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In 2024, Vietnam’s garment market is gaining significant attention due to the shift of orders from other countries. Vietnam is affirming its position as a leading garment manufacturing hub with strong growth potential.

However, this industry faces challenges such as competition from Bangladesh and rising production costs. To maintain and expand market share, Vietnamese businesses need to optimize production processes and improve product quality to meet the stringent demands of major export markets like the EU and North America.

Fabric Import Tax Fees

When importing fabric into the Vietnamese market, businesses must pay attention to the applicable taxes. Specifically, businesses will need to pay import tax and value-added tax (VAT). The specific tax rates depend on the HS code of each fabric type and the origin of the goods.

• VAT: Applies to all imported fabrics, with a tax rate ranging from 5% to 10% depending on the HS code.
• Import Tax: For most fabric types, the import tax preferential rates range from 5% to 20% depending on the HS code.
• Special Preferences:

Countries with FTAs with Vietnam: If fabrics are imported from countries that have signed Free Trade Agreements (FTAs) with Vietnam and fully meet the origin conditions (with C/O certification), businesses may enjoy special preferential import tax rates, even 0%.

Japan, South Korea: For fabrics imported from Japan and South Korea, preferential import tax rates range from 0% to 12% and 0% to 20%, depending on the fabric type and HS code.

Thailand, Indonesia, Malaysia: Fabrics imported from these countries often enjoy a 0% preferential import tax rate.

Detailed Fabric Import Procedures

Garment import and export is a complex process requiring accuracy and thorough knowledge of customs procedures. To help you understand each step, King Freight Logistics Vietnam presents the detailed process below:

I. Garment Import Procedure

Step 1: Customs Declaration

• Document Preparation: Ensure you have all the necessary import documents, such as the Sales Contract, Commercial Invoice, Bill of Lading (B/L), Packing List, Certificate of Origin (C/O), and Arrival Notice.
• Customs Declaration: Enter the declaration information into the Customs software system after accurately identifying the HS code of the goods.

Step 2: Customs Clearance

• Declaration Channeling: After completing the declaration, the Customs system will return the channeling results (green, yellow, red). Print the declaration and submit the complete import documentation to the Customs Department for clearance.

Step 3: Customs Inspection

• Customs Inspection: After inspection and if no issues arise, Customs will clear the declaration. Next, pay the import tax to complete the procedure.

Step 4: Transport to Warehouse

• Declaration Settlement: Once the declaration is cleared, proceed with the necessary procedures to transport the goods to the warehouse for storage and use.

II. Garment Export Procedure

Step 1: Prepare Necessary Documents

• Determine Garment Type: Check export regulations for the specific type of goods.
• Prepare Export Documents: Include the Export Contract, Invoice, Packing List, and other necessary documents.

Step 2: Register Export Business

• Business Registration and Export Code: Ensure the business is fully registered and has a valid export code.
• Customs Registration: Complete the registration procedures with Customs to legalize the export process.

Step 3: Customs and Related Procedures

• Customs Declaration: Proceed with export declaration at the border and inspect the goods as required by Customs.
• Goods Clearance: Once inspection is complete, the goods will be cleared and prepared for transportation.

Step 4: Transportation and Delivery

• Choose a Transportation Method: Select a suitable transportation method to ensure the safety of goods during transit.
• Prepare Packaging: Pack the goods according to standards to prevent damage.

Step 5: Complete Export Procedures

• Issue Invoice and Related Documents: Complete the issuance of export invoices and necessary documents.
• Payment and Final Procedures: Pay transportation fees and complete the final procedures at the export border.

Important Notes for Garment Import and Export

Compliance with Customs Regulations: Businesses are only allowed to clear goods after completing tax and fee payments as per regulations. This ensures goods are not held at the port and avoids legal complications.

Prohibition of Used Garment Imports: The import of used garments is prohibited unless the business has a license for importing as scrap. Therefore, be mindful to avoid violations.

Certificate of Origin (C/O): The C/O is crucial as it directly affects import tax rates. Ensure goods have this certification to benefit from tax incentives.

Labeling Requirements: According to Circular No. 43/2017/NĐ-CP, all imported garments must be clearly labeled. Compliance with this regulation not only facilitates customs clearance but also builds product credibility in the market.

Accurate HS Code Identification: Accurately determining the HS (Harmonized System) code is vital for paying the correct tax and avoiding penalties. This requires precision and caution in customs declaration.

Formaldehyde Declaration: For garments post-manufacture, businesses must declare formaldehyde content as per current regulations. This is a mandatory step to ensure the quality and safety of products before market circulation.

Contact KFLV for Support

In the context of 2024, Vietnam’s garment industry continues to attract attention due to the shift of orders from other countries, affirming its position as a leading manufacturing hub with strong growth potential. However, to maintain and expand market share, businesses need to optimize production processes, improve product quality, and adapt to challenges from international markets such as the EU and North America.

If you’re looking for comprehensive solutions for garment import and export processes, contact us at King Freight Logistics Vietnam for detailed consultation and the best support. Contact us today for free consultation!