Registration fees will closely follow the car price.

Vehicle registration fees will have many changes in the near future.

This paradox has been more appropriately adjusted in the new proposal of the Ministry of Finance regarding this issue.

Car price fluctuation 5% will update price list

In fact, in recent years, the car market has been fiercely competitive with new car models continuously being launched, and manufacturers competing with each other, so car prices on the market tend to decrease, but not to the level of 20% to be able to adjust the registration fee (LPTB). Therefore, there are cases where consumers have to pay a fee at a price higher than the actual purchase price.

For example, according to the LPTB calculation price list, the Ford Ecosport Titanium 1.5 costs 670 - 680 million VND while a car dealer in Ho Chi Minh City announced the price of this car model is 648 million VND (about 3% lower than the price list). This situation causes controversy between the fee payer and the authorities about the LPTB calculation price and this case is quite common. Recently, there was a case of a consumer buying a car for 800 million VND with an invoice but when calculating LPTB according to the price list, the price was 850 million VND.

According to regulations, car manufacturers must notify the Ministry of Finance to adjust the price list for calculating LPTB, so it is difficult to determine whether the car manufacturer did not notify in time or the Ministry of Finance did not correct it in time. The reason LPTB is not calculated based on the invoice price is because there is a situation where car dealers list a lower price than the actual selling price to avoid tax. But car buyers think they have to pay more than the actual purchase price. Therefore, the arguments and frustrations continue.

The new proposal of the Ministry of Finance to reduce the fluctuation level of car and motorbike transfer prices for the LPTB calculation price list from the current 20% to 5% will overcome this problem. Previously, the Ministry proposed a fluctuation level of 10% or more to adjust the LPTB calculation price list, but in the latest draft, the fluctuation level has been adjusted to 5%.

Increase LPTB of pickup trucks

Regarding this, the Vietnam Chamber of Commerce and Industry (VCCI) has just sent comments to the Tax Policy Department (Ministry of Finance) on the draft amendment and supplement to Decree 140/2016 in the case of transferring assets that have been exempted from LPTB, confiscated assets. Specifically, vehicles that have been registered for the first time, when confiscated and then resold, will pay at the second rate. Vehicles that have not been registered for the first time must pay at the first rate.

However, this regulation does not clearly state how to determine whether a vehicle has been registered for the first time or not, which may cause disputes between the tax authority and the fee payer. VCCI gives an example, a vehicle is registered for the first time by company A and has paid 10% LPTB.

Company A sells a car to Mr. B, which is exempt from LPTB. Then, Mr. B sells the car to Ms. C, which is subject to LPTB. At this time, according to the draft regulations, Ms. C will have to pay LPTB for the first time at the rate of 10%. Thus, the same car has to pay LPTB twice at the rate of 10%. Therefore, VCCI proposes that each car and motorbike will only be subject to LPTB with the first collection rate once.

In the new draft, the Ministry of Finance maintains the first LPTB collection rate for pickup trucks carrying goods with a carrying capacity of less than 1,500 kg and 5 seats or less; and VAN trucks with a carrying capacity of less than 1,500 kg. Specifically, the first LPTB collection rate is equal to 60% of the first collection rate for passenger cars (in the 10 - 15 range), the second collection rate onwards is 2%. This is a collection rate that has caused much controversy in recent months. Many opinions suggest keeping the first collection rate for these types of vehicles as it is currently at 2%.

However, according to the Ministry of Finance, these types of vehicles when participating in traffic are applied road signaling systems like passenger cars, are not limited in the time allowed to circulate in urban areas, and are allowed to circulate in lanes reserved for passenger cars. However, the first LPTB collection rate for these types of cars is only 2%, while the first LPTB collection rate for passenger cars is in the range of 10 - 15%, which is unreasonable. Therefore, in the coming time when the draft officially takes effect, buyers of these types of cars will have to pay LPTB with an amount 3 - 4 times higher than the current amount.