
through various export promotion
schemes, such as the Export Scheme
from India (EIS), Duty Free/Exemption
Scheme, electronic hardware technology
parks (EHTPS), export-oriented units
(EOUS), biotech parks (BTPS), and
industrial zones (STP).
Concessions may be offered according to
the end-circumstances. User's Duty-free
importation of equipment used for R&D
in the pharmaceutical, biotechnology,
and agrochemical industries is permitted.
Temporary imports into India for display
or use in specific events are considered
duty-free, subject to the importer's
statement defining the purpose of the
exhibition and excluding imports of
jewelry, semi-precious stones, or
precious stones.
Tariff preferences
India
prioritizes
processing
imports from territories with which it
has signed Priority agreements, as
long as we follow the rules of origin.
The average proportion of priorities
discussed by India in various
associations fluctuates, as does the
range of priorities. In the case of the
MERCOSUR agreement, however, the
coverage is witnessed not high (3.1%),
the duty free line accounts for 3%, and
the preferential price (14.8%) is slightly
lower than the average MFN tariff. The
number of items takes precedence in
every sentiment and is less than that
of agriculture.
US - VN
Tariff
framework
US
VN
- The Harmonized Tariff Schedule of the
United States (HTSUS) published and
maintained by
the U.S. International Trade Commission
(USITC).
- Goods are
classified according to the Harmonized
System nomenclature of the World Customs
Organization
(WCO)
-since 1 January 2018, has 10,878 tariff lines
Viet Nam's tariffs are established by the
Standing Committee of the National Assembly
in the form of statutory rates at the 4-digit HS
level, which constitute duty bands within
which the Government fixes the applied duty
rates.
at the eight-digit
level.
Form
The United States implemented the 2017
The customs tariff is generally issued annually
edition of the nomenclature established
in the form of an MOF circular
under the
International Convention on the Harmonized
Commodity Description and Coding System
effective
1 January 2017.
Applied MFN
rates
-The MFN rates are mostly ad valorem,
At 4.8% overall, the simple average tariff
remains virtually unchanged year by year
-The highest tariffs (i.e. above 100%
ad valorem or estimated ad valorem
equivalent (AVE)) affect certain agricultural
items, in particular dairy products, peanuts,
and tobacco. Outside of agriculture,
above-average applied rates are mainly
found in textiles, clothing and footwear
The simple average applied MFN rate for all
goods is 11.9% in 2013; 18.1% for agricultural
goods; and 10.9% for non-agricultural
products (WTO definition).
- The highest tariffs include: 135% for five
tariff lines concerning cigarettes (HS 2402.20
and 2402.90); 100% for two tariff lines
concerning certain tobacco products such as
cigars, cheroots, and cigarillos (HS 2402.10);
and worn clothing and other worn articles (HS
6309.00)
Tariff quotas
-The 54 tariff-rate quotas (TRQs) maintained
by the United States cover approximately
1.9% of the tariff lines in the HTSUS
-19 TRQs concern the dairy sector (dried
milk, butter, butter oil, cream, cheeses, ice
cream, etc.), and 6 cover cotton.
- Other imports subject
to TRQs include beef, peanuts and peanut
butter, sugar, chocolate, cocoa, olives,
mandarin oranges
(satsumas), animal feed, and tobacco.
- Fill rates may vary significantly between
the TRQs and over time as a result of
differing market conditions. Quotas with
low fill rates are generally administered
on a first come, first served basis.32
Vietnam mainly applies tariff quotas for eggs,
salt and tobacco
- Tariff quotas for eggs, refined and raw
sugar, and salt are decided by the Ministry of
Agriculture and Rural Development (MARD).
Tariff quotas for unmanufactured tobacco are
decided by the MOIT, which announces
annual import tariff quotas and decides on
methods for managing imports of each
commodity
- Quotas for salt are allocated to traders that
wish to use it for manufacture, as confirmed
by a competent regulatory authority. Quotas
for poultry eggs are allocated to traders that
wish to import them. Quotas for refined and
raw sugar are allocated based on annual MOIT
guidelines in consultation with the MARD and
the MOF. Quotas for unmanufactured tobacco
are allocated to traders that have been issued
a license by the MOIT to manufacture
cigarettes using imported unmanufactured
tobacco.
- Viet Nam also has tariff quotas for
preferential imports of rice, paddy, and
unmanufactured tobacco from Cambodia and
Lao People's Democratic Republic in
accordance with bilateral memoranda
concluded in 2005 (Laos) and 2007
(Cambodia). In-quota volumes are subject to
0% import duty.