Vietnam, known as one of the world’s leading rice exporters, has a complex and dynamic system for rice export taxation. Understanding this system is crucial for international traders and businesses involved in the Vietnamese rice export market.

The Vietnam rice export tax is governed by various regulations and policies set by the Vietnamese government. These regulations aim to balance domestic rice supply and demand, protect farmers’ interests, and maintain the competitiveness of Vietnamese rice in the international market.

In recent years, there have been significant changes in the rice export tax regulations due to shifts in global market trends and the evolving needs of the domestic economy. As of 2024, the Vietnamese government has implemented several reforms to simplify the tax procedures and reduce the tax burden on rice exporters.

These reforms are part of the government’s broader strategy to promote the sustainable growth of the rice export sector and enhance its contribution to the national economy. They are also aligned with Vietnam’s commitments under various international trade agreements, including the European Union-Vietnam Free Trade Agreement (EVFTA).

HS Code and Export Duty of Rice in Vietnam

When it comes to importing/exporting any commodity, including rice, one of the first things needed to determine is the HS code of the commodity. The classification of a product to a certain HS code is based on the nature, composition, and other characteristics of the actual exported commodity at the time of export. This information is typically derived from catalogs, technical documents (if any), or decided by the Customs Department of Commodity Verification.

Please note that the above-mentioned HS codes and export duty rates are for reference only and may vary depending on the specific circumstances of each export transaction. For the most accurate and up-to-date information, exporters should consult with a professional trade advisor or the relevant Vietnamese government agencies.

Customs Duties on Exporting Rice from Vietnam

Understanding the customs duties on exporting rice from Vietnam is crucial for any business involved in the Vietnamese rice export market. These duties can significantly impact the overall cost of exporting rice and, consequently, the profitability of the business.

• Value-Added Tax (VAT): In Vietnam, exported commodities, including rice, are exempt from VAT. This means that exporters do not have to pay VAT. According to current stipulations, the VAT on exported commodities in Vietnam is 0%. This is a significant benefit for exporters as it reduces the overall tax burden.
• Export Duty: as per the above table
• Preferential Export Duty: For taxable commodities with a tariff of more than 0%, it’s important to note that cargo exported to certain regions can enjoy special preferential export duty under Free Trade Agreements (FTAs). Specifically, cargos exported to the European Union (EU), the United Kingdom (UK), or members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) can benefit from these preferential rates. This can significantly reduce the export duty and make Vietnamese rice more competitive in these markets.

Governmental Management and Export Procedure of Rice in Vietnam

The process of exporting rice from Vietnam involves several steps and requires compliance with various regulations set by the Vietnamese government. Here’s a detailed guide:

Licensing for Rice Export

According to Decree No. 107/2018/NĐ-CP on rice export business, enterprises need to obtain a Certificate of Eligibility for rice export business from the Ministry of Industry and Trade. To obtain this certificate, rice export businesses must meet certain conditions and submit a complete application dossier.

Conditions for Rice Export Business

Traders can engage in rice export business if they meet the following conditions:

1. Have at least one specialized warehouse suitable for storing paddy and rice, complying with national standards and technical regulations on warehouse storage (QCVN 01 – 133: 2013/BNNPTNT).
2. Have at least one milling, grinding, or processing facility for paddy and rice, complying with national standards and technical regulations on warehouse storage and processing facilities (QCVN 01 – 134: 2013/BNNPTNT).

These facilities may be owned by traders or leased from other organizations or individuals under a written lease agreement with a minimum term of 5 years. Traders with a Certificate of Eligibility cannot lease or sublease the declared facilities to demonstrate compliance with the business conditions stated in their certificate for other traders to use in their applications for certification.

Traders are only allowed to export organic rice, specialty rice, and nutrient-enhanced rice. They do not need to meet the conditions specified in points a and b, do not require a Certificate, are exempt from the mandatory reserve requirement, and are subject to reporting responsibilities as specified in clause 2 of Article 24 of Decree No. 107/2018/NĐ-CP.

Application Documents for Certificate of Eligibility for Rice Export Business

The application dossier for the Certificate of Eligibility includes:

1. Request for issuing the Certificate of Eligibility for rice export business (Form No. 01 attached to Decree No. 107/2018/NĐ-CP: 01 original copy).
2. Certified copy of the business registration certificate or the enterprise registration certificate, investment certificate.
3. Certified copy of the lease contract for the warehouse, milling, grinding, processing facility (for cases where traders lease these facilities) or documents proving the right to use land and ownership of these facilities (for cases where these facilities are owned by traders).
4. Original copy or valid certified copy of the rice export contract signed by both parties.

The processing time for approval is 15 days, and for disapproval, it’s 7 days (returned with clear reasons for rejection). The Certificate of Eligibility is valid for 5 years from the date of issuance.

Customs Procedure of Export Rice from Vietnam

The customs procedure for exporting rice from Vietnam involves several steps and requires a variety of documents. Here’s a detailed guide:

Customs Dossiers for Export of Rice

The customs dossiers for the export of rice normally include:

• Business registration: This is required if you are exporting for the first time. There’s no need to submit this document for subsequent exports.
• Commercial Invoice: This document contains details about the goods and the terms of the sale.
• Letter of introduction: This letter introduces the exporter to the customs authorities.
• Minutes of container handover: This document is required when exporting with a full container.
• Input documents for commercial goods: Some branches may require additional documents related to the goods being exported.
• Agreement to develop the Customs – Enterprise Partnership: Some branches may require this agreement, which outlines the cooperation between the exporter and the customs authorities.

Additional Procedures and Documents

Depending on the requirements of the importing country, you may need to prepare the following documents:

• Certificate of Origin (C/O): This document certifies the country in which the goods were produced.
• Certificate of Free Sale (CFS): This certificate confirms that the goods are legally sold or distributed in the open market, freely without restriction, and approved by the regulatory authorities in the country of origin.
• Certificate of Health (H/C): This certificate ensures that the goods are safe for consumption.
• Phytosanitary Certificate: This certificate ensures that the goods are free from pests and diseases.
• Fumigation Certificate: This certificate confirms that the goods have been fumigated to kill pests and insects.

When performing customs procedures for rice exports, traders dealing in organic rice, specialty rice, and nutrient-enhanced rice without a Certificate only need to present the original or authenticated copy of a confirmation document or certification from authorized organizations or institutions. This document confirms that the exported rice product complies with the criteria and methods determined by the Ministry of Agriculture and Rural Development and the Ministry of Health, as stipulated in points d and dd of clause 2, clause 3, Article 22 of Decree No. 107/2018/NĐ-CP.

>> Read more: Comprehensive Guide to Import Customs Procedures for Rice from Vietnam

Impact of EVFTA on Rice Export from Vietnam

The European Union-Vietnam Free Trade Agreement (EVFTA) has been a significant driving force for Vietnamese rice in the EU market. This agreement, which came into effect on August 1, 2020, has brought about substantial changes in the trade balance and has opened up new opportunities for Vietnamese rice to compete with other countries’ rice products exported to the EU.

According to the commitments from the EVFTA, the EU gives Vietnam an export quota of 80,000 tonnes of rice per year. This includes 30,000 tonnes of milled rice, 20,000 tonnes of unmilled rice, and 30,000 tonnes of aromatic rice. Notably, the EU will not apply a quota for broken rice exported from Vietnam.

Furthermore, the EU will cut the tariff for rice to zero within 3-5 years from the date of entry into force of the EVFTA. This tariff reduction is expected to boost the competitiveness of Vietnamese rice in the EU marke.

The impact of the EVFTA has led to Vietnamese rice products enjoying competitive advantages within the fastidious EU market. Despite the EU making up a small proportion of total Vietnamese rice exports, this can be considered a potential market for high-value rice varieties.

However, the pandemic and high sea freight rates are likely to restrain the growth of Vietnamese rice exports to the EU. Despite these challenges, the EVFTA will continue to help local firms boost exports to this market in the future.

>> Read more: The Impact of EVFTA on Rice Export from Vietnam

Comparing Rice Export Taxation: A Focus on Vietnam

When it comes to rice export taxation, it’s important to understand how different countries approach this issue. Let’s take a look at the rice export tax rates in four major rice-exporting countries: India, Thailand, Vietnam and China.

• India: India imposes a 20% export duty on various types of rice, excluding parboiled and Basmati rice.
• Thailand: rice exporters had to pay a surcharge of 2,500 baht per ton, and exporters who buy rice from millers for export must pay a tax of 0.75% of export value.
• Vietnam: Vietnam enjoys a 0% tax rate on rice exports to the European Union (EU), the United Kingdom (UK), or members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) under the Free Trade Agreements (FTAs).
• China: China continues to impose export tariffs or impose provisional export duties on 106 export commodities with fixed and unchanged tax rates. However, the exact tax rate for rice is not specified.

Freshdi.com's Guide to Rice Exportation

Freshdi.com's guide provides you with all the detailed information about the Vietnamese rice industry, covering various topics from the import market and popular rice varieties to price trends, finding exporters, and necessary considerations when exporting rice from Vietnam. This guide helps you understand the Vietnamese rice market, helping you succeed in trading with rice suppliers in Vietnam.

Chapter 1: Comprehensive Overview of Vietnam’s Rice Market Dive into the heart of Vietnam’s rice industry, exploring the vibrant import market, diverse rice varieties, competitive pricing, and key considerations for exporting rice from this Southeast Asian powerhouse.

Chapter 2: Certified Vietnam Rice Exporters List accredited by the Ministry of Industry and Trade - October 2023 Stay updated with the latest list and criteria of rice export-qualified enterprises recognized by Vietnam’s Ministry of Industry and Trade.

Chapter 3: Vietnam’s Top 10 Rice Exporters (January 2022) Uncover the dynamics of Vietnam’s rice industry, highlighting the top exporters and key market trends in January 2022.

Chapter 4: Top Vietnamese Rice Suppliers: A Comprehensive Guide 2023 Navigate through the top Vietnamese rice suppliers, their diverse product offerings, strategic locations, and tips for successful cooperation.

Chapter 5: How to Import Rice from Vietnam: A Step-by-Step Process Demystify the process of importing rice from Vietnam with insights into types, prices, suppliers, and more.

Chapter 6: How to Find Rice Suppliers in Vietnam Learn how to search and select reliable rice suppliers, along with essential tips when working with Vietnamese suppliers.

Chapter 7: Comprehensive Guide to Import Customs Procedures for Rice from Vietnam Master the import customs procedures for rice from Vietnam, including the necessary steps and key requirements for a smooth import process.

Chapter 8: Understanding Rice Export Taxation from Vietnam: A Comprehensive Guide Get a grasp on rice export taxation in Vietnam, including HS codes, export duties, and the impact of the EVFTA agreement.

Chapter 9: Top Types Of Rice Exported Abroad: Vietnam Rice Export Discover Vietnam’s fragrant rice varieties, their unique characteristics, and their global distribution.

Chapter 10: Forecast for Vietnam’s 2024 Rice Exports Gain an insightful look into Vietnam’s rice industry, its export forecast for 2024, and the underlying market dynamics.

Conclusion

In conclusion, understanding the dynamics of rice export taxation in Vietnam is crucial for businesses involved in the Vietnamese rice export market. This comprehensive guide provides insights into the HS codes, export duties, and the impact of EVFTA on rice exports from Vietnam. It also compares Vietnam’s rice export taxation with other major rice-exporting countries. By staying updated with the latest regulations and taking advantage of preferential export duty under FTAs, exporters can optimize their operations and maximize their profitability in the global rice market. As the rice export landscape continues to evolve, staying informed and adaptable will be key to success. Stay tuned for more insights and updates on this topic. Happy exporting!