Dear lawyer, I got married abroad so I want to buy; car to send back to my parents in Vietnam; Because I wanted to make a surprise, I wanted to ask a car lawyer; If I give it as a gift when I receive it, will my parents still have to pay any tax? Ask your lawyer for an answer.
The issue of giving is a very delicate matter, especially; It’s about wanting to surprise someone you love. giving gifts of great value; or cars, also comes with many related obligations such as paying taxes, etc. So, if you give a car, it’s tax-free for sure; It is the concern and question of many people. To answer those questions; Please take a look at our article below.
When do you donate a car without tax?
According to point b, clause 4, Article 105 of Circular 194/2010/TT-BTC of the Ministry of Finance; guidance on customs procedures; customs inspection and supervision; export tax, import tax and tax administration for exported and imported goods: “Goods of organizations and individuals from abroad; gifts or presents to Vietnamese individuals with a value of zero goods; in excess of one million dongs, or the value of goods exceeds one million dongs but the total payable tax amount is less than fifty thousand dongs, they shall be exempt from tax (not having to carry out procedures for consideration of import tax exemption).
Thus, goods being gifts or gifts have a value exceeding the norm; considered for tax exemption mentioned above, tax must be paid for the excess. Taxes to be paid when carrying out import procedures for cars include import tax, excise tax and value-added tax.
What taxes do you need to pay for a car donation?
Donating cars can be in many different forms such as domestic gifts, inheritance, and gifts from abroad. Each case will have different regulations, types of taxes and tax rates to pay.
In case of inheritance
According to the provisions of Clause 9 Article 3 of Decree 65/2013/ND-CP; guiding the Law on Personal Income Tax dated November 21, 2007; Law amending and supplementing a number of articles; of the Law on Personal Income Tax dated November 22, 2012.
Incomes from inheritance are securities, capital shares in economic organizations; business establishments, real estate and other assets; must register to own or register to use.
In case of inheritance of other properties, ownership registration is required; or register for use that is not subject to tax exemption as prescribed; in Article 4 of Decree 65/2013/ND-CP
Therefore, in the case of inheritance, a car is a property that must be registered; ownership should be subject to PIT in accordance with the above provisions. The tax rate for income from inheritance is 10% on taxable income. In addition, related to the name change, registration fee must also be paid according to regulations.
In case of receiving gifts from abroad
As mentioned above, cars receive gifts from abroad; will be subject to the same taxes as ordinary excise; include: excise tax, value added tax, import tax.
Import tax: (For the case of sending a used car)
The import tax rate in this case is determined; according to Decision No. 23/2008/QD-BTC of the Ministry of Finance dated May 8, 2008 on import tax rates; used passenger cars with 15 seats or less (based on the number of seats and cylinder capacity). Accordingly, the car has a cylinder capacity of 1000cc; you send will be subject to an import tax of 8,000 USD.
Car import tax is understood as the state’s tax collection; for automobile products originating from other countries; when imported into Vietnam market. The calculation of import tax on automobiles is also very; Especially compared to other products on the market.
You can calculate import tax on a car from its selling price. Refer to Lexus car prices; This car is quite expensive. However, if the import tax is deducted, it will be extremely cheap.
Special Consumption Tax:
According to Articles 5 and 6 of the Law on Special Consumption Tax No. 27/2008/QH: Amount of Special Consumption Tax; payable = (Import tax calculation price + Import tax) x Special consumption tax rate.
Article 7 Law on Special Consumption Tax No. 27/2008/QH12; There is a Special Consumption Tariff for automobiles. Accordingly, the tax rate will be determined based on the number of seats and cylinder capacity of the car. In this case, the tax rate for the 1000cc cylinder car you send is 45%.
VAT tax
According to the provisions of Article 8 of the Law on Value Added Tax No. 13/2008/QH12; of June 3, 2008, the value-added tax rate for cars is 10%.
Value-added tax you have to pay = (Import tax calculation price + Import tax + Special consumption tax) x Value-added tax rate
In case of receiving gifts in the country
The tax payable is still the same as importing cars from abroad (most cars in Vietnam are imported). The taxable person is the person paying for the car (the donor). The tax amount is calculated directly with the selling price of the car.
However, neither the gift giver nor the gift recipient have to DIRECTLY pay taxes. This tax amount shall be paid by the automobile importer to Vietnam to the competent authority.
If you want to calculate the tax payable, you need to know the selling price of the vehicle. At this point, you should refer to this BMW car price.
Do I have to pay tax when I donate a car?
Most when donating cars, they are subject to taxes as prescribed by law. The amount of tax and the amount of tax paid is not small. Cars transported from outsiders to Vietnam are also subject to more expensive taxes. However, there are still cases where one or more taxes are exempt.
In addition, at Point L, Clause 7, Article 30 of Decree 100/2019/ND-CP; Regulations on sanctioning of administrative violations in the field of road and railway traffic; Penalties for failure to register a car title are as follows:
A fine of between VND 2,000,000 and VND 4,000,000 shall be imposed on individuals;
A fine ranging from VND 4,000,000 to VND 8,000,000 shall be imposed on organizations.
Therefore, the transfer of car names for donation is not only to ensure rights; interests and obligations between the parties but also a mandatory procedure as prescribed by law.
Thus, car donation must pay many different taxes; especially paying taxes from abroad. If the new car tax is less, the old car tax more. Before giving a car, you should understand the regulations; To pay taxes in full, it is best to consult a lawyer.
Related article:
- Finalization and refund of personal income tax in Vietnam
- Procedures to register for the latest personal tax code in Vietnam
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Frequently asked questions
Failure to register the transfer of the donated car will be fined according to the provisions of Point L, Clause 07, Article 30 of Decree 100/2019/ND-CP
The procedure for transferring the name of a donated car is not too complicated and very quick, so if it is given to a large asset such as a car, the recipient should quickly transfer the name to legalize the property and avoid disposing be born later.
“Article 9. Registration fee exemption
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Land allocated, leased or recognized by the State to be used for agricultural, forestry, aquaculture and salt production purposes.
Agricultural land for conversion of use rights between households and individuals in the same commune, ward or township to facilitate agricultural production in accordance with the Land Law.
Agricultural land reclaimed by households or individuals by themselves in accordance with the land use planning approved by a competent state agency, without dispute, but granted a license by a competent state agency certificate of land use rights.
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