Decree No. 125/2017/ND-CP referring to the import tax on used cars comes into effect on January 1st, 2018.
Accordingly, cars of nine seats or less which have cylinder capacity of below 1,000cc are subject to the absolute tax rate of USD$10,000/car, doubling the current one.
Cars of nine seats or less which have cylinder capacity with excess of 1,000cc are subject to complicated tax, which is calculated by: [(used car price) x (the tax rate from 150% to 200%) + US$10,000] per car.
Cars which have cylinder capacity with excess of 2,500cc are subject to complex tax, which is calculated by: [(used car price) x (the tax rate from 150% to 200%) + US$15,000] per car.
Cars of 16 seats or more (except for refrigerated vans, refuse collection vehicles having the refuse compression device, tanker vehicles, armored cars for valuables transport) are subject to a preferential import tax of 150%.
Also, imported components (details and parts) enjoying the 0% tax rate must be included in this list and are not available in Vietnam.
Nguyen Tuan, Director of Thien Phuc An, an automobile importer, said that the decree was introduced too late, especially when 0% import tax on CBU (Completely Knocked Down) will soon come into effect.
Tuan added that if the government had promulgated these policies five years ago, it would be more reasonable. In the past five years, many automobile businesses have been waiting for opportunities from the new business conditions. Therefore, they maintain the showroom and staff system, which made them suffer US$2 to 4 million of losses.
Now, the decree was promulgated at the same time with the 0% import tax on CBU, which has forced many businesses to shut down or switch to other fields.
According to even some businesses, with the recently issued policies, the entrance for imported new and used car to Vietnam’s market is even much more difficult.