Vietnam and Laos: another step forward
On 1st September 2016, the Government of the Socialist Republic of Vietnam issued different Decrees in the field of Import and Export tariff, including for example: Decree No: 122/2016/ND-CP schedules of import tariffs and preferential import tariffs, list of goods and its flat tax, compound tariff, and out- of - quota import tariff; Decree No. 126/2016/ND-CP special preferential import tariff schedule of Vietnam for the implementation of the ASEAN - India agreement on trade in goods in the 2016 - 2018 period.
On the same date, Vietnamese Government also issued Decree No. 124/2016/ND-CP on special preferential import tariff implementing bilateral trade agreement between the Government of the Socialist republic of Vietnam and the Government of Lao People's Democratic Republic.
This Decree will be valid till October 3rd 2020 and it abolishes Circular No. 216/2015/TT-BTC dated December 31, 2015 of the Minister of Finance on guidelines for import tariff to implementing Bilateral Trade Agreement between the Government of the Socialist Republic of Vietnam and the Government of Lao People's Democratic Republic.
It represents another important step in the strengthening of trade and investment between Laos and Vietnam.
The scope of the aforementioned Decree is to implement Bilateral Trade Agreement between the Government of the Socialist Republic of Vietnam and the Government of Lao People's Democratic Republic signed in Vientiane on March 3, 2015 (which replaces their existing treaty dating back 1998 and hereinafter referred to as Trade Agreement between Vietnam and Laos) and criteria for enjoying special preferential import tax rates in accordance with Trade Agreement between Vietnam and Laos.
In detail, this Decree regulates the following list of goods from Laos imported into Vietnam:
-List of goods originating from Lao People’s Democratic Republic, being granted by Vietnam with a 50% reduction of import tariff compared to that of ATIGA (special preferential import tariff of Vietnam to implement the ASEAN Trade in Goods Agreement) when exported to Vietnam (Annex I) ;
-List of imported goods originating from Lao People’s Democratic Republic not accorded preferential tariff treatment when exported to Vietnam (Annex II);
-List of goods originating in the Lao People’s Democratic Republic, subject to tariff quota each year when exported to Vietnam (Annex III).
Wherefore, the tax rates for goods from Laos imported into Vietnam are classified as follows:
-Imported goods (of Annex I, when they follow the conditions of Clause 2 of Article 4) being granted with a 50% reduction of import tariff compared to that of ATIGA (Article 4);
-Imported goods (excluded those in Annex I, II) being granted with special preferential import tariff of 0% (Article5);
-Imported goods (prescribed in Annex III, when exported to Vietnam and meeting conditions prescribed in Clause 2 Article 4 ) subject to tariff quota (Article 6).
In conclusion, the traditional friendship between Laos and Vietnam has been growing consistently over the past time, resulting in an improvement in terms of trade and economic cooperation and investment between these two countries. The results of this rapport are tangible and consist of some important agreements, such as the Border Trade Agreement stipulated on July 5th 2015 ( which establishes that all the land border crossing between Laos and Vietnam are open for bilateral trade).
Therefore, Decree No: 122/2016/ND-CP is surely another step forward in the trade relationship between these two emerging ASEAN countries.
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