What is the car excise tax in Vietnam?

The domestic car market in recent years has grown better than expected in Vietnam. The steady growth of the passenger car market under 9 seats averages 20-30% per year. Vietnamese people’s demand for car shopping has become more intense than ever, partly because of the opening mechanism of the state, and partly because of the increasing demand for this kind of vehicle. Besides, people have to pay attention to the tax rate when they intend to buy a car. So, in this article, LSX legal firm would like to inform you of a kind of tax for this kind of good: “What is the car excise tax in Vietnam?”

What is the car excise tax in Vietnam?

Excise tax, an indirect tax, levied on a number of luxury goods and services in order to regulate production, import, and social consumption. At the same time, this kind of tax strongly regulates the income of consumers. Also, contributes to increased revenue for the State Budget, strengthening production and business management of taxable goods and services.
This tax is submitted by the establishments that directly produce the goods, but the consumers are responsible to pay for the tax because the tax is added to the selling price.

According to Article 2 of the Law on Excise Tax 2008 (amended 2014) and Clause 2 of Decree 108/2015/ND-CP

Goods subject to excise tax

• Firstly, cigarettes, cigars, and other preparations from tobacco plants for smoking, inhalation, chewing, smelling, sucking;
• Secondly, liquor;
• Thirdly, beer;
• Fourthly, automobiles with less than 24 seats, including cars that carry both people and goods with two or more rows of seats, with a fixed partition design between the passenger compartment and the cargo compartment;
• Fifthly, two-wheeled motorcycles and three-wheeled motorcycles with a cylinder capacity of over 125cm3;
• Sixthly, aircraft, and yachts (used for civil purposes);
• Also, the gasoline of all kinds;
• Air conditioning capacity from 90,000 BTU or less;
• Cards;
• Lastly, Votive and votive goods (excluding votive goods which are children’s toys and teaching aids).

Note: goods subject to excise tax must be finished goods products, excluding components for assembling these goods.

In order to encourage the domestic automobile industry, the Ministry of Finance and the Ministry of Industry and Trade now studying policies and measures to support domestic automobile production and assembly in order to increase the value created in the country.

Currently, the excise tax applied to cars with 9 seats or less is calculated according to the cylinder capacity.

Specifically, vehicles with engines under 1.5L are taxed at 35%; cars from 1.5-2.0L pay 40%, cars over 2.0-2.5L pay 50%, cars from 2.5-3.0L pay 60%, from 3.0-4.0L pay 90%, over 4.0-5.0L pay 110%, over 5.0-6.0L subject to 130% apply tax of 150% for vehicles over 6.0L.

Gasoline hybrid electric cars (PHEVs) and electric cars (EVs) will pay a tax rate of 70% compared to cars of the same type using gasoline.

Services subject to excise tax

• Firstly, the disco business;
• Secondly, business in massage and karaoke;
• Thirdly, casino business; prize-winning electronic games, including games with the jackpot, slot, and similar machines;
• Fourthly, betting business (including Betting on sports, entertainment, and other forms of betting as prescribed by law);
• Also, the golf business includes selling membership cards, golf tickets;
• Lastly, the lottery business.

Objects not subject to excise tax

According to Article 3 of the Law on Excise Tax 2008 (amended 2014) and Clause 3 of Decree 108/2015/ND-CP, goods specified above are not subject to excise tax in the following cases:
(1) Goods that are directly exported by a manufacturing or processing establishment, or sold or entrusted to another business establishment for export;

(2) Aircraft, and yachts used for business purposes of transporting goods, passengers, and tourists;
(3) Ambulance cars; cars carrying prisoners; funeral cars; cars designed with both seats and standing seats that can carry 24 people or more; cars running in amusement parks, entertainment, and sports areas without registration for circulation and not participating in traffic;
(4) Goods imported from abroad into non-tariff zones, goods sold from inland into non-tariff zones and used only in non-tariff zones, and goods traded between non-tariff zones, except for passenger cars with less than 24 seats.

Imported goods not subject to excise tax

• Goods of humanitarian aid, non-refundable aid; gifts for state agencies, political organizations, socio-political organizations,socio-political-professional organizations, social organizations, socio-professional organizations, people’s armed forces units, and gifts for individuals in Vietnam according to the levels prescribed by the Government, including:

+ Humanitarian aid goods, non-refundable aid goods, including goods imported with non-refundable aid sources approved by competent authorities, emergency relief goods to overcome the consequences of war, natural disasters, and epidemics;

+ Gifts from overseas organizations and individuals to state agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, social organizations associations – occupations, people’s armed forces units;

+ Gifts for individuals in Vietnam according to the level prescribed by law.

• Goods transported in transit or pass through Vietnam’s border, goods transshipped according to the Government’s regulations;
• Goods temporarily imported for re-export and temporarily exported for re-import not subject to import tax or export tax within the time limit prescribed by the law on export tax and import tax;
• Items of foreign organizations and individuals according to diplomatic immunity standards; carry-on items in the duty-free baggage allowance; goods imported for tax-free sale as prescribed by law;

Legal service of LSX Legal Firm

LSX legal firm provides legal services to clients in various legal areas. To make your case convenient, LSX will perform:

• Legal advice related to new regulations in business suspension;
• Representing in drafting and editing documents;
• We commit the papers to be valid, and legal for use in all cases;
• Represent to submit documents, receive results, and hand them over to customers.

With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.

Furthermore, using our service, you do not need to do the paperwork yourself, We guarantee to help you prepare documents effectively and legally.

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After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.

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