Massive import of expensive cars to avoid taxes

The sharp increase in the average price of imported cars in a short period of time shows that expensive cars with large engine capacities are being imported to Vietnam ahead of the tax increase deadline of July 1.

The law amending and supplementing a number of articles of tax laws will take effect from July 1. Accordingly, the special consumption tax on expensive cars with less than 9 seats and an engine capacity of 2.5 liters or more will increase sharply. The larger the car capacity, the higher the tax increase (60-150% increase for cars over 6 liters).

The number of cars with less than nine seats increased sharply in the last month before the new tax law took effect.

Market records as well as data from management agencies show that before this deadline, traders have stepped up importing large-cylinder-capacity, expensive car models... to Vietnam.

According to the General Department of Customs, although the number of imported cars in the first half of June was only over 3,600, down from the same period last year, cars with less than 9 seats increased sharply. Specifically, in 15 days, nearly 1,400 cars of this type were imported, up nearly 40% compared to the same period in 2015.

Along with that, the average price of each imported car increased sharply.reached an average of 27,800 USD and was about 10,000 USD more expensive per car than the same period last year. Compared to last month, the average price of imported cars in the last period was also 2.5 times more expensive. In the first 6 months of the year, the average price of imported cars was 16,900 USD per car, an increase of 40% compared to the same period in 2015.

Customs data also shows that since April, the import volume from Vietnam's traditional expensive car import markets such as Germany, Japan, Canada... has increased sharply compared to the same period last year, even 3-6 times higher. The average price of imported cars from Europe and America has also increased by 10-30%.

Of these, although the number of cars imported from France has decreased, the average price has increased dozens of times, ranging from 100,000 USD to 266,000 USD per car. In the first 5 months of this year, Vietnam only imported 15 cars from France, but the average price when arriving at the port (excluding tax) was equivalent to 151,600 USD, or nearly 3.8 billion VND per car. In the same period last year, Vietnam imported more than 100 cars from this country, but mainly the low-cost group, with an average price of around 10,000 USD.

MA luxury car dealer also commented that there has never been a time when the number of these car lines imported to Vietnam was as high as recently.Immediately after arriving at Vietnamese ports, supercars and luxury cars are continuously unpacked and have import procedures completed to meet the July 1 deadline.

In particular, some famous super luxury cars such as Audi R8 V10 Plus, Ferrari F12, 488, Rolls-Royce Wraith, Bentley Mulliner... have been continuously completing import procedures in recent times. Many other high-end cars such as Cadillac Escalade, Lexus LX570... are also rushing to complete import procedures, as the time for tax increase is approaching.

A representative of an auto importer said that in fact, over the past month, the number of imported cars with mid-range prices and above (over 30,000 USD) has increased significantly, especially since the beginning of June. According to him, the hasty change in tax schedules has caused businesses to import cars in a tax-evading manner. To import in large quantities, importers must prepare a large amount of capital, negotiate with partners, and structure products. In particular, for expensive supercars, the pre-order period is up to 60 days, so investors must proactively negotiate early.

"The new tax schedule was officially approved in early April and by the end of May and early June, manufacturers will be paying their orders. That's why there has been a recent influx of supercars," he said.

He also said that although the number of imports has increased sharply recently, in reality Vietnam's supercar collection is still modest because the cost is 4-5 times higher than in other countries.

According to VNE