Taxes and fees payable when purchasing imported cars in 2018

1. How to calculate car tax in Vietnam

- Imported car tax:Import tax on cars from ASEAN countries is 30% and from outside the region is 70%. This tax has greatly affected the price of imported cars, making them very expensive compared to other markets in the world.

- Special consumption tax (SCT):Depending on each type of vehicle, the special consumption tax will have significant differences. However, in general, the special consumption tax for vehicles with less than 9 seats in Vietnam will fall between 40 - 150%. This is also a fairly high tax that car consumers have to pay when buying cars in the Vietnamese market.

- Value Added Tax (VAT):Value added tax, also known as VAT, is an indirect tax calculated on the added value of goods and services arising in the process from production, circulation to consumption. This is a tax with a wide scope of impact and is levied on almost all goods and services on the market. For cars, VAT will be calculated as 10% of the price after special consumption tax.

2. Other fees

In addition to the three main taxes above, to be able to circulate on the road, vehicle owners need to complete the following taxes and fees:

Registration fee: 10-15% (depending on the province or city where you live).
License plate fee: 2 - 20 million VND (in Hanoi and Ho Chi Minh City).
Inspection fee: 240,000 VND - 560,000 VND/inspection.
Technical safety certificate issuance fee: 50,000 VND - 100,000 VND/one issuance.
Road usage fee: Includes fee collected through BOT toll stations to recover capital for construction of traffic works when cars pass through and road maintenance fee (VND 130,000 - VND 1,430,000/month depending on vehicle load).
Liability insurance premium.
Physical damage insurance (optional).
Fuel fee.
Emission testing fee.
Fuel economy testing fee.
Energy labeling certificate fee.

3. Changes in import car tax in 2018

With the strong growth in people's demand for cars, the National Assembly has approved a roadmap to reduce import tax on cars in 2018 from January 1, 2018.

-Import tax:According to the ASEAN Trade in Goods Agreement (ATIGA) applied from January 1, 2018, the tax on imported cars from ASEAN countries in 2018 will be reduced from 30% to 0%. This is also the lowest tax rate in the imported car market in Vietnam so far.

Although the 2018 car tax reduction only applies to cars with a localization rate of 40% or more, this has given consumers some peace of mind when intending to buy a car this year.

- Special consumption tax:From January 1, 2018, special consumption tax on cars will also change significantly depending on the type of car.

For vehicles with less than 9 seats and a cylinder capacity of 1.5L or less, the special consumption tax is reduced from 40% to 35%. And for vehicles with a cylinder capacity of 1.5L to 2.0L, the special consumption tax is reduced from 45% to 40%.

For cars with cylinder capacity from 2.5L - 3.0L, special consumption tax will increase from 55% to 60%.

With this 2018 car tax reduction, although there is not much fluctuation in price, it is also a positive move for the Vietnamese car market in the following years.