Auto importers looking for a big pick me up

Many pick-up models sold in Vietnam have been hit with inconsistent registration fees in many cities and provinces. In Hanoi and many northern provinces, the ownership tax rate for pick-ups is 2 per cent, while in Ho Chi Minh City and some southern provinces, this rate is ranging from 10 to 20 per cent, according to Vietnam Automotives Manufacturers’ Association (VAMA) petition sent to the  General Department of Taxation.

For example, customer Ha Van Dinh paid 15 per cent or VND102 million ($4,900) of registration fee for the pick-up Ford Ranger imported from Thailand in April in Danang Customs. However, the Mitsubishi Triton GLS bought by Nguyen Lu Trong Nhan in Binh Duong was subject to a 10 per cent registration fee.

Actually, there were even inconsistent ownership tax rates for the same model in the same provinces or cities, especially for Toyota Hilux, Ford Ranger and Isuzu D-Max, the petition claimed. A Toyota Hilux bought by Hoa Nong A Chau in May was subject to a 15 per cent registration fee, while another customer Vu Van Hoa paid only 2 per cent of that tax.

A pick-up vehicle-goods-carrying is not subject to an ownership tax rate of 10-20 per cent under Official Letter No.2824/BTC-TCT and should enjoy an ownership tax rate of 2 per cent, according to VAMA. Official Letter No.2824/BTC-TCT issued by General Department of Taxation guides Circular No. 124/2011/TT-BTC on registration fee for pick-ups.

VAMA added that the  certificate  of  conformity  from  inspection  of  quality  technical  safety  and environmental protection  for  imported motor vehicles issued by Vietnam stated a vehicle which  was  registered as  “ a pick-up with double cab”  was subject to a 2 per cent ownership tax rate.

Furthermore, when  being  imported  into Vietnam,  those pick-ups  enjoy  5 per cent ASEAN Common Effective Preferential Tariff (CEPT) import  duty,  as  similar as import duty rate for trucks or a pick-up vehicle-goods-carrying.

VAMA concluded cities or provinces not  applying  the 2 per cent ownership tax rate to the  above mentioned  pick-up are in contradiction with the instruction provided by Official Letter No.2824/BTC-TCT.

So far, VAMA has been able to convince several tax offices to apply the “right” ownership rate, including Hanoi, Haiphong, Quang Ninh, Danang, Dong Nai and Binh Duong provinces.

But, all the other provincial tax department are reluctant to impose the rate of 2 per cent given the instruction in the above-mentioned regulations are not clear enough.