More than a year after the enforcement of ASEAN-Japan Comprehensive Economic Partnership (AJCEP), the application of Certificate of Origin Form A (preferential C/O) has proved business efficiency in export activities.

However, to get maximum interest of tax reduction, exporters must apply suitable forms of C/O in the Japanese market.

According to statistics of the Ministry of Industry and Trade, in 2009, 37,018 sets of C/O Form AJ were granted with total export value of US$1.7 billion, accounting for 27.81 percent the total export value to Japan. This was the biggest number of C/O and export value applied by Vietnam so far in all free trade area agreements (FTA).

C/O AJ applied to exports to Japan include precious stone and metals (85.07 percent), plastic products (77.62 percent), aquatic products (70.24 percent), footwear (66.58 percent), chemicals and chemical products (50.96 percent), garment (47.95 percent). Other products of bamboo, rattan, sedge, vegetable and fruit also applied C/O AJ as high as over 40 percent.

Compared to the first 9 months of 2009, the use of C/O AJ increased in products such as precious stone and metals, plastic products, aquatic products, garment, footwear, and vegetables and fruit. As a result, it gives comparative edge to Vietnamese exports over commodities of other countries.

According to some enterprises, the granting of C/O remains complicated. Mr. Duong Minh Tam, an entrepreneur in Rach Gia, said that each time applying for C/O, his company had to go to Can Tho or Ho Chi Minh City. If lacking some documents, they had to go back and forth to complete the dossiers of 6-7 documents for C/O AJ. He proposed that the granting should be delegated to provincial departments to save time and money for businesses. Documents must also be simplified to help businesses promote export.

Mr. Pham Ba Cuong, Import-Export Department of Ministry of Industry and Trade said that the Ministry will soon consider the establishment of C/O granting offices in provinces with a big number of exporters and accelerate the on-line granting process to save time for businesses. Simplification of documents will also be considered regarding different kinds of products to improve the granting of C/O.

Also, according to Mr. Cuong, to ensure the interests of businesses exporting to ASEAN-Japan markets, businesses must update research and calculate tax rates of different months to apply for suitable C/O. The tax rates applied after April 1, 2010 will be much less for aquatic products, meat, footwear, vegetables and fruit. Therefore, due attention must be paid to documents relating to C/O, especially concerning Vietnam-Japan and ASEAN-Japan agreements with related documents and applications. Businesses must study carefully these two tax rates and apply with flexibility to get lower tax rate and ensure maximum interest in export activities.

VCCI