List of cars that may be subject to property tax in Vietnam

Aim at luxury cars, imported cars

In fact, the market currently has many types of cars in the segment under 1.5 billion VND that are having very good sales. At the price of 1.5 billion VND, most of them are luxury cars, imported cars. Of Honda's imported cars, only the Odyssey minivan has a price of 1.9 billion VND, the rest of the car lines such as City, Civic, CRV, Accord all have selling prices, rolling prices below the level of having to pay property tax.

For Toyota models, Vios, Altis, Innova, even the most expensive Camry and Fortuner are not subject to property tax when the price is just under 1.5 billion VND. Meanwhile, Land Cruiser VX and Land Cruiser Prado are subject to property tax, when the price of these models ranges from 2.2 to nearly 4 billion VND.

For Ford, two car models in the sights of property tax are Ford Everest Titanium 3.2AT 4WD with a selling price of 1.9 billion VND and a rolling price of 2.2 billion VND; another car model, Explorer, is also in the sights with a selling price of about 2.1 billion VND and a rolling price of about 2.5 billion VND.

Meanwhile, Ford's small cars such as Focus, Eco Sport or Ford Ranger pickup trucks are also not subject to property tax as the price and on-road price of these cars are all under 1 billion VND.

In addition to joint ventures, the car market currently has many domestic private giants participating in large-scale production and assembly such as Mazda and Kia assembled cars by Truong Hai - Thaco; imported cars such as BMW, Peugeot or Mini Cooper...

Most Mazda models are priced below 1.5 billion VND, the two most premium versions of Mazda, CX5 and Mazda 6, are also priced at around 1 billion VND/car. Models such as Mazda 2, 3, BT50 are all priced below the tax rate.

Meanwhile, Kia similarly has no cars that are subject to property tax. The most expensive models such as Optima and Sedona are priced from 1 billion to nearly 1.3 billion VND/car; other models are priced lower.

Meanwhile, BMW, Mercedes, Lexus, Land Rover, Audi, Volkswagen, Volvo... are all in the group of cars subject to property tax. These are luxury cars, with high value but are loved and used by many people.

For example, the Lexus brand, all of these high-end cars are "involved" in property tax if applied because all of these imported cars in Vietnam have the lowest price of 2.3 billion VND, the highest price is Lexus LX570 with a selling price of nearly 8 billion VND, the rolling price is nearly 8.6 billion VND.

Imported luxury cars are "difficult", but domestic cars are protected?

In fact, we do not have to wait until Decree 116 on conditions for the production, trading and import of automobiles, luxury cars and imported cars to enter Vietnam, but right from the time the amended Law on Special Consumption Tax (Law 106) took effect in July 2016, luxury cars have had difficulty entering Vietnam due to the high special consumption tax of 60% to 150%, an increase of 30% to 90% compared to before.

By 2017, when Circular 20 on conditions for trading in imported cars expired, Draft Decree 116 was issued, setting out many strict conditions and by the time it came into effect (October 17, 2017), imported luxury cars seemed to have "disappeared" in Vietnam.

If the property tax is approved, luxury car users, in addition to paying high excise tax, will have to shoulder an additional amount of VND4.5 million to nearly VND15 million per year (depending on the price, from VND1.5 billion to about VND5-6 billion per car). For this reason, imported luxury cars will become increasingly "difficult" in Vietnam.

Meanwhile, the domestic market share belongs to the mid-range car segment with prices ranging from 500 to 1.3 billion VND. With the number of imported cars decreasing sharply, the domestic market is mainly assembled cars owned by joint ventures and private individuals, which poses a high risk of car prices being difficult to decrease, with companies colluding to keep prices down.

Currently, the Ministry of Finance has not provided any basis to justify the imposition of property tax on cars worth 1.5 billion VND. If the goal is to compensate for budget revenue or to collect budget revenue, then the imposition of tax on cars worth 1.5 billion VND will hardly bring in the "satisfactory" budget because the number of cars consumed by this type of car is not much, while the majority of cars sold for less than 1.5 billion VND.

In the case of taxing property at the price of a car over 1 billion VND, in theory, the tax will collect more and it is easy to explain the purpose of "increasing budget revenue". However, if taxing property on cars over 1 billion VND, the impact will be very large, there will be a strong reaction from consumers and domestic manufacturing and assembly enterprises.

If we impose a property tax on a car worth 1.5 billion VND, the first goal is to target the rich and the extravagant, and the second is to tighten the grip on imported cars and create a "non-tariff" barrier to protect domestic production.