It is impossible to "collude" to reduce the price of cars by less than 1.5 billion VND to avoid paying property tax.

A representative of the Ministry of Finance has responded to the suspicion that the seller and buyer can negotiate and record the selling price of the car lower than 1.5 billion VND to avoid property tax. Accordingly, it is confirmed that this will not happen.

"Based on business registration, the Ministry of Finance has issued a Price List for calculating registration fees for car models. This has been done for a long time. Many times, people buy cars during promotions but when paying taxes, they still have to pay higher prices because businesses have not updated with the Ministry. The application of property tax on cars over 1.5 billion VND is also based on the Price List for calculating registration fees" - said Mr. Pham Dinh Thi, Director of the Tax Policy Department, Ministry of Finance.

On that basis, the Ministry of Finance does not believe that there will be a situation where the seller and the buyer agree on a lower price to avoid paying property tax.

According to the draft Law on Property Tax, which was just announced by the Ministry of Finance on the afternoon of April 13, aircraft, yachts, and cars worth VND1.5 billion or more may be subject to a property tax of 0.3 or 0.4%. This tax must be paid annually if the draft law is passed.

For new airplanes, yachts, and cars: the taxable price is the value at the time of tax calculation as prescribed by the Provincial People's Committee.

For used aircraft, yachts and cars: the taxable price is determined by multiplying the value of the new asset by the percentage (%) of the remaining quality of the asset issued by the provincial People's Committee according to the asset's usage time at the time of tax calculation.

"In case a higher tax rate needs to be applied, the Provincial People's Council decides to increase it but not more than 50% of the general regulation. This regulation aims to create initiative for local authorities in determining appropriate property tax rates," Mr. Pham Dinh Thi further explained.

Aircraft, yachts, and cars valued at less than VND 1.5 billion; aircraft, yachts, and cars used for business purposes or transporting goods and passengers are not subject to property tax.

However, the Ministry of Finance also proposed a second option of not taxing airplanes, yachts, and cars.

International experience shows that currently only 3 countries impose property tax on movable assets including machinery, equipment, vehicles (including cars, airplanes, yachts) are Korea, Kazakhstan and Bolivia. However, Korea only imposes tax on airplanes and yachts.

According to data provided by the Ministry of Transport, 100% of the number of aircraft and yachts registered nationwide are owned by organizations. No aircraft or yachts are privately owned.