Flash autos roll in due to loop hole

Pursuant to Clause 3 in Ministry of Finance (MoF)’s Circular 118/2009/TT-BTC, overseas Vietnamese (Viet Kieu) repatriates are liable to bring one personal car into Vietnam for use.

In reality after the import of fewer than nine seat brand-new cars into Vietnam was restricted following enforcement of Ministry of Industry and Trade’s Circular 20/2011/TT-BCT to reduce import of luxurious items into the country, traders have used this Viet Kieu import incentive loop hole.

Circular 20, effective from June 26, 2011, stipulates additional procedures for imported cars from nine seats or less.

In the recent past, a Dong Nai Customs Department representative voiced the need to have in place clear definition of ‘used cars’ to avoid preferential import policy being abused for import of new expensive cars into Vietnam.

“Through checking Viet Kieu records asking for auto import licences we came to know that most of their cars were newly bought to bring into Vietnam. Hence, personal cars of Viet Kieu repatriates also need to follow current regulations about used cars as having usage time of above six months and running not less than 10,000km in foreign countries  which are currently applied to used cars eligible for import into Vietnam,” according to the Dong Nai Customs Department in a proposal.

Haiphong Customs Department’s management assumed the incentive policy on car imports as property of Viet Kieu repatriates being abused to cash in on tax exemptions such as import duty and value-added tax exemption.

This would create a big difference in retail price compared to similar imported car models bearing full taxes.

A Thua Thien-Hue Customs Department representative said local customs bodies found it hard to define authenticity of document sets provided by Viet Kieu like car ownership certificates, car circulation registration or Viet Kieu passports which were granted by different US states.

The customs bodies argued that Viet Kieu when bringing cars into Vietnam are only required to show family record book provided by Vietnamese police authority but not needed to show Ministry of Public Security’s decision allowing Viet Kieu to reside in Vietnam as regulated in Circular 27/2001/TTLT/BTM-TCHQ and this would create a loophole under which cars would be imported into Vietnam in the form of a Viet Kieu repatriate property to evade taxes.

In mid-2012 Ho Chi Minh City Customs Department had proposed the General Department of Customs turn to the MoF asking for imposing import duty on automobiles Viet Kieu brought into Vietnam as their asset to restrict commercial importation of less than nine seat cars into Vietnam.

Besides, in light of Item 2.c, Clause 101, Circular 194/2010/TT-BTC each Viet Kieu family allowed to reside in Vietnam only have one car each model exempted from paying import duty when bringing into Vietnam.