Vietnam is set to extend export tax relief to a number of goods including products and machinery used in the treatment of waste, as well as goods registered under Vietnam’s emerging Green Label certification. Outlined by the Ministry of Finance (MOF) under Circular 128/2016/TT-BTC, incentives are set to come into effect as of September 23rd, 2016.
Current Export Tariffs
Vietnam currently applies export tariffs on a variety of products leaving its boarders. The main targets of these taxes are products used in the extractives industry or other exports that are deemed to have a significant impact on Vietnam. Depending on the impact that a given industry or export is deemed to have, taxes can range from 0-45 percent.
Vietnam’s Green Label Certification
Vietnam has recently released an optional environmental certification for enterprises with hopes of emphasizing its commitment to environmental protection and as a means of incentivizing investors to comply with a more stringent set of standards within its boarders.
Pursuant to Circular 128, goods that have achieved compliance with standards set out under Vietnam’s Green Label program will soon be eligible for a complete exemption from all export taxation outlined under MOF Circular 182/2015/TT-BTC.
Application for Incentives and administration
Vietnam’s Green Label program conforms with the International Standards Organization (ISO) and is administered at the national level by the Ministry of Natural Resources and Environment. To obtain Green Label certification, specific procedures and protocols must be followed dependent on the good in question. The structure of the application process is broadly outlined in Circular 41/2013/TT-BTNMT while criteria for individual goods is regularly updated online.
Waste Treatment Relief Under Circular 128
In addition to exemptions offered to goods with Vietnam’s Green Label, export of specific goods relating to recycling activities, waste treatment and disposal will also be eligible for 50% reduction on applicable export tariffs. A list of goods eligible for reductions is outlined in Government Decree 19/2015 ND-CP. The following are some key areas that have been included:
- Treatment of concentrated domestic wastewater
- Collection, transport and treatment of solid waste
- Treatment of hazardous wastes
- Treatment and renovation of polluted areas
- Rescue and handling of oil spills, chemical incidents or other environmental incidents
Implications for Investment
This article was first published September 2016.
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