Businesses often add every amount paid at customs into “cost of goods,” creating two common distortions: capitalising deductible import VAT, or omitting import duty and directly attributable logistics costs. The result is an unreliable margin, unsupported selling prices and insufficient import cash planning. This article separates three data layers: tax payable on the customs declaration, inventory cost recognised in accounting, and actual cash required at import.

B2B operational guidance · Legal update: 17 July 2026 · Not a substitute for case-specific tax or accounting advice.

QUICK FACTS

Import duty

The portion of import duty that is not exempted, refunded or subject to non-collection normally forms part of inventory or relevant asset cost.

Import VAT

For VAT-taxable imports, VAT payable belongs in the cash plan; only the non-deductible portion increases inventory or the related cost.

VAT taxable base

In a common case, the VAT base includes customs value, import duty, supplementary import duties and other applicable taxes.

Two exchange rates

The customs exchange rate used for tax is not automatically the accounting rate used for payables and inventory.

SCOPE OF APPLICATION

This article mainly applies to Vietnamese businesses importing goods for trading, production or use as assets. The worked formula focuses on VAT-taxable imports and ad valorem import duty. Non-VAT imports, absolute or mixed duties, excise tax, environmental protection tax, supplementary/trade-remedy duties, exemptions and special customs regimes require a separate calculation model.

A tax rate cannot be concluded from a commercial name alone. Classification requires the HS code, technical description, origin, C/O where preferential treatment is claimed, customs value and declaration date.

KEY TERMS

Term	Meaning	Cost relevance
Customs Value	The value used as the tax base, generally starting from transaction value and adjusted under customs valuation rules.	Tax base, but not necessarily identical to accounting purchase cost.
Import Duty	Duty under MFN, FTA special preference, ordinary rates, or absolute/mixed methods.	Non-refundable duty normally forms part of inventory cost.
Import VAT	VAT arising at importation for goods within the scope of VAT.	Where it arises, this is a cash outflow; it is recorded as deductible input VAT when conditions are met, otherwise included in inventory/asset cost or the relevant expense.
Landed Cost	Total cost to bring goods to the location and condition ready for sale or use.	Used for pricing and margin analysis; not identical to customs tax payable.
COGS	Inventory cost recognised as expense when goods are sold.	Import-related taxes and costs generally enter inventory first, then flow to COGS as units are sold.

OPERATING MECHANISM

Use three separate management ledgers:

Tax ledger

Customs value, tax rates and amounts payable for clearance.

Accounting ledger

Inventory/asset cost, deductible input VAT and foreign-exchange differences.

Management ledger

Allocation by SKU, order and sales channel for landed-cost pricing.

Customs value is not automatically the book value. Customs applies valuation rules and the customs tax exchange rate on the declaration date, while accounting follows the entity’s accounting exchange-rate policy. A difference can be valid when supported by a reconciliation.

TAX AND COST FORMULAS

Ad valorem import duty: Import customs value × Import duty rate

Import VAT taxable base – common case: Import customs value + Import duty + Supplementary import duties (if any) + Excise tax (if any) + Environmental protection tax (if any)

Import VAT: VAT taxable base × VAT rate effective on the customs declaration date

Inventory cost when VAT is deductible: Accounting purchase price + non-refundable import taxes + directly attributable costs to bring goods to the required location and condition

Inventory cost when VAT is non-deductible: The above inventory cost + non-deductible import VAT

The applicable import-duty rate may be MFN, FTA special preferential or another rate depending on origin and documents. The VAT rate must also be checked against the product and policies effective on the declaration date.

COST-COMPONENT ANALYSIS

Assume an import customs value of VND 1,000,000,000, import duty of 5%, VAT of 10%, no excise or environmental protection tax, and VND 80,000,000 of directly attributable freight, local charges, customs processing and delivery. Figures are illustrative only.

Item	Calculation	Amount	Management treatment
Import duty	1,000,000,000 × 5%	50,000,000	Normally included in inventory cost.
VAT taxable base	1,000,000,000 + 50,000,000	1,050,000,000	VAT base in this example.
Import VAT	1,050,000,000 × 10%	105,000,000	Cash required at import.
Inventory cost if VAT is deductible	1,000,000,000 + 50,000,000 + 80,000,000	1,130,000,000	VND 105 million is tracked as input VAT, not inventory cost.
Inventory cost if VAT is non-deductible	1,130,000,000 + 105,000,000	1,235,000,000	Non-deductible VAT increases cost.
Tax cash-out at import	50,000,000 + 105,000,000	155,000,000	Not the same as accounting expense for the period.

Control point: The example uses one exchange rate for simplicity. Actual accounting purchase cost and customs value may differ because of exchange rates, Incoterms and valuation adjustments.

WHICH TAXES ENTER COST?

Tax	Included in cost?	Key condition	Cash impact
Import duty	The non-recoverable portion normally yes	Check exemption, refund, non-collection and special customs-regime treatment.	Payment, guarantee or deferral timing depends on the regime and taxpayer eligibility.
Fully deductible import VAT	Normally no	The goods must be VAT-taxable; check VAT method, tax-payment evidence, business use and deduction conditions.	Where VAT arises, it is still paid at import before later deduction.
Non-deductible import VAT	Yes, or recorded in the related asset/expense	Non-taxable activities, missing conditions or statutory deduction limits.	Permanent economic cost.
Partially deductible import VAT	Only the non-deductible portion	Allocation ratio and supporting records.	Full VAT may be paid first; deductible portion is tracked separately.
Excise, environmental, supplementary import and other taxes	Only the portion not refundable, creditable or offsettable	Review the recovery, credit or offset mechanism under each tax; do not assume every amount paid enters cost.	Amounts listed in Article 7 of the VAT Law may also increase the import VAT taxable base.

DOCUMENTS AND DATA TO CHECK

Document/data	Prepared/issued by	Use	Fields to reconcile
Contract, invoice, packing list	Buyer and seller	Purchase price, Incoterms and product description	Currency, quantity, unit price and buyer-paid items.
Technical file and proposed HS code	Importer/manufacturer	Duty and product policy	Composition, function, material, model and specifications.
C/O and origin evidence	Competent issuer/exporter under the FTA mechanism	Special preferential duty claim	Form, origin criterion, transport, third-party invoicing and validity.
Customs declaration and tax-payment evidence	Importer, Customs and bank	Tax liability and input VAT	HS, value, rate, amount, date and reference.
Freight invoices and debit notes	Forwarder, carrier, terminal, warehouse and trucker	Direct import cost	Scope, shipment reference and domestic service VAT.
Landed-cost allocation sheet	Finance/accounting/supply chain	SKU allocation and COGS	Consistent allocation driver and no duplicate VAT.

PROCESS FOR CALCULATION AND ALLOCATION

Lock product descriptions and proposed HS codes. Separate lines with different tax rates.
Build tax scenarios. MFN, valid FTA preference, no C/O, and absolute/mixed duty where relevant.
Prepare a valuation bridge. Separate accounting purchase price, customs value and Incoterms adjustments.
Calculate by customs line. Import duty first, then the VAT base and VAT.
Determine VAT status. No VAT because the import is outside the VAT scope, or VAT arises and is fully, partially or non-deductible.
Accumulate direct costs. Freight, insurance, local charges, clearance, inspection and delivery. Separate abnormal storage, penalties, DEM/DET and delay-driven costs for accounting-policy assessment instead of automatically capitalising them.
Allocate to SKUs. Duty by HS line; common costs by weight, CBM, value, packages or a causal hybrid.
Reconcile three totals. Customs tax, logistics/payables and inventory receipt.

RISKS AND COMMON ERRORS

Error	Cause	Impact	Control
Capitalising all import VAT	Confusing tax cash-out with economic cost	Overstated inventory and margin distortion	Separate deductible and non-deductible VAT columns.
Excluding VAT from cash planning	Assuming deduction eliminates payment	Clearance funding shortfall	Maintain a separate import cash-out report.
Using customs value as absolute book cost	No exchange-rate or adjustment bridge	Mismatch in payables, inventory and FX	Reconcile invoice, customs value and book value.
Averaging duty across all SKUs	Ignoring HS-line tax rates	Wrong SKU margin	Assign duty directly by customs line first.
Budgeting on an unverified C/O	No origin-rule review	Underfunding if preference is rejected	Prepare with-C/O and without-C/O scenarios.
Double-counting international freight	CIF/CIP invoice plus full freight added again	Overstated landed cost	Review Incoterms and valuation components.
Capitalising every local charge, DEM/DET and abnormal cost	Normal directly attributable costs are not separated from delay, penalty or inefficiency costs	Overstated inventory and weak audit support	Capitalise only costs directly bringing goods to the required location and condition; assess abnormal costs separately under the accounting policy.

LEGAL BASIS AND SOURCES

The following sources were checked through 17 July 2026. Apply the version effective on the customs declaration date and review relevant FTA tariff decrees, temporary VAT policies and product-specific rules.

Instrument / source	Issuer – effectiveness	Role in this article
Law 107/2016/QH13 on Export and Import Duties, as relevantly amended by Law 90/2025/QH15	National Assembly; review the current consolidated legal chain	Tax bases, calculation methods and import-duty principles.
Decree 26/2023/ND-CP as amended by 144/2024, 108/2025 and 199/2025	Government; apply the version effective on the declaration date	MFN import tariff and related duty schedules.
VAT Law 48/2024/QH15, amended by Law 90/2025/QH15, Law 149/2025/QH15 and Law 09/2026/QH16	National Assembly; legal chain current through 17 July 2026	Import VAT taxable value, rates and deduction principles.
Decree 181/2025/ND-CP, amended by 359/2025/ND-CP and 144/2026/ND-CP	Government; Decree 144/2026 effective 20 June 2026	Detailed implementation of the VAT Law.
Circular 69/2025/TT-BTC	Ministry of Finance; effective 1 July 2025	Operational VAT guidance and supporting-document rules.
Ministry of Finance confirmation of the application date of Circular 99/2025/TT-BTC	Ministry of Finance; applies to financial years beginning on or after 1 January 2026	Current enterprise accounting framework for inventory, taxes and COGS recognition.
Customs information on Circular 60/2019/TT-BTC	Vietnam Customs; amends customs-valuation rules	Customs value is determined from the transaction and required adjustments, not merely the invoice total.

FAQ

1. Does deductible import VAT mean there is no cash cost?

For VAT-taxable imports, no. The tax is still paid at import; deduction affects subsequent VAT accounting, not the initial cash requirement.

2. Is import duty expensed immediately?

For trading inventory, it normally enters inventory cost and flows to COGS when the related goods are sold.

3. Does VAT on domestic logistics enter inventory cost?

Deductible service VAT is separated; the net service amount is the direct cost. Non-deductible VAT may increase inventory or the relevant expense.

4. Does a C/O guarantee 0% import duty?

No. The agreement, origin criterion, HS code, transport and document validity must all be satisfied; some preferential rates remain above 0%.

5. Must FOB price be increased by freight and insurance for customs value?

Costs to the first import border may need to be considered under valuation rules. The actual adjustment depends on the documents and transaction terms.

6. Should all costs be allocated by goods value?

No. Duty follows HS lines; ocean freight may follow CBM/weight; documentation may be per shipment; trucking may be per trip.

7. When should landed cost be recalculated?

After tax assessment/refund, supplemental debit notes, value adjustments, quantity differences, new charges or a change in VAT deductibility.

APPLICATION NOTE: Management landed cost, accounting inventory cost and corporate-income-tax deductible expense may not be identical. The entity should document its accounting policy, allocation drivers and tax evidence.

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