Answer – Vietnam's special consumption tax reform on wines and spirits – P-007506/2016

The Commission and the EU Delegation to Vietnam, in close cooperation with EU industry associations as well as the European Chamber of Commerce, have, since 2014, on a number of occasions, expressed concerns to different levels of the Vietnamese government about the reform of the Special Consumption Tax (SCT).

The Commission is ready to raise the issue again if there is evidence of discrimination between local and EU producers or a breach of other World Trade Organisation rules. At this point in time, however, this does not seem to be the case, as the SCT applies in the same manner to both locally produced goods and imports.

Although the tax burden under the SCT may have increased, the reform of the tax structure has removed apparent discrimination, so that exporters and domestic producers now compete on a level playing field in Vietnam.

The EU-Vietnam Free Trade Agreement (FTA), which has not yet entered into force, provides for the removal of import tariffs over seven years, to the benefit of EU exporters. However, it does not include provisions on internal taxes. The suspension of concessions under the FTA does not, therefore, constitute an appropriate manner of pursuing this matter.

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