Changes to the method of calculating vehicle registration fees.
The tax authorities will update the vehicle registration fee calculation price when the vehicle price changes by 5% or more (either increase or decrease), instead of only updating it if the price fluctuation is 20% or more as is currently the case.
In the draft Decree amending and supplementing a number of articles of Decree No. 140/2016/ND-CP dated October 10, 2016 of the Government on registration fees, the Ministry of Finance proposes amending the price fluctuation threshold for transferring ownership of cars and motorcycles from 20% or more to 5% or more compared to the Price List in order to adjust the Price List for calculating registration fees.
This means that the tax authorities will update the vehicle registration fee calculation price when the vehicle price changes by 5% or more (either increase or decrease), instead of only updating it if the price fluctuation is 20% or more as is currently the case.
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| Changes in the method of calculating vehicle registration fees when car prices fluctuate will better reflect reality. |
According to the Ministry of Finance, this is to align with reality and meet tax management requirements, ensuring that the price list is adjusted and supplemented in a timely manner.
According to Decree 140/2016, tax authorities only update the vehicle registration fee calculation price when the vehicle price changes by 20% or more (either increase or decrease). Manufacturers argue that this regulation is no longer reasonable. A 20% price change for automobiles rarely occurs, as this represents a significant difference.
According to a report by the Vietnam Automobile Manufacturers Association (VAMA), during the period 2015-2017, depending on the car model, the common price fluctuation ranged from 2-7% (decreased) to 2-6% (increased).
In cases where new types of cars and motorcycles not yet included in the price list emerge, or where cars and motorcycles already included in the price list see their market transfer prices increase or decrease by 5% or more compared to the prices in the price list used for calculating registration fees, the Tax Department shall compile and report this information to the General Department of Taxation before the 10th day of the last month of each quarter.
The General Department of Taxation issues the adjusted and supplementary price list for calculating registration fees before the 25th day of the last month of each quarter, to be applied from the first day of the following quarter. The adjusted and supplementary price list for calculating registration fees is issued in accordance with regulations on the issuance of price lists for calculating registration fees or based on the average market transfer price in each locality.
