Cars over 1.5 billion VND may have to pay additional property tax
Taxation of airplanes, yachts, and cars worth over 1.5 billion VND was mentioned by the Ministry of Finance in the proposal to develop the Property Tax Law project.
The Ministry of Finance has just proposed to the Government to submit to the National Assembly Standing Committee and the National Assembly to include the Property Tax Law project in the Law and Ordinance Development Program for the 14th National Assembly. Specific information about the scope and subjects affected by this Tax Law was shared with the press by Mr. Pham Dinh Thi, Director of the Tax Policy Department on the afternoon of April 13.
The Ministry of Finance is considering and seeking opinions on property tax on airplanes, cars and yachts. Specifically, if these assets are worth VND1.5 billion or more (except for those used for business purposes, transporting goods and passengers), they may be subject to a tax rate of 0.3% or 0.4%. For new assets, the taxable price is the value at the time of tax calculation as determined by the provincial People's Committee.
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For used aircraft, yachts and cars, the taxable price is determined by multiplying the asset value with the remaining quality percentage of the new asset by the remaining quality percentage of the asset issued by the provincial People's Committee according to the time of use at the time of tax calculation.
Further explaining, Mr. Thi said that because this revenue is related to local revenue for infrastructure investment. Therefore, in case a higher tax rate needs to be applied, the Provincial People's Council decides to adjust it up but not more than 50% of the general regulation. According to him, this regulation aims to create initiative for local authorities to regulate appropriate property tax rates.
According to the representative of the Ministry of Finance, international experience shows that there are currently 3 countries that tax assets on movable assets including machinery, equipment, vehicles, including cars, airplanes, and yachts: Korea, Kazakhstan, and Bolivia.
According to the Ministry of Transport, 100% of aircraft and yachts registered in Vietnam are currently owned by organizations. None are registered as privately owned.
Therefore, in the submission to the Government, the Ministry of Finance still presented the option of not taxing this group of assets to get opinions.
A representative of the Ministry of Finance said that the proposed contents of the Property Tax Law have not yet been sent to ministries, branches, and local People's Committees for comments and have not been widely posted on the website. The consultation with these agencies will take place in a few days. After that, based on the received comments, the agency will ask for the Ministry of Justice's appraisal and include it in the law-making program.