Tax & Custom Alert – December 2023

This Update highlights recent tax and custom developments in Vietnam.

New Decree on Import Management of Refurbished Goods under CPTPP Agreement

The Vietnam Government has recently issued Decree 77/2023/ND-CP on import management of refurbished goods under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP Agreement“).

Refurbished goods are defined as commodity products made up in whole or in part from recovered supplies; have a shelf life similar to the shelf life of the goods themselves when unused; perform all functions such as functions of the goods themselves when unused, with the quality and performance efficiency unchanged or similar to the quality and performance efficiency of the goods themselves when unused; and have a warranty similar to the warranty applicable to the same type of goods when unused, listed by product code in Appendices I, II, III, IV and V of Decree 77/2023/ND-CP.

Value-added Tax Reduction Policy

Enterprises must take note of the following value-added tax (“VAT“) reduction policy of the government as prescribed in Decree 44/2023/ND-CP dated 30 June 2023 (“Decree 44“):

• Reduction of 2% of VAT rate for groups of goods that are applying the tax rate of 10% (to be reduced to 8%), except for some groups of goods such as telecommunications, information technology, metals, products from prefabricated metals, mining products (excluding coal mining), coke, refined petroleum, chemical products, and commodity products subject to excise tax.

The items that are not entitled to VAT reduction are specified in Appendices I, II and III of Decree 44.