Used cars imported to Vietnam are expected to be taxed 150-200% plus tens of thousands of USD.

The Ministry of Finance has drafted an import tax policy for auto parts for the 2018-2020 period, including a proposal to amend the tax rate for imported used cars. With this tax rate, many used cars imported to Vietnam will have higher prices than new cars.

The Ministry of Finance said that the import turnover of used trucks is increasing due to the low import price from China. The number of used cars with less than 9 seats has gradually decreased due to the increase in import tax since 2013. Specifically, in 2013, 3,777 cars were imported but by 2016, it had decreased to only 1,441 cars, and the import of cars with more than 9 seats was insignificant due to the high tax rate.

Used cars are subject to very high import taxes.

The Ministry of Finance proposes import tax policy for passenger cars with 9 seats or less according to engine capacity.

For vehicles with a capacity of less than 1.0 liters, according to WTO commitments, taxes will be imposed at 200% or 150% (taking the lowest tax rate) plus an absolute import tax of 10,000 USD.

The current import tax rate for this car line is 5,000 USD/car, so the Ministry of Finance proposes to adjust the import tax rate from 5,000 USD to 10,000 USD/car.

For vehicles with a capacity of 1.0 - 1.5 liters, the Ministry of Finance proposed increasing the tax commitment to the WTO by 200% or 150% plus an absolute import tax of 10,000 USD.

The Ministry of Finance also proposed to increase the tax rate committed to the WTO for vehicles with a capacity of 1.5 liters to 2.5 liters by 200% or 150% plus 10,000 USD.

For vehicles with a capacity of 2.5 liters or more, the Ministry of Finance proposes to increase the tax rate to the committed rate of 200% or 150% plus 10,000 USD, taking the lowest rate. For other types of vehicles with the same new WTO committed tax rate, the annual tax rate must be added 15,000 USD.

For vehicles with a capacity of 1.0 - 1.5 liters, the Ministry of Finance proposed increasing the tax commitment to the WTO by 200% or 150% plus an absolute import tax of 10,000 USD.

For 10-15 seat vehicles with a capacity of less than 2.5 liters, the Ministry of Finance proposed an absolute tax rate of 10,000 USD, and 15,000 USD for vehicles with a capacity of 2.5 liters or more.

For trucks, the Ministry of Finance proposed to keep the current tax rate, including import tax of 150% plus 7,000 USD.

Previously, the Ministry of Industry and Trade sent a document to the Governments setting out conditions for businesses importing used cars in the Decree regulating conditions for production, assembly, import and business of car warranty and maintenance services.

The Ministry of Industry and Trade has proposed two options. First, businesses importing used cars will also have to have a certificate from the foreign manufacturer designating the business to import and recall on behalf of the manufacturer when errors occur.

Option 2, the conditions on import authorization and recall in case of errors only apply to new vehicles, and old vehicles are excluded.

The Ministry of Industry and Trade has proposed option 1 because it believes that imported used cars must be strictly managed like newly imported cars to limit the possibility of affecting consumer rights and the environment.

According to Vneconomy