Vietnam’s import duty system operates three tariff tiers, standard, preferential, and special preferential, with duty calculated on CIF value under Law 107/2016/QH13, as amended by Law 90/2025/QH15. For FDI manufacturers, the actual duty burden depends on two factors: the HS code classification of imported goods and the country of origin. Enterprises sourcing from FTA partner countries (CPTPP, EVFTA, RCEP, ACFTA) can reduce rates to 0% on qualifying inputs with a valid Certificate of Origin. Decree 167/2025/ND-CP and Circular 121/2025/TT-BTC also updated customs procedures.
This guide covers the rate structure, available exemptions for machinery and raw material imports, VAT and export duty treatment, and the compliance obligations that FDI enterprises face at Vietnam’s border. For the complete Vietnam tax system overview, including CIT, VAT, PIT, and cross-border obligations, see our pillar guide.
Vietnam’s Import Duty System: Three Tariff Tiers
Vietnam applies three import tariff categories based on the origin of goods, established under the Import-Export Tax Law.
Standard (ordinary) rates apply to goods from countries without normal trade relations with Vietnam. These rates sit at the highest level, above the preferential rate for each product category. Few FDI enterprises encounter standard rates in practice, since most trading partners maintain at least MFN status.
Preferential (MFN) rates apply to goods from countries with Most Favored Nation treatment. Most U.S., European, and Asian exports fall under this tier. Rates vary by product and are often low for industrial inputs. The preferential tariff schedule currently in force is adjusted periodically through decrees for specific products.
Special preferential rates apply to goods from FTA partner countries. These are the lowest available rates, often 0%, and apply only when the importer presents a valid Certificate of Origin proving goods meet the agreement’s rules of origin.
The calculation base is straightforward: Import Duty = CIF Value × Applicable Rate. CIF (Cost, Insurance, Freight) represents the goods’ value at Vietnam’s first port of entry, determined under WTO customs valuation standards.
How FTA Preferential Rates Reduce Costs
Vietnam participates in multiple FTAs, each offering different tariff reduction schedules. Choosing the right agreement can materially cut import costs on the same product, depending on the product and agreement.
| FTA | Key Partners | Coverage | Rate Reductions |
|---|---|---|---|
| CPTPP | Japan, Australia, Canada, Mexico, Singapore | Industrial goods, agriculture | Phased reductions under the agreement’s tariff schedule |
| EVFTA | EU member states | Machinery, electronics, vehicles | Phased reductions under the agreement’s tariff schedule, with a large share of lines already at 0% since August 2020 |
| RCEP | China, Japan, Korea, ASEAN, Australia, NZ | General goods | Phased reductions under the agreement’s tariff schedule |
| ACFTA | China, ASEAN nations | Machinery, electronics, components | Preferential rates on industrial imports under the agreement’s tariff schedule |
To claim preferential rates, submit a Certificate of Origin (C/O) with your customs declaration. The C/O must prove the goods satisfy origin criteria, typically a minimum value-addition or substantial transformation threshold that varies by product category and agreement.
When multiple FTAs cover the same product and origin, choose the agreement with the lowest applicable rate. A Chinese-origin electronic component, for instance, could qualify under both RCEP and ACFTA, compare rates under each schedule before filing.
Importing Machinery, Equipment, and Materials for Manufacturing
FDI enterprises setting up manufacturing facilities face substantial capital equipment imports. Vietnam’s import-export tax law provides specific duty exemptions to reduce this burden.
Duty Exemptions for Fixed Assets and Raw Materials
Article 16 of the Import-Export Tax Law establishes duty exemptions for investment-incentive projects in two categories:
Fixed assets and capital equipment: Imported machinery, equipment, components, spare parts, specialized vehicles, and construction materials forming part of the project’s fixed assets are exempt from import duty. This covers machinery and equipment in the production technology line, spare parts, and raw materials for their manufacture or assembly. The exemption applies to initial project setup and subsequent capacity expansions authorized in the investment certificate.
Raw materials that cannot be domestically manufactured: Materials imported for projects in special-incentive sectors or exceptionally disadvantaged areas, and by high-tech and science-and-technology enterprises, receive duty exemption for 5 years from the date of production commencement. Mining projects, resource-heavy products and excisable goods are excluded. The exemption covers inputs consumed directly in the production process, not general operating supplies or office equipment.
Claiming these exemptions requires:
- An active Investment Registration Certificate (IRC) specifying the imported items
- Documentary proof that equivalent goods aren’t available domestically (for raw material exemptions under the 5-year scheme)
- Customs declarations identifying goods under the applicable exemption category
- Accurate HS code classification matching the declared exemption type
Misclassifying goods or claiming exemptions on ineligible items triggers duty recovery plus penalties. HS code accuracy matters here, a single digit difference can shift an item from exempt to dutiable.
Export Processing Enterprises (EPEs) operating within designated non-tariff zones receive broader treatment (see the full EPE VAT regime). Under Article 2.4(c) of Law 107/2016/QH13, goods imported from overseas into a non-tariff zone and used only inside it are not subject to import duty, and Decree 35/2022/ND-CP Article 26 gives EPEs that treatment once customs confirms the supervision conditions are met. Raw materials imported to produce or process goods for export under contracts signed with foreign parties, and goods traded between overseas and a non-tariff zone, are also not subject to VAT. But EPE status comes with its own compliance requirements, including customs-supervision measures such as fencing, surveillance, and inventory systems linked to customs. Duty exemptions on fixed assets may also interact with CIT incentive eligibility, enterprises in priority sectors and disadvantaged areas can qualify for both.
Export Duties and VAT on Imports
Export duties apply narrowly. Vietnam levies export tax only on natural resources, minerals, forest products, and scrap metal, with rates between 0% and 40% calculated on FOB (Free on Board) value. Most manufactured goods exported from Vietnam carry no export duty, including the products FDI enterprises typically manufacture, reflecting Vietnam’s export-oriented industrial policy.
Export duty rates change periodically through decree amendments, recent adjustments have targeted specific minerals and chemical products. Businesses exporting natural resources should verify current rates under the latest tariff schedules before committing to supply contracts.
Import VAT is a separate charge, calculated on a wider base than duty alone:
Import VAT = (CIF Value + Import Duty + additional import duties, if any + SCT, if applicable) × VAT Rate
The standard VAT rate is 10%, temporarily reduced to 8% for certain goods and services through December 31, 2026 under Resolution 204/2025/QH15 and Decree 174/2025/ND-CP. This 2% reduction excludes telecommunications, financial and banking services, securities, insurance, real estate, metal products, mining products (except coal), and goods and services subject to special consumption tax (except petrol).
Zero percent VAT applies to goods exported from Vietnam, including goods sold from mainland Vietnam to organizations within non-tariff zones for direct use in export production. Under Law 90/2025/QH15 (effective July 1, 2025), on-the-spot export transactions, where goods are delivered in Vietnam as designated by a foreign trader, are also treated as exports for VAT purposes and must go through customs procedures.
Import VAT paid at customs is creditable against output VAT in subsequent tax periods. For manufacturers with export revenue, this means import VAT is recoverable, though the VAT refund process (our VAT refund services can support the dossier) requires accumulated input VAT of VND 300 million (~USD 11,400) or more for export refunds under Law 48/2024/QH15.
Special Consumption Tax on Select Imports
Special Consumption Tax (SCT) applies to specific imported goods under Law 66/2025/QH15, effective January 1, 2026. Affected product categories include:
- Automobiles with fewer than 24 seats, rates from 15% to over 100% depending on engine displacement
- Alcohol and beer, graduated rates based on alcohol content
- Tobacco products, percentage-based rate (75%) plus fixed amount (VND 2,000/pack from 2027, increasing annually to VND 10,000/pack by 2031)
- Sugary beverages exceeding 5g sugar per 100ml, newly taxable at 8% from January 1, 2027 and 10% from January 1, 2028
- Air conditioning units (above 24,000 up to 90,000 BTU, taxed at 10%), excluding units designed for installation in vehicles
SCT is calculated before VAT, increasing the effective total tax on affected imports. FDI enterprises in food and beverage, automotive, or consumer goods should factor SCT into landed cost calculations when planning Vietnam-based manufacturing or import operations.
Compliance Obligations and Penalty Risks
Accurate customs reporting is a continuing obligation. Three areas carry the highest risk for FDI enterprises.
HS code classification. Incorrect tariff codes result in either duty underpayment (triggering recovery plus penalties) or overpayment (recoverable but operationally costly). Vietnam uses an 8-digit HS classification system extending the WTO’s 6-digit base. Products with multiple potential classifications, common in electronics and composite materials, should be confirmed with customs authorities before first import.
Customs valuation. Declared CIF values must reflect actual transaction prices supported by commercial invoices, contracts, and shipping documents. Circular 121/2025/TT-BTC (effective February 1, 2026) updated customs procedures, so confirm the current valuation procedures with customs before filing. Understated valuations can trigger administrative penalties under current rules.
Customs settlement reports. Enterprises importing materials to manufacture or process goods for export, including EPEs, either connect their stock data to customs or file an annual settlement report (báo cáo quyết toán) within 90 days after the financial year-end (Circular 38/2015/TT-BTC Article 60, as amended by Circular 121/2025/TT-BTC). These reports reconcile imported materials against production output and exported finished goods. Errors found after the 60-day correction window are handled under tax and administrative-penalty rules. Penalties for late or missing settlement reports follow the current regulations on administrative penalties in the customs field.
Anti-dumping duties add another layer. Vietnam applies a number of anti-dumping measures, primarily targeting steel, sugar, and textile fibers from specific origins, and new investigations open regularly. FDI enterprises sourcing raw materials should verify whether specific products and origins face active trade remedy measures before committing to supply contracts. Cross-border service payments related to sourcing may also trigger Foreign Contractor Tax (FCT) obligations.
How Import-Export Tax Fits Your Vietnam Operations
Three decisions determine your effective border tax rate: HS code classification accuracy, FTA preferential rate selection, and exemption eligibility for fixed assets and production materials. Getting these right before operations begin avoids costly duty recovery and penalties later.
For FDI manufacturers, the gap between standard duty rates and FTA preferential rates can be material to production economics, depending on the product and agreement.
The Tax Compliance team at Indochina Link Vietnam, led by certified professionals including David Nguyen (CPA #3868) and Tiffany Nguyen (FCCA), advises FDI enterprises on tariff classification, exemption applications, and ongoing customs compliance as part of our tax compliance services. Schedule a consultation →
This guide reflects regulations current as of October 2026. Vietnam’s import-export tax framework changes frequently through decree amendments and tariff schedule updates. Verify specific rates and exemption eligibility with qualified professionals before making sourcing or investment commitments.
