The car import tax system in Vietnam

1. Calculate the after-tax car price

Taxable price + Tax total (Excise tax + Import tax + VAT) = The after-tax price

Tax total = Excise tax + Import tax + VAT

1.1 Import tax

Import tax = (Taxable price) x (Import rate)

Impost rate = based on cylinder capacity
 0% under ATIGA effective from 2018

1.2 Excise Tax (the special consumption tax)

Excise tax = (Taxable price + Import tax) x Excise tax rate

Excise tax rate : based on the cylinder capacity
 45% - Less than 2000 cc
 50% - From 2000 to 3000 cc
 60% - More than 3000 cc

1.3 VAT

VAT = (Taxable price + Import tax + Excise tax) x 10%

VAT rate is fixed at 10% for every kinds of goods

Example:

TOYORA CAMRY 3.5 LE 2009

Price: $20,000

Import tax rate: 80% $20,000 X 0% = $0

Excise tax: 60% $20,000 + $0) X 60% = $12,000
VAT: 10% ($20,000 + $0 + $12,000) X 10% = $3,200
TAX TOTAL $15,200

The after-tax price

$20,000 + 15,200 = 35,200

 NET MANUFACTURER'S PRICE/ IMPORTER'S SELLING PRICE TAX RATES

UP TO SIX HUNDRED THOUSAND PESOS (P600,000.00) FOUR PERCENT

(4%)

OVER SIX HUNDRED THOUSAND PESOS (P600,000.00) TO ONE TEN PERCENT

MILLION PESOS (P1,000,000.00) (10%)

OVER ONE MILLION PESOS (P1,000,000.00) TO FOUR MILLION TWENTY PERCENT

PESOS (P4,000,000.00) (20%)

OVER FOUR MILLION PESOS (P4,000,000.00) FIFTY PERCENT

(50%)
RATES AND BASES OF THE AD VALOREM TAX ON AUTOMOBILES.
EFFECTIVE JANUARY 1, 2018:

Import tax in Vietnam

Most goods imported into Vietnam are subject to duty. Tax rates vary,
depending on the type of the product you want to import. Take into
account that consumer goods, especially luxury goods such as cars,
alcohol, and cigarettes face higher import duties than raw materials,
equipment, and machinery that are used for manufacturing.

Import taxes are to be paid before customs clearance as your goods

won’t be released otherwise. Late payment will risk the success of on-
time customs clearance and furthermore, it may also result in higher
costs.

Value-added tax (VAT)

In addition to import duty, goods brought to Vietnam are also subject
to value-added tax (VAT). VAT rates are either 0%, 5% or 10%. Certain
products, e.g goods that are necessary but cannot be produced in
Vietnam can even enjoy VAT exemption.

Currently, the value-added tax is under discussion in Vietnam to be

raised to 12% at max. However, it has not been confirmed yet.

VAT
Examples of goods this rate applies to
tax rate
Machinery that cannot be produced in Vietnam, teaching and

0% vocational training as provided for by law, humanitarian aid,

etc.
Medical equipment, sugar, special-purpose machinery and

5% equipment for agricultural production, clean water, fresh and

live food, etc.

Standard VAT rate, imposed on goods not eligible for 0% or
10%
subject to 5% VAT
Source: Law No 13/2008/QH12

Special consumption tax (SCT)

Some consumer goods are classified as luxury items and an additional
tax will be imposed on those products. The special consumption tax or
also known as the luxury tax applies to certain imported goods, e.g
alcoholic beverages, tobacco products, and petroleum products.

SCT rates start at 7% and can be more than 100% for some products
such as cars with a higher engine capacity. For example, E10 gasoline
is taxed at 7%, cigarettes face 70% SCT until December 31, 2018.
Starting from January 2019, however, the tax will rise to 75%,
according to the Law No. 70/2014/QH13. 

Vietnam auto industry

Vietnam is majorly an automobile assembly hub, rather than a manufacturing one,

unlike Thailand and Indonesia. Due to the absence of a supporting industry, the cost of
manufacturing a car in Vietnam is about 20 percent higher than neighboring countries
which compels the domestic manufacturers to import almost 60 to 80 percent of
components. In addition, such imports reduce the localization rate of domestic
manufacturers, which currently stands at around 10 percent, while the ratios in
Thailand, Malaysia, and Indonesia are as high as 85, 80, and 75 percent respectively.

While 2016 automobile sales in Vietnam hit a 20-year record high with 304,427 units,
sales in the first 11 months of 2017 reduced by 10 percent year on year, to 244,670
units. The reduction has been attributed mostly to consumers waiting for reduced prices
of imported cars from January 2018.

Tariffs on imported vehicles

The 0% rate of preferential tariff levied on imported vehicle components (subject to conditions) will now apply
from 16 November 2017 to 31 December 2022.

The Decree No.116 on requirements for manufacturing, assembly and import of motor

vehicles and trade in motor vehicle warranty and maintenance services and
the Circular No.03 on technical and environmental safety inspection of imported motor
vehicles regulated by Decree No.16 

. Sample Computation

1. The After-tax Price of Automobile

Taxable price + Tax total (Excise tax + Import tax + VAT) = The after-tax price

Tax total = Excise tax + Import tax + VAT

a) Import tax
Import tax = (Taxable price) x (Import rate)
 Import rate = based on cylinder capacity
 0% under ATIGA effective from January 01, 2018

b) Excise Tax (the special consumption tax)

Excise tax = (Taxable price + Import tax) x Excise tax rate
Excise tax rate : Law No. 106/2016/QH13 (see table 1)

c) VAT
VAT = (Taxable price + Import tax + Excise tax) x 10%
VAT : 10%

Illustration:

CHEVROLET MALIBU 3.5 (ASEAN IMPORT)

Price: $20,000
Import tax rate: 90% $20,000 X 0% = $0
Excise tax: 0% $20,000 + $0) X 60% =$
VAT: 10% ($20,000 + $0 + $12,000) X 10% =$
TAX TOTAL

The after-tax price

$20,000 + 15,200 = 35,200