Localities apply different tax on pick-up vehicles

The pick-up vehicle is being imposed inconsistent ownership tax rates in many cities and provinces because some localities consider it as a goods transport vehicle while others see it as a passenger one, the automakers association said.

Vietnam Automobile Manufactures Association (VAMA) complained on Wednesday that pick-up models from its members such as Toyota Hilux, Ford Ranger, Mitsubishi Triton and Isuzu D-Max are currently imposed different tax rates in different localities.

For example, in Hanoi, this tax rate for pickups is 2 percent, while in HCM City and some other provinces the rate applied is the passenger one from 10 percent to 20 percent. Actually, there are even inconsistent rates for the same model in the same province or city.

Meanwhile, based on the certificate of conformity for imported vehicles issued by Vietnam Register, a vehicle registered as “pickup with double cab” is subject to a 2 percent ownership tax rate, also known as registration fee. Certificates of conformity of those models are consistent with Items 3.2.7 and 3.2.8 of Vietnam National Standard 2010 TCVN 7271 detailing the five criteria for a pick-up.

Besides, when being imported into Vietnam, the pickups enjoy 5 percent Cept import duty, which is the tax rate for trucks, VAMA said.

Therefore, cities or provinces not applying the 2 percent rate for the above mentioned pick-ups are in contradiction with the instruction provided by the Ministry of Finance on registration fee for pickups and guidance of the general Department of Taxation dated May 28, 2012 on the tax rate for pick-ups.

VAMA said that this inconsistent practice increases anxiety among customers who want to own a pick-up and affect customers’ rights as well as causes difficulties for enterprises working in the automotive industry in Vietnam.

To protect the consumers’ rights and stabilise automakers’ business, VAMA has contacted with many tax bodies, provincial tax departments, the general Department of Taxation and the Ministry of Finance to seek clarification about the tax rate for pick-ups.

So far, VAMA has been able to convince several tax offices to apply the right rate, including Hanoi, Hai Phong, Quang Ninh, Danang, Dong Nai, and Binh Duong’s Di An Town.

All the other provincial tax departments are reluctant to impose the rate of 2 percent, citing instructions from central authorities are not clear enough.

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Category: Legal