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Chapter 1:
Overview of Vietnam’s tariff
system in international trade
relations
1st Semester, 2024
Phd. Thao Bui

Learning objectives
 Have general knowledge of Vietnam’s tariff system in
international trade relations.
 Be able to understand and differentiate taxes and duties
applicable on exported and imported goods.
 Have a positive attitude learning and actively self-update
changes in tax and customs regulations.

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Content
1.1 General theories of taxation
1.1.1 Definition of tax
1.1.2 Characteristics
1.1.3 Classification
1.1.4 Function
1.1.5 Roles
1.1.6 Basic elements
1.2 Introduction to the organization structure
and the profession management of tax
collection and inspection in the customs
organization
1.2.1 Taxes on exported and imported goods
1.2.2 History of customs tax collection
1.2.3 Organizational structure in customs
authority
1.2.4 Collections on imported and exported goods

1.1 General theories of taxation

1.1.1 Definition
1.1.2 Characteristics
1.1.3 Classification
1.1.4 Function
1.1.5 Roles
1.1.6 Basic elements

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1.1.1 Definition of tax

 “Tax is a monetary deduction, of a deterministic nature, not directly
refundable due to citizens contribute to the State through a path of power to
offset the State's expenditures” (Gaston Jeze, 1934)
 “In order to maintain that public power, it is necessary to have the
contributions of the citizens of the State which are taxes ..." (Marx & Envy,
1962)
 “Tax is a compulsory transfer of money (or transfer by goods or services) of
companies and households to the Government, for which they do not directly
receive any goods or services in exchange, the payment is not a fine that the
court penalty for a violation of the law” (Makkollhell and Bruy, 1993)

1.1.1 Definition of tax

 From the perspective of income distribution: "Tax is a form of distribution
and redistribution of gross social product and national income in order to form
centralized monetary quarters of the state to meet the expenditure needs of
the state.”
 From the perspective of taxpayers: “Tax is a compulsory contribution that
each organization and individual must be obliged to contribute to the state
according to law.”
 From an economic perspective: “Tax is a special measure whereby the state
uses its power to divert part of its resources from the private sector to the
public sector in order to perform the socio-economic functions of the state.”

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1.1.1 Definition of tax

 According to the Vietnamese dictionary: “Tax is the amount of money
or kind that people or organizations do business, depending on assets,
income, occupation ... to be paid to the state at the prescribed rate.”
 Tax is a compulsory contribution from natural and legal entities to
the State according to the extent and duration of legal for public
purposes (Nguyen Thi Lien, 2010)

1.1.1 Definition of tax

 Tax is an amount of money that organizations and individuals, who
fulfill their obligations and rights to contribute according to law to the
State at a specific level and time limit to meet the needs of the State;
macro-regulation of the economy; redistribute part of society’s
income and wealth; control the distribution process and spending
levels in the economy; change society’s consumption habits and do
not reimburse taxpayers directly.
 Part of the taxes that organizations and individuals contribute to the
State is returned to the people indirectly in the form of social grants,
social benefits and other consumer funds.

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1.1.2. Characteristics of Tax

Compulsory

For public purposes Tax No direct refund

Influenced by economic,
political, social factors

1.1.2. Characteristics of Tax

Compulsory
 Taxes are regulated only by the State
 Taxes are regulated in the form of legal documents (law, decree, circular,
etc.)

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1.1.2. Characteristics of Tax

 No direct refunds
 Taxes are indirectly refunded to taxpayers through the provision of public
services by the state
 No public services directly provided to taxpayers by the State before
collecting taxes and
 No direct reimbursement to taxpayers after paying taxes.

1.1.2. Characteristics of Tax

 Influenced by economic, political and social factors
 Taxes are influenced by
 economic factors (price, market, economic growth, etc.)
 political factors (political institution, policies, etc.)
 social factors (practices, traditions, etc.)
 other factors (international integration, etc.)

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1.1.2. Characteristics of Tax

 Used for public purposes
 Taxes are collected for government expenditures and public purposes
including:
 Operation of government
 Economic infrastructure (roads, public transportation, etc.)
 Public security, public education, public health systems, military, scientific research &
development, culture and the arts, public works, distribution, data collection and
dissemination, public insurance, etc.

1.1.3. Tax classification

Direct taxes
Based on
tax mobilization
Indirect taxes

Tax
classification
Taxes collected on
income
Based on Taxes collected on goods
tax subjects & services
Taxes collected on
property

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1.1.3. Tax classification

 Classification based on the method of tax mobilization
 Direct taxes
 Indirect taxes

Classification based on the method of tax

mobilization
 Direct taxes
 Direct taxes are directly levied on a taxpayer’s income and property
 Taxpayers are identical with taxable objects
 Examples:
• Corporate income tax (CIT),
• Personal income tax (PIT),
• Natural Resources Tax (NRT)

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Classification based on the method of tax

mobilization:
 Indirect taxes
 Indirect taxes are not levied directly on the income or property of
taxpayers but indirectly on the prices of goods and services.
 Taxpayers and taxable people are not the same
 Examples: Value Added Tax (VAT), Export Tax, Import Tax, Excise Tax/
Special Consumption Tax, Environmental Protection Tax

1.1.3. Tax classification

 Classification based on tax subjects
 Taxes collected on income;
 Taxes collected on goods and services;
 Taxes collected on property.

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Taxes collected on income

 Corporate income tax (CIT): levied on incomes including income
from production and business activities, service activities and other
incomes of enterprises.
 Personal income tax (PIT): levied on the income of high-income
individuals.

Tax collected on goods and services

 License tax: paid by individuals, organizations and enterprises to
the State to recognize legal status in their production and
business activities.
 Economics entities (depending on registered capital level): 1 – 3 million
p.a.
 Households and individuals conducting business activities (depending
income level, above 100 million/year): 0.3 – 1 million p.a.

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Tax collected on goods and services

 Import and export tax: An indirect tax, collected on goods
allowed to be exported and imported across the national border,
items purchased, sold and exchanged between the domestic
market and the non-tariff zone ...

Tax collected on goods and services

 Excise tax/Special consumption tax: levied on several goods
and services of special nature that the State does not encourage
production, business and consumption.
 Value added tax (VAT): levied on the added value of products,
services and goods through each stage of circulation from
production to consumption.

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Tax collected on goods and services

 Land tax: tax on houses and land for construction works that
individuals or organizations using must pay to the State.

Tax collected on goods and services

 Stamp duty: is an amount of money that individuals, organizations
and enterprises wish to pay to the authorities to be legally
guaranteed by the State the ownership or right to use a certain
type of property.

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Tax collected on goods and services

 Natural resources tax: An indirect tax levied on the process of
exploiting natural resources.
 Tax payable = Mining output * Tax calculation * tax rate

Tax collected on goods and services:

 Agricultural land use tax: tax on land used for agricultural
production.
Tax payable = Area of land used * Valuation

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Tax collected on goods and services:

 Land use right transfer tax: individuals or enterprises must pay
tax when transferring land use rights
Tax payable = Land area subject to tax * Taxable price * Tax rate

1.1.4 Functions of tax

 Distribution of social products
 Socio-economic stabilization

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1.1.5 The role of taxes

 Tax is the main and stable source of revenue for the state
budget
 Tax is a tool for macroeconomic management and regulation;
Adjust major balances of the national economy
 Taxes contribute to ensuring equality and realizing social justice

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1.1.5 The role of taxes on import and export goods

 Basis for the State to control the quantity, quality and impacts
of exported and imported goods on the Vietnamese market
 Contribute to business regulation and consumer orientation
 Contribute to the protection and development of domestic
production
 Encourage exports and attract foreign direct investment
 Help the State balance the international payments

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1.1.6 Basic elements of tax policy

 Name of tax
 Taxable objects;
 Non-taxable subjects;
 Taxpayers;
 Tax exemption, reduction, tax refund
 Tax calculation and collection base: Quantity of good, Tax rate, Taxable
value, Exchange rate

Content
1.2 Introduction to the organization structure and the profession
management of tax collection and inspection in the customs
organization
1.2.1 Taxes on exported and imported goods
1.2.2 History of customs tax collection
1.2.3 Organizational structure in customs authority
1.2.4 Collections on imported and exported goods

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1.2.1 Tax revenues on import and export goods in

the customs industry
Export -
import tax

Additional
Excise tax
import tax Exported -
imported
goods

Value added Environmental

tax protection tax

1.2.2 History of tax collection activities in customs

industry
 Import and export duties
 From 1945 to 1988
 From 1988 to 2016
 Law on export and import of commercial goods 1988
 Law on export and import tax 1991
 Law amended and supplemented 1993, 1998
 Law on import and export tax 2005
 From 2016 to present
 Law on export and import tax No. 107/2016/QH13

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1.2.2 History of tax collection activities in customs

industry
 Excise tax
 Law on excise tax 05/1998/QH10
 Law on excise tax 27/2008/QH12
 Law amended and supplemented 70/2014/QH 13 dated 26/11/2014
 Law amending and supplementing 71/2014/QH 13 dated 26/11/2014
 Law amending and supplementing 106/2016/QH 13 dated 06/04/2016
 Law amending and supplementing 03/2022/QH15
 Consolidated document No. 08/VBHN-VPQH consolidates the Law on
Special Consumption Tax dated 25/01/2022

1.2.2 History of tax collection activities in customs

industry
 Environmental protection tax
 Law on Environmental Protection Tax No. 57/2010/QH12 dated
15/11/2010
 Effective :01/01/2012  customs collection of environmental protection
tax from 2012

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1.2.2 History of tax collection activities in customs

industry
 Value Added Tax
 VAT Law No. 57/1997/ L-CTN dated 10/05/1997
 Law amended and supplemented 07/2003/QH11
 VAT Law No. 13/2008/QH dated 03/06/2012
 Law amended and supplemented 31/2013/QH13 dated 19/6/2013
 Law amending and supplementing No. 106/2016/QH13 takes effect
01/7/2016

1.2.3 Organizational structure in customs authority

Import - Export Tax

Department

Import-Export Tax Division

Professional Division

Tax managment team

Tax administration team
(receive declarations and
implements the policy)

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1.2.4 Collections on imported and exported goods

 Collections from Taxes
 Import and export taxes
 Excise tax on imported goods
 Environmental protection tax
 VAT on imported goods
 Additional import duties: Safeguard duty, Anti-dumping duty,
Countervailing/Anti-subsidy duty
 Collection from Fees and charges

Discussion

What factors affect taxes applicable on imported and

exported goods?

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Thank you!

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