Tax Commitment in EVFTA: Key Industry Benefits
The tax commitment in EVFTA (EU-Vietnam Free Trade Agreement) introduces major tax reductions, fostering economic growth and opening up opportunities for businesses across industries. The agreement outlines specific timelines and commitments by both Vietnam and the EU to lower or eliminate tariffs, providing significant benefits for key sectors.
1. Textile Industry
After the EVFTA takes effect:
- Import tax rates on garments will gradually reduce to 0% from the Most Favored Nation (MFN) rate (approximately 12%).
- This reduction will occur over a period of 3 to 7 years, boosting Vietnam’s export competitiveness.
2. Footwear Industry
Upon implementation of the EVFTA:
- The EU will eliminate import duties on 37% of tariff lines within the footwear sector, including waterproof shoes, slippers, and footwear materials.
- Remaining tariff lines will experience gradual tax reductions to 0% from the MFN level (around 12.4%) within 3 to 7 years.
3. Fruits and Vegetables
The EVFTA brings notable advantages to the fruits and vegetables sector:
- 94% of total 547 tariff lines for fruit, vegetables, and related products will be tax-free upon implementation.
- Key Vietnamese exports like lychee, longan, rambutan, dragon fruit, and pineapple will benefit.
- Entry price taxes will apply to 24 tariff lines (4.4%), covering items like fresh cucumbers and lemons.
- Certain products, such as sweet corn, will be subject to quotas.
4. Meat Products
Tax commitments in the meat industry include:
- Immediate elimination of tariffs on live animals, beef, and pork by the EU.
- Gradual tax elimination (within 5 to 7 years) for poultry and processed products from cows and pigs.
- Vietnam will eliminate tariffs for live cows, pigs, and chickens from the EU as soon as the agreement takes effect, with a 7-10 year roadmap for beef, pork, and chicken.
5. Dairy Industry
For Vietnamese dairy exports:
- The EU commits to eliminate all tariffs on dairy products from Vietnam upon the agreement’s entry into force.
6. Imported Cars
Under the EVFTA, cars imported from Europe to Vietnam will:
- Gradually enjoy 0% tax reductions within a 7-10 year timeline, aligning with the agreement’s schedule.
Contact LawPlus for Expert Support
For detailed advice on tax commitment in EVFTA and its implications for your business, reach out to LawPlus:
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- Hotline: 0965 052 039 (Vietnamese) | 0966 008 030 (English)
- Address: 86 Xuan Thuy Street, Thao Dien Ward, Thu Duc City, Ho Chi Minh City, Vietnam.